DALLAS -

Along with offering another update on how the company is navigating the costs associated with processing vehicles destroyed during Superstorm Sandy, Copart highlighted the early success of its mobile apps that were launched at the end of the second quarter of its current fiscal year.

Copart said 30,000 users downloaded the apps for Android, iPhone and iPad during the first two weeks after their unveiling on Jan. 31. Along with the volume of downloads, chief executive officer Jay Adair cheered the rate at which Copart users take advantage of the mobile app daily.

Adair said more than 90 percent of users who downloaded the app still utilize it each day.

“A lot of you have downloaded apps on your Android or iPhone before. You check out the app, and you immediately delete the app thinking, ‘Why did I even bother?’ That has been the opposite case for us,” Adair said during a conference call with investment analysts on Thursday.

“This is a really big deal,” he continued about the rate at which the apps are being put to use. “It shows us the stickiness of the product and desire for the product.”

Adair specifically mentioned the capability of the iPad app, which can allow users to join and attend live auctions without registering with Copart. He indicated that availability wasn’t possible when users went to the company’s traditional website.

“That’s really bumped our attendance,” said Adair, who also added that more than 10 percent of auction attendance now derives from Copart’s mobile app.

Furthermore, Adair highlighted that new-member registrations are up 10 percent since the launch of mobile app and total participation at Copart auctions during the second quarter jumped 30 percent year-over-year

“These are just incredible numbers,” Adair said.

Copart intends to roll out enhancements to its apps such as improving the ability to move from auction to auction via the iPad app. The company’s first-generation app prompted Adair to reflect on Copart’s metamorphosis via the Web.

“I was asked back in the late ’90s at a conference about how big can the Internet become in Copart’s life. How many cars can you sell online? At the time, we were 2 or 3 percent. I remember thinking we may get to 10 percent, not knowing that we would go 100 percent Internet,” Adair said.

“The mobile app is really going to be a user-experience change for us,” he went on to say.

Copart’s Q2 Operating Results

For the three-month span that ended Jan. 31, Copart calculated that its revenue, operating income and net income came in at $266.2 million, $62.8 million and $39.6 million, respectively. The figures represented an increase in revenue of $38.3 million or 16.8 percent; and decreases in operating income of $0.8 million or 1.2 percent; and in net income of $1.0 million, or 2.4 percent, respectively, from the same quarter last year.

Copart said the operating results for the second quarter were adversely affected by abnormal costs incurred as a result of Superstorm Sandy. These costs include the additional towing, payroll, equipment, travel, housing and facilities expenses directly related to the operating conditions created by the storm

The company computed that these costs net of the associated revenues generated a loss of $11.9 million during the quarter and had a negative after tax impact on diluted earnings per share in the quarter of $0.06.

“We expect these additional costs to continue into future quarters. However, we believe they will be completely offset by auction revenues and, accordingly, no future loss is anticipated,” chief financial officer Will Franklin said.

Franklin noted that of the more than 50,000 units destroyed by Sandy that came into Copart’s pipeline, less than half were sold during the second quarter of the company’s fiscal year with the remainder to be sold in Q3.

Copart established 15 temporary locations, utilizing 350 acres to process Sandy units. The company also brought in 500 haulers from as far away as Washington and Copart personnel from its other U.S. and U.K. operations to handle the volume.

“The important part of this is we did a great job of handling the catastrophe but we also learned a lot about how to handle future catastrophes,” Adair said. “This is very different than Katrina because the storm waters came in and receded so quickly as opposed to a catastrophe that’s either not of this scale or a catastrophe that takes much longer for the waters to clear before the claims come in. This is one those catastrophes that happened so quickly.”

Sandy’s impact also left Copart with a slight decline in volume for its non-insurance business.

“The hurricane had a negative impact on normal used-car trading activity in the Northeast region, which is an important region for our non-salvage business,” Franklin said.

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