CARMEL, IN – ADESA, Inc., reported its fourth-quarter and annual financial results for the period ended December 31, 2005. For the fourth quarter of 2005, the company reported that net income rose 5.5 percent from the fourth quarter of 2004 to $23.1 million, or $0.26 per share, on revenues of $238.6 million. For the fourth quarter of 2004, the company reported net income of $21.9 million, or $0.24 per share, on revenues of $223.4 million.

"In addition to increasing shareholder value, we set new records for both revenue and earnings, while operationally we further strengthened our management team. Strategically, we deployed more than $84 million of capital in order to broaden our geographic footprint, improve operations and enhance our customer service offerings,” said David Gartzke, ADESA chairman, CEO and president.

For the fourth quarter of 2005, the company reported a 6.8-percent increase in revenues to $238.6 million, compared with $223.4 million in the fourth quarter of 2004. The $15.2 million increase in revenue was primarily due to higher revenue per vehicle sold, benefits from recent acquisitions and Canadian currency translation, which favorably impacted revenue by approximately $1.9 million.

Net income for the fourth quarter was $23.1 million, or $0.26 per share, compared with net income of $21.9 million, or $0.24 per share, in the fourth quarter of 2004. For the quarter ended December 31, 2005, the company had approximately 90.0 million shares outstanding on a weighted average diluted basis, compared with 92.4 million shares for the same quarter in 2004.

Fourth quarter 2005 operating profit for the company's Auction and Related Services (ARS) segment increased 6.8 percent to $29.7 million, compared with $27.8 million in the fourth quarter of 2004. Due primarily to selective fee increases – driven in part by higher wholesale used-vehicle prices, higher transportation revenue, and favorable Canadian currency translation – revenue per vehicle sold for the ARS segment increased to $460 compared with $430 for the same quarter in 2004. The higher transportation revenues and favorable Canadian currency translation had corresponding increases in cost of services.

Due primarily to a decline in loan transactions (down approximately 3 percent to 260,000), the company's Dealer Financing segment reported a slight decline in fourth-quarter operating profit to $18.3 million, compared with $18.4 million in the fourth quarter of 2004. Fourth-quarter 2005 operating profit was also impacted by certain legal, transaction, and employee training, travel, and relocation costs. Revenue per loan transaction for the quarter increased seven percent to $123 from $115 in the fourth quarter of 2004.

For the year ended December 31, 2005, the company reported revenue of $968.8 million and net income of $125.5 million (or $1.39 per diluted share), compared with revenue of $925.5 million and net income of $105.3 million (or $1.15 per diluted share) in 2004. Relative to 2004, Canadian currency favorably impacted revenue by approximately $13 million, while net income for 2005 was negatively impacted by incremental interest and corporate expenses of approximately $11.8 million, or $7.2 million net of tax.

Financial results for 2005 included debt-refinancing costs of $1.5 million net of tax, or $0.01 per diluted share, as well as a loss from discontinued operations of $0.6 million net of tax, or $0.01 per diluted share. In 2004, the company incurred debt prepayment and certain transaction-related costs of $10.3 million net of tax, or $0.11 per diluted share, as well as a loss from discontinued operations of $3.7 million net of tax, or $0.04 per diluted share. Excluding these non-recurring costs and results of discontinued operations, the company would have reported 2005 earnings per diluted share of $1.41, an 8.3 percent increase as compared with diluted earnings per share of $1.30 in 2004. For 2005, the company had approximately 90.3 million shares outstanding on a weighted average diluted basis, compared with 91.5 million shares in 2004.

Excluding approximately $0.03 per diluted share resulting from the adoption of Statement of Financial Accounting Standards ("SFAS") 123, Share-based Payment, ADESA expects 2006 income from continuing operations to be approximately $137 million to $143 million resulting in diluted earnings per share from continuing operations in the range of approximately $1.50 to $1.58.

Including the impact of SFAS 123, the company expects 2006 income from continuing operations to be approximately $134 million to $140 million resulting in diluted earnings per share from continuing operations in the range of approximately $1.47 to $1.55. EPS ranges are based on an estimated weighted average diluted share count in the range of approximately 90.5 million shares to 91.5 million shares.