Good day, ladies and gentlemen, and welcome to the KAR Auction Services Q1 2019 Earnings Call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to introduce your host for today's call, Mr. Mike Eliason, Vice President of Investor Relations and Treasurer. Mr. Eliason, you may begin.

Thanks, Sheree. Good morning, and thank you for joining us today for the KAR Auction Services First Quarter 2019 Earnings Conference Call. Today, we'll discuss the financial performance of KAR Auction Services for the quarter ended March 31, 2019. After concluding our commentary, we'll take questions from participants. 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. Lastly, let me mention that throughout this conference call, we will be referencing 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 we issued yesterday, which is also available in the Investor Relations section of our website. Now I'd like to turn this call over to KAR Auction Services CEO, Jim Hallett. Jim?

Thank you, Michael, and good morning, ladies and gentlemen. Welcome to our call. My agenda for today's call will include reviewing our first quarter financial performance, discuss some of the trends that we're seeing in the first quarter and how we see those playing out throughout the balance of the year, provide you with an update on TradeRev, walk you through our plan and our timing for executing the spin. And then we'll wrap up with discussing capital allocation, including our second quarter dividend. But before I get started with the financial performance, let me start with telling you that for the quarter, we were on target with our budgets. And from the get-go here, I am reaffirming our full 2019 -- our full year guidance for 2019. So with that, I'll turn to the financials. Revenue of just over $1 billion was up 10% over the prior year. Adjusted EBITDA was $231 million, up 1%. In terms of how the first quarter matched up against our expectations, we saw revenues come in a little better than our first quarter budget. Our adjusted EBITDA was very much in line with budget. In terms of the segment performance, we reported 6% revenue growth and 8% adjusted EBITDA growth at Insurance Auto Auctions. We had 6% revenue growth and 3% adjusted EBITDA growth at AFC, and ADESA had 14% revenue growth with a 7% decrease in adjusted EBITDA. About half of the decline in adjusted EBITDA is directly related to the increased losses at TradeRev. The remainder of the decline reflects the mix of revenue in the profitability of various revenue sources for our physical auctions. Lower sales volumes in all of the ADESA auction channels in the last half of January and all of February was certainly a drag on our…

Thank you, Jim. I only have a few topics to add to the conversation today. First, let me walk you through our guidance. We expect adjusted EBITDA of $935 million to $970 million for 2019. We continue to expect net income per share of $2.46 to $2.65, and operating adjusted net income per share of $2.90 to $3.09. In our earnings release yesterday, we provided additional items of guidance that I will not walk through on this call. I will let you know there were no changes in any of those items provided in the earnings release. In terms of our financial performance, we saw a reduction in our gross margins at ADESA that weighed on our consolidated performance. There are 2 major contributors to the decrease in gross margin at ADESA. The first is the accounting for purchased vehicles related to ADESA Assurance and certain cars on the web transactions. The ADESA Assurance program allowed dealers to purchase vehicles online and return the vehicle within a specified period of time, and we return the market value to the dealer. ADESA will then sell the vehicle at auction, and we are required to record as revenue the purchase price of the vehicle plus any buy fees as revenue. We also record the amount returned to the original purchaser as cost of services in our financial statements. The revenue and cost of services for both ADESA Assurance and CarsOnTheWeb are a pass-through, and this caused a 190 bp reduction in gross margin at ADESA. Revenue per unit sold at ADESA increased in the first quarter. We had online only RPU of $144, a 23% increase. This increase was driven by increased TradeRev volume and an increase in open sales on the OPENLANE platform. Physical auction RPU increased 7% to $875 in…

[Operator Instructions]. Our first question comes from John Murphy with Bank of America.

So when we look at ADESA, and I appreciate there's a lot of moving parts with the acquisition here. But Jim, you've mentioned that half of the pressure on ADESA or the 7% decline in EBITDA was a result of TradeRev and half was for physical. So it sounds like there was something else going on at physical that may have pressured the margins. But I mean, when we look at this, I mean, as far as the physical volume, the institutional mix, the conversion rate, the RPU, I mean, everything looks very good from the operating metrics standpoint. So it's kind of hard to tease out sort of the pressure we're seeing from assurance and CarsOnTheWeb. And I'm just -- I don't know if you can give us any more sort of a walk there because, I mean, we're just not getting back up the sort of normal levels that look reasonable there?

John, let me start with the numbers, and then Jim will make some comments about the marketplace. Ironically, the first quarter -- many times in the fourth quarter, we see lower volumes running through our auctions and selling and high use of our facilities as they're preparing vehicles for sale in the first quarter. The slow retail activity in January and February that was experienced throughout the market caused some of that same phenomena. We were getting a lot of off-lease cars in, doing a lot of work on them, which gave us revenue. And those cars are going to sell later, and that's the high-margin business. So that's why we have such strong feelings about the margins improved in March when the cars started selling at a greater pace. And in fact, it's continuing into April.

Yes. John, there is not much that I can add to that. I've always said in the past, I'm not going to use weather as an excuse for performance. But I can tell you, I think we can all recall that the last couple of weeks of January and February, we went into a polar vortex, as they say. And basically, retail really shut down for a good period of time. And we didn't see that come back until sometime in March. And as Eric mentioned, March -- we're very, very pleased with our March, and we're quite pleased with what we see going forward here in April.

If I could clarify, CarsOnTheWeb was not a drain on EBITDA. It did influence revenue. And ADESA Assurance influenced revenue as well but was not a drain on adjusted EBITDA either.

Okay. So if we think about it, it sounds like sort of a backlog of cars on auction lots that are ready to go that will get cleared out. Is there any way to sort of dimension sort of the inventory or the backlog? I mean insurance Auto Auctions, you said there was a 10% increase in inventory. Is there anything like that on the ADESA side that you can give us to kind of understand the magnitude of what might flow out in the coming months?

No. Again, the cars on the lots and ADESA aren't there more than a few weeks, and so we've never focused on that number. I will tell you, our lots our full. Our lots have been full actually for most of this year. We have a number of lots over capacity. But the reason we don't give a specific inventory number, it's only the commercial cars that sit there a long time, many cars come in, it's not a good indicator of volume in the short term coming up. But I will say the lots were full, and that's the evidence. The other thing I'll add to that is we're continuing to see a large number of off-lease cars being returned. And the reconditioning work is very popular. And there were some information in an industry magazine this morning talking about cleaner cars are being sold at auction because the retailers are demanding it.

Okay. And if I could sneak in one follow-up on the spin. The transition costs or the stand-up costs on -- either on the Insurance Auto Auctions side and then what stranded cost might be on the ADESA side, can you put a sort of dimension on those for us just so we could have an understanding sort of as the companies get split what we should think about there?

Yes. And again, in the Form 10, we provide in the past and it hasn't changed. There is about $15 million in incremental costs to the IAA segment that they will bear. About half of that cost though is being allocated to them in the Form 10 from -- with KAR, and that's the cost that in essence will disappear from Remainco once they stand up and we no longer have to provide the support services. So it's roughly half of the $15 million -- is already incurred through KAR. We'll move over to them once they stand it up and disappear from the IAA SG&A.

Our next question comes from Chris Bottiglieri from Wolfe Research.

Thanks for the Color on TradeRev. Want to follow up a little bit there. Is there a way to -- the 200,000 units would still be a pretty massive sequential acceleration throughout the year. So I was wondering if there's maybe a way to contextualize April's growth relative to like the monthly average for Q1 to kind of assess the cadence you're on now.

Well, I think that what you're saying is you're seeing more retail activity, you're seeing more opportunity for inventory through the trade-in process, and also you're seeing us continue to open new markets. I think on the last call, we told you that we're currently at 125 markets, and our goal was to get to 175 markets through 2019. And without getting into the weeds, we're very much on track to continue to open those markets as we go forward. And just a good indicator I think was the fact that we actually were selling -- and I know it was one day last week that I mentioned, but when you start selling 1,000 cars a day, it starts to create a lot of confidence within the team. And I think that's really, really driving the enthusiasm for what we see going forward here in April and as it plays out throughout the balance of the year.

And Chris, just to add, the first quarter volume was up 42% over the prior year. It was -- it just wasn't sequential growth. We are seeing in April very strong performance in many of the new markets we've entered. That's what's driving 1,000 cars in 1 day. And the growth rate in April was much stronger than the months we saw in the first quarter.

That's really helpful. And then just a follow-up to that. You mentioned acquisition activity as part of capital allocation as you think through that. I was wondering kind of maybe you can give us a sense for where you'll be looking with the dealer-to-dealer market, like TradeRev competitors be one area where you'd be looking to acquire. Any thoughts there would be helpful.

Yes. Chris, I would say that in terms of capital -- or in terms of acquisitions, I would remind you of what we spoke previously about where our focus is. We continue to be focused on the international markets and growing out our international platform. And then the other area that we continue to focus on is this whole area in terms of online and digital selling. That space we will continue to look at acquisition opportunities in that space. With that, I've got nothing to share with you today.

Our next question comes from Craig Kennison with Baird.

I want to start on TradeRev, that 40% growth metric. To what extent is that driven by better engagement for users that have been on the platform for the last year? And to what extent is that a function of adding new dealers? What's the bigger driver?

Yes. So Craig, I think it's kind of a combination of those things that you spoke about. Number one, there is no question that just organically, the longer the dealers are on the platform, the more familiar they become with it and their management teams become with it -- become familiar with it. That certainly helps drive growth. And then getting out and visiting with other dealers, being in the marketplace, introducing the product, sending our people out to teach them how to use it and how to launch it and just getting them more familiar with it, adding new dealers to the platform, adding new markets. I had the opportunity to be in the Florida market this past weekend, I spent some time with some dealers there and really having that discussion, change is difficult. And changing habits and old habits is difficult. And just talking about -- just talking with dealers just about if you need help that we have people that can come in and we can train your people, we can have people come and help you launch your inventory. It's all of those things, I think. You got to understand that we're taking in basically a new product to market here. And dealers are creatures of habit, and we just need to help them break through those old habits.

And Craig, let me be clear on one thing. New markets would be a different contributor than adoption rate in existing markets in the growth -- year-over-year growth.

Right. And sort of understanding those 2 big drivers, does it change how you structure your incentives? In other words, do new users respond to different incentives than your existing base?

I think that the big incentive is obviously transportation. It's nice that we can offer the inspections, and we can offer the financing, and we can offer the transportation, but I think the one that dealers are most focused on is transportation. But what the team has done there, the leadership team has really sat down and really tried to understand the transportation in terms of where is it being most effective. And being most effective sometimes, as an example, it may not make sense to ship a car 1,000 miles across the country. And where do you get your best bang for the buck on those incentives, and getting more focused on maybe the local market and maybe shorter distances. Those are some of the things that we've kind of walked through with the TradeRev management team in terms of what are the incentives that are really impactful and then how do you best use those incentives. And it's not a one size fits all.

Our next question comes from Gary Prestopino with Barrington.

Jim, you went through some things that you said you adjusted on TradeRev in terms of the incentives. Can you just go through that again? I didn't quite -- was able to write it all down.

Yes. Well -- go ahead, Gary.

No. Go ahead, go ahead.

Okay. So the biggest thing that we looked at is, we've really looked at the incentives, and particularly the transportation incentives and really where was the sweet spot in terms of that transportation. And in some cases, it didn't make sense to be shipping cars, as I said, 1,000 miles across the country. And where is the sweet spot and where are we getting the best return on that? And that's one of the big areas that we looked at. Eric?

Yes. And Gary, what we did is we focused on what's the distance that a car is transported to get the highest value. Obviously, it does no good in a local market to have a dealer buy, shipping a car 2,000 or 3,000 miles if he's not going to be a regular participant in the market. So we focused, and therefore, we may provide some support. But the closer you get to the market, the more we're willing to pay of the total bill for the transportation. And then it weans it off as you get further away. And one of our focuses was actually to control the cost to TradeRev, the high cost going to one-off sales. Let's build a customer base, give a little bit to a lot more transactions rather than a lot to single individual transactions. So it's a very sound methodology they deployed, and looking at the sweet spot provide more if you're transporting, let's say, 200 to 400 miles versus 1,000 to 1,500 miles.

Okay. And you're still seeing the mix of buyers of the TradeRev vehicles as being independent dealers and the suppliers being more of the franchise dealers?

Yes. For the most part, Gary. There are some exceptions to that, but the primary sellers are the franchises and as you mentioned, the independent dealers are -- strong buyers as well as franchisors are buying off the platform as well.

Our next question comes from Stephanie Benjamin with SunTrust.

I just wanted to follow up a little bit on ADESA growth margin, and I apologize if I missed some of what you said. But I'm just trying to think through as it gets clear in terms of there was a reduction due to the accounting for ADESA Assurance and a little bit of CarsOnTheWeb and then also the lower-margin ancillary services. That's nothing new. So I'm trying to think through how we should think about gross margin going forward. Is it the fact that we should see lower -- less of an impact from those ancillary services because of maybe a backlog of actual auctions that you mentioned are at the quarter? And then how should we think about that -- the ADESA Assurance impact going forward?

Yes. So Stephanie, good question. The impact of purchased vehicles. Just that ADESA Assurance was the bigger one, but CarsOnTheWeb also has some vehicles where we don't really purchase it, but we are at risk during the period from which the car is bought online before we can begin the processing due to VAT over in the multiple countries we operate in. That was 190 basis points. That will be a permanent change as that's part of our programs, and we'll see the margins decline because we're grossing up revenue and cost of services. The other, the 200 basis points, I think I would call -- I think your industry calls it transitory. It's a temporary situation, and I think you'll see that mix reverse to where we'll see, again, a greater impact from the Auction Services revenues and now to bring the margins back up. And I think that is temporary. With that said, you know our effort to provide additional service even off-premise. We are growing that business separately, but I think the impact on this quarter was more of a temporary. But over time, we are willing to take more revenue at a lower margin as we see the marketplace change with all the fleets and the different ride-sharing and car-sharing opportunities.

Great. And then I think you also mentioned that TradeRev's gross margin improved as well during the quarter. And again, I apologize, my phone was killing in and out, but could you talk a little bit about that unless I didn't misinterpret it entirely?

Yes. Last quarter, we've made a comment that we see in a mature situation, the TradeRev gross margin as being 75% or better. And that's consistent with the online marketplace. That's what we said. We're not quite there yet, but I will tell you, we're very close. We've brought it up substantially with the change in these incentive programs. And we're seeing margins, again, across all the cars sold that I think -- again, they're greater margin than we see in the physical auction business for a dealer consignment car as a percent of revenue. And the other thing is the revenue per vehicle sold has also increased. It's really a great direction to the point where I would say, if the car sells on TradeRev versus physical auction, I'm not sure there is a difference in the ultimate gross margin dollars we're realizing at this stage.

Our next question comes from Daniel Imbro with Stephens Inc.

I wanted to follow up on the last few questions. Obviously, mentioning kind of dialing back the incentive program at TradeRev. Have you seen any competitive responses in that market as you've done that? Are your peers dialing that back? And then Eric, you just mentioned RPU, if I recall part of what drove up RPU, you are taking up some pricing at TradeRev to offset these incentives. Have you been able to hold on to those RPU increases as you dialed back these incentives?

So Daniel, I'll take the first part of that, and then I'll let Eric take the second part of that. In terms of competitors in the marketplace. Certainly, we get the anecdotal feedback and we listen to our dealers, and we talk with our sales reps and people in the field, and we generally know what's going on with the competition. But for the most part, we know there are good competition in the marketplace, but we're really focused on what we're doing and the value that we can deliver to our customer. And it's not just about being in the market with the technology, but it's about building out a real infrastructure to continue to support these -- this market segment going forward. We talk about the 5 million cars. And so it's -- yes, technology gets the transaction done, but we talk about our transportation, we talk about our finance, and we talk about our inspections. We talk about the other services that we offer in terms of how we take care of payment and how we take care of title, how we take care and handle arbitrations. Just -- there is a lot more than just selling the cars off. And those are the areas that we're focused on is, as I said in an earlier comment, I guess with -- in another conversation I said, our goal is not -- this is not a sprint. This is a marathon. And we're looking to win the marathon. We're looking at the long-term value that we can create here, and we think we have the assets that create that value.

And then specifically to RPU. The increase is because the TradeRev team recognized that the dealers value this transaction and were willing to pay more for it. Separately, though, the margin went up in part because we were also then able to package the incentives and reduced our costs on executing the transactions with lower transportation and support that we provide to them. But the RPU is sticking because of the value of the transaction they're willing to pay for it when they find the cars that they want to buy, and then the margin goes up when I can reduce the incentives. It had -- it did not influence what they were paying.

Okay. Got it. And then just as a quick follow-up to that. We're seeing the RPU sustaining, and I think you mentioned a minute ago, Eric, that we're seeing gross margins already pretty close to that 75%. But we still saw losses, kind of, call it, $17 million in the first quarter, so call it on track for your full year losses. Do you know what's driving that loss? And how that's going to get better as we move through the year? Is it just the scale? Or what's going to drive the improvement in profitability if we're already there on the gross margin side?

It's the cost of the field staff, the TradeRev [indiscernible]. Again, this is hand-to-hand combat, I'd like to say. Where they're out there with people talking to dealers, it's the training, it's the sales support team that's behind the scenes. All the people that are doing the work, entering images and helping the dealers to all of that. So the field team or -- the SG&A cost that I talked about was a big driver of it. And what's exciting is, as the volume picks up, which I am confident it will, that's going to offset some of that cost in future quarters because I think we've had the growth of the expense ahead of what revenue it generates and that's normal in a new business. So we will start to absorb some of that with this increased gross margin on a per-car-sold basis.

Our next question comes from Bret Jordan with Jefferies.

As you got a bit more experience, I guess, pitching against ACV. How's the dealer response to using both of them? Are you seeing that they are open to two platforms? Or is it usually focusing on one?

Yes. I think that -- I think where you see it, Bret, is that you see that buyers tend to look at both platforms. I think dealers tend to sell on one platform. And that's just -- again, I don't have a lot of factual information around that, but that's kind of the feedback that we're getting in the market that they'll pick one or the other to sell, but buyers will go anywhere they can to get a car.

Okay. And then as far as dealer ramp goes. Yes, you've got labor out there, you're helping them upload and train them to use it. Are they usually sort of weaning themselves off your labor and doing it themselves? Or do you have to stay with them fairly long now?

Yes. We're finding that we're having to stay with them for a longer period of time. It's different dealer to dealer. And we have some dealers that probably don't need the help quite to the same extent. But for the most part, that was a decision that we made in our strategy with the leadership team at TradeRev over the course of the last year or last 7 or 8 months is really having that person there to, if you will, hold their hand, and assist them and continue to get them through this transformational change.

Okay. And then final, what are you seeing sort of the average profile of a TradeRev car? Maybe what its value is compared to the average ADESA car?

Yes. It's somewhere in the order of $6,000 to $7,000.

Our next question comes from Bob Labick with CJS Securities.

Obviously, a lot of color on TradeRev. So thank you for that. I figured I'd jump over and ask a question on IAA because obviously a big part of the company as well.

It's just a little part of our business we ought to talk about, right?

Yes. Why not. So I guess two questions. First, you have very nice price capture, about 5% in the quarter. So I was wondering, if you could expand on the thoughts going forward for that. And then Jim, you mentioned 1% volume obviously in this quarter but then a good inventory growth. And then you mentioned 5% to 7% growth. Was that volume growth you're anticipating, 5% to 7%? Or is that price plus volume? Because you were obviously there with the 1% and the 6%.

Yes. So Bob, we're -- I was talking volume growth of 5% to 7%.

Okay. Great. And then do you think the -- so talk about the drivers of the 5% price, please. And how sustainable that is going forward?

Yes. Well, one of the things that we're seeing is that when you think about the drivers of that business, we're seeing more and more vehicles being written off as a percent of total accidents. As a matter fact, in the quarter, that was at 19%, right around 19% of all accidented cars were declared in a total loss. And that comes down to what we talked about in terms of the sophistication of these vehicles with all the new technologies, there's a tendency to write-off more -- of more and more of these cars. And it tends to be a higher-dollar car. And as a result of higher-dollar car, that's driving proceeds overall. You think about the other things that drive that business and they all tend to be tailwinds right now. Talking about miles driven, you're talking about our international buyer base, talking about scrap metal prices. All -- to a certain extent, all of those things are kind of playing a role. But when you get these 5 or 6 different drivers, all the kind of tailwinds at your back, they add up to driving the overall proceeds for vehicles. Eric, would you add anything?

The only thing -- and then we realized that through the increased buy fee. The 5% came from buy fee increases as they're paying more on average for the vehicles they're acquiring, to Jim's point.

Got it. Okay. Great. And then if not now obviously, I guess, it would be soon but I guess I'll ask. In terms of capital allocation and dividend and uses of free cash at IAA, how much can you tell us about expectations going forward?

Yes. So really, we need to wait until the spin actually happens. And we have a Board in place and the management team and the new Board will really set that into motion. And I think it's a little bit too early for us to comment on that. Although, obviously, we're preparing to get those things in place at the time of the execution of the spin. Eric?

Yes. It will be a decision by the new Board as to what dividend policy is. And so until the spin occurs, we will not be providing any information on what they intend to do because we don't know.

Our next question comes from John Sykes with Nomura.

My question is a little bit tied in with the last question. But I was just trying to get -- really get a sense as to what sort of the free cash flow of the existing business will be. And the reason for that is when you look at Moody's, they've got it on watch negative. And I guess they're looking, too. They want to see what ends up kind of happening. But let me ask this to the degree that you continue to generate a decent amount of free cash flow, how much of that's going to go to deleveraging the existing business versus shareholder initiatives?

So John, this is Eric. The first and foremost, I -- as I mentioned in the comments, the entire proceeds of the capital raised by IAA will be distributed back to Remainco. And Remainco as part of the tax-free reorganization, we are using all of the proceeds to repay existing debt. So the leverage level at Remainco will be lower than the spin. We have begun the rating process. Again, in the next couple of days, we'll launch the debt transaction and part of that process is they do ratings of Spinco, but they're also looking at Remainco. And I am confident we've answered the questions that might have caused them to put us on credit watch. And we'll see how they come out, but I think we've answered their questions now that they see the proceeds are going to be used to repay debt, I think that's a positive.

[Operator Instructions]. Our next question comes from Derek Glynn with Consumer Edge Research.

Just following up on the commentary around total loss frequency. Just based on the C2C data you've disclosed over the years, total loss has been fairly increasing year-over-year. Just curious if you think there is any level where that total loss rate may actually top out?

Yes. Great question and a question that we often get asked. Quite frankly, we just stepped back 3 or 4 years. Total losses were around 13%. And we watched them grow. And I think Eric and I have had conversations as where does it get to? And we always thought, well, maybe the peak is 20%. But now when you're at 19%, you're knocking on the door of 20%. It's a little bit of a guessing game, but we think there is opportunity for it to continue to grow. But certainly, as you know, from history, I got over that predicting game many years ago. So with that, at 19%, we always felt 20%, maybe grow a little more than that. Eric?

Maybe a little bit 20%. Who knows? At some point, though, they will top it out because the value of the car is in the replacement parts, and there needs to be a robust collision repair industry to use those parts. So I still think that there is a level at which there will be more cars repaired by a significant number of than cars totaled.

And I'll just maybe reinforce my earlier comment. As we're seeing these vehicles get more and more complex, more and more technology, and then you start thinking about how they talk about cars into the future, I think it only increases the opportunity to maybe right the vehicle off for 2 reasons. Number one, from a financial repair standpoint, but also I'm sure there's going to be legislation around what can be repaired and what can be replaced. And those sorts of things will play into it as we go forward.

Got it. And then just separately on AFC. The provision for credit losses came in a little lower than we were expecting. What were the puts and takes there during quarter? And how should we think about that trend through the remainder of the year?

Yes. I think AFC pretty much operated -- it follows the retail activity. I think -- well, I know our loan losses were at 1.6%. That was pretty much exactly the same as it was a year ago. So loan losses were very much in line with our expectations. I think that AFC performed to the retail market. Eric?

Right. And we did get a little growth in the portfolio that was probably a little better than a year ago in the first quarter. And that's not driven by the number of transactions. As you can see, we were down 1%, but the average loan balance has gone up as the value of the vehicles has gone up. And the truth is, that's good for our credit profile because those cars are high likelihood of selling as they get up in value. So I think that's really what's contributed to -- again, it was flat, but despite a 1% decline in volume -- number of loan transactions.

Speakers, I am showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Jim Hallett for any closing remarks.

Thank you, Sheree. First of all, ladies and gentlemen, I want to say thank you for being on this morning. Thank you for your continued interest in our company. I'll just make a couple of comments. As the -- the first quarter was, as I said at the outset, it was as we expected. However, I would say that there was some choppiness to it that we spoke to. And I also mentioned that TradeRev got off to a slow start, but I want to reassure you that I am extremely confident that we will deliver on what we said we would deliver on, and we will reach our goal of selling 200,000 cars on TradeRev platform in 2019. So early inning, maybe a little bit slow. But I think we're catching up fast as we moved into March and April and going forward. So with that, I'm also pleased to make sure there's no confusion. We are doing a spin. And it's going to happen, and our plans are that, that will happen by the end of June. So thank you for being on, and we'll look forward to catching up with you as things develop. Have a great day.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may all disconnect, and have a wonderful day.