Copart, Inc. (NASDAQ:CPRT) Q1 2019 Earnings Conference Call - Final Transcript

Nov 29, -0001 • 07:00 pm ET

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Copart, Inc. (NASDAQ:CPRT) Q1 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, everyone and welcome to the Copart Incorporated First Quarter Fiscal 2019 Earnings Call. Just a reminder, today's conference is being recorded. For opening remarks and introductions, I would now like to turn the call over to Mr. Jay Adair, Chief Executive Officer of Copart Incorporated. Please go ahead, sir.

Executive
A. Jayson Adair

Thank you, Chantelle. Good morning, everyone and welcome to the first quarter conference call for Copart fiscal 2019. It's my pleasure at this point to turn it over to Jeff, who will go through the financials. We will then come back to Will, who will give you an update on US, International and then I will give you an update on what is happening in Germany since there's a lot of changes going on there and pass that to Jeff as well. So with that, I'll turn it over to Jeff.

Executive
Jeffery Liaw

Thanks, Jay. I'll start today's call with the Safe Harbor. During today's call, we'll discuss certain non-GAAP measures including non-GAAP net income per diluted share, which includes adjustments to reverse the effect of disposals of non-operating assets, foreign currency related gains and losses, and certain income tax benefits related to accounting for stock option exercises. We've provided the reconciliation 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. We believe the presentation of these non-GAAP measures together with our corresponding GAAP measures is relevant in assessing Copart's business trends and financial performance. We analyze our results on both a GAAP and non-GAAP basis described above. (Forward-Looking Cautionary Statements).

Turning our attention first to the first quarter of fiscal 2019, we achieved a record first quarter in unit sales revenue, gross profit, and operating income. The period presents a somewhat noisy comparison in comparison to the first quarter of last year given the events of Hurricane Harvey last year and Florence and Michael this year. We'll provide metrics during this call with and without those events to provide you a cleaner comparison. Starting at the top line, our global (ph) revenue grew 10.1% year-over-year. Excluding those three hurricanes I just mentioned, revenue would have been 15.1% instead. We were burdened by an unfavorable year-over-year currency effect on revenue of $0.3 million on foreign operations primarily due to the relative strength of the US dollar in comparison to the pound and the Brazilian real. Our global service revenue grew (ph) 5.5%. Again, excluding those three hurricanes, global service revenue would have grown at 11% instead. Purchase (ph) (technical difficulty) was 48%, split approximately equally between US and internationally in terms of the absolute growth. The growth in US was driven by a mix of things including NPA and CoCorrect (ph).

Internationally, our growth was driven by the (technical difficulty). As you know from following Copart, our actual Copart owned inventory is still relatively modest with $19.7 million (ph) at quarter-end, small in the context of our overall business since (technical difficulty) is reflected