CPRT - Earnings call transcript Q2 2020

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Operator

Good day, everyone, and welcome to the Copart Incorporated Second Quarter Fiscal 2020 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.

Jay Adair

Samantha. you, Thank and to everyone, pleasure welcome to Good second it's quarter all the call. you morning, a I’m going you to President turn financial he it over to update an Harbor, on company, on then will update give for Jeff and I'll quick give a performance. the and Safe Liaw, our

So that, with Jeff?

Jeff Liaw

Thanks, Jay.

certain Relations of and yesterday. our corresponding discuss of non-GAAP assets, our tax to income items, GAAP from taxes assessing results of on most non-operating these we'll with a on certain comparable bases. include provided We measures, accounting financial option GAAP trends our call, together non-GAAP are measures, discrete measures, today's analyze for which directly reconciliation benefits, to XXXX-XX. the our ASU measures effect performance. exercises, certain adjustments press release currency income and related business related to believe and gains, foreign We've link, During and in and shares the payroll on these issued our non-GAAP in relevant reverse tax the non-GAAP Investor effect GAAP measures stock equivalent website both common under We disposal the

call risks from cause may update forward-looking statements, In addition, do undertake implied We that not projected subject actual statements. to to by any forward-looking this or are and results which those to contain materially could uncertainties differ our statements.

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

Jay?

Jay Adair

Jeff. you, Thank

rates, is we have to or effort the When we so it's better have and gains to cars, a that due years closer to technology been that can we to vehicles last for that the five to are never the that globally, again car, and Europe loss five room, build last This future. whether network out handle more the prepared have has continue an date come ever the in due that like due U.S., think I'd share For it we of to been then over state seen to have had. have capacity total we years. about starters, to market think in, ongoing we more about that capacity, locations in for and we continued

say that We the trends capacity will expect both handle and we that. to to continue, happy I'm those have

When that it the there be whether catastrophes, comes to for events, a catastrophes they no Copart or way storm match small handles super cab. is

equipment facilities field, through we we storm through store Our a the have super to the XX,XXX XX,XXX, vehicles where preparedness better never utilize in in has event, locations that large been that process can XX,XXX, technology our the it the we've developed when and we in understatement deploy, to comes to it an position to that not last unmatched is say five years, that events. is industry those over the

our on I talent, huge, are as the years or wins in be best to huge last and years the their our this put the it run has success it industry, due Our whether the through unmatched people the credit that of many so the over also company of success whether training, achieved ability a and now, be company. tenure, is the amount five people

and the service is customers and are and years, what and offer come, the that our XX our We've put technology us industry. gap continue offering that completely moving to space up Our would back I What our ago. years, been in online technology the we'll continues a rolling titans of lead have to we’ll we in developed competitors, over developing the in be keep now years technology Silicon XX against the teams any unmatched. XXXX, for out we leader currently years the Valley. to And tech to a in between

picking Copart assignment technology people, also that than a but XXX,XXX a XXX over company. a up in continue company over facilities, We're acres, land to process, holding over pick our day. is less technology, logistics a do and and Through our and XX,XXX we're from to we we're a our win. up company, also with vehicles month, we’ll

of With to to my Jeff? the pleasure it's over and President, turn Jeffrey the for on financials an that, it L., our update company. performance the

Jeff Liaw

Jay. Thank you,

in quarter. noted, As operating We profit, and the for change was second over revenue quarter with last for million Jay or are record of growth It our global income. results to experienced year. Copart we second revenue, a X% $XX pleased gross

grew declined substantial a instead. at a but that's arrangement to revenue fee-based purchase-based a from nominally primarily U.S. international XX.X%. contracts X.X% U.K. customer converting year-over-year, revenue The Our due sales

global which the revenue measure activity or grew a million XX% Our accurate units year-over-year, business. with sold, more underlying our along is service $XX.X in of

costs As and our sales economic we've comparison our noted their on disproportionately calls, are relevance to vehicle prior visible to business. in

million for to quarter, or again U.K to second $X X.X%, shift the due primarily year-over-year purchase of from the our fee-based customer Our purchased engagement. the consignment declined arrangements vehicles a

year-over-year, grew with and growing international unit XX.X%, U.S. units by XX.X% units global Our sales growing X.X%.

in was growth of customers by and existing at discussions as driving become are repair organic driven rising generate riding from growth growth and strong auction our total non-insurance to attractive, share in as economically returns continuing, loss we The from customers, the organic compared favor trends we've customers, well insurance more long-term more unit U.S. costs. continue gains. insurance to prior market noted as Our salvage frequency

offset as management efforts as and grow groups, to a automotive reflects part nominally wholesalers. basis which noninsurance dealers, continue certain seller We our with our charities capacity on well, in proactive year-over-year, X.X% on business, by unit such growth

the on at and this basis business growth sales charities We our our to marketing liquidity year-over-year. those notably, most But auction attribute we a and XX.X% wholesalers, unit Excluding achieved grew Copart. noninsurance to perhaps increased efforts.

very pool best we the a is in and together, deliver sellers We to auction would industry. and of have we sellers, the brought buyers argue, the our large liquidity

industry International U.S. inventory same above, that of customer This Our growth at X.X%. growth north well as just both global inventory unit X.X% year-over-year. increased as the by driven inventory was inventory again growth trends X.X%. growth at that grew wins. noted same

$XXX.X gross grew rate XX.X that arrangement. expanding points. Our from increase million to a basis XX.X portion shift from We year-over-year. a this margin is same gross XX.X% by experienced to to XXX of change $XXX.X of margins of to A profit or a with customer principle-based arrangement million gross the course, fee-based attributable, from

also form we that, always, again, In of in average trends note grew operating particular, globe as across insurance leverage. to as U.S., the as ASPs, in to year-over-year. fuel ASPs leverage, U.S. benign our we costs, addition In those labor by health towing On costs, expand et well operational gross X.X% would the further prices offset in efficiencies rising helped which and globally, achieved the selling generally the margins. at cetera, in

lift ASPs auction continues year-over-year well less cars. of mix Our That international it liquidity. true. quarters ASP call the continue increase ASP talk This of and That's XX our for growth. in consecutive is in the a their That I a an of damaged believe, newer, as growth now therefore more years, prove as comparison, we to about trend more U.S. reflects, bidders, product is now more and bidders, on

bids that International all therefore, for activity, as as of platform, bidding generate per effectiveness proactive marketing more unit, buying well prices a better the of we outcome efforts, our more auction VBX. and selling reflection auction customers. our activity, is and digital our again The

the Just of affected value shy our of are won participation and their by our of by vast buyers. buyers, U.S. or international those of XX% of lifted majority prices attributed auctions the the have and international same units

encourage and compensation $XXX,XXX general, sequentially multiple year Turning It's will with relative expenditures, excluding to fluctuate about in the They view from ago folks to up million our statement. I'll on up slightly million general time, the over and about We In flow stock-based $XX.X our expenditures administrative can quarter. P&L $XX.X this first depreciation. quarter. to G&A them, a take projecting are grow to cash and quarter by speak numbers business. a and other also as only

recent growth costs, the leverage, there here We continue with -- have like, can there the can we leverage, years. We we believe achieve health but care believe line do labor operating nonetheless. we yard top believe we pressures are inflationary certain to experienced rates, operating achieve rates are and in regarding given cost, as

Our to or operating million million, margin operating of an points income basis XXX grew $XXX.X from expansion. $XXX.X reflecting increase GAAP of XX.X%,

equity interest expense in million. $XXX,XXX flat approximately net $X.X this case, ours. at non-consolidated currency of gains, Our roughly to positions income is slash losses year-over-year certain Other from of attributable offset by largely expense

such from our quarter net income the exercise of tax million reflected reflects stock $XXX.X on Our growth second GAAP the quarter been decreased year-over-year. has earnings of increased included million $XXX.X an in net second which in non-GAAP million from a of finally tax income year, the for non-GAAP million, XX.X% yesterday. $XX.X P&L, increase And release XX.X% employee to on $XXX.X from million options, benefit $XXX.X million to as this year-over-year. our or income $XX.X of the

as quarter, operating with last corresponding year the And million of Turning lease balance this show at million on then $XXX million right of sheet assets adopted likely an we with $XXX the we as the of of now the balance already, finished in know and use the quarter first standard, $XXX quarter -- flow liability cash change on statements, new XXXX. the lease balance you sheet well. in as $XX.X to We cash a sheet net million debt.

cash On principally an earnings $XX statement, the we for $XXX.X flow year-over-year. million, the million quarter, increase by flow higher operating of cash of driven generated

quarter. were per expansion, Our capacity in expenditures million capital The these for expenditures years. of in $XXX our the strong of capital practice majority recent

to that industry note well share capacity both as in as I'll wins. to market expansion our aggressively here invest continue growth, serve we

the do in dialogue the we discussed past, great which communities business. a in is collaborative in with we As and permitting length complex

lumpiness timing completion is flow of cash in the purchases certain subject our to So, the always statement. of

completions. quarter in invest years period. last achieve this dollars indicative worth growth able period quarter a cases, tens our in run projects. for our of will history, past single customers That we’re quarter's and said, millions, outsized execute assets, us. for a growth Copart's of in We the to would at site to general single this an rate even some for few to We the of that is CapEx capacity more obviously look of as of We're delighted in ourselves time millions capital and

efforts that, comments our Q&A. a I'll on then up it make can few we Germany, and open With for in final

our approach unabated. our continue efforts Regarding Germany, in and strategy

investing people, in very technology, and in and are We lands. substantially

cars and progressively source build to continue We it.. a liquidity, better principle at as to we're getting

loss. as to costs, experiences well as real remains as direct serve is total which the the earn economic policyholder improved the objective industry lower benefits for unchanged, their there, insurance to claims the well, carriers’ long-term both consignment and However, volumes cases benefits in of in

dialogues and makers on carriers, active Germany. on as a the with forward for consignment well. decision have at industry with sold We basis that calls look to major discussing insurance you cars in have We future further

With it that, I'll to for open up Q&A. ask Samantha, you

Operator

Thank you. CJS with Our question [Operator come Instructions] will from Bob first Labick Securities.

Bob Labick

call carriers game optimize that some Good that on going? morning. start alluded their claims think more results that? it's How you XXXX, wanted is I the been talk long-term how helping initial should you about just we any a about a to Have XXXX? plan, Can is to there or last that process.

Jeff Liaw

claims is there that in calls, for job day. detail We have last but do about is the to on and and it characterize customers something improve every earnings That's we a I'd Bob, term. journey. insurance it spoken view our literally is our the economic XX-year greater outcomes we in as-- principal process somewhat may

view there ongoing are released, that commitment do, discrete we what change that se very as selling, just certainly in individual that we purposeful have products per but already to we that a have products So queue, we the wouldn't an products outcome. are I Bob in

Bob Labick

Got it.

And had. last Can highest us still Are forward? just thanks. pace to this two the more just Was on all in you color give land going in you've international obviously you the the spoke Okay, keep as years the well? looking little then that? U.S. quarter is about you similar CapEx a

Jeff Liaw

be will U.S. some expenditures the will capital the be internationally, U.S. the with vast majority of in majority vast The but

out it called I is higher much obviously years. we have incurred So in rate because it a recent that

this closed by memory on would history. know time nature is literally in if years of to past quarter. dollars began lumpy you We X in as have the phase is of ago and years expansion then industry I as have or than more of the few by aggressive capacity so capacity delayed our we of announced is It been the nature our XXXX beast, phase because our approximately run of months. in this is of XXXX initiatives in the look more rate our Bob, for having X you CapEx been growth April past indicative could this that so a property expenditures the long that millions serves, tens

And of expenditures of so millions tens in of a await quarters time. dollars few the you

want So we so and we We it. as don't customers and once. to for it at it our we have endeavor all acquire happens available can and simply the to land, smooth as develop soon ourselves sometimes

Bob Labick

Got it.

current sounds reached you for It given this where great. volume capacity faster constrained growth? you equilibrium your the just if acquiring Have for volume guess levels? on constraints talk growing if currently what about think Okay, been you've I to now based ask stand that you're quarter you years, growth. and have to new in on need crazy you reached you XX% several get there growth future Can before, But for I are double-digit capacity?

Jeff Liaw

So fair a question. it's

Jay that serve business the customers all if well I the us. top. exceptionally in ready with and land, could invested markets are across we at think We've noted to as do when our they so

in these during been an has ours. We've you But that’s for required Bob. is capacity acquire may there have heard it's effort that particular. customers proactive decisions noninsurance to a respect develop land. factor, critical wouldn't make of also our So and in within gating the made to it them all certain us deck say on hands to to commitment sellers insurance I discussion which as free that

Bob Labick

Got it.

much. so you super. Thank Okay,

Operator

from Our come with next Craig will Baird. Kennison question

Craig Kennison

trends, claims that XXXX. Good morning. see industry of questions. for you're ask taking in total I terms Thank unfolding the wanted about you what rate loss and my seeing in how to activity you and

Jeff Liaw

a back, step Craig a take I'll and broader make bigger observation.

claims. activity relatively nominal in I flat the seeing terms that's are think we of year-over-year claims

the decline. I'm their Very certain that claims industry to So seen its these most disposed aggregators most modestly cars XXXX-XXXX perhaps course get you trend who history, of are better. we've period as smartphone points carriers regarding I our frequency when over was smartphone generally the data sure history, has penetration time. results XX-year do at One already generally same peak drivers distraction declined certain think Over track of XX-year time as anomalous accident was our for but -- for as claims probably well frequency get of that safer over perhaps otherwise, same.

in frequency, our which as However, loss has very steadily the time. increased total you one way know tailwind has over business been

I quarters think individual to tough months and are measure.

prepare. sensors involved it are have dig, becoming the becoming once are over to the of lot I that kind which if and in think but think set and there is always going they cameras can that to surface, difficult to noise cars you and be car, at more of our clear or take any is for the cars technologically continues I that trend become up of back move a that you reasons think see sophisticated making time more motor therefore, below you the I step number, all and, all, reasonably

are compelling at makes time buyer our improving So, same less while which repair base international rising, is our repairers liquidities the auction expanding. costs

time the worse we at there's XXXX, literally is better a year, I driven a sixfold decades years this frequency answer and salvage the rise XX for quite to -- what are literally come. I frankly fivefold continue loss long-winded expect but that years to same bit which it why sixfold over know that to come. in expect and is it's years I past over So, will the think of but increased total prepares

Craig Kennison

then see of different parks a in European such frequency? substantial constitution loss the trend total car looking claims that is are or rate we'd your at European and park, that in And differences car Thanks. business, there

Jeff Liaw

in it strokes, compelling certainly for and no. and we we true the the again brand that's in are The U.S. idiosyncrasies In how broad in to country-specific high-labor which too, is UK and can repair broader local There prepare underlying But vehicle same here similar, strokes, are by cost such a and costs how those cars loss and that frankly, proposition the high-labor make no. complexity. growing cars. enter exactly drivers are economic total demand of affect the participate. emerging say, there And the large

Craig Kennison

how versus X conversations the you today now you're lastly, that you've with insurance year maybe And would frame ago, assets and European having carriers in conversations platform a sort of ground or those the got an active on Europe? working

Jeff Liaw

the well telling the outcome. one to have to U.S. to and way, why It's Fair thing as much question, yards cars It's another more economic engaged and the results the at UK the demonstrate be Craig. as auction superior sales actual which or analogs proposition open, [Indiscernible] matter people productive. should can compelling. by discuss economic

platform, the buyers is on Germany XX, Which compelling to that on like delivering February and So, in cases XX buying ground a is the many on profit Z. literally all. of they're X, a Germany most XXXX cars of the Germany, is February U.S. is be Germany, auction outside in can using of trading Y, the not argument

have conversations for in the that reason. So advanced part

Operator

John question will with Research. from next Healy Our Northcoast come

John Healy

Thank bit you applications always we selling create develop you ask could to industry that are more time seamless have I be would that guys you technology on you. the guys I about last with if could maybe upgrades kind understand hoping of there. about where area the of think kind little that from could titling potentially some One the a a buying about guys thought benefits and the comments become I've talked service wanted was pushing endpoint envelope? and the a and states have you made like you technology. to guys about front. the the Clearly, I nice long I led applications. few when And years, to made for guys you feel about

So, just understand can technology to to side the bring what back-end of on trying industry? things, the

if technology a of of some that been the able quicker, the economics said, vehicle that for and the bring extended the into time? the that move road And to you potentially period with from does associated guys storage have benefit cars industry, you

Jeff Liaw

cars there John. our close allowing which course, cycle us said for My Bob, a investment times, side titles outcomes of to the them quickly quickly them, -- Thanks, probably there network internally. more do own the of salvage improve of for particular answer state titling therefore is quickly global to I similar original to process, processing are in non-stock technology the a you that each we're well, for be dozens to when platform. literally And them in is that for the to that treating to which sellers. ordinary and technology best process its selling to outcomes, That what in claims more and auctioning means, shortening liquid is has us steps

our your besides biggest So broadly, the is single our the far investment question, answer land. by Copart technology yes, here

you just resorts If headquarters walk expenditures. numbers technology you with and a Copart and group the to group through is were literally meet find overwhelming by group

part what talk it it, our our frankly sellers biggest than like more we about has we but huge single So, Copart a we this, is with do, been on of investment. do it calls

John Healy

end in what have U.S.? at And probably I inventories did. the but Did quarter I missed you the guys it, might mention of the were

Jeff Liaw

Inventories [Technical year-over-year. Difficulty] X%

Operator

Our come Inc. Imbro question from next with will Daniel Stephens

Daniel Imbro

incremental a out strategy next and growth for clarifier there market to Are that guys. overall market comments. quick today? of up the contracts you there comment or in share Hey, just about Jay, good for large Talking and trends? opening questions. Are my RFP any year your kind on coming was incremental Thanks on capacity taking seeing morning recent share.

Jay Adair

continue. succeeded up the the get or specific was was having to and share But I they're twofold, RFP. tender that market we never do making I forward capacity wins point at Well, talking have historically that about, one we after that anticipate the have to and clients is trend into whether will we going second

part, a whether to previous the be other quicker, sold if on vehicles detrimental we for or I And storage standpoint. if most quicker. the sell was are would about not was I benefit when thing think from add a going comment question, vehicles the that we there

an the all Our storage that business. -- a to return is services as understand, just or vehicle and investors goal so as generates our storing possible quickly the the those goal insignificant part customer vehicles move for of vehicles higher

So, clarity I just wanted to add some that. on

Daniel Imbro

or maybe along dealer a state, Jeff, you lot municipality that longer kind then, are be out follow-up, from away and steady have of, shift phased should strategically? that towards a far municipality that toward this mix in legacy benefit What's shift a mix we? mix more out the within going charity And forward? to helpful. continue charity. and we call of largely the That's Should continue from right off non-insurance ways How term,

Jeff Liaw

these all remodel would of don't detail We best of what face our make quarter would year-over-year. and to resource We we from get to that somewhat we time time largely accordingly. think question. level constraints did also Complicated think quarter I -- complete. And across course of I can value do about to I took -- customers how and But happened decisions of some categories. that largely just think as is complete. into want which this shift the

Daniel Imbro

warm dynamic volume thinking are this to to less in be we quarters guys just strong up you XXXX-XXXX That's impact that of on business. if any of tend me. in impact year today or due the last show negative on there enough half frequency, winters really industry your kind Thanks. from just winter helpful. should does growth And where some one then that accident have the coming look results back one Historically, at to should we the this see in

Jeff Liaw

for extreme course, could tend to to whether events, excuse becomes tend an fair very sometimes feels that exception business. and of like talk not to with quantify explanation a difficult because it we it's about the of both We it's an Yes, quantifying in weather United lower become question. claims -- that factors of, means across was nonetheless. at year-over-year yes, the therefore, measures, the the fewer it funnel was precipitation and with up benign winter at agree X.X% all States top do higher generally I that temperatures of by you that that, I know. precisely, don't Inventory least a the

by precipitation depressed personally. was judgment others to and is better temperatures left that whether a probably to So, me

Operator

Thank you.

question SunTrust. with Benjamin will next come Our from Stephanie

Stephanie Benjamin

afternoon. it or hoping on the a per seeing talk pricing side was call about the Hi, I the equation. could little good revenue bit you're Jeff, unit you more of what

I a called of think But is historical little you maybe out bit ASP another growth. from on year-over-year trends. basis quarter slower a some

calling used what I for think if the to side you that and maybe know kind the pricing some per to you're could are vehicle Thanks. and the some declines equation side not, seeing of that's if and in but revenue or this year. unit I going don't of speak materialize market. pricing on

Jeff Liaw

and In itself think selling asking car auctions two selling is at some prices is cars among a cyclical cars include like, you about really the our one as of you're function other x of our economics of of for currency is phenomenon, affect different used fluctuations which of variables secular course which that both you can That cyclical prices forces, auction. prices, that, I the and noted, mentioned things.

course, marginal totals, that frequency more we and cars ASPs as of rises, get second, up. loss think The that is are loss total would drive frequency total drivable rises, more we

are fine drive secular ASPs haul, combination to pass week, the month, speaking, The we all those we So very in over long variables. think individual tailwinds of year, But quarter ultimately of perhaps net projects the the or will believe too up day, become generally debt. any the two etc.

of revenue to both The also as provide that's something of drive as volume Revenue that much second and per your can. we addition -- express drive we part with per on not unit of sellers course We se we we revenue disclose. buyers. growth question unit, the services we

Stephanie Benjamin

then clarification, on some you a some with did carriers just that testing were that’s for models did I are I you know that consignment testing it had say And consignment model Germany, Germany I but that or I miss twice. apologize in twice, hearing

clarification. So just a

Jeff Liaw

said, the Germany. basis cars insurance our people-based We physical industry we through continue also serve purchase that continuing That we consignment as principal to and have technology a as infrastructure on is to carriers cars build and talents activity in long-term. well sold

Operator

next with Bret Jordan Jefferies. come will from Our question

Bret Jordan

morning, you to big guys. year, inventory and the contribution good think what core pretty legacy-ish share there some gains growth? the versus look was Hey, what was last had at from inventory growth When quarter is any new about in customers you the way

Jeff Liaw

well, detail, get probably that's it there in number. is characterize market was a I as the think share that would into. I as would I year-over-year level both -- of But underlying we that gains well market characterize would, way growth

Bret Jordan

anymore, talk Okay, virus? you I any of don't but relative we to guess market about great. with on volatility guess pending what's the And any Chinese Is do scrap scrap pricing demand, price see I impact, from on there going Corona there?

Jeff Liaw

say I'll minimis. de Scrap answer in is would I Copart two parts. price maybe effect largely on

of reasons but year. tiny overall buyers when for are Chinese a the below portion last regulatory our very percent sales in So I part

not borders. obviously, said, observe buyer are specific Corona they're virus, That of insignificant national not will So necessarily Copart cars.

downstream but spreads it if today's there effect So, could be no. in

Bret Jordan

being think I total in when the Okay on you one question the there? about Germany, smaller I think about the yard size and Germany, somewhat yard. U.S. then what's just guess acreage than

versus is guess better I it in to about think So, locations? it acres

Jeff Liaw

Probably so, though not something we acreage. Yes, discuss. we investing in would are

we is we think yards work would is for like acre I storage generally and Germany long part parcel because time to smaller The needed in to be the going. today vehicle and to get to that. in U.S. here correct for that in do matter that wait intuition develop lead your and our

facilities starting some more had we them. gotten with of smaller So, there achieved and quickly cases operations in a mixing by number facilities [ph]

Operator

Barrington with come Prestopino Gary question from will Our next Research.

Gary Prestopino

just is where versus versus what you? a is it Good now morning, Jay of last could you're year? you was mean, the that current changed. insurance the percentage mix percentage vehicles I noninsurance, and are selling, as Jeff, maybe how me, Hey, tell how

Jeff Liaw

The I seasonality to and that. seasonality. not some bit current was -- little It's There percentage it is approximately Xa% but of year it year-over-year. north ago, was think a a not

XX% a talked believe that's was XX%. a just non-insurance ago moment the shift and of year function ago. that So I we within now a about And is partially

Gary Prestopino

one for And cars. could dealer growth -- as you is the dealer cars. of Correct? there If the most growth assume that is

Jeff Liaw

That is in a Yes. meaningful source the of business. our growth non-insurance

Gary Prestopino

their I'm it? Do should the this, have with of I it facilities to sell dealer know the at you and you lot car, capability, it sell one or take the to you the your do have question, the to have capability to do lot, but asking probably

Jeff Liaw

safest way exploring there is let's we to multiple automotive service the those characterize are the So, it say, are, ways dealers. probably -- that to to way best

I perspective buyer offer value is we think comparison in base their principal clearly proposition the to our from today, in marketplace. that other offerings the

example, value relatively we it the world we the how number we that all value is offer. different post base. buyer a have are are a manage, clear deliver I variables over those global booking not, and candidly, require quite we with physically avenues. For to deliver that And whether the simpler of and it's side, how the I already we that proposition experimenting or all Gary. think from have as we We are deep But think and

Operator

Thank you.

with Consumer Our Derek will from Glynn Edge Research. next question come

Derek Glynn

just vehicles follow-up key better they're or Are question. actually of platform. specifically purchased differ there trying leveraging the your Thank own by inventory you for your them their dealers. I'm at get I'm from auctions offering quality? terms a non-insurance and any to in business the how at with taking how sense core that from differences had relationship your on age curious I them for retail. a independent the sourced or

Jeff Liaw

X to provide through I'd damaged would very as the tends too course, they automotive a think a But a number drivable, to to the trading and that. cars in see wants us, would but you Copart map rules sometimes liquidity broad perfectly receives often that on of and draw finance trends tax be and hard in sometimes so through near-term It's Copart or to consign think that Y, over cars brand do ones, I of cars simply sometimes newer there general, and are be natural all to I wide facilities, say specialized well. car under to a if cosign sometimes are will ones both sweeping you a process cars dealers achieve tough range auction.

Operator

next is call questions. last Our come from question [Operator Thank This with will Research. Wolfe Chris for Instructions] the [ph] you.

Unidentified Analyst

the question. for taking guys, European you A the Hey, on question for rollout. thanks

the sounds -- the have are out capabilities the actual right it like and you and service. insurers So proving you like with data data actual to

the is them like for of of more timeline long model kind and type that highly right on how from take And like model's they've disposition it preventing other are points they've given that board? that the what's two, data? this insurers then model? friction that the acting to like conversion a made compelling better changes decision, what presumably decided What's once besides are of quickly regulated industry once So,

Jeff Liaw

through back all barrier, which biggest single with been historical the set literally is simply their way Chris, that think for interactions of the I inertia, industry to is their practices a an insurance decades, is claims. that policyholders it's accustomed from

that carriers to should barrier built what We meaningful So to improve do. when frame be in think policyholder certainly break. the to I than that anything it the habits habits do else. momentum But is to practice experience, believe this accelerate time as is are that that causes the more there. there speculating tough difficult some from direction But exactly and conversion volume shift

Unidentified Analyst

yard can there And robust translate CapEx CapEx the of Is through for us basically or That's up you CapEx, yard quarters cost does help how coming how to Got translate you years you. to the or mean, CapEx near-term? but been [indiscernible] the super that matter? in then lately, that do kind cost? think helpful. of op implications on kind the I the has of lag,

Jeff Liaw

would every you access point think literally to if data inside that company, correlation too our try had a to be draw. I noisy to

So shops to site the -- CapEx, I'll cars when CapEx, where the are net we new some the give closer of new indications. directional repair open be being helpful from. because to certainly facility a seem is accidents some the retrieved just we or you is

We costs the manage So, facility. yards are there the congested are to we extra incurring because savings and may immediate therefore the of achieve in savings and vehicles are labor likes would the the terms achieve vehicles. inside retrieval that nearby, of very

and incurs some labor, of new level utilities, and the like. opening course, management's of telecom, However, costs, quote fixed facilities including

opening opened. that facilities, you gross in quarter So, way given there opening CapEx, current effect set are enough big now steadily, not across given -- a and It’s variations of any cost of enough I system, and that the variations takes. facility’s quarter you the so any from It's very puts facilities any or new expanding set hear pronounced. are the enough affect facilities, would does the us explain have we visibly because the in where a don't say financials discuss done that be sit. we won’t margin one newly don't a reason

Unidentified Analyst

very for That's All you helpful. you. time. Thank the Got right.

Operator

you. Thank

come will from Stephens, question Daniel Imbro next with Inc. Our

Daniel Imbro

thanks, follow-up. a market commentary. quick guys. the actually I have follow-up Jeff, Yes, European a on

in While particularly lower, the collision Europe. alternative part usage similar, car believe park I is in is repair

in support So, -- what question Germany vehicles of sell over more is, run the existing drive Germany units traditional an collision today? or in I the there place to Europe the in is salvage or you're guess market and would volumes, selling salvage you

Jeff Liaw

vehicles, re-driven be it achieve value or fuel to altogether, the or I restored other. that full find justify will else. them back so those XXX%damage, fair, fair and home achieve cars could liquid there possibly value cost considerably proposition fair observation than U.S. still industry is nonetheless, Difficulty]. today. is we are in of Europe think the economic That repaired, do which full there within should not I market The utilization But observation they in many economically today's lower totaled value, that. clearly But cars are to or today, disposition that alternative as help for in one are that for scrapped We way that is traditional carriers be salvaged simply opposed Europe you the Industry is carriers repair rebuilt fair. the a is will are to the There help said, dismantling, cars and even which somewhere again are parts simply Europe your whether not are can be that [Technical we and here pattern that think which ultimately don't

Daniel Imbro

Makes total sense. Thanks so much.

Operator

this any to turn in questions further would like I showing the speakers am At remarks. over closing to not you. time, the back queue. Thank the for I floor

Jay Adair

We much. Samantha. Thanks thank you, attending you, to call. Okay, for forward look Thank so the next Bye-bye. everyone, the reporting quarter. QX in

Jeff Liaw

Thanks, you guys.

Operator

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

Copart (CPRT) 20 Feb 202020 Q2 Earnings call transcript