KAR Auction Services, Inc. (NYSE:KAR) Q2 2019 Earnings Conference Call - Final Transcript

Aug 07, 2019 • 11:00 am ET


KAR Auction Services, Inc. (NYSE:KAR) Q2 2019 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the KAR Auction Services, Inc. Q2 2019 Earnings Conference Call. [Operator Instructions] Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]

I would now like to turn the conference over to your host, Mr. Michael Eliason, Treasurer and Vice President, Investor Relations. Sir, you may begin.

Michael Eliason

Thank you, Valerie. Good morning and thank you for joining us today for the KAR Auction Services second quarter 2019 earnings conference call. Today we will discuss the financial performance of KAR Auction Services for the quarter ended June 30th, 2019. After concluding our commentary, we will take questions from participants.

Before Jim kicks off our discussion, I'd 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 last night, 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?

James P. Hallett

Thank you, Michael, and good morning, ladies and gentlemen, and welcome to our call, and I'll say welcome to our first call with the new KAR. I want to start by outlining my agenda for today what I plan to cover. I want to review the results of the spin-off of Insurance Auto Auctions, update our outlook for 2019, highlight the strategic focus of KAR as a smaller and more focused enterprise, review how we plan to deploy capital in the near term and our capital allocation priorities for the future, and I will spend a few minutes discussing my priorities for M&A targets as well.

As you know, we successfully completed the spin-off of Insurance Auto Auctions on June 28th. Primary motivation for completing the spin was to unlock shareholder value that we felt was not being recognized within KAR, and after one month I believe it's clear that we have accomplished our objective of unlocking shareholder value. As we have previously discussed, the separation of KAR and Insurance Auto Auctions will allow each enterprise to focus its attention on its respective core business.

In the case of KAR, we're focused on remarketing used vehicles. And I believe that we are world-class in the remarketing of vehicles and everything that we do in our business should contribute to remarketing vehicles. We expect our operating decisions, our allocation of capital, and our M&A targets to align with our