DALLAS -

After highlighting the company’s performance during the first quarter of its 2014 fiscal year, Copart chief executive officer Jay Adair explained how the sales slowdown during the heat of the recession four years ago is still impacting the salvage industry.

Adair told investment analysts that vehicles on the road today are older than what was in operation back in 2008 and 2009 when the economy stumbled into recession.

Experian Automotive reported earlier this month that the average age of vehicles on the road was 10.9 years in the second quarter of 2013, almost a full year older than was recorded in Q2 of 2009.

“As we talked about back in ’09, and if you recall after the ’08 crash of the market, we said if sales stayed at these low ratios like they did, that we’d see vehicles aging, which they have. And we’d see more vehicles become probable for total losses, which is what we’re seeing today,” Adair said on Tuesday.

“We’re seeing the market expanding,” Adair continued while mentioning that Copart’s inventory of salvage units is about 20 percent higher now than it was a year ago. The Copart boss explained how market conditions as well as demands from insurance company clients are pushing that level higher.

“We tease, because 20 years ago, the standard was four-day pickup. Today, they want 24-hour pickup. Now they push for same-day pickup. We’re always seeing a push toward that,” Adair said.

“We’ve been able to improve year after year on cycle times. I suspect there’s a point when you can’t improve any more. You can’t hit zero. At some point we’ll stop seeing that improved, but with technology it’s pushed us to improve even further. There are some tools we have to be able to pick up cars within hours instead of days,” he went on to say.

Q1 Performance

For the three-month span that ended Oct. 31, Copart reported that its revenue, operating income and net income came in at $279.9 million, $65.0 million and $41.4 million, respectively. Those figures represented an increase in revenue of $41.0 million, or 17.2 percent; and decreases in operating income of $9.4 million, or 12.6 percent; and in net income of $4.4 million, or 9.6 percent, respectively, from the same quarter last year.

Copart’s fully diluted earnings per share for the quarter were $0.32 compared to $0.36 last year, a decrease of 11.1 percent.

Included in the financial results for the most recent quarter are the results of Copart’s QCSA acquisition, which closed on May 30. The company indicated these results included revenues of $17.2 million and expenses, excluding severance and lease termination costs, of $17.9 million.

“We expect our QCSA acquisition to contribute to our operating profit by our third quarter of this fiscal year,” Adair said. “During the quarter, severance and lease termination costs totaled $3.7 million. We expect severance and lease termination costs to continue into our third quarter of this fiscal year.”

New Website in Final Development

Adair also shared on Tuesday that Copart’s completely revamped website is in beta testing and should be ready for a full roll-out later this fiscal year. One of the major differences between the new site and what Copart uses now is the elimination of the need to register to participate.

“You can jump in and watch an auction so you can learn much more about our business. That registration process for people can be a pretty big barrier,” Adair said.

Copart offered a glimpse in its business when a rare Ferrari crossed its online block earlier this month. The company made a video of the sale and uploaded it to YouTube. It can be viewed below.

Nick Zulovich can be reached at nzulovich@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.