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Letter to the Editor
Wednesday March 16
Insurance Auto Auctions Reports Higher Q4 Net Earnings
Insurance Auto Auctions, Inc. has reported higher net earnings for the quarter ended December 26, 2004. The Company recorded net earnings of $4.0 million, or $0.33 per diluted share, versus a net loss of $0.3 million, or $0.03 per diluted share, for the same quarter a year ago. Revenues for the quarter were $62.2 million compared with $51.1 million in the fourth quarter of 2003. Fee income in the fourth quarter increased to $53.7 million versus $43.5 million in the fourth quarter of last year."In the fourth quarter we were once again able to grow sales and earnings as our products and service offerings continued to be well received in the marketplace," said Tom O'Brien, CEO. "Our customers have been pleased with the improvements we have made to the business over the past several quarters and we have been rewarded with another quarter of double-digit volume growth over the prior year, both on a same-store as well as on an overall basis. This volume growth was the result of market share gains made earlier in the year combined with our ability to generate higher net returns for our suppliers."
The company reported full-year 2004 net earnings of $12.3 million, or $1.04 per diluted share, versus net earnings of $2.3 million, or $0.20 cents per diluted share, for 2003. Revenues for the year were $240.2 million, a 15 percent increase over revenues of $209.7 million in 2003. Fee income during the year increased to $208.7 million versus $169.7 million in 2003.
"We are pleased with our 2004 results, not only from a financial perspective, but also because of the customer relationships we were able to solidify throughout the year," said O'Brien. "The initiatives we had implemented in prior years had a direct impact on our success in generating higher volumes, increasing our market share and driving higher net returns, each of which translated into better results for IAA. We also kept our eye on growing strategically, adding four new locations during the year that all fit our acquisition and greenfield investment criteria. Furthermore, a portion of our success is attributable to a strong commitment to our comprehensive bidding philosophy in which we supplement live auctions throughout our nationwide network of branches with proxy as well as real-time, Internet bidding capabilities, which our customers continue to strongly support."
Insurance Auto Auctions previously announced that it signed a definitive merger agreement to be acquired by affiliates of Kelso & Company, a New York based private equity investment firm. The closing of the transaction is subject to certain terms and conditions customary for transactions of this type, including stockholder approval and the completion of financing. Stockholder approval will be solicited by IAA by means of a proxy statement, which will be mailed to IAA stockholders upon the completion of the required Securities and Exchange Commission filing and review process.
Insurance Auto Auctions, Inc., founded in 1982, is a provider of automotive total loss and specialty salvage services in the United States, and currently has 78 sites across the United States.
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