CPRT - Earnings call transcript Q2 2019

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Operator

Good day, everyone and welcome to the Copart Incorporated Second Quarter Fiscal 2019 Earnings Call.

Just a reminder, today’s conference is being recorded.

For opening remarks and introductions, I would like to turn the call over to Mr. Jay Adair, Chief Executive Officer of Copart Incorporated. Please go ahead, sir.

Jayson Adair

you. Thank and second everyone Copart. call to welcome morning, quarter the for Good

so turn Jeff have the is then on Vice and questions Franklin, to today with Will any President. to answer then that over Liaw, going On time. much. us me All operations Will Franklin Jeff will call Jeff? an comments for right Liaw opening CFO at give and thanks I'm we'll we it and happy to update that Executive be

Jeffrey Liaw

Thanks, Safe Jay. Harbor. start with I'll the

on the described comparable measures these analyze financial press yesterday tax non-GAAP today’s these non-GAAP the for During the and business assessing afternoon. losses, results changes and performance. in We to which trends Relations presentation financial certain release benefits GAAP measures to together income measures, related non-GAAP net We non-operating the option call, our under reconciliation tax to effects of and stock above. and adjustments our basis on GAAP gains issued both believe most share, impact directly diluted the Investor link of GAAP our including the of of website assets, foreign is we'll deferred taxes Copart’s discuss income accounting relevant We've foreign-currency-related repatriation of the provided disposals and of certain exercises. a on earnings, non-GAAP with income non-GAAP of measures, measures, in includes reverse our per net corresponding

that actual to from those implied comments. time this made federal not on statements behalf. and meaning by subject We from substantial that be of securities cause projected to call laws, any within results uncertainties are addition, our may contains update to forward-looking time the materially undertake to or and In our statements which risks do differ statements forward-looking could

reports that analysis the filed complete in our more a of discussion periodic and business, related discussion SEC. portions the review our management’s could risks with affect the For please

Now with will of our profits revenue. gross related Harvey. income, over key communicate dollar with storm I primarily operating the our of quarter the second Brazilian the Real. to this fiscal were Hurricane second operating foreign Harvey without effects operating XX attention by first the a X.X% QX and quarter nominal course with fiscal to make global unfavorable a incurred fiscal the million year-over-year metrics starting to a I'll our revenue it of of in also disproportionally nearly two second isolation, results. basis. the turn with those our we pleased storm first pounds months losses quarters due with We our while distorted an that $X.X of a revenue, captured call to operations an I'll start the of six comparison and XXXX the in in Hurricane gain quarter first XXXX. from We're the on over would million of we effect of strength relative XXXX reflect the point currency related of XXXX disproportionally captured record growth costs achieved quarter because of and reminder

the Excluding revenue Harvey growth of was XX% effect even. Hurricane our

business more looking again growth activity. revenue service to Harvey and XX.X%. revenue global year-over-year typically indicator We revenue accurate excluding of the as Hurricane X.X% growth was Our was service suggest and service underlying

of relatively Our the $XX.X at small A between equally split our Germany. business. international purchased of driven and at end the which our the overall Copart owned approximately largely inventory businesses growth by is remains million of reminder UK that year-over-year context quarter car small quick XX.X% in course

unit volumes Again year-over-year charities number [indiscernible] X.X% declined sales excluding X.X% grew slightly growth our U.S. and our X.X%, international nominal decline for unit sales with unit our unit XX.X%. units and global global U.S. Harvey grew of a excluding X.X% grew to and units at at volumes year-over-year. of Turning X.X% Hurricane U.S. slight Harvey,

will Our greater in grew inventory in nominal growth non-insurance U.S. Then detail to X.X% Hurricane few a at Harvey effect unit was minutes. our turning driven excluding Will segments our inventory, insurance both X.X%. describe of the global by and inventory grew year-over-year, our which

the number our profits XX.X% gross For year-over-year same be growth. excluding that quarter, grew Harvey, X.X% would year-over-year

from so Our this points approximately increased ago gross rate a XX.X% year, lift. XXX year margin basis to XX.X%

which margin through gross compressed shift explained slight Excluding of by the car effect X% entirely almost is slightly Harvey mixed our approximately purchased the revenue.

quarter. will reflection the of on the this pursue efforts more are Copart cars the Hurricane as ago, both that average so growth a excluding phenomenon, Harvey, auctions United year of in XX.X% grew type Will again selling vehicles That member the Copart prices the well Copart to context same expansion our year year-over-year. and base. for this ago at XX.X% States compares XX.X% marketing Our we provide for that consigned, a year a and $XX.X with as

and before you've quarter to to believe administrative million Repeating achieve will stock complexity excluding compensating can quarter operating [ph] $XX.X the topline $X.X $XX.X time grow this general, vary expenditures given over of mantra heard quarter a experienced. were depreciation year with to were we year from that Turning up million and our and in from G&A we million down we growth to versus will sequentially XXXX. general and ago leverage first expenditures, a inflation continue the

$X.X% for same GAAP Harvey, at grown excluding operating quarter, have operating that was the Hurricane XX.X%. growth income would income Our

interest as you lower down Our our see debt given balance. can net net expense slightly is year-over-year average

largely sale replaced center, adjusted out see you that also is our of on data reconciliation. in income our non-GAAP in gain a other of specifically Our million assets $X.X

the discussed will one presentation. calls, stock in U.S. quarter rate option XX.X% reflection exercises time tax and lower as was from prior reflect income tax which second a of benefits Our our we the as well again federal rate in non-GAAP

million reflects year of million income basis, for to net the excluding nature a and now the last year, non-GAAP The exercises. there locations net of for speak a of folks We turn call quarter. before coming $XXX.X quarter second page as already that effects year-over-year for of But have transcript second net for our then plus briefly both so much adjusted non-operating rate tax represented to on detail it tax and update million Germany, quarter major where GAAP dive background quick be of our described to earnings balance for one-time encourage rates schedule to our the review our the efforts back XX.X% up Harvey $XXX.X XX cash and XX.X% second into the the the we year-over-year. quickly substantive the we deep market deduction and we've the well adjustment further income flow. sheet I'll an first a just tax greater grew year business. the including in tax and which in major platform that’s would testament non-GAAP of of growth of as it the quarter this crease current a a the excess a that assumption to is buyer buyers the the the to running for a think auctions running Our quarter locations year charge, of spent adjustments Copart in as attention was of those we are that transition footprint of one-time daily or option our power country. for talked across increased brand reform an $XX Copart the outside sold the now market the with the that Germany. majority income reflection our include, and physical the minus this technology At and We folks across disposal remind year-over-year. to frankly Hurricane for for XX% On from of ago strong stock Germany the about assets that model network in same losses name, Germany. inefficiency strong volumes non-GAAP total I'll

sales approximately unit Germany eight for in Our ago year same for times volume the Copart second quarter. a the are

through ability at show to service we auctions. positive Copart continue also Online, that the to a margin to demonstrate purchase listing cars that Germany them own Wreck and We our

answer we have and in know, the continue Germany insurance also that in model that a our Copart with reasons dialogue parallel in market for claims and including believe as policy for the experience total well costs for the as and UK akin host of U.S. we a what loss for you holders. right claims As both in ultimately carriers carriers the is as to well

with to other Turning statement, was to cash was balance $XX.X the balance capacity attributable activities. cash million. of to with outs buy our and the and flow CapEx flow the gross the CapEx sheet operating About maintenance lease of for million XX% $XXX.X attributable expansion and quarter the

below just $XXX founded open of hand the end call with Copart shares to have are of and We revolver cash turn at $XX of of With also more EVP, quarter. the average the draw outlays purchased provided stock We million purchases still Franklin. available The X.X a million. market I'll weighted Will price as $XXX the in approximately total We over that, million. than liquidity these on million $XX. at

William Franklin

Thank you, Jeff.

a our operational more Copart few for provide performance once me Let comments strong the about another quarter. delivered again second quarter.

adjusted same when to volume year quarter grew Harvey activity the in the by U.S. X.X%. Our last

total we in be our is insurance loss frequency. continues by an the into noninsurance and continued to and increase organic wins market Our expansion by volume believe market driven in growth market Organic the driven within growth growth markets. salvage

Used repair car auction ASPs for used loss. same cost an our values. total Manheim growth grown leading significantly at at to growth Car X.X%. of were Using XX%. generating higher in economic baseline insurance a growth has January auctions the U.S. our has high claims in As The returns has by cars as are returns the Index resulting only auction the outpaced elevated in a XXXX Using percentage our baseline,

digital when our rest the quickly the industry moving XXXX of convention is toward been platform. completely digital since BBX While we the have remarketing reintroduced

improved BBX. We continually our now awesome platform, have

industry. XX have international in to Over recognized as growth the [ph] is years the on the commonly focus marketing those standard The a and in of addition CO from activity elevated significant buyers BBX left bidding our last buyers.

into is translated now languages. seven website U.S. full Our

XX.X% In of U.S. website sold that we were all total, on elements international have of vehicles XX% were In XX.X% and the native the to buyer. units received the currently countries an sold the U.S. to bid the international one a quarter, we from from accommodate buyers. sold to and at website over value sell our all least of languages into international of countries. addition, units buyers U.S. In of XXX XXX

get efforts bids. bring have to who more to those marketing our to Our attends and auctions two buyers goals, place to more

in increase and up was bidder the X%. was sold bidders per been Breaking XX% efforts. of the the we unique have been lot the primary saw Growth an number further, both of XX% in international in up XX% bidders bidders. number The has down successful ASPs domestic unique We unique bids driver are These focus received non-insurance independent Also growth our be include the and in increase and are in the growth U.S. X.X% services dealers of that fleets, dealers, and to sellers. continued strategy. both, a car. contributing finance the in and increase providing U.S. in charities, equipment the additional The buyers to leasing we wholesalers. and to growth per franchise markets markets companies, [ph]

Excluding XX% equivalent across same The and growth markets industrial the XX%, from ago, Volume up last quarter in same and the broadly companies volumes volume XX%. respectively. XX% seller year, in wholesalers grew and than by companies Finance our was XXX% XX%. U.S. more dealers segments. years was up over by rental municipality noninsurance XX%, fleets the were and multiple almost two charity car quarter spread

grown We increase individual segments. our delivering operational successfully auction dealerships And our non-insurance banks and and deflates we returns have develop we're as programs that integration continue to as systems we we better to as non-insurance have targeting volume sellers. developed sales and the

our as volume the again UK, The and XX% we once market UK non-insurance we revenue increases in grew insurance very growth and XX.X%. growth local respectively. and wins currency, in driven of by Turning delivered another to In out volume. the business quarter volume and business grew both growth XX.X% organic strong in and EBIT as growth we by from saw came

meaningful to and Brazil also in see growth continue We Canada. both

EBIT. local market of X.X% revenue As increased our the XX.X% remain Globally our our by remarkable, Germany immaterial countries. to XX% insurance our share volume respectively. Jeff of both and offer each of expand our to Canada In by in which have our and Americas, Brazil value note we labor, growth led cost commentary land local increase us an technology, sample quarter already health volume With more we those in on that, revenue we all our has average in in increasing provided revenue people, Germany. we our XX.X% the processes, operations in respectively. and even has terms process currency that the and outside raising for UK In are was the and car. allowed and to seeing currency cost and

Our internationally [indiscernible] The the prior adjusted X% provide and When inventory respectively. and New capacity and inventory U.S. the by and In X.X, Gulf and Mocksville, a the exited over we continue. and this and three the California eight accommodate U.S. anchors over was has serving growth Harvey, in X.X, our South alone area. for Carolina growth these growth worldwide engaged three the we have York To up serving over serving the area, in Califormia XX.X, XX.X, weeks the announced X.X in Charlotte U.S. respectively. Bay to year-over-year in North massive expect areas the to Mexico this the of expansion. with last Coast and and XXX quarters, trend North Sacramento worldwide are along and standalone capacity of East Harleyville, the have we averaged Until capacity. internationally X.X Charleston

Todd, Brazil expansion announced far Germany. have new one projects in in in construction U.S., of turn phase. So the These session. capacity for in XX X we concludes consume the in facilities, and That back of I'll the alone U.S. projects Q&A X the the several of hundreds acres my capital. in in XX we comments. year, projects Canada, fiscal your phase have Currently over millions engineering call XX and to of will thousands and represent each the this XX dollars and

Operator

take first CJS will Bob Thank you. Labick We of from Instructions] our question [Operator Securities.

Bob Labick

for morning, Good thanks my taking questions.

Jeffrey Liaw

Hi Bob, good morning.

Bob Labick

real XX in accelerated XX Germany, can noninsurance phase? surprised is on your couple group has pace with your and to obviously a about over I just Germany guess you rollout during kind which over last you the this talked one Starting months of questions really the on impressive then acceleration you've that to you what Hi, quick months about. road the of most very talk the last, X six share,

William Franklin

at terms is how of so our changing just the there up quickly. think so surprise summer I looking biggest we the opening started in When many well got team performed this what yards make would network UK a in realized the more in other terms Brazil, strategy worked the the needed us for successful, Canada. what markets, and U.S., we of us we and that's and

an and and As stronger quickly we ability have a network cars ability we probably have surprising up team's to our services thing. is do that most really the the better easier and to provide a just pick performance

and brand marketing our and members, has auction. process that over out and bring on the great of a our to Second started well I job amount there just to the that getting say teams auctioning we're in. is the available buyers we Once would done we been had able buyers cultivating hold auctions to just we've once a now, really XXX auctions started for week cars regular

very the and but been positive. we'll are it past. we're We what like it's Jeff's and which let about us happy comments see on in Germany. report So we in with And performed then results, those succeed very talked

Bob Labick

would likely insurance know I quarters great reason off still that then but one doesn’t know be your style, it to if wanted and of flipping do company wouldn’t U.S. you next possible quarters potentially happen? you over I'll couple over that's happen move the and I the severe about believe the question to and that you or what it. succeed Okay, just next want more the first, and perform I talked

William Franklin

happen. to today you with that that Well, I think have associated the reason The is friction happen will going with process. do it's

hold buyer vehicle outline So acquiring brand I giving some is pick double concerned uniformed of you with Germany, the scores playing the there buyer driver up there their the in number and ends come for to location, a the the an location, the we touch bring has that conversations you best scenarios at The There experience isn’t it can possible could and are promoters then auction the they IMET it that when the give. have a that picking send the insurer buyer end and that could to house negative. And buyers up, our company not you insured insurance that. about vehicle service and and don’t insurance insured net and obviously our and that the to could and be it. vehicle then yes customer the the pick up clearly have where in up be with wants with and company salvage,

returns. is reason Second

to We cars. able buy are

Jeff off through yards and simple. the able just cars to them has platforms bring and we're then a them mentioned And As auction higher is buy on get the and return. previous very cars to over basically that very,

allowing world to You country there going no the bid when contingency, bid are and to whereas it, on know from is are get. to is buyers they bid if no around There dealership is somewhere on they they a own are the product there they vehicle. they else a less may it going platforms that you're of the the the rather not question the sell to other, buyer. If than trough or are body through XX% vehicle get chance because high going some get than shop bidder insurer may knowing through to they the they

locations, timeframe then up of logistical difficulty, before amount they different get it degree taking a a as half that we can can a dozen sure vehicle and up a and a not get bid When vehicles, and a or different to dozen buyer on go and locations three when certain more buy So of that a product. bids so this of to a for having to, when has unknown buyer Copart weeks within to three a element buyer a get vehicle. within And underestimated. it that homes well. different away just And can they That's to pick insurance three be as better the four three experience has something pick it it on out opposed said going making up you the should the to to then And component. it take pick you're as guarantee that buyer you're and days. lot have

see point to that doubt I guess, this continued don't at I So going market. that have traction we're in any

Bob Labick

that of one, obviously just these, if And non-insurance are the about color. discussed just may of or bit little was be there, quick who you the exactly then impressive a finance, primary same? one helpful dealers very et Thank or bidder rental it the last from cetera, talk you. online are Great, buyers the very base is growth than these cars, coming your buyer is new unique core just how different wholesalers,

Jayson Adair

that our base No, that changes get those that easily that's the heavy buyers, get Bob and demonstrates types these the you're profile platform. buyers on an auction equipment efficiency offering We based are seeing easily that buyers and we're just those the I view constantly buyer and offering able to our cars even cars. different think of us have product of these and for we're of appetite

Jeffrey Liaw

I are add just to I'll both Bob that, think true. but

by nature that base the kind and the cars the well, true their so achieve vote that they So thirsty Otherwise also of are dealer way of of dealers as as and feet a but expands Cobalt it's is much we say and expand fantastic as to prices reflection existing auction as independent four auctions. buyer consigners. evolves wouldn't like cars offer at offered we as they the the our that for through vote we're with buyer base consign the further we'd They forth. they by us, the

testament bringing that So it's power to network to cart the I more of doing cars and a go quite time. they're that think buyer well over

damaged a further then non well buyers or virtuous I bring network effect damaged cars or as then newer also well. those into think has as that because the less cycle slight

marketplace a it's both that to think and continues I buyers on sellers. sides, expand So

Bob Labick

Thanks Great. much. very

Jayson Adair

Bob. Thanks

Operator

from Craig We'll Thank take Kennison our question Baird. next of you.

Craig Kennison

to start Can with continue volumes see business you my of your questions. growth to using just the drive integration on to taking operators Thank I examples you're that you for with or provide Well, tools dealer's, there. non-insurance rental fleet companies? non-insurance you great wanted systems

Jayson Adair

to system their tend a segments species platform for migrated each mean operations. I to different

Auto extremely the and the For dealer write Number example, or the a dealer come finance for buyers that us it's track other just important creating the that the theirs. two to processes. And The gate our a the resistance needed called are not us our we it's that's IMS. use is systems, those lines reduce different dealers by of the to operating systems companies along access of, Auction any systems, caused use those socket. integrations a to it seem and their system system sniff to systems integrations and of and friction initiative have is just part

piece tiling repossessions transportation can in could that which on. equipment more insurance an voluntary special car the for equipment, counter surround to are pick concerned the company. of Finance need And have heavy completely of cost go compliance. processes have example, with and to to provide even title different repossessions The well much heavy up got rules where dealerships. pick you services For X, documentation up companies auction for $XXX opposed for on Dealers you after we I a when like charities bidding. under as and and tiling is $X,XXX process

as it And being able is integrated so matter their being it just systems into process to to needs. their software not specific a our accommodate change of

Craig Kennison

extent versus helps, of is customers fueled the that what customers already That services you've and growth the your are your that landed use then dramatically service? by trying increasing new to

Jayson Adair

internally. more things. more of that cards things volume. the We're returns customers doing process, big seeing contacting more have growth. send driven again. for the said organic of that they're we've we're a years both. them it's the and we're us encouraging It's systematic eliminate I receiving lot to people, like had is We're or It whether a one that that It's and We're combination seeing friction, not

Craig Kennison

about Got beyond. and And headed rate is you Europe. where may U.S. Europe, think look to be total and you data frame you the that wanted then ask in when and I XXXX XXXX the trend in any loss loss where rate to also at in do have it. do rate total headed And in headed. and is Where then the that loss beyond

William Franklin

Right, last first one so prone of that think I'll total comment the on in tailwind to the through XX part That's the I than is this accidents you rate, the that repaired. loss years, business went ever your as know be for way totaled question. behind there are cars are

unassailable an time, to think that's over do that's micro tough. think there is or we at here quarter-to-quarter year-to-year forecast basis, to read factor so hard I really particular forces that We drive have is the even macro upwards will in no mind. on work a it ceiling overwhelming that trying

So forecast I good a have don't point for in XXXX. time QX,

how is sources precisely from we example the comparable US. no quite any very As they here in as as in point share here U.S. to so a source with as they practice know data The total handle as exhaustive CCC have that's for at how UK don't a think seen you Germany the we data estimates losses. have as I different comprehensive haven't the But or have major even we the number don't for Europe, you.

Craig Kennison

Thank it. you. Got

William Franklin

Craig. Thanks

Operator

Thank question from Bret Jordan of next you. We'll our take Jefferies.

Bret Jordan

morning good Hey guys.

get the have it? having they selling to possible buy that, to on still the will traffic it sense up in if agency purchased send opposed option insurance enough individual is volumes Germany car without the is the consignment the On the once flipping companies the you car trend you in you as to car

William Franklin

through hold do so non-insurance so well. the we as acquiring Right we're auctions, now coming have some now that volume We in we're doing can platform. that cars

the starting But for have to to that is we're rental insurance So switch industry illustrate process companies well the currently companies. large insurers the as to our them car then the to model. strategy the and over as vehicles service benefits

Bret Jordan

pipeline, near-term the could maybe around put real comments years? acquisition a of on timeframe And projects Okay over going you of very estate a around XX is thousands or some to of great. that Will's acres, then large estate that is those period be real

Jayson Adair

too years long. is think I

months, think all delivered. should XX I within majority XX those the be vast projects of

Bret Jordan

you. Thank great. Okay

Operator

Research. from Thank take Gary our question of you. We'll next Barrington Prestopino

Gary Prestopino

this Hey good the non-insurance non-insurance give year Will, give quarter versus you you Hey that? morning percentage everyone. of you vehicles did or the what of can Hello? when breakdown about last talked percentage were

Jayson Adair

Yes, question so [indiscernible]? other any have do you

Gary Prestopino

certainly Oh I do.

terms or the of is on impact that - was it In margin couple or vehicles growth it an Is gross a purchase down of points. Germany in just the basis more sequentially hundred what? that was currency

Jayson Adair

as Germany, a of Germany. car currency is partially ledger It both across reflection affect right well. parts is it that affect sides because in largely not would partially growth this also currency in It – area is of that purchased mix can

cars, about you what and a sold example the car we've $X,XXX to on worth. this car it's but prices not the So that shrink for rise would on can car make - dollars more spread purchased double before, for expect certain talked more purchased for as a for bought a $XX,XXX the grows profit

Gary Prestopino

I lastly, they pooling vehicle then about account for wanted costs they were up And were dramatically, ask - year-over-year that? would the what Okay. to pretty

Jeffrey Liaw

That's Gary. effect largely the the of change accounting

forces So - is BPC we accounting quite is and it what make up us more the on hangs which pretty to the a a of use I think we short, story there revenue, anyway pull robust to now discussion this [indiscernible] long balance costs how - is it revenue so why which to the of corresponding more push back the sheet more now dramatically. which forward, check

Gary Prestopino

me or call. changes lastly on the wrong the call or I late, into numbers the explain at Jeff, address Could beginning And Yes, unit got whatever? it. volume generally got okay, I booked those you volume of that some of that then the would you unit actually call give

Jeffrey Liaw

said unit I'll growth Yes nominal big unit the in growth Harvey, unit of U.S. give declined X.X sales, Hurricane we Harvey X.X%, one, the and sales growth unit U.S. ex X.X%, so unit ex sales of global international with X.X%. declined excluding you charities XX.X%, U.S. X.X%, of

Gary Prestopino

Okay, thank you.

Jayson Adair

for is vehicles the Gary, sold same I XX.X% the year quarter, for last you that on got non-insurance of and U.S. XX.X%. was the percentage number last

Gary Prestopino

you. thank Okay,

Jayson Adair

welcome. You’re

Operator

Thank you. Wolfe our Bottiglieri Chris We'll from next Research. of take question

Chris Bottiglieri

taking for thanks the Hi, question.

could have just segment? Just prices. the it some you its done disaggregate of think hoping the may mix, look the average what insurance increase ASPs in I sort to selling of be or at would

Jayson Adair

You're right.

we course of versus impact change the it we increase Of and in companies. some for solely the in mix of haven’t insurance the separated ASPs is - mix don’t

we call. could sure provide to So I'm not that on you the

Jayson Adair

provide U.S. Manheim will on insurance a two-year basis only I on being think up stats the XX%/ Will and

Jeffrey Liaw

the Right, has but revenue. not impact on it

Jayson Adair

not But that revenue. including in is are impact the ASPs the right up significantly insurance for segment year-over-year and up the So, point on isolation.

just increases shift, is insurance it's significant mix So ASPs in not the in States. also United it

Chris Bottiglieri

Got trying what am I arrive to at. it. That's

think maybe demonstrate increasing So used historically? this, total anything the rates, you that demonstrate, when vehicles there are more you any a can today you that loss driving or for vehicle can cite you and about to like you like being totaled total saying are terms metrics loss younger there's vehicles older is what's in rates younger of than of than

Jayson Adair

on is last hold the themes totaled. that calls the I about being slightly we still all seeing few average true, newer on you've us cars are think which heard talk

year model So if we car sell. of the look at we the

while. We than are selling and ago cars today newer that's been true were year a for more a we

more less are damaged cars We easily. the selling are so cars, also totally

companies insurance metrics them rather us estimates. certain provide regarding to do the they to have repair We

time. seeing much the value repair relative our And car. by damage entering estimate system to the intact that of the is less So cars particular barometer, we are over how

all the phenomenon the flip is this described. On bidding Will side that of

supply more cars side way the are on buyers, and damaged are and I also and our So domestic international, less for seeing the demand you but on buyers. seeing international and more By think buyer side more newer cars. the diversified base we global

it's in working concert selling So of that prices both those has things driven up.

Chris Bottiglieri

like lastly collision year this for looking And think and mean is what you rates then accident XX% frequency on data technology just are amazing impacting volume of Got Are last are still down pretty avoidance the any actual year-over-year seeing accidents have and there there? growth. loss or I still frequency. sounds total you Do do yet you some you. that just Well it

think I far still off. it's too

Jayson Adair

We probably do. have than better data any don't you

and third history. the sources follow the frequency declined loss frequency that the majority equation. data what And and so fast vast side party for of by of it's dwarfed forth. total say steadily company's first the other slightly, but very this course is slightly been I has we track like would time on Accident So over

upward Total XXXX, meaningfully far maybe that have that organic increases volumes as up accident tapered the continues over declining rate tell I saw flat. frequency be can had frequency the think from XXXX not its rapid But driven previously. we unit may time. it very accident loss in frequency somewhat trend. rising XXXX, so that do has So as it's at we

Chris Bottiglieri

you. Got it. That's Thank helpful.

Operator

Thank from you. We'll take our Daniel Stephens question Imbro [indiscernible]. of next Inc

Unidentified Analyst

is Is locations Hey, that good service I One my store to Germany, morning at for questions. a guys. as footprint. guys you in Jeff you a taking twelve network on the the sufficient country Thanks are today? think mentioned U.S. salvage growing. also the in growing but guys market single to market growing how that rapidly you the industry Obviously taking high share are digits then similar And is

Jayson Adair

the as So, for footprints.

to we sufficient my dramatically this of actively for Germany. no doubt invest our mind us the this landing the there. grow that is more market There's think will over time, in in still platform we is I capacity kind in participate as trade

the the XX in is good in country. geographically of the early capacity sufficiency participation innings are still So Germany. a in of But very of terms we spread across our

again question second Your was there?

Unidentified Analyst

growth of digit that range? similar on kind high Germany, in the it single US and is to Just industry

Jayson Adair

a tricky question to That's answer.

very are salvage your heard what review point shares different relatively sense across the but very a taking sense a in the is listing old and our the and from sure concept we underlying I that even nuanced the characteristics are quarter share call cars be et is traditional UK the think the in that system. model can I'm first a cetera about So should nutshell from you in again which taking the from don't the through U.S. different the service

a cars have long The new is markets China to where two. also fleet has developing condition and high, expensive Regulatory parts by old. that grown so tax are have mature are are the decade drive are are had last comparison labor Burdens so repair the are time high. in old economies or cars cars. to could to the costs for or old, cars for in meaning you to comparison way be the is meaning costs meaningful Germany airbags age by restore back likewise to and that India So tremendously cars average the economy a like

Germany model don't for speak like of Germany, just attempt Copart All in but forces Germany. same are for auctions salvage the first in the exist, we ones don't to so it's in statistics to underlying they we are because those similar but to deploy like

Unidentified Analyst

over Europe. XX% going that U.S. I mentioned vehicles now are of of are Will some think those abroad I'm vehicles to and over assuming Thanks. you going

develop any buyer I you love would as at further thoughts time seeing can U.S. to cannibalize you're today? talk and that the in base extent. just Does the EU your So the hear your Germany that of about to around you the the auctions market. international over demand German market

Jayson Adair

we're obvious doesn't. really some affordable but impact our Caucus it our cannibalization in and because Mexico not in international the it's think we also have Nigeria our our will is and are don't growth countries. are provide in Germany, pollination is two to on in and which develops. it cars buyers activity States There and scope seeing in UAE as significant a international Germany is next the developed cross United less activity proximity significant Most top Most countries. to No, of three and of of the the its the transportation our

Unidentified Analyst

guys deploy in share short me great. funded quarter some chose obviously it you one allocation, repo to on to the recent seen any carry leverage culturally some want years? gained the given business on to on in but today has your comment maybe the scale you've appetite you've Okay then and last don't And capital from of more you Understanding changed with the just you activity, towards capital debt. term future

Jayson Adair

think a you been there's I No, go so far philosophical shift back. if don't

summer few XXXX. XXXX December the repurchases years a end of Just on XXXX of consummated had we balance and for sheet the the in leverage we at share even

So then land, We gives how in But leverage we philosophical do even have more international flexibility generally meaningful strategic prefer we now. forth. to leverage. be, then and had little shift which so to no, about there's comes pursuing a bit us acquiring we it to financial growth no think flexibility when

So a we'll institution. continue be relatively low leveraged to

Unidentified Analyst

guys. a Got it. Thanks lot

Operator

Glynn Edge Consumer our you Derek take question next Thank Research. of We'll Instructions]. [Operator from

Derek Glynn

question. for you my Thank taking

outside about the on America and growth you opportunities think how you of North out investments to an stand or large those two Can Europe, As China additional view made that? whether and have been as opportunities long in run. potentially India markets you update expand provide

Jayson Adair

there that you thought the host long to extent for very markets think States. markets well term I the haven't materialized are yet promising nearly and Europe the captured they in That have a of and United they same reasons.

So we'll emerges couple next it's not be years there but when anyway. the it in of

Derek Glynn

Okay, Understood. you. Thank

Operator

for Thank and remarks. management closing concludes I'll turn session. question our answer you. to This back it

Jayson Adair

forward on the to call coming QX. reporting look and for we the next on call you again. Thank Bye-bye. Thanks on

Operator

of great thank gentlemen today's rest day. a participation. This concludes Ladies you conference. your and your for Have

Copart (CPRT) 21 Feb 192019 Q2 Earnings call transcript