Copart, Inc. (NASDAQ:CPRT) Q1 2020 Earnings Conference Call - Final Transcript
Nov 21, 2019 • 11:00 am ET
Excuse me, everyone. We now have our speakers in conference. [Operator Instructions] I would now like to turn the conference over to President and CFO, Jeff Liaw. Please go ahead, sir.
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.
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. We believe the presentation of these non-GAAP measures together with the 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. In addition, this call contains forward-looking statements within the meaning of federal securities laws, which are subject to substantial risks and uncertainties that could cause actual results to differ materially from those projected or implied by our statements and comments.
We do not undertake to update any forward-looking statements that may be made from time to time on our behalf. For a more complete discussion of the risks that could affect our business, please review the management's discussion and analysis portions of our related periodic reports filed with the SEC.
Thanks, Darren. We are certainly pleased with our results for the quarter. Darren, in a moment, will walk through details of those results with the metrics that we traditionally disclose. Wanted to pause for a few minutes also to talk about some of the bigger themes in our business, as those themes, I think, will help explain and drive the results of the past quarter and the past year, and frankly shed light also on our strategic approach to the business.
First, we want to talk about the evolution of the total loss universe. I think historically, we've been good and the industry has been good about talking about repair costs. And while rising repair costs due to vehicle complexity and age and labor rates and the like, we're driving increased total loss frequency. Needless to say those trends continue unabated and are accelerating due to rising complexity in the proliferation of accidents -- accident detection and avoidance system. It's well understood among customers, investors and other stakeholders, that repairing cars has become progressively less attractive economically for many, many years.
I think where we've been less effective is in communicating the other side of salvage equation and to be precise, I mean the values that we can generate for these cars at auction. The total loss industry has changed very dramatically over Copart's 37 years,