Q1 2021 IAA Inc Earnings Call
Doctors section and our annual report on form 10-K for the year ended December 27, 2020 filed with the SEC on February 22021.
The forward looking statements made today are as of the date of this call and IAA does not undertake any obligations to update these forward looking statements.
Finally, the speakers will refer to certain adjusted or non-GAAP financial measures on this call a reconciliation schedule and the non-GAAP financial measures to the most directly comparable GAAP measures is available and <unk> press release issued today a copy of today's press release may be obtained by visiting the Investor Relations page of the website at www.
Dot dot.
Dot com.
I'll now turn the call over to John John.
Good morning, and thank you all for joining us for our first quarter call I'm going to make a couple of brief comments on the quarter before I talk about our initiatives.
And we were very pleased with the strong start to the us generated organic sales.
6% for the quarter.
As we noted on our prior call we came into the first quarter of 2021 with good momentum for assignments volume sold and revenue per unit.
As the quarter unfolded and revenue per unit continued to increase each month and assignments and continued at a steady pace.
In fact March represented the first month of year over year assignment growth that we've seen since the pandemic began.
Along with strong industry tailwind another key driver to our results continues to be the benefits generated from our buyer digital transformation BDC.
PDT is contributed to the significant increases that we experienced and revenue per unit over the past year.
So now let me turn to our strategic initiatives.
We continue to make good progress and are seeing positive results from our margin expansion plan.
As we discussed on our last call with the completion of our BBT last spring our focus has turned to the other elements of the plan.
Towing optimization branch process improvement and pricing optimization, all remain on track are restricting and consolidation of Tony and resources in several markets is beginning to pay dividends, both in terms of and improved service and lower costs.
We are on target to complete these transitions by the end of 2021.
We also made good progress and the quarter on both pricing optimization and branch process improvement.
Shifting now to other initiatives, we continue to be excited with the progress that we're making with loan payoff and supportive of our initiatives to broaden our service offering.
During the first quarter, we added over 100, new lenders to our loan pay off platform and we ended the quarter with over 1600 financial institutions on our portal.
And we also expanded our national footprint with DDI and building out electronic title and registration processing expertise and both Michigan and Indiana.
Our negative equity capabilities of loan payoffs, which are on equal and the market continued to be an important differentiator, particularly given the continuing increase and the percentage of vehicles with loans that exceed the pre crash sites.
Our customers are continuing to see significant reductions and in some situations of up to 22 days and cycle times using loan payoff.
For buyers, we continue to expand and enhancements that we've made to our tools and product offerings and our growth and expansion of our global buyer network continues to be very successful.
During the first quarter, we grew our international buyer network by 15% sequentially quarter over quarter and over 50% on a year over year basis.
This growth is both from traditional broker buyers and market alliance partnerships and reinforces the great strides that we're making with digital marketing and search engine optimization to attract both domestic and global buyers to our platform.
We also continue to make good progress and building out our strategic partner Alliance network. Most recently announcing that we added apparel modal and experienced export supplier based in Moldova, which is a key element and providing access to our buyers and the growing eastern European market.
We also introduced two new value added features to our UK merchandising platform IAA.
Engine start and IAA key image.
These tools give buyers additional vehicle details and creating greater confidence to bid and purchased vehicles.
Yes.
And we also expanded our merchandising platform interac in Canada and the quarter. After the positive reception that we received last year and the us.
As we look ahead of the remainder of the year, we expect to continue to benefit and and the progress we have made and continue to make with our strategic initiatives as well as industry tailwind that continue to support strong revenue per unit trends.
Our non insurance business also continues to perform well with double digit year over year volume growth and the first quarter driven in part by growth and dealer volume or.
Our non insurance team has done a nice job of growing both our base business and identifying and closing attractive new prospects from this space and we will continue to pursue additional opportunities.
As Vance will discuss in more detail. We are also on our position and despite the ongoing pandemic to provide guidance with respect to our expectations for revenue and EBITDA growth for the year.
For the year, we expect organic revenue growth of 15%, 20% and organic adjusted EBITDA growth and the range of 23% to 28%.
Our expectations incorporate currently known volume shifts both negative and positive, including a shift away of additional volume from a top three customer.
The timing of these shifts will impact individual quarters differently, but we expect a strong 2021 overall.
And also incorporate some wins to date, including from a top customer that are partially expected to offset the aforementioned negative volume shifts.
We also expect continued strong revenue per unit trends as well as continued improvement and vehicles miles driven.
IAA has made enormous progress and improving and enhancing our offerings and I believe we are very well positioned going forward to drive higher levels of performance and expand our market position.
So before I close and I also want to spend a few minutes and another important initiative within IAA. The continued focus that we're putting on diversity equity and inclusion within our organization.
It was my honor earlier, this year and side and the CEO action for diversity and inclusion pledge the largest CEO driven business coalition to advance diversity and inclusion and the workplace.
We've also established a formal diversity equity and inclusion program within IAA with three different areas of focus.
Each with strong involvement from across the organization.
We firmly believe that addressing these issues with vigor and transparency will allow us not only to create greater employee satisfaction, but also allow us to better serve our buyer and seller customers.
So in closing I want to thank all of our teams for all their hard work and dedication to IAA and I will now turn the call over to Vance to review our results and outlook in more detail.
Thanks, John I will focus my discussion today on our adjusted non-GAAP results and just touch on key highlights from our first quarter financial performance before providing more detail and our outlook for fiscal 2020 one.
Please see today's press release for more details on our financial performance and our methodologies and calculating non-GAAP results for the quarter consolidated revenues increased 15, 5% to $423 5 million compared to the prior year period organic consolidated revenue, which excludes the impact of <unk>.
Foreign currency increased 14, 4% to $419 $5 million is a 28, 2% increase and revenue per vehicle and more than offset the 10, 7% decrease and volume.
Service revenues increased seven 9% to $364 million compared to the first quarter of fiscal 2020 and vehicles sales increased 93, 6% to $63 1 million compared to the prior year period, the total loss ratio increased to 24% from 20% and.
The first quarter of 2020.
Looking at our geographic performance revenues increased and both our U S and international segments were driven by higher revenue per unit offset by lower volume International revenue also benefited from a higher mix of vehicle sales as one of our providers switched from a consignment model to a purchased vehicle model during the fourth quarter of 'twenty.
20 <unk>.
Gross profit increased to $172 7 million from $135 6 million and the first quarter of fiscal 2020 gross margin increased 380 basis points and the quarter, primarily due to higher revenue per unit as well as benefits from our margin expansion plan.
Knowing that we achieved this level of growth margin improvement, even with purchase vehicles accounting for a much higher percentage of revenue compared to the prior year.
SG&A expenses were $43 4 million compared to $38 million and the prior year adjusted SG&A expenses were $39 4 million and increase of 11% compared to $35 5 million and the prior year period, due mainly to higher compensation related costs.
Adjusted EBITDA increased by 33, 2% to $133 2 million from 100 million and the <unk>.
First quarter of fiscal 2020, excluding the impact of foreign currency organic adjusted EBITDA increased by 32, 6% to $132 6 million for the first quarter of fiscal 2021.
Interest expense declined by 3 million to $13 million compared to $16 million and the first quarter of fiscal 2020. The decline was primarily driven by lower interest rates on our floating rate debt the interest rate on our term loan was 238%.
The effective tax rate was 25, 2% versus 25, 3% and the first quarter of fiscal 2020.
Net income increased to $72 5 million from $44 7 million and the prior year. Adjusted net income increased by 56, 1% to $77 9 million or <unk> 58 per diluted share compared to $49 9 million or <unk> 37 per diluted share and the first quarter.
<unk> of fiscal 2020.
Turning to our balance sheet and cash flows capital expenditures for the quarter were $30 3 million compared to $10 6 million and the prior year. The increase was driven in part by a land purchase earlier in the quarter and increased investments and technology.
We ended the quarter with total liquidity of $677 7 million and with a leverage ratio of two three times, which is nearly a full turn below the $3 two times level at the time and the spin during.
During the period, we generated free cash flow of $91 million compared to $86 7 million and the first quarter of fiscal 2020.
Turning now to our outlook for fiscal 2021, as Jon mentioned, we are providing an outlook for fiscal 2021 for.
And for the year, we expect organic revenue to increase 15% to 20% from fiscal 2020 revenues of $1 billion and $384 million 9 million and our organic adjusted EBITDA to increase 23% to 28% from fiscal 2020, adjusted EBITDA of 390.
$8 5 million as discussed this outlook incorporates the benefits we expect to continue to realize from our strategic initiatives as well as industry tailwind, which remains supportive of strong revenue per unit trends as John reviewed. These expectations also include loan volume losses, as well as wins, including additional volume losses from us.
Free customer, which will partially be offset by no known volume gains, including from some of our top customers. We expect this shift in volume to occur over the next few months and we expect to be at a full run rate of these net shifts and the fourth quarter of 2021.
For fiscal 2021, and we also expect our effective tax rate to be in the range of 25% to 25, 5% and for depreciation.
<unk> and amortization to be and the range of 88 million to 92 million.
And as noted in our press release today subsequent to quarter and on April 30, we executed a new senior secured credit facility, consisting of a $650 million term loan a and a $525 million revolving credit facility. Both maturing on April 32026, this replaces our existing 700.
$74 million term loan b and $361 million revolving credit facility. We are pleased that we were able to capitalize on strong market conditions to execute this transaction, which provides us with attractive terms and additional liquidity to support future growth. This facility will reduce the interest rate on our floating rate debt by 50 basis points from the next two.
Quarters.
And with the rate tied to the pricing grid after that and the potential for and up to an 87 five basis points.
The reduction in interest rates, depending on leverage for the full year. We expect we expect interest expense of approximately $57 million, which includes a noncash writeoff of deferred financing fees of approximately $10 million on a cash basis, we expect our new capital structure to result in savings of approximately $4 4 million for the remained.
There are 2021 due to both a lower rate as well as a lower debt balance we will have no mandatory principal payments required on this new facility and 2021 and closing I want to reiterate John's comments that we're very proud of the progress we have made to improve our competitive offering and elevate the buyer and seller experience with that we'll open up the call to questions operator.
And then.
Thank you and I will now begin the question and answer session to ask a question.
And one and you touched on from.
If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question and Chris Bowden and at this time more parts inventory to us.
From a roster.
Yes.
Okay.
Okay.
And our first question today will come from Daniel <unk> with Stephens, Inc. Please go ahead.
Yes, Thanks for taking my question guys and congrats on the start to the year.
Thanks, and thanks, Dan and thank you David.
And Vince I wanted to turn and the volume backdrop and it stepped down a bit sequentially can.
Can you provide a bit more cadence or color on the cadence of the quarter from both assignment and volume growth I know John and.
March was good for assignment and then with April just wrapped up here last week can you talk about how assignment and maybe trended through April as we lap easier comps and miles driven and begin to recover.
Yes, Hello. This is Vance I'll go first.
John I'm sure will want to add and as well.
So yes through the first quarter of the year, we continue to see.
Find us.
We plan to continue to increase slightly relative to kind of the clinical and.
Somewhat of a pickup as it relates to vehicle miles traveled certainly in the us.
What we're seeing overall us debt vehicle miles traveled is still down from pre pandemic levels.
Not a lot, it's kind of and the 7%.
<unk> down from pre pandemic levels and.
And so thats, what were kind of continuing to see and we expect that to get better throughout the rest of the year.
And that's the expectation those restrictions are continuing to be lifted and Martin's open up internationally, we're continuing to see more restrictions in place. So vehicle miles traveled and assignments are down more internationally, but as you know the form of our business by borrowers in the us.
Yes.
And said it well to Daniel I think that we do expect restrictions to continue and be.
And our reduced drilling and <unk>.
And he is going to results and greater miles traveled which will result in improving assignment levels.
Okay got it that's helpful and then moving to the gross margin type events really nice service gross margin leverage I think up over 600 basis points year over year is that just a byproduct of stronger revenue per unit is that.
Your margin expansion plan, and maybe parse out what drove that core core margin leverage.
Yes, Thank you Dan and you hit on it and the primary driver of that is going to be really really strong revenue per unit and.
So that's by far and away and going to be the biggest element of that but in addition to that and we continue to see the impact of the cost reductions as part of our buyer digital transformation and moving to an all digital auction platform. So that certainly has also contributed as well.
And.
And then just a quick follow up on that you had noted and the guide that you raised your revenue per unit from Ken.
Kind of assuming it remains elevated should we interpret that as you're assuming stronger core growth margin through the remainder of the year.
Well I think we haven't given anything by quarter in terms of kind of what our expectations are.
But we do think as we thought about guidance and the trends that we're seeing and revenue per unit, we do continue to see really elevated.
Revenue per unit levels and we at this point based on.
And one the things that we've done to our own model and.
And the changes we've made which we believe is the largest.
Benefit that we're seeing in terms of driving higher revenue per unit. We expect those those are clearly sustainable and our mines, but on top of that.
And there's also higher used car prices.
Net and used car price index. For example is at an all time high and continues to local higher and we expect that to stay from all the information that we see and hear elevated throughout at least the remainder of 2021.
That's great. Thanks, so much for the color and best of luck. Thank.
Thank you Pam.
And our next question will come from Craig tenants and Wednesday.
Please go ahead.
Hey, good morning, and thanks for taking my questions as well just to follow up on that last point related to revenue.
Per unit.
You've seen phenomenal growth rates and a year over year basis and is your guidance more that you think it could remain elevated such that as you say some of these difficult comps.
We might be flat or up a little debt or do you think these growth rates are.
Sustainable.
I think I'll go first and then John maybe.
And then add color as well is is that as we've talked about.
To completely bifurcated and say what percentage is due to the things that we've done internally and what.
What percentage is due to things and a more macro driven having said that we do believe at this point based on and continuing set of trends that we've seen that the bigger impact is coming from the things that we've done internally things such as storage and all digital auction format. The growth that we've seen and our global buyer network, which has been really.
Current.
And innovations such as 360 view feat.
Teacher tour and other things, we're doing with tools and information, we're providing buyers as part of our interact net margin of our merchandising platform, we think that thats the largest contributor that we do think that.
Elevated used car prices has an impact because all things considered equal people oriented and were more willing to pay more per car. If they can sell it for more and we do think that thats, probably have an impact and we think it's less certainly less and kind of at this point and what we're seeing from the internal things that we've done to change our operating model and drive better results.
So over time.
One would expect that the used car price index will come down.
Some point in time.
We don't necessarily from what we see and read and information and we gathered and see that happening very much in 2021, we expect it to stay at very high elevated levels.
That's really helpful and just a follow up on that if you just isolate the things that are within your control and the impact on <unk>.
And the last year can you stack success on that and make further gains of the same kind of magnitude again and the year going forward either us many innovations happening on the platform that allow you to charge that extra fee.
Yes, we are continuing to add feature and capabilities that we're able to charge for it to the platform. So we do believe that we can continue to grow and whether it's going to be at the pace it was or not and that remains the same for some of the things to advance just described in terms of the macro factors, but.
We continue to as I said in my remarks, broaden our service offering and both the buyers and sellers and.
To the extent, we do that we can charge for our services and the products. So we think we can continue to grow.
<unk>.
And a sustainable way.
And just to add what John was saying the other thing to that and we believe is a large contributor to that gave us the growth of our global climate and buyer network and certainly we've made a lot of progress there, but we still believe we have a lot of gain a lot of additional opportunity there and so as we continue to grow that global buyer network add more.
<unk> to the platform that are bidding on more units and bidding more times and a more unique bidders per unit.
That was the debt obviously continues to drive up proceeds and revenue per unit as well.
Thanks, a lot and I'll get back in the queue.
Thanks, and thanks Craig.
And our next question will come from Bob <unk> with CJS Securities. Please go ahead.
Hi, Good morning, it's actually lead you go to for Bob This morning.
Good morning.
Couple from me could you talk a little bit about your non insurance product progress, obviously very large market.
What if anything changed during the pandemic and then maybe a little bit of how you're attacking it or which areas you find most attractive whether it's dealer cars repos or just.
<unk> and <unk>.
Yes, thanks and.
I think I think one of the things that happened and the pandemic was that there was some disruption and the whole car markets, which gave us an opportunity to truly capitalize on that.
And to build on that we do.
Do you believe there is growth and all of the areas you described whether it's and the fleet rental and the dealer or just in and non insurance kind of the lower end of that market.
Still.
The enormous growth opportunities.
Through our digital platform we have.
Build some customization to really and help those sellers and put their cars and market the merchandising.
And.
Features that we have they really like and.
And theyre embracing so yes, it's an area that that we continue to focus on and again, we've had some nice growth and we think.
And we see continued opportunities to grow that business.
Above and beyond where it's at today.
Got it and then just one more from me.
So given the volumes have been down for basically the last year, how has that impacted your efficiency at your yards and has the reduced volume changed any of your land expansion goals at all or your philosophy around the land.
Yes.
And as advanced that happy to answer that question. So.
And so if you think about the cost structure and I think we pointed out this before and our yards.
So.
A portion of that is labor and so as we've had cloud or certainly at the beginning of the pandemic and 2020, when we have reduced assignments as we talked about kind of reduced hours and we didn't reduce employees, we just kind of a reduced hours to kind of.
Align ourselves more appropriately with the level of volume that was coming in and so clearly we have the ability to kind of flex that and we're very proud of the fact that.
We just kind of reduced the hours, we didn't reduce employees and the us and we think that was an important thing to do.
But outside of that if you think about rents lenses.
And some of the other costs, we have are more of a fixed cost nature. So theres not as much kind of deleveraging or ability to kind of flex that if you will and then the other one is clearly tow costs and tow costs are variable on the unit. So as units go down your total cost flex completely with that because youre not paying to have that unit.
And if that helps.
And I would just add on land, we do take a longer view on us.
We think about growth of our customers' growth and the market.
And making land decision so.
We continue.
To make sure we've got capacity to support our sellers for the long term.
Great. Thanks, very much and I'll hop back in.
Thank you.
And our next question will come from Stephanie Benjamin with Truest. Please go ahead.
Hi, good morning.
Good morning, gentlemen.
I wanted to touch on the commentary about just.
Yes, and volume from top three customers, both positive and negative I think you know the understanding is that shift occur throughout the year and you've given carrier, but I love to hear and maybe a little bit as much as you can get on the back during behind from the day.
Particularly on the positive right and D. D that this is something that again with the investments and if it made over the course of the year has allowed us to improve the overall.
And a tool that the insurance carriers have now and.
And the same.
And part of that shift away with us volumes at the top three customers and what do you think it's driving some of these malls and fast and he can tell.
Yeah.
Sure.
So.
As we've talked about before carriers have different criteria for making decisions they look at their own and metrics.
I look at this portion of our claims operation differently and.
So we really.
And as I've said and my comments I feel very good about the suite of services and products that we put together and we're getting.
And have gotten good traction and the market from a number of carriers big and small.
That being said, we had one that made a decision to move some some business away, but again as we've talked about and over the last couple of years, there are going to be swings and volume.
And that occur and.
But again and the long term I really believe that we are we are positioned well to continue to improve our position. So.
Yes, it really is.
<unk>.
Each company kind of looks at this decision, making very differently.
Great and then we'll follow ups to your international expansion commentary.
Can you give me the.
And does that began about maybe.
Regions, where youre seeing on and the expansion of the day, you called out I think that opportunity and eastern Europe, and any geographic commentary would be helpful. Thanks.
Sure Yeah, no. It is fairly broad based and in terms of our and we're talking about buyer growth international buyer growth. It is fairly broad based we continue to grow and improve and central and South America, and then eastern Europe, The Middle East West Africa. Those are all continued to be strong markets.
So I wouldn't point to one over another and again I think.
Tools that we've deployed around our Seo and our digital acquisition strategy I think has really.
And helped drive this growth fairly evenly.
Got it well thank you so much thanks.
Thanks, Stephanie.
And our next question will come from Chris Sorry.
Sorry, but clearly we exited BNP Paribas. Please go ahead.
Hey, guys. Thanks for the question.
Hi, Chris.
Hey, good morning, I was hoping you could unpack the revenue guidance a little bit it seems like FX rates and purchase Eagle MX are pretty helpful. Right now and it seems like the <unk> and stay strong its pricing.
A reasonable estimate.
Is it fair to assume then that the that the volume like two year CAGR does that get worse over the course of the year because of the net share count losses, and how you think about volume specifically on us and a pre COVID-19 basis, and I think the forward throughout the year.
Yeah. So Chris this is Vance speaking so were.
And not providing guidance by quarter.
So.
Just to give you some sense of health.
We do as we talked about we do expected elevated expect elevated with a revenue per unit levels to stay intact for.
For the remainder of 2021, so that will be the biggest kind of positive impact we did talk through kind of the share shifts and kind of the net.
Downside impact of those.
So we can't really get into kind of the specifics of that but all things considered equal that would have a net volume impact.
And then if you were to compare 2021% to 2019, obviously coming out of the pandemic and a little bit of some of the share movements volume.
Volume you would have higher <unk> by quite a bit by a significant amount in 2021 versus 2019, and then you'd have less volume given kind of.
What's happening with the pandemic and and some and a little bit due to some of the shifting around of volume as well.
Yes, let us.
Really helpful and.
And then wanted to just.
And a sense for tailing cost thinking you mentioned this earlier, but can you just give us a sense there and do you have like a big optimization plan that you are hoping to take.
Towing.
Those costs are very inflationary now is that true is that what youre seeing and and two can you give us a sense for us if your own initiatives are helping to offset that and and kind of like what inning are you in terms of optimizing those costs.
Yeah, So I'll start and John will probably want to jump in as well and so so Chris one we're not seeing a ton of infill.
Inflationary cost upstate there's not some out there, but it's not.
Excessive by any stretch.
And what we to your point that Tony and optimization initiatives, and we have which are things such as.
Redistricting, and we've talked about going from.
Moving away from and anchor anchor total model to more of a distributed model within markets and Theres a variety of other initiatives those are well underway and.
So we remain on track with the timing related to those and we feel comfortable with the benefits related to those that we outlined.
And to some degree to the degree that there is kind of some inflationary. This is more offsetting that and then some is the way I would describe it.
Yes, and just to add to it I think when you think about total cost fuel prices are probably the biggest component of that cost. So.
To the extent that fuel prices change we could have.
And some impact to total cost but.
And that really is the biggest.
Variable element and that cost structure.
Yes, and that makes perfect sense, thanks for the help.
Thank you.
Yes.
And our next question will come from Bret Jordan with Jefferies. Please go ahead.
Hey, Brad Congrats.
On the organic revenue.
Outlook is there any impact from the higher mix of purchased vehicles or are we pretty much lapping that and it's apples to apples.
So Brett there is an impact because we did have a customer that we alluded to and the fourth quarter of 2020 and international customer that with debt.
<unk>.
Our agreement from a consignment model to a purchased vehicle model, which is not abnormal and those markets and so we didn't have that and the first quarter of 2020. So we have and effectively lap that so we are getting some benefit from a revenue standpoint because of that.
And then a question I guess you talked about the growth rate of the global buyer Network program could you talk at all about maybe the volume impacts from those foreign buyers or maybe not.
Percentage of your bids that are coming from those foreign markets.
Yeah.
But I think again, and we've talked about and capacity.
It continues to grow and be strong.
We havent, we havent talked about specifics because of the.
And the nature of some of our domestic buyers who are then going to export the vehicles. So really trying to isolate what's truly international demand is.
And can be difficult. So we don't want to misstate, but needless to say that we haven't seen a.
Commensurate growth in our current volume to our international buyer.
And relative to that growth and their participation so that they are bidding and buying.
And real.
Strong sanction.
And I guess, the <unk> and non insurance I guess I'd assume it's higher than your average when maybe more run and drive cars and that mix could you talk about what you see and the economics of non insurance vehicles versus the portfolio average.
I mean, we're seeing increases and <unk> across the board.
Brett and I think that's getting to your question and kind of where we've seen more or less between non insurance and insurance.
And.
But we're and it's interesting because of the non insurance side, you really have to bifurcate between different non insurance products because.
Non insurance includes things like rental cars that are and end of life and includes a.
And dealer cars and things of that nature that are not necessarily damaged vehicles, where maybe high mileage that may be really good vehicles.
Versus you may have cars that are donated and not all but some cars that are donated that are not right, they're not going to hide.
They're going to have to skew lower on the proceeds level. So it really varies across non insurance. What we can say for sure is we are seeing proceeds higher and revenue per unit higher across the board for insurance and non insurance.
Okay, great. Thank you.
And once again, if you'd like to ask a question. Please press Star then one.
Our next question will come from Gary <unk> with Barrington Research. Please go ahead.
Thanks, Good morning, everyone.
Good morning, and good morning here couple of questions here.
When you cited that buyer base and international was up 15% is that correct for us.
The total buyer base up 50.
That's the international buyer network is up 15% sequentially quarter over quarter and over 50% on a year over year basis. So how does that translate into your total buyer based on how much has that increased year over year.
I don't think we've disclosed that.
Our international buyer base and I don't know that we've disclosed the percentage composition of our international and more total buyer base.
But obviously, our international buyer base is meaningful and becoming much more meaningful over time.
And because of the growth that we're seeing for example, it's grown 50% year over year. So.
I think it's fair to say that our domestic buyer base continues to be really really healthy and really really strong, but it would not have grown 50% year over year and growth.
Is this demand on the buyer the international buyer base side could that be also driven a lot by the fact that theres just less cars out there.
And they can't get their hands on cars to export.
Yeah, No. We think that's I think that's right and we believe that some of the contributing factors are if you think about some of these developing countries.
And there does that the economies are developing they're looking for more automobiles to beat for the people from the <unk>.
Let us into their country.
And as more disposable income to purchase vehicles, yet there is not necessarily the network of <unk> and <unk>.
And dealer sitting on every quarter are sitting.
To some of these populous areas and so this.
And this becomes an opportunity to get cars refurbished those cars and get them back out on the road for drivers and these developing countries and to do that and a way that the economics works for the buyers, which is one and one of the reasons why it makes us so beneficial because they can buy these cars that are higher mileage low value damaged via.
Vehicles arbitrage the repair cost.
And that offset the shipping costs, and then be able to sell these vehicles in these developing markets.
And for society as well.
Hey, just a couple more questions here you mentioned the assignments, but you didn't talk about inventories as you started this quarter ended last quarter.
Year over year can.
Can you give us some idea of <unk>.
The level of inventories percentage change year over year and maybe.
Sequentially as well.
Yes, Gary year over year is up three 7%.
Okay.
And then just two more quick questions.
The $10 million of fees that youre getting from refinancing is that all going to be recognized in Q2 or is that ratably across the next three quarters.
Yes, Gary that gets written off so those are just fees from the old deal. So those arent new fees and current and so those if those are fees that get written off from the previous transaction based on specific accounting rules. So those all get written off this quarter.
Okay. Thank you.
Thanks, Darren Thank you Gary.
And this will conclude the question and answer session I would like to turn the conference back over to John <unk> for any closing remarks.
Just wanted to say thank you again for your interest and participation. This morning, and we look forward to continuing to update you on our progress. Thank you and have a great day.
The conference has now concluded. Thank you for attending today's presentation. At this time you may disconnect and have a great day.
And.
And.