KAR Auction Services reported year-over-year increases in revenue, adjusted EBITDA and net income during the first quarter as each of its three major divisions — ADESA, Insurance Auto Auctions and Automotive Finance Corp. — all registered jumps in gross profit.

The company reported Q1 total revenue came in at $632.4 million — an increase of 8 percent from the year-ago figure of $583.8 million.

KAR’s adjusted EBITDA for the quarter that ended March 31 increased 10 percent to $162.2 million, up from $147.1 million during the first quarter of last year.

Officials highlighted their net income spiked a whopping 163 percent to $54.5 million, or $0.38 per diluted share, as compared with net income of $20.7 million, or $0.15 per diluted share, in the first quarter of 2014. They acknowledged net income for the first quarter last year was negatively impacted by $20.6 million ($0.15 per diluted share) resulting from the company's refinancing activities.

KAR’s Q1 adjusted net income per diluted share for the quarter ticked 2 percent to $0.42 versus adjusted net income per diluted share of $0.41 for the same quarter in 2014.

ADESA Performance

KAR reported Q1 revenue from ADESA increased year-over-year by $29.9 million, or 10 percent, to $328.0 million. The company explained the increase in revenue arrived primarily a result of an 8-percent rise in the number of vehicles sold, as well as a 2-percent uptick in revenue per vehicle sold, which includes the impact of a decrease in revenues of $6.1 million due to fluctuations in the Canadian exchange rate.

As a result, the company determined, gross profit for ADESA from the first quarter increased $13.0 million, or 10 percent, to $140.9 million, compared with $127.9 million in Q1 of 2014. Gross profit for ADESA constituted 43.0 percent of first-quarter revenue, a slight improvement from 42.9 percent of revenue a year earlier.

Like revenue, KAR pointed out the gross profit improvement was primarily the result of the increase in vehicles sold.

IAA Results

Officials highlighted revenue from Insurance Auto Auctions climbed in the first quarter by $13.0 million, or 6 percent, to $238.0 million. Sparking that revenue rise was an increase in vehicles sold of approximately 8 percent.

However, the overall upward revenue move was partially offset by a 2-percent decrease in revenue per vehicle sold, related to lower average auction prices. IAA's total loss vehicle inventory has increased approximately 20 percent year-over-year.

All told, the company reported Q1 gross profit at IAA increased to $91.4 million, or 38.4 percent of revenue, compared with $87.1 million, or 38.7 percent of revenue, for the same quarter last year.

Officials explained the increase in gross profit was mainly attributable to a 6-percent increase in revenue, partially offset by a 6-percent increase in cost of services.

The increase in cost of services was primarily attributable to variable cost increases related to the increase in volume specifically pertaining to towing and processing costs, as well as labor and occupancy related costs.

AFC Update

Meanwhile, KAR said AFC’s Q1 revenue increased year-over-year by $5.7 million, or 9 percent, to $66.4 million. Fueling that revenue increase was a 10-percent rise in loan transactions and an increase of 20 percent in “other service revenue” generated by PWI.

But the revenue performance was partially offset by a 1-percent year-over-year dip in revenue per loan transaction

KAR tabulated that its managed receivables increased to $1,355.8 million as of March 31, up from $1,107.9 million on the same date a year ago.

Officials said that gross profit for the AFC segment increased year-over-year by $3.7 million, or 8 percent, to $48.0 million. That figure represented 72.3 percent of revenue, compared with $44.3 million, or 73.0 percent of revenue, for the first quarter of last year.

AFC also incurred a 12-percent increase in cost of services primarily the result of increases in compensation expense and expenses associated with PWI.