KAR Auction Services reported its first-quarter financial results late on Wednesday, highlighting rises in revenue, adjusted EBITDA and net income as well as the impact of Superstorm Sandy on the performance.

The company’s revenue during the span ending March 31 came in at $557.6 million, marking a 10-percent increase compared to the first quarter of last year when KAR generated $506.9 million.

KAR indicated its Q1 adjusted EBITDA ticked up 1 percent year-over-year, rising to $136.2 million from $134.9 million.

Officials then computed that first-quarter net income jumped by 12 percent to $29.1 million, or $0.21 per diluted share. A year earlier, their net income was $26.0 million or $0.19 per diluted share

KAR explained that its adjusted net income per share for the first quarters of this year and last year was $0.31. Adjusted net income for the first quarter of this excludes a $6.4 million net loss ($10.8 million pre-tax) due to costs incurred for processing vehicles damaged in Superstorm Sandy.

More Details of Impact from Superstorm Sandy

In the first quarter, company officials said Insurance Auto Auctions incurred a non-recurring pre-tax net loss of $10.8 million related to the processing of Superstorm Sandy vehicles. 

“This net loss has been excluded from adjusted EBITDA in accordance with the definitions in our credit agreement,” KAR said. “These losses are net of auction services revenue realized or to be realized upon the sale of the vehicles. 

“The significantly higher tow costs incurred in order to respond to the requirements of our customers, increased occupancy costs due to the leasing of temporary locations to process Superstorm Sandy vehicles and increased labor costs for the temporary work force brought into the New York and New Jersey area resulted in a net loss on the sale of the Superstorm Sandy vehicles,” company officials continued.

As a result of adverse weather conditions experienced in the United States and the volume of Sandy vehicles sold by IAA in the first quarter, the company noted that the inventory of IAA’s total-loss vehicles increased more than 10 percent as of March 31 compared to the same point last year.

Dividend Payout and Updated 2013 Outlook

KAR’s board of directors on Wednesday announced a cash dividend of $0.19 per share on the company’s common stock. The dividend is payable on July 3 to stockholders of record as of the close of business on June 24.

Looking forward, KAR said it continues to expect 2013 adjusted EBITDA of $535 to $540 million. The company also expects net income per share of $0.82 to $0.87 and adjusted net income per share of $1.15 to $1.20, both assuming an effective tax rate of approximately 40 percent.

Officials said, “2013 adjusted net income per share represents GAAP net income per diluted share excluding excess depreciation and amortization and stock-based compensation, both resulting from the 2007 merger, as well as Superstorm Sandy costs, all net of taxes.”

Additionally, the company expects 2013 cash taxes of approximately $85 million, cash interest expense on corporate debt of approximately $78 million and capital expenditures of approximately $95 million. 

“This would result in free cash flow before dividend payments of approximately $277 to $282 million,” KAR said.

Editor’s Note: Watch for Friday’s edition of Auto Remarketing Today for a report from KAR Auction Services' quarterly conference call with investment analysts.

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