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KAR Auction Services' CEO Discusses Q1 2012 Results - Earnings Call Transcript

But more importantly, and what management continues to focus on is this company continues to be a very strong generator of free cash flow. In fact, Eric will be telling you that we've repaid our revolver, and that has been done ahead of schedule.

So as we look at the business units starting with ADESA, overall volumes at ADESA increased 9% and that did include the OPENLANE volumes. Without the OPENLANE volumes, volume at ADESA was down 6%.

And just a couple of words of caution. I think we need to be careful when we're analyzing the ADESA volumes. We're now selling vehicles at OPENLANE that were previously sold at ADESA. And as we say the lines between ADESA and OPENLANE are starting to blur. And the most important thing is that we continue to sell as many vehicles as we can, and have always maintained it's not up to us to dictate where the car gets sold, whether it be on the Internet or at a physical auction, let's just get the most car sold.

So another thing that I would caution you on is when you look at the quarterly industry data, the quarterly industry data does not provide a complete picture of the industry performance. This quarterly data include certain projections and excludes certain volumes, particularly online closed sale volumes, such as those from OPENLANE, ADESA and other competitors. We're somewhat restricted by confidentiality agreements and the nature of their reporting whereas I'm much more confident in the year end NAAA industry survey which is a survey of all NAAA auctions, which is purely based on the volumes that are being reported rather than the detailed information that the customers don't want us to report. So hopefully that all makes sense.

With that said, I do feel ADESA's first quarter volume trends are very consistent with the industries, if not even a little bit better. I'm particularly pleased with the Dealer Consignment segment. Dealer Consignment is up 16% versus the prior year. And Dealer Consignment continues to help offset the softness that we're seeing in commercial volumes.

I think the work and the resources and the effort that we've put in place in reference to Dealer Consignment over the course of the last 3 years is paying dividends today.

Read the rest of this transcript for free on seekingalpha.com

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