Before Jim kicks off our discussion, I would like to remind you that this conference call contains forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties that may affect KAR's business, prospects, and results of operations, and such risks are fully detailed in our SEC filings.In providing forward-looking statements, the company expressly disclaims any obligation to update these statements. Also let me mention that throughout this conference call, we will be representing both GAAP and non-GAAP financial measures. Reconciliations of the non-GAAP financial measures to the applicable GAAP financial measure can be found in the press release that was issued yesterday, which is also available in the Investor Relations section of our website. Now I'll turn the call over to Jim. James P. Hallett Great. Thank you, Eric, and good morning, ladies and gentlemen, and thank you for joining us today. Really 3 topics that I would like to cover. First, I'd like to give you an overview of our first quarter performance outlook on the wholesale used vehicle market. And then following Eric's comments, I would like to come back to you and give you an update on the OPENLANE integration process and how that's going. First taking a look at KAR's first quarter performance, KAR was able to achieve 5% revenue growth and all of our segments were up over last year. We continue to maintain very strong gross margins, and Eric will provide more detail on that in his commentary. And I believe that the company is well positioned for growth. We've done a good job of controlling our direct cost and holding our SG&A line steady other than the SG&A costs that are associated with the integration of OPENLANE.
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