Copart(CPRT)2021-05-20 19:24Financial Data and Key Metrics Changes - Global revenue increased by 8 million benefit from currency fluctuations [14] - Global service revenue rose by 147 million to 89.8 million from 262 million in Q3 2021 [16] - Operating cash flow for the quarter increased by 369 million [17] Business Line Data and Key Metrics Changes - Global unit sales increased by 3%, with a 4.5% increase in the U.S. and a 5% decline internationally [6] - The U.S. non-insurance business grew approximately 30% in unit volume year-over-year [6] - The dealer business increased by 26% in unit volume year-over-year [7] - Insurance business volumes were down approximately 3% compared to Q3 2020, but effectively flat with 2019 [6] Market Data and Key Metrics Changes - Global inventory at the end of April increased by 16% year-over-year, with a 21% increase in U.S. inventory and a 13% decline in international inventory [7] - Average selling prices increased worldwide by 48% year-over-year, with U.S. insurance ASPs up more than 50% [8] Company Strategy and Development Direction - The company continues to expect modest increases in per capita driving and anticipates a recovery in driving activity post-pandemic [10] - Long-term growth is expected to be driven by increasing demand from emerging economies for wrecked vehicles [12] - The company is focused on capacity expansion and has invested 2 billion in liquidity, including $912 million in cash and an undrawn revolving credit facility [17] - The company is still in investment mode, focusing on land and infrastructure expansion [36] Q&A Session Summary Question: Impact of increased supply-demand imbalance on auctions - Management indicated that the strong used car price environment has helped with conversion on consigned vehicles, but no unusual effects beyond price were noted [20][21] Question: Advantages of Copart in the dealer market - Management stated that auction liquidity and delivered prices are the most important factors for dealers, and Copart continues to deliver strong results [22][24] Question: Demand levels from international buyers - Management described international buyers as healthy, purchasing at rates similar to pre-COVID levels, with a focus on higher-value cars [27][28] Question: Update on Germany operations and consignment model - Management confirmed ongoing investments in Germany and progress in converting to a consignment model, which is seen as economically superior for insurance carriers [30] Question: Capital expenditure outlook - Management indicated that the majority of capital expenditures are focused on incumbent markets, with continued investment in land and infrastructure expected [36][41] Question: Value of land holdings and potential actions - Management emphasized the importance of owning land for long-term service to customers and indicated that they prefer to hold land rather than engage in sale-leaseback transactions [75][76] Question: Interest in digital dealer-to-dealer marketplaces - Management acknowledged the evolving market and the potential for strategic extensions but emphasized the strength of their existing auction liquidity [78] Question: Types of items considered for auction - Management indicated that while the core business remains critical, they are open to cautiously exploring other markets, such as powersports equipment [83]