Auto salvage firm on expansionary course, files for new stock offering.

Insurance Auto Auctions Inc. last week filed with the Securities and Exchange Commission to offer an additional 900,000 shares of common stock. At today's going rate on the NASDAQ for IAAI shares, the offering would raise about $26 million, which will probably be slated for acquisitions.

Concurrently, the North Hollywood-based company announced that Robert H. Kenmore resigned as chairman of the board and a director.

Kenmore said he is leaving to devote more time to the privately held merchant banking firm Equivest, where he serves as company president. However, he said, he has also entered a seven-year consulting agreement with IAAI.

Officials of IAAI said the company "provides insurance companies with a means to process and sell total-loss and recovered-theft vehicles."

Specifically, IAAI sells salvaged vehicles, depending on their condition, to "dismantlers" (scrap dealers), body shops, used car dealers, hobbyists and registered buyers, according to Executive Vice President William Liebeck.

Company officials said IAAI is the only publicly traded company in the "$3 billion per year" automotive salvage industry. The $3 billion estimate was compiled by company officials from a number of sources, according to Liebeck.

IAAI posted revenues of more than $60 million in 1992, up 45 percent from $41.8 million in 1991. Net earnings were $4.38 million, or 61 cents a share, in 1992, compared with an $11.7 million, or $3.13 per share, net loss in 1991.

First-quarter earnings for 1993 almost doubled to $1.2 million, or 15 cents per share. Second-quarter earnings had not yet been released as of press time.

On June 17, the company announced it had acquired two automobile salvage operations in Arizona and Oregon. Some $6.5 million in cash, stock and notes changed hands to acquire the assets from American Insurance Auto Auction and West Coast Auto Auctions.

Earlier, in March, IAAI bought Orange County Salvage Sales Inc., the largest automotive salvage operation in Orange County, for $13 million.

In 1992, IAAI spent more than $20 million on mergers and acquisitions. IAAI spokesman Bob Spence said the takeovers are "consistent with our objective to expand throughout the Western United States."

"We're always looking," confirmed William Liebeck, adding, "That's the primary use of funds for this offering."

IAAI has 15 salvaged auto sites in California, Oregon, Arizona and Hawaii.

Following the announcement of plans for a new issue, IAAI stock closed at $28.88 per share. It had reached a 52-week high of $31.50 on June 29, on a volume of 181,875 shares, about twice the stock's average daily volume in June, according to NASDAQ.

Wall Street analysts offered bullish appraisals of the stock.

"They're making acquisitions; their business is growing," said analyst David Armstong, who follows the stock for Filemark Research. "I can't think of anything wrong."

Ed Keon, spokesman for Institutional Brokers Estimate Service, noted that four analysts contacted by his firm predicted IAAI's earnings at a mean of 79 cents per share for 1993 and $1.07 for 1994.