CPRT - Earnings call transcript Q1 2020

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Jeff Liaw

Thank you, Dan, and welcome to Copart’s Fiscal 2020 First Quarter Earnings Call. I’ll ask Darren Hart, our VP of Finance, to start with the Safe Harbor.

Darren Hart

Thanks, Jeff.

During today’s call, we’ll discuss certain non-GAAP measures, including non-GAAP net income per diluted common share, which includes adjustments to reverse the effect of certain discrete income tax items, foreign currency related gains, certain income tax benefits and payroll taxes related to accounting for stock option exercises, and the effect on common equivalent shares from ASU 2016-09. We’ve provided a recollection of these non-GAAP financial measures to the most directly comparable GAAP measures on our website under the Investor Relations link and in our press release issued yesterday. of is measures business relevant financial presentation corresponding with trends the performance. measures GAAP in believe these together non-GAAP the and We assessing Copart’s

described a our and on analyze both We non-GAAP results basis above. GAAP

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

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

Jeff Liaw

Darren. Thanks,

the certainly to our in talk also a those results to past the to quarter. of and pleased of our will through light we are that approach our results on themes, those business. pause about past the Wanted metrics some drive help as the think, for also with traditionally details Darren, business, will and walk and I results frankly explain the disclose. for strategic year, shed with of moment, a minutes We themes the quarter few bigger the in

want First, about total the to talk loss we evolution of universe. the

many, and customers, system. accidents those years. due rising rising other rates has costs the complexity Needless that we’re been labor investors say about good – repairing progressively economically It’s due like, well increased repair unabated repair continue accident the vehicle in age and And has been to for loss industry driving think good among while attractive trends we’ve frequency. the proliferation less are I historically, and talking become about cars many complexity to stakeholders, understood and costs. accelerating total of avoidance and detection to and and

has side loss worked years, at days these less of five. changed to XX weights effective Copart’s mean salvaged the that for is precise, were literally In salvage The I in values even industry we’ve in significantly other over the the cars and be auction. total metals. communicating generate fairly where very past think been I our equation vehicles can early their of over dramatically course, and we

sell You see even we in Because Outside when calls earnings prices a were never have and of ago earnings that cars vestiges four we how CFO of became disclosing valuable scrap talked of year-over-year. for change parts recently their as the those we calls, this they been increasingly literally year prices. scrap once for instead, the Why? years. Copart about I’ve at competition.

As drive and upwards. for the the businesses values dismantling dismantling through industry evolves the salvage parts leverage prices, their higher helped profit OEMs to industry aftermarket

Since insurance more loss forever more our then, totaling that expensive, line is rising worth and company just still as has as metals, the not partners. that our in rebuildable are shift cars that frequency them them for then salvage and has selling total more over it’s The of equation function for ourselves becoming cars a become well. time punch preparing isn’t there industry, attractive not significant as has which however, drivable, their been per their value in the vehicles, se there is worth their value but altered instead parts, these which a today weight

their We yielding totals claims more reality this for insurance and carrier have way more processes, earlier ones to is help them whom with further partners number our as optimize more of We becoming intend under and a well. apparent. initiatives

has auction becoming is we a platform and, brand at reach, prices drive course, offer global in the can universe achieve of our at by the expanded But same for reputation how? lifted increases auction. How with we’ve part our physical we cars business, increases and buyer been able volume more the those still time our liquidity to that price

actually the Europe, hand fastest-growing unit and it in lowest has increased. are economies dismantling You America while certainly our that because eclipsed industry certainly our and first of growth as can prices industry and Eastern had that’s in auction world, that rate well, that at world. also And in markets the see in Central Africa of the general the the penetration automotive South in the

demand So much proactive our efforts. substantially over through few our grown we’ve the supply while very grown marketing more have we past years, still our

And I’m Q&A and about to and insurance. ourselves generates briefly get tackle, share that certain being differentiated our Copart’s flywheel that’s the value wanted we’ll I customers. wins market sure thing for the for second that’s auction in liquidity questions and

generate specific know talked that better the we on the grown I value of as comment accounts rest haven’t individual we because think already share have we service than most auction the better Why? an an them are account But we basis. industry, others. very time basis. about at don’t emphasized we we over than on years, auction Ultimately levels just well, that individual market over we important, which on the steadily You believe results and deliver

sell described for has the insurance then growth further non-insurance of the our raises achieve a ultimately business. business, moment fueled by, auction enhanced growth, can been right the insurance an liquidity is our by course, industry also price the our of same total well. growth from cars auction Every also proposition car frequency phenomena value in helps ago. to and but our in we loss we dealer The earn organic automotive our as which we to And increases contribute

We’ve decades customers this and with year passing grow it making for each that and platform, made and people to process more to in us us. our valuable technology, the enabled to land investments

auction And so liquidity of virtuous the cycle continues.

remains efforts, tackle We an expansion I earnings great described past, know The likewise which, wanted our but our in expansion efforts detail call of been future use you seed pickups, our German the during as quarter our leverage well. enable growth value purchased Germany, there serve Build of important global build physical German – effectively fourth to last thing auctions, driver infrastructure important in for overhaul strategy will necessary footprint, XXXX already has logistics network, to international proposition bring to our rapid Copart process claims buyer an industry. is insurance the the and cars nationwide vehicle to our consistent. be a buyer driver capabilities, our our

in expand As are Germany, you elsewhere intentions know already well. Europe as our from to Western

consignment in insurance in economically with Germany year-over-year superior Our market proposition profits general. German will be unit revenue sequential in very our in trends and the providing encouraged substantial growth that volumes, are clear model an indications the carriers for trading and

why the and of over Vice that, into back don’t dive the we to Hart. our With quarter, it specifics I’ll Darren President, turn

Darren Hart

record foreign with primarily relative Jeff. to revenues, revenues profits. and million currency the delivered grew the first due Thanks, quarter another $X.X Global We by the XX.X% strength or headwinds, operating against despite strong in gross profits dollar pound. U.S. $XX.X quarter of million, British

XX.X%. service Global by revenue grew

vehicle purchased converted were to customer contract. UK sales as flat substantial purchase-based contract from we a a Our a sales sales fee-based

by QX year. First by quarter XX.X% global increased unit XX.X% sales versus and vehicle of last grew inventories volumes

and share growth fueled a XX.X% from by U.S. and customers higher market increase organic selling gains. and prices non-insurance revenues by driven our volume by average insurance existing grew XX%,

wholesalers. and represents dealers, equipment total fleets, and dealers leasing non-insurance and Our approximately charities, of XX% U.S. volumes companies, sales includes business finance franchises, independent

We the marketing, our across our our to by Excluding sales sales focus increased non-insurance charities, and auction and unit attribute growth non-insurance liquidity. XX%. volume operational increased

U.S. average First year-over-year. X.X% quarter selling grew prices

an our well and activity ASPs as efforts, auction all-digital as per international outcome reflect more bidders as continue selling increasing mix and the customers. is International result bidders cars. higher marketing buying bids and Year-over-year, less-damaged proactive bidders, of a platform, unit therefore effectiveness domestic better over liquidity, XX%. well therefore by bidding international improving as of as more for of auction newer bidders, VBX. we unique our prices increased and our The unique

significantly to year. XX% used U.S. to roughly car indices growth various as ASPs versus cycle used car well share then vehicle Increasing last unit continue to prices inventories due such selling strong the Manheim which gains. continued was drivers. price tailwinds as by our grew this quarter Our these market index, back as industry flat outpace

to to UK flat while as and volumes service from international vehicle revenue were flat international vehicle contract sales Germany based revenues International customer purchase foreign grew inventories were revenues U.S. XX.X%, and International X.X% due by purchased vehicle the currencies. shift. grew shift by unfavorable purchased aforementioned offset grew fee and was customer Globally, X.X%. contract growth

percentage and U.S. the health selling $XXX.X efficiencies. Globally, operational grew margins million globally, gross grew from part or of rising and gross profit to points. from note German to our XXX expansion XX%, rising gross in margins margin basis gross do to of ASPs to In XX.X%, International by XX.X% insurance XX.X% business. the driven and to increasing XX.X%, mix from an from grew we XX.X% and costs. labor, U.S. XX.X%, million due declined $XXX.X

these have However, in part been and by operational rising efficiencies. ASPs costs rising offset

the General on a compensations. administrative pre-tax by increased $X.X primarily related compensation million $XX.X year depreciation, expenses, of stock and portion $XX.X million taxes million, driven stock from and payroll employer excluding ago to charge certain a to executive

earnings, an one-time in This the as our after-tax earnings such been basis included on reflected non-GAAP release. has charge in

development. higher growth, European costs was decreased due Beyond our G&A lower the support U.S. by this international in of and of G&A offset item, to a expansion businesses, legal software capitalized

G&A expenses in any continue will we but leverage provide given While expect our overtime. G&A modestly grow, may generally quarter, to fluctuate operating

interest grew point to to an impact. given primarily average from year-over-year $X Net expansion, from a income lower or basis $X.X to XX.X%, foreign inclusive our million which $XXX.X balances. million operating reduced offsetting unfavorable income cash Operating interest up $XXX,XXX represents margin XXX million year-over-year of currency was expense $XXX.X million, due

benefit benefit QX tax a million options non-GAAP options million items. exercise as earnings stock tax of The other the and income one-time from included reflected earnings $XX.X of million exercise employee from on been and the $XX.X such benefit a the as benefits the income $X in our reflects benefit tax discrete release. of tax have stock well in included employee discrete tax as The income

to to $X.XX $X.XX earnings grew increased income to XX.X% million. $X.XX and share $XXX.X net net grew GAAP per $XXX.X or $XXX.X $XXX.X non-GAAP GAAP diluted Non-GAAP income per or XX.X%. from increased from million $X.XX share XX.X% diluted from from million million earnings year-over-year. to

$XXX benefit. quarter operating in income and balance ASC a $XXX.X lease finished We this show for to driven the Now and balance large sheet in the of We cash due net $XXX.X liabilities were $XXX.X million cash right-of-use flows an increase now operating million a by part lease turning million million, debt. tax in sheet. $XXX.X million of to and Operating standard, asset million, with on quarter lease cash $XXX.X earnings, the quarter higher the and adopted XXX, flows. the new

to attributable XX% We expansion. $XXX.X over capacity invested in quarter, CapEx during the million with

growth total Given fueled projects the loss to we prospective due developing demand. land remain frequency, meet and currently projects the and focused and sustained industry-wide XX a volume phase and higher development higher by have We new expansion XX current yard to the phase. purchasing – in in engineering on

stock we from million paid employee During proceeds $XX.X collected option in also exercises the and withholdings. quarter, million stock-based $XXX.X for

you up for in to thank if would questions, that Copart. it interest continued open your We you’d Dan, appreciated. be

Operator

first in Instructions] CJS from Yes, Please Bob queue Our question Securities. sir. Labick with go comes the ahead. [Operator

Bob Labick

Good on another nice congratulations quarter. morning, and

Jeff Liaw

Bob. Thanks,

Bob Labick

into more give to how actually you you your brought up, the I as buying. all international obviously, insurance types customers, us Just the or insurance that you’ve they the buyers older your Is a base, guess, about general U.S.? your cars? the start, a I most talked lot it on are Are non, in and say, customers buyer on? what same wanted more selling. on little a the pattern benefits or strong newer color cars are Can focused of they’re little color it focused international it

Jeff Liaw

for and a one. good thanks Bob, question, the

bother the is the case, I just makes with battery is to demand their nuance will a value, they that would logical – being you one largely old sense general, higher vehicles, interest a – is ship are value car very think in they metal never on similar which overseas. which which typically because is

half to did tend than those that. many in approximately heavily. course And on they – they say our would They value so drivable we many, talk very on So about of purchasing or I U.S. still international particular. minus. that how options, focus of more cars bidders rebuildable, vehicles plus the overlap are

cars. So is similar with nudge it the value to aggregate in the that point higher being the

Bob Labick

it. Got

the years value That’s the numbers related that great. percentage Okay, cars to the think you helpful. then three things, on it next given trends just customers goes so any the – where and don’t servicing do of purchased, like half at go? And you you’re I over five think you’re you now all, – targeting right know that but where do target not to roughly know focusing years? industry just the number, in but your might Again, I service

Jeff Liaw

state Don’t a have about has that overtime. mentioned we Think number economic that an secular few important in grown of in penetration. Bob. it a steadily low growth There end those there markets, ago moments mind, tailwinds automotive are

I U.S. the education well-being for like. same for that in economies, think the healthcare we our mobility. for here is economic and take granted for In likewise have demand the essential or those mobility

for an think don’t will cars end in state could U.S. So there demand there, overtime, vehicles, that wrecked have still become se, I mind cars Bob. drivable we be more but per

Bob Labick

Got it.

the couple independent past cars, dealer of obviously Can looking on at lot dealer Is you little franchise that that over little buyers a more then you Or that talk dealer car there’s just typical years. Copart cars? dealers? growth to that’s who been a are? is Or about bit info the consigning international? Okay. sales, other and of the and a And from on

Jeff Liaw

Both.

the an with ago, area the carriers international over for And growth that emphasis talked delivered now that been think a it’s that of domestic you of a as liquidity, is us to marketing which alike. the dealer that’s buyers meaningful we And efforts, source know, our quarters insurance the one – cars, number matter of phenomena really and is because a car them. that function for dealer proposition, year-over-year. I has same I the about value again, is auction think is years, is it values has most that for moment

side the So fairly other it sample of is representative again buyers the a equation. of on

Bob Labick

much. so Thanks right. All Super.

Jeff Liaw

Thank Bob.

Operator

Our the queue go in next with Craig ahead. from Please question comes Kennison Baird.

Craig Kennison

that vehicle Jeff, the I the quarters pressure to model, taking with a of dramatic UK conversion to thanks anticipate start questions. And that from With overview. my thanks customer? on Hey, for more should for we consignment three wanted conversion. sales

Jeff Liaw

The I quarters few hesitate, word – a persist the if you will that’s it’s probably for for pressure, yes, math, persist mean. will

I not actual a per so think per think more unit us, revenue. we our economics about se, we it’s economics basis, the unit because for cars, think pressure basis gross on I than do

Craig Kennison

ensure significant previously it. I its Got from volume And to numbers, – math business don’t use nearly competitor. a then question you committed where get another we of have clearly and earned but that all to

second, does do going by think this happen, won the how Copart this the a end understand XX% why relationship? of customer with you business? described was And First, volume that as year, that math to that’s all jive which most of you of

Jeff Liaw

like find share cycle, in on we we that we’ve customers, about but for earned results, we And customers. auction specific generically, we and reasons other about superior first historical also unsatisfying, not economic the where it’s deliver often decades, accounts, on deliver considerations the a organically. like years commenting but been not market can us one. have very More you in the Craig, for factor general, commenting certainly decision, foremost, that individual our for events are is very significant ultimately catastrophic value to the depending are and number on and –

week-to-week, process, Number year-to-year. a moment, course, account two, our yard service in our them network, – a levels, of is times somewhat and crisis as technology, And our we well. service and day-to-day, as but function I do people, service well related we in our of how noted of then turn that how is

make decision the when are that That’s but we prioritize depending history, carrier that their decisions anyone – you partner would insurance are differently, on how and and they’ll on. the in partner is criteria those considers who every salvage where

Craig Kennison

or of exterior that the better the to your just last such improving through and way would lately then innovation about And your services from and be better the among what talk that question look you across interior been have platform. around doing car or might my all innovate has camera and ocean. banks insurers is if cycle or auction platform connect you’re video a There the a views of times bidding competitors your you

Jeff Liaw

we’ve of calls. take And on Good general, think, been robustly describing in But not – in we those services very seriously. Yes. I enough question. earnings our types remiss services them perhaps those

be example, already I So that the policyholder payoff raised. needs the the for loan plan carrier one, aren’t I’ll you those in of or on altogether, that obtained be that just before an his policyholder on the And can so by question loan comment in can the outstanding paid-off. a payoff so just loan has lender one claim salvage the total and loss on loan who complication the think a her balance for car, node, be per to the to resolved conversely owed resolution

it, calls ours payoff ago, understand didn’t others offering it to I We intend those our a point. talk on XXXX, for the As to they about wanting recognize in claims. an and launch our important process. had or months so to product per carrier of are earnings We an we at in insurance automated beta customers. an We for testing alpha some as resolve in loan six the whole that industry love launched We consideration se. already May claims delivered

appreciated developed a now at We while months that is and students accordingly for it six and it. second are of this meticulous we a delivered a point ago. We service bottleneck

Craig Kennison

can follow-up, to there way improvement describe any cycle the tool? that from payoff is you time sorry I’m loan

Jeff Liaw

very Craig, do, isolate to variables. because hard Hard it’s to

on portion to financial is that which that connected portion we intermediaries a the of cars with. have a still that and for partnered those imagine various are outstanding might institutions you As have loans

but we improvement, white, certainly and partners appreciate not both is a quite insurance our it and black it’s So it. always tangible

Craig Kennison

Great. Thank you.

Jeff Liaw

Craig Thanks,

Operator

go the ahead. Healy in Please question from with Northcoast next comes queue our Research. John And

John Healy

share about market to a Thank Jeff. question gains, ask wanted you. the I

number to alluded back in get you the for way has the could us in the kind the You dollar the bit company I been peel out Potentially your business off share. you terms little in insurer into purely then lead years, know changed do that it point and topic. Is gap a little that that maybe the any to buyer little contribute the insurers to? few Just onion base think widened? And think is more that just last to you return there what of also, was gap why that the you on that how topic scale? economics years bit? international over the just returns love build of if has a dollar the that Is over the of bit the gaining a on the successful

Jeff Liaw

Sure.

delivered all you’ve important on ultimately bid units are across value underappreciated international describe just And that this offers. sometimes they how buyers also think units at that units full the right? heard buyers, I help how and international value So maybe both provide that length the us they by the the other that Copart They of the all relevant on values realization acquired disclosure, auction, the call they are. for but fair on, virtually are and

render Beyond buyers you for which we technology that, if to which for us an number alike, yields quote Copart best-in-class – do too. the considerations and auction think have already, we the haven’t sellers anyway, in and attend there others increasing should are and bidders. so is what But other judgments. for own VBX, of has industry your yielded online you

unit per time. if per even excess, in well bids increased very bids growth, long bids a unit, for unit international and have consistently per meaning domestic bidders bids unit – our So

phenomena auction described, the So John. it’s about mostly we liquidity just

John Healy

ask of thinking just jumped land land over here? at was then, of QX come of think us know of Kind be the years? anomaly should about bit. normalized help things a we about in little should if sign what to spend kind next of couple in to could And terms I as look we the or up wanted you curious a about to And quarter. investment Great. And the

Jeff Liaw

extrapolate dollars. cases it’s and of of think hard to given expenditures, about I a tens from think some costs, capital talking we’re multiple but in I particular, land are quarter, of millions in parcels

those business into reading be the would years quote as for four will I levels one for anticipate. bouncy. today continue investments come, think say I is consider we as for quarter’s we that So expenditure if you the Copart, numbers years well to past necessary have elevated both that as to capital growth

John Healy

you. Thank Great.

Jeff Liaw

John. Thanks,

Operator

Our next with Bret comes ahead. Please go from Jefferies. question Jordan

Bret Jordan

guys. Hey, good morning

Jeff Liaw

Good morning.

Bret Jordan

may your versus if could yield buyer Jeff, sort it base, those Obviously, out frequency of much you put competitor. spread what But give perspective, of auction? a the benefit be feeling for in you and us bidding. average yield you’ve the building end could their done the good like Hey, job the a how look the quantify does

Jeff Liaw

comparison unit would But never it car, Tough our its industry evidence. literally Bret. has is of you feet, per number we know, all pretty sold be true. We like-for-like. that we but have that voted increasing believe and would we to the believe That’s quantify, of proposition both bids of is auction on bids, international with else over believe an course, equal, auctions, time, significant, generally simply the the compelling not this individual

Bret Jordan

points Do it’s single-digit percentage mean sort think of or double-digit ballpark? I points, you percentage

Jeff Liaw

– auctions. both have – that but Bret, were that, on cars sold I on would don’t know. I to can’t. multiple literally the data We no really I don’t do

we can’t – that. it’s quantify So

Bret Jordan

we’ve Okay. talked versus a ago? volume to was of what we is what big now compare what maybe got dismantled, was guess, that? mix where being But you you All five about change that right. and You ago question, And built I years sound Could XX% and scrap, five like then percent recently. the rebuilt. years a percent was were percent

Jeff Liaw

if XXX very buys be drive if a all of they’re think be very different versus those scrap drivable have rebuildable the aggregate, have again would I Won’t can from we can to been been to clearly in who for a intend a point-to-point in different in different either perfect based in they away, because favor buyer – intentions we that judgment. those miles units. able visibility comparisons may of we We estimates units – six Ukraine, can us have directionally a don’t them who from owns part, render it’s yard, it’s also significant the surmise is and shift scrap dismantling But guess cars. buyer

see if the also we’ve been to clearly and auction growth. cars – attended very the part selling, XX% appearances and obliterated of will You in see you saw the that literally damaged what can sort Copart one the be the returned that never in you in physical XXXXs, car, can is that of was

If you look at the to temporarily set, car willing car today with XX% probably you damage, drive it even looks a away. had right were forgo, like you could a car. technology It the if

nature very has the So of as car the changed well.

Bret Jordan

total Okay. go number rates? And as could as you do in any teens the new what guess, to? upper of thoughts that far high we’re I boundary the now, If have loss

Jeff Liaw

thoughts. I the capped new XX%. then someday frequency folks could that is loss No XX% be is to it and or you’ll if And wonder, frequency, the we today see then. have total then perhaps, to whatever at loss And say total take back XX-year And who ones X%. think the old XXXX, I view think, you see look

would XX%, it will years, ultimately if a believing this we less have think having bit up XX% point foreseen tug see XX ceilings we’re quite that logic over that past out If are the as So instead. I from went being. I conversation any don’t it X% reality to ended than in the

there there is particular, there economies, international go. form as growth frequency is particular – in outlet in long for these no can no there a no is so higher in gauge natural buyers, that, of who is where view need is cars loss on total ceiling, our cars the that So

Bret Jordan

Thank Yes. you.

Jeff Liaw

Thanks, Bret.

Operator

go Chris the ahead. with comes question Wolfe Bottiglieri next queue Our Research. from Please in

Chris Bottiglieri

question. Hi, the thanks for taking

the is The want mean, growth? your decelerate I to you’re pretty get you I one here of on – about hey, first think on lapping that do growth or ASP mean X% anything growth. But there kind really ASP sense how on still impressive. last the first if one is year. demonstrable

Jeff Liaw

longer quarter many I or our That for over XX quarter improvement noise it’s you it’s enough we’ve respect talk is this in that – one there think business, now for solid think us given said, a any so. me look all price in I – selling that included. to consecutively been about I with hear this in and a of time. good period quarters been is up consistent variables

there are secular know forces here. you cyclical and As

as better currency, of The frequency generally as that that [indiscernible] those secular fluctuations There more cyclical will Secular drivers well, cause ones. think are sort well. directions. total in more them, cars, ones that here are we being can including improved drive they of total maintained I forces loss upward ASPs as both

we So continue customers. values I think we’re – to are happy delivering better for our

Chris Bottiglieri

yet It’s depreciation And CapEx the bunched of a it different few question years okay. re-ask your and I what way when have yard a earlier. LTM asked barely then at kind of Yes. But recently. ago, ups basis, in I double $XXX an look was roughly that it’s kind about million. was It’s

back this number. imply – And guess you’re land more the I go I’ll I at track that would So you that. now. and have development if disclosed phase probably see right you can

an on it is you for get to expansion added of the way can any If capacity So behind domestically, the expansion? yard of wanted yards? you’re internationally, clarity urgency kind set existing is to the would of there is there what’s trying or provide to thematically sense just customer additions win? where helpful. you be land do to capacity of biggest But kind is Are a it bifurcate – anything

Jeff Liaw

But space, course and elsewhere. could good them Copart to-date, Whatever build plenty efficiencies able we we – markets, of – quote for are we we demand so is every it now. us, of portion new would this if expand yard, the have in these long we’ve which of been traditional that reflection ones see in a into for meaning majority to more use for expansions. strong our operating facilities to. Therefore, affords will The of expand you doing visibility time, can contiguous perfect instead love a business expenditures demands necessary and of into CapEx you’d that are be they space a when will

right you’re have future. simply that is today we facilities growth guess and that driving in – What’s demand development. So in the demand many to demand

Chris Bottiglieri

Got you.

you. Thank Okay.

Jeff Liaw

Thank you.

Operator

Glynn [Operator the queue in Instructions] comes Research. Our question Edge with Derek go Consumer ahead. from last Please

Derek Glynn

Hey, guys. taking Good our morning. Thanks questions. for

Just ops. yard on a follow-up

line time, further helped any But You’ve by item you on particular that for over initiatives that gained some or margin can higher I’m part drive that cost see probably pricing. of inefficiencies in improvement? tackle wondering areas if to guys leverage you in any there item

Jeff Liaw

is answer the and somehow yes question fair a It’s both no. and

it relentless how our us, trips focus self-help weight our initiatives last an efficiency we of And drivers are app So optimize for the which of therefore, yard that this we a make unnecessary time, yard. year, to for including reduces the is our deploy – driver for is example, area all we operations.

So a at we initiatives of number under hundreds, way. times have that

of cases, from some know business I don’t and them yield to offset step our quite will factors you well. they any In know that change. fuel see in natural help healthcare sure I’m inflation a we function other and

us of an worked. been it yes, ongoing emphasis is and has it area for So

Derek Glynn

been it. And acquisition of NPA. years couple secondly, Got it’s the a since of then just you announced

us your progressing? give contribution growth met to sense to update is Can of powersports if business a the looked And get you it What broadly, like? wanted how Just has an its expectations? there.

Jeff Liaw

us. Got NPA for been has it. Yes. acquisition great a

We’re thrilled the that a family today. are part they of Copart are – they

business to from our did add like contribute it needed We would the time twofold. strategic transaction stand-alone the our insurance that believe we that needed I basis to also on – logic was think Copart and would as and we you to value and well. deal the a non-insurance it may remember

business, fronts. own. both that business on on own, on grown the NPA the delivered it’s auction The run powersports have think meaning we has organically through its grown I their

you the our And noted respects to markets, comes when contributed nuance powersports in many expertise to remember is likewise, its we it well. space, which in a may as different

business now in-house in well. our has expertise our contributed So having capabilities that to as traditional

counts. yes, So both on

Derek Glynn

Thanks Great. guys.

Operator

there in speakers, more are no the And queue. questions

Jeff Liaw

the talking us you next Great. Thank you, you for We’ll to call. everyone. joining Thank for to quarter. forward look

Operator

you. Ladies this presentation. gentlemen, today’s concludes Thank and

disconnect. now may You

Copart (CPRT) 21 Nov 192020 Q1 Earnings call transcript