WESTCHESTER, IL – Insurance Auto Auctions, Inc., (IAA) has announced financial results for the fourth-quarter and full-year 2006. The company’s performance in 2006 was driven by successfully integrating acquisitions and greenfields along with increased buying activity as a result of the company’s live auctions combined with Internet bidding capability.
The company recorded revenues for the quarter of $92.6 million, compared to $69.9 million in the fourth quarter of 2005, an increase of 32.5 percent. Fee income in the fourth quarter increased to $79.2 million versus $59.6 million in the fourth quarter of last year. The company reported Consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) consistent with the definition in the company’s senior credit agreement of $15.8 million during the quarter compared to $10.1 million for the fourth quarter of 2005, an increase of 56.4 percent. Consolidated EBITDA is a non-GAAP measure that the company uses as a primary measurement of its financial results because it is indicative of the relative strength of the company’s operating performance.
“We were pleased with our financial results in the fourth quarter as we once again saw strong increases in revenues, earnings and Consolidated EBITDA over the prior year,” said Tom O’Brien, CEO. “We saw a record number of buyers bid on our vehicles during the period, either online through our real-time I-bid LIVE product or at our live physical auctions, which have continued to have a positive impact on overall selling prices. New acquisitions and greenfields have also been fully integrated onto our platform as we provide enhanced coverage and services for customers throughout the country.”
The company recorded full-year 2006 revenues of $332.1 million compared to $280.9 million in 2005, an increase of 18.2 percent. Fee income for the year increased to $281.9 million versus $240.1 million during the prior full year. IAA reported Consolidated EBITDA of $56.7 million for the full year versus $50.6 million for the full-year 2005, an increase of 12.1 percent.
O’Brien concluded, “In 2007 we will continue to offer customers our dual-bidding strategy, which provides live auctions that are supplemented by our Internet bidding technology. Given their ongoing positive feedback, this offering is clearly the preferred choice among customers in our industry and we believe directly contributes to higher returns for our vehicle providers. We will also focus on enhancing both our technology as well as our service offering in order to improve our customers’ experience working with IAA. Furthermore, while we are pleased with the broad geographic footprint we have built to date, we will significantly enhance our coverage with the integration of 42 ADESA Impact auction facilities into IAA following the closing of our planned merger. We believe our success in 2006 will also provide a solid foundation for the merged company as the combination of ADESA’s salvage operations with IAA’s auctions will strengthen our market position and enhance our national footprint of salvage auction facilities.”
The company expects to file its Annual Report on Form 10-K for the year ended December 31, 2006, prior to March 31, 2007.