Copart, Inc. (NASDAQ:CPRT) Q1 2017 Earnings Conference Call - Final Transcript

Nov 22, 2016 • 11:00 am ET

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Copart, Inc. (NASDAQ:CPRT) Q1 2017 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Ladies and gentlemen, good day everyone and welcome to the Copart Incorporated First Quarter Fiscal 2017 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, CEO of Copart Incorporated. Please go ahead, sir.

Executive
Jay Adair

Thank you, David. Good morning everyone and welcome to the first quarter call for Copart. I am going to turn it over to Jeff Liaw, our CFO, who will give you an update on the financial performance for the quarter and then he will pass over to Will Franklin, our EVP, who will talk about some of the operational affects that we had in the quarter.

So with that, it is my pleasure to introduce you all to Jeff.

Executive
Jeff Liaw

I will start with the Safe Harbor. During today's call we will discuss certain non-GAAP measures including non-GAAP net income per diluted share which excludes the impact of foreign currency related gains and the tax effect of recent executive stock option exercises. We have provided a 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 their corresponding GAAP measures is relevant in assessing Copart's business trends and financial performance. Copart's management analyzes its results on both a GAAP and non-GAAP basis described above.

(Forward-Looking Cautionary Statements)

Per our custom, I will start with a brief review of our income statement and then progress through the balance sheet and cash flow statement as well. We are pleased with the result of our first quarter in fiscal 2017. We have continued the basis of the presentation that was shared with you in the last quarter with a non-GAAP presentation to account for certain foreign currency related gains as well as stock option exercises. I will provide more color on both of those to come.

Starting with the headlines, we experienced global revenue growth of 19.8% and that is after accounting for the detrimental currency effects on revenue of approximately $9 million, largely due to the depreciation of the pound relative to the dollar. We grew unit sales volume worldwide at approximately 19% with US unit growth of approximately 20% and international unit growth of approximately 14%. Global inventory growth was 25% of which 5% is attributable to catastrophic weather events.

Service revenue growth outpaced that of purchase car revenue growth with $56 million of our growth attributable to service revenue and $1 million attributable to purchase car revenue growth. This is largely due to a proactive shift on our part from purchase car volumes to agency arrangements instead.

We experienced gross profit growth from $120.9 million to $145.3 million. A couple of points of color, we did experience year-over-year scrap price improvement of approximately 26%. We continue to cite the same American Recycler Index averaging five different regions over the three months in the