KAR Auction Services Inc., parent of ADESA Inc., said today that first-quarter net income fell 29 percent to $20.7 million, as revenues rose 5 percent to $583.8 million. The company attributed the fall in profits to refinancing activities.
At KAR’s ADESA unit, revenue grew 5 percent to $298.1 million in the quarter.
The revenue growth was primarily the result of a 7 percent increase in the number of vehicles sold. But it was partially offset by a 2 percent decrease in revenue per vehicle sold.
KAR Auction CFO Eric Loughmiller said the revenue per vehicle sold at ADESA fell because sales in ADESA’s online channels grew to approximately 37 percent of its sales from 34 percent in the first quarter of 2013. Online sales generate less revenue per vehicle sold than sales in the physical auction lanes, he said.
“This decrease is due to the continued success of our private label” closed Web sites that are open to dealers operating specific franchises, Loughmiller told analysts and reporters during a conference call outlining the company’s first-quarter earnings.
Also during the call, Jim Hallett, KAR Auction CEO, said ADESA’s sales of dealer-owned vehicles grew to 50 percent of the company’s business in the first quarter, up from as low as 25 percent in 2009.
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