Q2 2021 IAA Inc Earnings Call
We ended December 27, 2020 file with the SEC on February 22021.
Forward looking statements made today are as of the date of this call and IAA does not undertake any obligation to update these forward looking statements.
Finally, the speakers will refer to certain adjusted or non-GAAP financial measures on this call.
The reconciliation schedule of the non-GAAP financial measures to the most directly comparable GAAP measures is available in Iaa's press release issued today.
Today's press release may be obtained by visiting the Investor Relations page of the website at Www Dot IAA AI.
Dot com.
I will now turn the call over to John.
Thanks Rich.
Morning, and thank you all for joining us for our second quarter earnings call.
I want to start with how proud and appreciative I am of the dedication and hard work from our nearly 4000 team members across the US Canada and the U K.
And the continuing uncertain times that continue to support 1 another of our clients our partners our industry.
Team continues to deliver for our customers, while remaining focused on health and safety.
We were very pleased with the second quarter performance, including organic sales growth of 48% and organic adjusted EBITDA growth of 92% compared to a pandemic impact of Q2 of 2020.
Comparing Q2 to Q1, we generated sales growth of 5% and adjusted EBITDA improvement of 15%.
Underlying these results is the continued strength and revenue per unit as well as stronger volume sold.
As we indicated and our Q1 call, we expected negative and positive volume shifts to occur over the second and third quarter of this year. These shifts are proceeding as we expected.
Our Q2 results include some of the impacts and we expect to be at a full run rate reflective of these shifts and Q4 this year and our full year outlook includes the projected impact.
Looking ahead, we have increased our 2021 outlook to reflect our year to date performance as well as our current expectation for the remainder of the year.
Let me now provide and update on our progress against our strategic initiatives.
First and most importantly, I'd like to discuss our primary focus of enhancing our relationships and expanding market share.
As we discussed last quarter, while we did have a top 3 customer move additional share away from us.
And we are encouraged by other share gains this year include.
Including additional share from a top customer that has the strong reputation for leveraging data analytics and decision making.
While the share gains don't completely offset the share of losses. The initiatives that we're undertaking to continue to be positively received by both our sellers and our buyers.
We are focused on the right things to grow market share.
Continuing to drive attractive returns for our sellers through our merchandising enhancements.
We are making as part of our <unk> platform.
By reducing cycle times for sellers through loans pay off inspection services and other operating initiatives and.
And acting as a true partner with a focus on providing best in class data analytics and integration and support for our sellers.
4 of our digital transformation and our continued focus on innovation, we continue to lead the industry and developing tools and capabilities to help enhance the buyer experience, which will result, and driving attractive returns for sellers on our platform.
In June as part of this focus on broadening our relationships with sellers, we acquired the assets of auto exchange of salvage auction provider of a strong presence in new Jersey, and long term seller relationships in that region.
The second this acquisition will also expand our coverage footprint.
Part of the part of the acquisition and the business generated approximately $5 million and revenue and it's off to a good start post transaction.
We are actively integrating this business into our marketplace platform and welcoming the auto exchange members into the IAA family.
Turning now to our strategy of broadening our service offering we've continued to expand our loan payoffs network ending the period with over 1700 financial institutions on the portal.
We've also enhanced our strategic agreement with do attract and provide electronic registration and titling services and Ohio by facilitating the digital transfer of total loss titles.
As we also announced last month, we have enhanced our loans pay off product to include the ability for insurers to pay off leases and participating lenders, making us the only industry participant to offer this capability.
And as account for approximately 30% of new vehicle purchases. So this increased functionality to further differentiate loan payoff and the market.
During the quarter. We also made good progress on expanding our international buyer network with the year over year growth of 52% and sequential quarterly improvement of nearly 6%.
We also expanded our strategic market Alliance network with partnerships and Nigeria, and the United Arab Emirates. We now currently have 13 of market Alliance partners and our global network.
Our margin expansion plan remains on track, we continue to see great results from buyer digital transformation and we are making good progress on our pricing totaling and branch process improvement initiatives.
Product strategy and development also remains the key focus.
For more than a decade, we've demonstrated industry leadership, and developing and implementing innovative new products and services.
To further accelerate this development spec bur has joined US as our new senior Vice President of product management with a focus on driving competitive differentiation and growth through technology and innovation.
He brings extensive product strategy and management expertise to this role and I could not be more pleased to have her on our team.
Switching now to guidance.
We're pleased to provide updated guidance for the full year 2021.
Based on our strong performance in Q2, and our current assessment of the remainder of the year we.
We are increasing our guidance for organic revenue growth the range of 20% to 24% and our adjusted EBITDA guidance and the range of 29% to 33%.
These higher ranges reflect both better revenue per unit and volumes compared to the previous guidance.
In summary, we're pleased with our results to date.
As we look ahead, we will continue to focus on delivering against our objectives, including disciplined capital allocation and driving shareholder return.
The debt and as noted in our press release today, we are pleased to announce that our board has authorized a $400 million 5 year share repurchase program.
And finally, I again want to thank all of variety of team members for their continued hard work I am also very proud of the IAA has again been elected a great place to work out for the third year in a row and we know our business success is the result of our great people, who remain dedicated each and every day, the executing against our initiatives and goals.
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And now I'd like to turn the call over the balance to discuss our financial results. Thank you John and good morning, everyone before I discussed our second quarter and outlook for fiscal 2021 and more detail as a reminder, my discussion today will focus on our adjusted non-GAAP results.
Please see today's press release for more details on our financial performance and our methodology when calculating non-GAAP results.
The John mentioned, we are pleased with our second quarter performance with strong year over year revenue and profitability growth compared to the second quarter of fiscal 2020, which was heavily impacted by COVID-19, our financial performance.
Performance also increased sequentially from Q1 as the results continue to reflect record revenue per unit driven by the enhancements we have made to our buyer platform, including tools like 360 view growth and our global buyer network improved and.
And wanted us as well as favorable macro conditions, including elevated used car price.
For the second quarter consolidated revenues increased 50% to $445.1 million compared to the prior year period organic consolidated revenue, which excludes the impact of foreign currency increased 48% to $439.2 million consisting of an increase and volume of 22.
2.9%, primarily due to higher vehicle miles traveled against the pandemic impacted Q2 last year as well as higher revenue per unit of 24%.
Service revenues increased 44, 4% the $382.5 million compared to the second quarter of fiscal 2020 and vehicle sales increased 95, 6% to $62.6 million.
The increases in both service revenues and vehicle sales were primarily due to higher revenue per unit and higher volumes of <unk>.
Nickel sales were also positively impacted by and international provider switching from the consignment model to a purchase vehicle model and the fourth quarter of 2020 and <unk>.
Total loss ratio was 19, 4% compared to 19, 5% and the second quarter of fiscal 2020.
Sequentially revenue increased by 5.1% compared to the first quarter of 2021.
And at our geographic performance revenues increased and both our U S and international segments were driven primarily by higher revenue per unit or.
Both segments also saw a higher mix of vehicle sales by the way lesser extent and the U S compared to international.
While the US economy open up substantially and the past quarter, Canada, and the U K, we're still under more severe restrictions for much of the quarter.
Gross profit increased to $195.9 million from $111.7 million and the second quarter of fiscal 2020, primarily due to higher revenue per unit higher volume and the benefits from our margin expansion plan.
Margin increased 640 basis points versus the prior year of 44% from 37, 6% and the prior year sequentially gross profit increased by 13, 4% and gross margin increased by 320 basis points at the end of the quarter, we did start to see some inflationary and.
Packed on our towing costs and we do expect total cost to be higher and the second half of the year, which is reflected in our updated guidance.
SG&A expenses were $43.7 million compared to $34.3 million and the prior year adjusted SG&A SG&A expenses were $43.3 million and increase of 31, 6% compared to an adjusted SG&A of $32.9 million and the prior year period.
The increase is due mainly to higher incentive based compensation related costs.
Adjusted EBITDA increased by 90 day.
4% $252.2 million from $78.9 million and the second quarter of fiscal <unk>.
Excluding the impact of foreign currency organic adjusted EBITDA increased by 92, 1% the $151.6 million for the second quarter of fiscal 2021.
Interest expense increased by $8.1 million to $21.9 million compared to $13.8 million and the second quarter of fiscal 2020. The increase was primarily driven by the $10.3 million loss on early extinguishment of debt in conjunction with the company's refinancing and the quarter offset by lower interest rates and floating rate debt.
Net nearly all of the $10.3 million expense was non cash as a reminder, on April 30, we executed a new senior secured credit facility, consisting of a $650 million term loan and a $525 million revolving credit facility. Both maturing on April 32026 as.
This facility reduced the interest rate on our floating rate debt in Q2 of 50 basis points and we continue to expect full year cash interest savings of approximately $4.5 million as a result of this new facility.
The effective tax rate was 24, 7% versus 24, 4% and the second quarter of fiscal 2020.
Net income net net income increased by 149, 7% the $82.9 million from $33.2 million and the prior year. Adjusted net income increased by 154, 9% to $93.3 million or <unk> 69 per diluted share compared to $36.
$6 million or <unk> 27 per diluted share and the second quarter of fiscal 2020.
Turning to our balance sheet and cash flows net cash provided by operating activities for the quarter was $129.4 million.
Capital expenditures for the quarter were $27.5 million compared to $11.5 million and the prior year increase was driven by a land purchased during the quarter and higher technology spending.
We ended the quarter with net debt of $894.4 million and a net leverage ratio of 1.8 times, we have reduced net debt by approximately $375 million since the time of the spin.
Total liquidity was $801.5 million, which is nearly triple the level of liquidity, we had at the time of the spin and.
And the first 6 months of fiscal 2021, we generated free cash flow of $192.9 million compared to 190, $195.2 million and the prior year period, the slightly lower free cash flow and 2021 is driven by higher capital expenditures true.
Turning now to our outlook for fiscal 2020..1 first a reminder, the fiscal 2021 is the 53 week year with an extra week and the fourth quarter second I do want to reiterate that our guidance assumes that there isn't a spike in COVID-19 cases, and the countries. We operate in and would have a significant negative impact on our results.
As John mentioned, we are raising our outlook for fiscal 2021, and incorporate and our better than expected Q2 performance as well as our view of the remainder of the year. While we continue to expect to see revenue per unit moderate and the back half of the degree of moderation the somewhat less than what our original ex original guidance assumed.
Our volume expectations, the second half of.
The only slightly higher and they were a quarter ago as miles driven trends have recovered slightly more quickly and we expected for.
For the year, we now expect organic revenue to increase 20% of 24% from fiscal 2020 revenue of $1.384 million as compared to our prior expectation of 15% to 20% organic revenue growth <unk>.
Organic adjusted EBITDA is now expected the increased 29% to 33% for fiscal 2020, adjusted EBITDA of $398.5 million versus our prior expectation of an increase of 23 percentage of 28%.
For the full year, we continue to expect interest expense of approximately 57% to $59 million, which includes the Q2 write off of deferred financing fees of $10.3 million.
We also continue to expect our effective tax rate to be and the range of 25 to 25, 5% and we now expect depreciation and amortization of that being in the range of $82 million to $86 million.
As noted in our press release, our board of directors. They proved the $400 million share repurchase authorization of <unk>.
Disciplined capital allocation plan is the foundation of how we run the company and returning capital to shareholders and the form of opportunistic share repurchases will be 1 aspect of this plan our philosophy on share repurchases is consistent the overall philosophy on capital allocation, we will repurchase shares when we believe they are trading and.
The discount to intrinsic value with some cushion and then the return on investment from repurchasing shares is favorable to other potential capital deployment opportunities, we will not be targeting a certain amount of shares to be repurchased in any quarter trying to offset dilution or managing our managed and EPS or to a targeted net leverage ratio.
In closing we are very pleased with our first half performance overall for fiscal 2021, and our entire team is focused on delivering on our operational and financial goals for the full year with that we'll open up the call to questions operator.
Yes. Thank you at this time, we will be and the question and answer session to.
To ask a question you May Press Star then 1 on you touched on file.
And speaker phone please pickup your handset before pressing Yankees to trying a question. Please press star and soon.
The time, we will pause momentarily to assemble the roster.
And the first question comes from Chris <unk> from Exxon BNP Paribas.
Okay.
Hey, guys. Thanks for taking the question.
Yes, the wanted to ask about the the telecast of you referenced on the call can you kind of maybe speak to that is that more fuel surcharges or is it just capacity or where labor markets and then.
And do these higher cost change the way youre thinking of that Youre, telling optimization self help initiatives because the increase the urgency of does it make it more difficult to just kind of thoughts that would be helpful.
Yes, Chris This is the answer I can go ahead and provide some perspective on that.
And so it's really not really about fuel, what we're seeing and the marketplace like and a lot of other industries as labor is very tight.
So getting and kind of the amount of <unk> that we need for the demand and assignments that we're seeing and the volume has become a little bit more challenging and because of that and certain markets, we're having to pay higher rates for <unk>.
And so it's really not about field, but it's really about the labor and the towing and.
Impacting tolling cost as it relates to our margin expansion plan.
It really.
It really doesn't impact the margin expansion plan and the way to think about it really is as debt.
And to have some marginal impact in terms of our cost.
And that's going to make the base of little bit higher with the actual initiatives that we're executing and our margin expansion plan and are still very much on track and we still expect to see the savings and it'll just come off of a slightly higher pace and we made of anticipated given some of the higher selling costs.
Okay, and so that's really helpful. Thank you very much.
Thanks, Chris.
Thank you and the next question comes from Stephanie more of a true of securities.
Great. Thank you and Jim Hoffman on for Stephanie and good morning, and congrats on the with the results I guess I just wanted to maybe ask about what you see from and find its level, maybe and you kind of comparing maybe finding volumes versus pre COVID-19 and how youre thinking of pricing today versus pre COVID-19.
So I think as we do as we said and our marks.
Volumes have come back.
Relative to our original projection for 2021 of a little bit faster. So we are seeing miles driven and recover which is resulting and assignment volumes.
As we reported the total loss frequency and was basically flat year over year and it was down and tech.
We're still seeing.
Robustness and the level of total loss frequency. So those factors as we said.
So there are a little bit ahead of where we originally thought.
And in terms of pricing and the market.
And as we said.
And we've taken into account what used car pricing of that we do believe it's kind of moderate and the back half.
It's a hard thing to predict various of social.
A lot of different reports out there of what might happen.
The pricing.
<unk>.
Taken and that information looked at our own data and made our best projections for the balance of the year.
And just to be and I just wanted to clarify as it relates to pricing when we think about data sources and information we're getting from the market, it's really around the elevated level of used car prices.
So in addition to that there is also the number of things internally that we've done that are positively impacting our revenue per unit <unk> talked about before so things like going through and all digital model and then also some of the enhancements like <unk>. The view that we have made our model.
Great, Thanks, and pulpwood and let me just squeezing 1 more if you could talk to some of the non insurance volume sort of what youre seeing there and the opportunity 9 strength and the value proposition that us with Brian and that market.
Yes, we're still bullish about that I think we've done a really good job of.
And that market.
We do believe that we're a great venue for.
Certain element of sort of the lower end of the of the.
And clear title market and.
We've done we've done well there and we continue to deliver there.
We've enhanced some of our offerings that are much more specifics of that marketplace and.
Yes.
It's also similar to some of what we're seeing and the used car world there is a.
Short supply right even in that market. So.
So I think sellers are really valuing what we're bringing to the what we're bringing to them to help them optimize the recoveries.
Great. Thanks, so much that's everything for me.
Thanks, Joe.
Thank you and the next question comes from Craig Kennison with Baird.
Hey, good morning, Thanks for taking my question John.
And you had mentioned the total loss rate trend.
And just a little bit, but thats running counter to the trend we've seen for some time now.
I imagine, there's some pandemic noise and that metric but.
As you unpack that what do you think is driving.
That flattening and that curve.
Yes, Craig it's hard to discern at this point I mean, we're actually talking to our customers now around what they're seeing because of it.
I think youre right that theres, probably some pandemic noise and.
But from from what we're hearing from them.
And they haven't changed their view of around.
Total loss decisions.
And I was felt like the theyre starting to repair of there that theyre actively repairing and more cars its really just a function of.
All of that math worked out for the quarter. So.
And we obviously keep an eye on and I'll see what happens next quarter, but nothing that we've heard or seen and the market.
Bob.
As of changing our view of that longer term trend that we've seen and.
And just because it just Greg just to add what John with the what John was saying, we do believe that there was some pandemic impacts. So if you think about the.
Second quarter of 2020.
The 90.
5% there we do believe that at that point that was kind of the height of the pandemic and insurance companies will likely not sending out as the adjusters as much given the pandemic and so because of that we believe that they will probably totaling more cars.
And that point in time, so we believe that there is probably some impact from that.
Other thing just to note as well as debt of 19, 4% and the second quarter of 2021 sequentially. The second quarter is usually a little bit lower.
From a from a quarter to quarter perspective as well.
And that helps thank you and then with respect to our approved growth I think in the past you've said that you believe.
Some of your internal initiatives represent and larger percentage of proportion of your growth and let's say of the Manheim index or used car prices does that still hold today.
Yes, we do we believe it also holds today and.
And so when we look at the data and information we have obviously, we have information and we're able to to look at what our growth and proceeds are and what our growth and revenue per unit or and what the growth is and the Mannheim pricing used car price index as well and so based on our assessment, we're continuing to see the.
That holds which is that we believe going to an all digital model. Obviously, you've moved out of the pricing changes that we got from now of 100% of transactions collect and internet be before it was only 7 per side and addition to the other enhancements we've made to the model.
Feature 2 of 360 view growth and our global buyer network has had a big impact as well.
That all of those things combined.
At this point, we continue to believe of having a bigger impact and elevated used car pricing. Although we believe that elevated used car pricing is having an impact and as we said and our prepared remarks, we would expect debt that would moderate in the second half of the year and going into the.
They're on.
Got it okay. Thank you.
Thanks, Thanks, Craig.
Thank you and the next question comes from Danaher umbrella with Stephens.
Hey, good morning, guys. Thanks for taking the question.
And Daniel and then following.
On that last comment something you guys have been talking a lot about us growing the international buyer base.
Can you maybe talk about where we are in terms of that initiative. How early innings are we and is the competition or customer acquisition costs, increasing as you and your largest peer both maybe accelerate the pace of international marketing kind of of the same time.
I still think Theres room, the drug and I think we've done a really good job as our as our data supports over the last couple of years and growing that but there is still enormous white space and the international market for us to buy.
And then.
And penetrate buyers through our multiple approaches whether its the market of alliance partners that we've talked about.
Through our digital marketing and then.
And the lesser extent because of the pandemic, but our and person.
Work that we do all of those I think we're still we're still seeing strong growth and.
I don't see the.
Moderating anytime soon.
Acquisition costs I think we've done a really good job through our digital channels to really make the pretty efficient so.
Not seeing that us as a.
I'm not seeing any change and what our acquisition costs are and continue to grow the I really do think there is there is really.
As I said continued white space to grow our international buyer rates.
That's helpful and.
Alright further debt.
And as we continue to add feature and function to help them do their job better we think of it we're going to we're going to help accelerate that through whether it's.
And how we're helping them.
Transport.
And we're helping them pay for things we continue to think about those international buyers and what we can do to make their life, a little easier and we think thats going to continue.
And to help us grow the important segment.
And Thats really helpful. Thanks, Sean.
Thank you. Please switching gears in the past few quarters, you guys mentioned the ancillary services are driving down cycle times and the assignment of increase have you been able to keep cycle times down and lower than pre COVID-19 levels and is there further room to drive down cycle times more and improve your efficiency.
I don't know advance or issues.
And I talked about the specifics of it.
But what I would tell you the Dana said there is still room to.
And prove that.
And again through our.
And the products and services, whether it's the inspection services of our loan payoff product the wider.
The adoption of that and penetration of that is taking meaningful timeline out of the out of the cycle.
We have experienced over the last year and a half of dnb issues, where they've slowed down again negatively affects our cycle environment a bit out of our control.
But I think we continue to work of that we do believe there is there is.
We have the ability and are going to work hard at trying to reduce cycle times as we go.
Yes, I would just add to what John said that yet to John's point I think at the beginning of the pandemic, which now for second and third quarter of 2020, we did see more of the impact.
Non cycled bonds, because we had the E&P closures and.
And kind of things of that nature, and sort of certain markets, but just kind of the ability to kind of process titles and all of that was a little bit more of a lengthy we've seen that moderate.
Since that point in time.
And to get back to a more maybe not completely but almost completely normal level.
And then certainly we believe and whether it's related to things like loans pay off of other things that we're doing there continues to be.
Good opportunity there to reduce cycle times.
Got it and then last 1 if I could squeeze it in and on the guidance and the.
Back half.
EBITDA margin does seem to imply a little bit of contraction just to get the revenue guide down to the EBITDA guide you've given US I think you mentioned total <unk> cost inflation, but can you maybe walk through what other factors are changing as we go into the back half maybe weighing on that EBITDA margin relative to the last few quarters.
Yes, I mean, the primary things I think you hit on the primary 1 which shows us that we haven't.
The related and <unk>.
<unk> cost of what we think will.
Happen and our forecast of the back half of the year and sort of what we think will happen between just based on what we started to see at the end of the second quarter. In addition to that.
And because of our performance as we alluded to SG&A.
Certainly if you look at us through the second quarter was up quite a bit and.
And the reason for that is incentive compensation cost. So that's having an impact to given kind of how well the performance of the total year.
Certainly through 2 quarters of the year is turning out to be and what we project going forward.
Okay got it thanks, so much guys.
Thanks, Dan and thanks Neil.
Thank you and the next question comes from Bret Jordan with Jefferies.
Hey, good morning, guys.
Hi, Brian.
I guess and the path to sort of quantify what you see the loan payoff tool doing to improve cycle times and I guess now that you've added leases to that product and give a feeling I guess, maybe more specifically how you see the cycle time picking up of that.
It is.
Still really bullish as I said I think of us fill an important element different lenders and and providers.
Providers actually have different opportunity based on how good they work before us. So I think I think we're seeing again, if you think about our cycle time.
I think we've talked about 45 and 90 days in total.
And taking 810.12 15 days off of that is still really meaningful we still believe that there is that opportunity as we add more lenders as we build and things like the lease tool.
We're getting greater adoption. So we still we still do believe that sort of.
The.
Significant cycle time improvement tool.
Cool.
And I don't think we have enough information on the leases.
At this point and timing of given that we're just rolling that out as to kind of.
<unk>.
But certainly as per.
Providers use the tool and they now use it for leases.
We would expect the baby in the cycle time reduction there as well.
Okay, Great and then a quick question I guess on the clear title market obviously.
Obviously, a big incremental market could you talk about the economics, there I guess you still for a bit half the payout payout upstream royalty the car maybe to be in that space.
But could you just sort of talk about where you see the profit there versus your legacy transactions.
Yes.
It's an opportunity.
Think we view it.
<unk>.
Pretty equally in terms of the opportunity of again, putting the.
And the royalty payments of the side because that is.
And that's temporary.
But as we look at the the.
Pricing and the quality of the vehicles and the cost of it takes 2 to service them.
Thank you.
Yes.
There's there's again different components within the next day or title market, whether youre talking about really low value or youre talking about.
Rental cars.
And we're going to be the different price points.
But all in we view it.
And I'm very favorably from a from a profitability standpoint relative to our legacy business.
Okay, great. Thank you.
Thank you and once again. Please press Star then 1 if you would like to ask your question.
And the next question comes from Bob <unk> with CJS Securities.
Hi, Good morning, it's actually lead you go to for Bob This morning.
So just to start depreciating the.
Some of the volumes of recovered faster than your original expectations can you talk through your expectations for timing of when industry volumes being returned to pre COVID-19 levels.
Yes, good morning.
And thanks for joining us so yes.
As we've talked about before if you look at.
And you know vehicle miles traveled.
That's actually fairly close to pre pandemic levels right now.
And so.
Obviously, if you think about assignments there a function of miles traveled frequency of accidents, and then total loss ratio.
The frequency and total loss, we're continue to frequency continues to be fairly stable.
The table total loss ratio, we continue to see the same drivers of that debt. We expect will continue to drive that up and then vehicle miles traveled.
Although different elements us nearly back or very very close to pre pandemic levels. So youre seeing things like.
Trucks and things of that nature, and obviously, our benchmarking higher than they were even pre pandemic, but obviously theyre getting and directs and get into Rex with cars. Unfortunately and.
And then there is.
And of cars.
Which are kind of like slightly below the last reading pre pandemic. So it's pretty much close if not back to the level.
Got it so so again once cars kind of get to that vehicle miles traveled pre pandemic level.
And I look at like the buckets of your growth being total loss frequency improvement.
Favorable more favorable market share shifts or growth and non insurance, how do we look at those buckets in terms of your growth going forward again, once the vehicle miles driven and on the car side kind of stabilizes.
Yes, and once again I would.
Think about vehicle miles traveled just total overall is being which again.
Kind of nearly close to or at pre pandemic levels pre pandemic levels right now.
And then I think the other factors are.
Kind of once again <unk> accident frequency is fairly stable and.
And then and total loss rate not considering the.
What happened and this comparison and the second quarter of 2021 versus 2020 for the reasons. We outlined continues to rise I think and and the other element.
And to that the 2 other elements 1 element is.
Share shifts we've talked a lot about that.
And kind of the impact on 2021, and then our focus on that and what we expect going forward.
And then the us.
John just mentioned, we believe that there is a.
We continue to make good progress on non insurance and we believe longer term there is and outside growth.
And outsized growth potential opportunity there to grow that business. It comes and many different segments rental cars repossession fleet. All of these type of thing, but certainly as we look at kind of the dealer side and the lower end of that dealer side.
We do believe there's opportunity there.
Great very helpful. Thanks.
Okay.
Thank you and the ones.
And as a reminder, please press Star then 1 if you would like to ask the question.
And the next question comes on and Greg <unk> with Barrington Research.
Hey, good morning, everyone.
The Gary can you give us the idea of of what what your non insurance vehicles process were in the quarter what percentage of change with the up double digit.
The provision.
Yeah. So we didn't we didn't provide and arent necessarily going to provide a the percentage growth of those but 1 way to think about it areas as debt. When we we are seeing continued strong growth in the non insurance side.
And if you look back.
And to kind of at the time of the spin non insurance was approximately 20% insurance was 80%.
Non the non insurance piece of that has grown and with index higher and the 20% now.
But and we are continuing to see strong growth and non insurance, okay. That's pretty helpful.
And then Keith.
Is it possible to if you look at the 24% increase and revenue per unit.
Parcel of possible that could you maybe parse that out like if we had.
Flat year over year used car price what would that increase had been I guess, what I'm trying to get at us.
And you're doing internally how is that impacting your revenue per unit when you factor out the used car price.
Yeah, Gary it's very difficult to.
Bifurcate between all the things that we're doing internally.
And then the precise impact of kind of used car that used car prices are elevated used car prices rather are having.
But as we mentioned earlier, what we do feel comfortable saying is that collectively all of the things that we've done to our model, albeit going all digital.
And now that we are collecting the internet fees on 100% of transactions versus the 70% other pricing changes that we've implemented.
Certainly the growth and our global buyer network enhancements, we've made to our model that if you take all of those things together kind of self help things that we've done our own on our own debt that is more of a significant contribution we believe from the data we are seeing relative to the impact that we think elevated used car price.
<unk> are having that's about the level of detail we can provide.
Okay, and then John as you look forward with used car prices I mean, and when you talk to people within the industry and whatever is the thought that.
Maybe we're plateauing here, but we're not going to see dramatic snap back down and we've hit a new high level for a time being or are we going to see continued attrition.
From here over the next 2 to 3 years and prices.
Yes.
And so hard to say here I mean, I think as new car production against the catch up the chips short and as all of that stuff you are going to see some.
Softening and the used car market, because theres going to be more availability of new cars.
They're not going to beat us precious to us they have been right now, but what the what the.
Through the 3 year trend.
I'm not going to hazard, a guess of that.
Alright, thank you.
Thanks Kurt.
Thank you.
This concludes the question and answer session I would like to return the Florida, John Kett for any closing comments.
Well. Thank you all for joining US again, thank you for your support and interest and IAA and we look forward to updating you next quarter and of a great day.
Thank you. The conference has now concluded. Thank you for attending today's presentation, you may not us.
The central lines.