IAA Boosts Gross Profit

By Staff Writer November 03, 2020

IAA Inc.’s chief executive officer said the company delivered more strong sales volumes for the third quarter of fiscal 2020, which ended Sept. 27.

“We delivered stronger than anticipated third quarter results driven primarily by record revenue per unit trends and also higher than expected sales volumes,” said  John Kett, CEO and president. “Assignments continued to improve throughout the quarter and ended the period at a run rate only slightly below pre-COVID-19 levels. In addition to these industry tailwinds, our results also benefited from our margin expansion plan and enhanced service offering.”

Gross profit, which is defined as total consolidated revenues minus cost of services, and exclusive of depreciation and amortization, increased by 1.7 percent to $138.3 million from $136.0 million in the third quarter of fiscal 2019. The increase in gross profit was primarily due to higher revenue per unit as well as cost reductions achieved, partially offset by lower volume and higher occupancy costs. Gross margin in the quarter increased by 280 basis points versus the prior year to 40.9 percent from 38.1 percent in the prior year.

Consolidated revenues decreased 5.4 percent to $338.0 million from $357.3 million in the third quarter of fiscal 2019. Foreign currency movements had a positive impact of less than $0.1 million on revenue for the third quarter of fiscal 2020. Third quarter revenue through July 2020 includes $1.1 million of revenue from DDI, which was acquired on July 31, 2019. Prior year revenue included $3.6 million related to a non-cash adjustment for certain revenue agreements.

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Last modified on Friday, 06 November 2020 14:52