Continued consignment growth from insurance and non-insurance business contributed to a strong fourth quarter for Copart.
On the insurance front, insurance companies were declaring vehicles total losses at an elevated rate, according to Jeffrey Liaw, Copart's CFO. This meant that Copart — with a business split of 80% salvage vehicles and 20% clean title vehicles sold — was receiving more salvage vehicles at its auctions, which contributed to a company-wide rise in volume during the quarter.
On the non-insurance front, the mix of vehicles the company sold during its fourth fiscal quarter shifted in its favor, toward higher-yielding vehicles. The volume of charity vehicles that the company sold, which typically yield the lowest margins, decreased during the quarter. Meanwhile, the number of franchised and independent dealer vehicles, which typically yield the highest margins, increased by 20%.
For its fourth fiscal quarter, the company reported revenue of $378.6 million, gross margin of $167.5 million, and a net income of $70.3 million.
These numbers, according to the company, represent a 13.8% year-over-year rise in revenue, an 18.4% increase in gross margin, and a 16.4% decrease in net income for its fourth fiscal quarter. The rise in revenue and gross margins, according to Liaw, was primarily driven by an 11.2% increase in worldwide volume.
One thing to note is that its fourth fiscal quarter ended on July 31, so these results were recorded prior to the effects of the recent hurricanes.
Looking at Copart’s North American business, organic growth and a recent acquisition also contributed to the company’s strong quarter results.
On a same-store basis, Copart reported a 10.9% increase in unit sales in North America. Adding in the business from National Powersport Auctions, which it acquired in June of this year, North American unit volume growth was up 12.5%.
Along with the results of its fourth fiscal quarter, Copart also provided results for its full 2017 fiscal year. During its fiscal year, the company realized a revenue, gross margin, and net income of $1.4 billion, $632 million, and $394.2 million, respectively, which represented a 14.2% rise in revenue, a 16.1% rise in gross margin, and a 45.8% rise in net income for the full fiscal year.