A. Jayson Adair - Chief Executive Officer and Director William E. Franklin - Chief Financial Officer, Principal Accounting Officer and Senior Vice President of Finance

Robert Labick - CJS Securities, Inc. William R. Armstrong - CL King & Associates, Inc., Research Division John M. Healy - Northcoast Research Bret David Jordan - BB&T Capital Markets, Research Division Samik Chatterjee - JP Morgan Chase & Co, Research Division Amy Norflus

Good day, everyone, and welcome to the Copart, Inc. Q4 Fiscal 2013 Earnings Call. As a reminder, today's call is being recorded. For opening remarks and introduction, I would like to turn the call over to Mr. Jay Adair, Chief Executive Officer of Copart, Inc. Please go ahead, sir. A. Jayson Adair: Thank you, Elizabeth. Well good morning, everyone. Welcome to our fourth quarter call. As many of you know, we have a process where I'll turn it over to Will to go through a brief disclosure and then update for comments financially and then turn it back to me. I'll go through my comments, and then we'll open it up for Q&A. So with that, it's my pleasure to introduce Will Franklin. William E. Franklin: Thank you, Jay. Before we begin our comments, I would like to remind everyone on the call that our remarks will contain forward-looking statements, including statements concerning our views of trends in our business. These statements are neither promises nor guarantees and are subject to certain risks and uncertainties that could cause the final results to differ substantially from those projected or implied by our statements and comments. The company expressly disclaims any obligation to update or revise these statements and comments. For a more complete discussion of the risks that could affect our business, please review the management's discussion and analysis and the risk factors contained in our 10-Q, 10-K and other SEC filings. Now I'll begin with a few brief comments on our fourth quarter financial results. Total revenue grew by $37.1 million. Purchased car revenue grew by $11 million and was driven primarily by growth in purchased car activity in the U.K. and for purchased car activity that came to us with the QCSA transaction. In the U.K., we introduced a program similar to the Copart Direct program, which we have in the United States. In that program, we buy cars primarily from the general public and resell them for our own account. Service revenue increased by $26.1 million. The increase resulted from growth in our international operations of approximately $4.1 million. Our QCSA acquisition of approximately $8 million, and from growth in volume in Copart U.S. The growth in volume in Copart U.S. came from both market share gains and overall market expansion as we have seen an increase in salvage frequency. In Copart U.S., the growth in volume was offset by a decline in revenue per car, driven by the decline in used car pricing and a change in our supplier mix. Charity cars were a larger percentage of our sales volume, and charity cars generally have a lower-than-average selling price. In Copart U.S., volume grew by almost 8% and was driven by growth in cars from insurance suppliers. Noninsurance volume represented 19.4% of our total Copart U.S. volume. Yard operations costs were up $21.4 million. The growth came as a result of our international expansion, the QCSA acquisition and its associated integration costs and inefficiencies, the growth of Copart U.S. volume and the growth in Copart U.S. inventory. Copart U.S. inventory was up 20% on a year-over-year basis. General administrative costs grew by $9.4 million over the same quarter last year. The increase was due primarily to additional costs, tied once again to our international expansion, which totaled $1.9 million, additional costs associated with QCSA expansion and acquisitions of $4 million, and additional spend on technology of approximately $2.9 million. We ended the quarter with over $63 million in cash. During the quarter, we made 4 acquisitions. We expended $52.8 million and we assumed $21.6 million in long-term debt in connection with those acquisitions. The debt was paid off simultaneous to the close of the transactions. In addition, we expended $16 million for capital assets and capitalized development costs. During the quarter, we had no open market share repurchases. We have almost $48 million shares remaining in our current repurchase authorization. That concludes my brief comments. I'll now turn the call back over to Jay Adair for further comments on our quarter's results. Jay? A. Jayson Adair: Thank you, Will. Good morning, everyone, again, and I've got basically 5 topics that I'll be going over this morning. I'll briefly talk about the inventory build, the acquisitions made in the quarter. Specifically, I'll talk to QCSA and the integration of that acquisition, timing and expectations that we have for the future, financial performance, our announcement on the REIT and our new website that we launched in the quarter. As Will stated, inventory was up 20%, and with the new accounting rules, we have the expense, we have the cost of that inventory build. In years past, we would defer those costs and we can't do that today. So some of the results of the quarter are associated with that large inventory build in the quarter. We expect that those vehicles will be sold off in Q2, primarily, and maybe a little leftover in Q3, but I want to caution the fact that we continue to build inventory. We've seen quite a bit of new business that's come in, in the last 6 months, both domestically and internationally, in fact. Although the international business didn't affect the inventory build in the fourth quarter, it will affect the inventory build in the first quarter that we're in now. As Will stated, ASPs are off slightly, and we see that now trending up a little bit. It's now trending up slightly, so we don't think that, that will continue. As we go into the winter, historically, we will see ASPs tend to increase as there's more accidents and more total losses will take place with a typically better quality product and a higher ASP going in. So I think in terms of average selling price, Q4 will probably be the low end of what we'll see compared to Q1 and Q2. And as you all know, there's a natural hedge that exists in our business and that as ASPs fall, units go up, and the inverse of that when ASPs -- when the ASP direction changes. So I want to point that out on inventory build for the quarter and then move into the acquisition of QCSA. So we completed the acquisition in May. We made it real clear to our customers that we would not make any changes for 6 months, which will take you basically into the end of this calendar year. We are right now looking at all of the areas that can improve the company, and I'll talk about that some more a little later here on the call. But because of that decision, we've got all the costs both operationally and G&A associated with QCSA. For example, on the outside, we're towing vehicles 100 miles past one of our own facilities that maybe is 20 miles away, so those types of expenses, personnel costs, facility costs, additional facilities that we have opened that we don't need because they're duplicate locations. On the G&A side, we've got a whole myriad of duplicate costs associated from accounting, sales, marketing, HR, IT, legal, everything that you would imagine that exists in a company that has to run independent. When that -- when this company merges with QCSA and we do complete the integration process, there'll be a number of savings that exists both on the ops and G&A side. Finally, I would mention there's a ton of increased costs associated with the acquisition for Copart as well. We are holding very frequent meetings right now with the whole company, working on the integration plans, setting everything up. We didn't want to make any snap decisions. And so as we are gearing up for that integration, there's a lot of costs that's associated both on the G&A and on operational as we build those plans and prepare for that integration. So it has had an effect on financial performance, which is pretty obvious. You can see that in the quarter with all these costs that are associated. We expect the integration to begin in the second quarter. We are currently in the first quarter the first quarter ends October. We expect the integration to begin in the second quarter, and we expect to have that integration completed by the third quarter. This delay of integrating the company obviously has had a lot of costs, but on the positive side, it's allowed us to really evaluate best practices for the entire company, what are things that QCSA does better than Copart, what does Copart do better than QCSA, and we want to map those improvements across the entire organization. We've also brought a fantastic management team to the table. This is a management team that's competed with us and our competitor for the last decade, and so there are some people that have some really, really strong skill sets when it comes to operations, when it comes to relationship management, when it comes to just really reviewing the process of making salvage total loss decisions. We've got some people that we'll be bringing into the team or that are with us now, but we'll be integrating them into the company into some roles that will be significant, material roles that will impact us positively going forward. And finally, I'll just mention that we are going to keep some of the locations. So we don't know exactly what that number is today, but we will probably end up with half a dozen new locations that will just make our network that much more robust and improve our ability to reduce towing. If we -- if I can just very quickly, I would state, if we are -- use Davenport, Iowa, as an example, if we are towing that market today from a yard that's considerably be far away and we can add that location that reduces our towing costs, as well as the example of shutting down one of their locations and towing them to our facilities, reduces their towing cost, so it really affects both of us. We can do that in both cases. So looking forward, we think that our margin improvement and our financial results will improve in Q2 -- that, that will start in Q2. I want to caution the fact that Q2 may have some leftover write-off expenses. I anticipate Q1, the quarter we're in now, having some write-offs, some nonrecurring expenses associated with the integration of QCSA and that as we complete that, we'll be announcing at the end of Q1, there may be a little bit of a tail leftover in Q2, but Q2 will start to see the improvements of reduced costs and improved revenues from the integration of this company. So that will extend into Q3, and we expect the operating results to be completed in Q3, but there may be a tail. Again, I'll just caution the fact there may be a tail into Q4, but integrating companies is something we have done many, many times. We've made 4 acquisitions in the quarter, and the other acquisitions we made domestically are already integrated into the company. So we will integrate this, which is there are so many locations and so much volume that we wanted to take our time and, again, as I said, take a look at best practices and make sure that we make the right decisions. So I feel very confident that the integration will take place in Q3, but it may be a little bit of tail results that you'll see in Q4, but that will complete us for fiscal '14. Fiscal '14, we expect to have all this integration finished. On the REIT. You saw the announcement in the press release. We spent a year reviewing this, and there were a number of factors that the board considered. We retained a number of outside experts. Obviously, a key factor was the board's assessment as to how the IRS review Copart's business. We spent quite a bit of time thinking about our business, how we felt it fit within the REIT regulations and how the IRS might look at it. As you know already, the IRS has been scrutinizing proposed REIT convergence more closely, and that's come out in the news in the last 6 months. Ultimately, the board decided that we should focus on our business and not pursue becoming a REIT at this time. And then finally, I'd like to comment on our new website. We launched the new copart.com in the fourth quarter. It's a completely new look and feel. There are over 100 major changes that the new site offers that our old site does not, but I would just like to focus for a minute on 3 changes that I think are a really big deal. First one is our new third-generation bidding technology. We launched VB2 in 2003. This year marks the launch of VB3, our third-generation technology. I want to encourage you to go to the new website, check that out. Already, what we're seeing is auction attendance is up. We have designed it in such a way that it's available to nonmembers, so you don't have to be registered. On our current website, if you register to watch the auction, you have to sign up as a member. On the new website, you do not, and we allow for unlimited auctions, and it's all browser-based. It's not Flash. It's not a Java applet. You don't have to layer them up on your screen. It allows you to roll your browser up and down and look at 20, 30, 40 auctions running at one time. What will be coming subsequent to this third-generation technology is probably the most exciting part. But the old technology was very static. We had the same amount of a timed countdown per buyer regardless of the buyer. The new technology will allow us to adjust that to become more dynamic and adjust the time that we countdown per buyer based on their bidding habits, and it will allow us to put sounds and information and to really queue in on the visual. So check it out. I think seeing is believing. If you look at the new technology, know what I'm talking about. And the next thing I will talk about is photo browsing. Photo browsing is something that we all do. The experience on our old site is not what I would call a standard in the industry today. You're all very familiar with how you browse photos when you go to Facebook, as an example. You walk into Facebook the way that you look at the images, that you cycle through the images. We have gone down the path of making it just like what you would expect in the industry. And this is very important because our buyers spend enormous amounts of time looking at inventory. And so now a member or a buyer can come to the site and browse those images much quicker, see that information, and the layout of the site allows us to expand the types of images that we'll be showing in the future. So that is very exciting as well. And then finally, I would just say that once you are a member and you sign up, we give you now a completely customizable dashboard. It's all widget based. You can set up "I want to look at sale list first" or "I want to look at my watch list first", "I want to see what lots are won or what lots I have to counter." All that is setup in the order that the member wants, not the order that Copart wants. It's not what we've decided, it's what they have decided. They can put the things that are most relevant to the top of the screen and adjust everything from news information and weather information to watch list and what's coming up for sale. The new website will be replacing the old site in the near future, so I highly encourage you to check it out. And that will, again, as we talk about the integration of Quad Cities in Q1, Q2, Q3, Q4, you'll be seeing us move to that new website, as well as further improvements to the website and our mobile bidding platform. So really good stuff there. All right with that, I'd like to open it up for questions. So, Elizabeth, if you would?

[Operator Instructions] We'll go first to Bob Labick with CJS Securities. Robert Labick - CJS Securities, Inc.: I wanted to just dig in a little bit more starting with yard and fleet. The increase in the quarter, you mentioned obviously the increased inventory. Is that 20% including QCSA or is that -- what's the organic number on that? William E. Franklin: No, that's not including QCSA. That's... Robert Labick - CJS Securities, Inc.: That's for Copart? William E. Franklin: Right. Robert Labick - CJS Securities, Inc.: Wow. Okay, that's fantastic, obviously. Are there any unusual Sandy expenses in there or anything else? William E. Franklin: No, most of those have already flown through. It's primarily the inefficiencies that are associated with integration of QCSA and QCSA itself. Robert Labick - CJS Securities, Inc.: Right, okay. And can you give us a sense or is it too soon to know roughly a year from now how much can be pulled out once you fully integrate both companies? A. Jayson Adair: I had cautioned giving that kind of view on it. I would say this, our expectations are that the margins will be similar to the margins of Copart, so that we'll convert that revenue to a historical Copart margin, not what you're currently seeing. Robert Labick - CJS Securities, Inc.: Okay, great. And then just to kind of stick on the margin side, just want to verify one thing, which I think you've been saying. But has there been any material change in the revenue model, the pricing outside of commodities, of course, or the cost of the processed cars or is the -- your near-term gross margin decline, the identifiable factors we've seen in the international and the integration and things like that? William E. Franklin: No, there's really been no change in the overall model. I mean, we've seen a little bit of costs to creep up in the cost process of cars. Tow costs have not come down after Sandy. And we've had a little bit of increase in the costs associated with title processing. The state of Georgia is now charging us $75 per car to convert a title from a clean title to a branded title. And so we're seeing a little bit of... A. Jayson Adair: I would just mention that has passed through though. William E. Franklin: That's passed through. That's part of revenue, but it's passed through with cost basically. And so we're seeing a little bit of creep up in the cost to process a car. Other than that, there really has not been a fundamental change in the model. Our ASPs tend to fluctuate with used car pricing, commodity pricing. We tend to look at the Manheim index and there's a few indexes that we focus on for our commodity information. And that, as Jay said, that trend was trending down through July, and it seems to have come up a little bit in August and that's what we're seeing in our auction results. Robert Labick - CJS Securities, Inc.: Okay, great. And then one last one and I'll hop out. In terms of capital expenditures, sometimes, you'll talk about the opportunities in the next 12, 18 months out there. Are you seeing more international opportunities on a near-term horizon and what are the opportunities in the U.S. for CapEx? A. Jayson Adair: Yes, there are opportunities out there. I won't talk specifically to them. And we will make some acquisitions in the year ahead, but our focus this year will be clearly on completing integration of QCSA, completing the migration from California that will be completely done this year, this fiscal year. So we've got some technologists that will be moving out in the next couple of quarters. And so, really, fiscal '14, if you will, will be very much focused on fully integrating and completing the move. I think we talked about Project Overdrive a couple of years ago and completing Project Overdrive, which is the move to Texas and a number of moves in addition to that and then completing QCSA and implementing new technology, the website, the mobile platform and then an internal system that we're implementing as well. So we want to get all those done, and then we'll get, I would say, more aggressive on the acquisition front.

We'll take the next question from Bill Armstrong with CL King & Associates. William R. Armstrong - CL King & Associates, Inc., Research Division: In G&A, Will, you pretty much outlined some of the major buckets of the increase year-over-year. Maybe could you tell us how much of that, that $9.4 million was nonrecurring? And how much might be ongoing? William E. Franklin: Yes, I mentioned the costs associated with QCSA and the deals, and that was about $4 million, and so we would expect to rationalize most of that cost. Now the timing on that, like Jay said, will be during the course of this year and I wouldn't be specific about when that will come down. But I would expect most of that to disappear. A. Jayson Adair: I would also -- Bill, I'd just comment on technology, where we are in the middle. We've talked about it before, we try not to keep bringing up the same points over and over, but we are in the process of making some major technology changes. So we do have duplicate costs today with technology that won't exist in years ahead. William R. Armstrong - CL King & Associates, Inc., Research Division: Understood. And with QCSA, I think you acquired 39 locations in total. Did I hear you say you're -- at the end of the day, you'll end up keeping about half a dozen of them, somewhere in that neighborhood? A. Jayson Adair: Well half a dozen on the salvage front and then there's another 6, 7, 8 facilities on our DVAA side. So you have to add both those together. So it'd be somewhere around a dozen, 14, 15, somewhere in that range. We have not completed the integration plan yet. As I said, we're not going to be implementing that plan until Q2. So we haven't completed it. We haven't made a decision, but I would say somewhere between 12 and 15 stores is where we'll end up. William R. Armstrong - CL King & Associates, Inc., Research Division: Okay, got it. And at the end of last quarter, I think you still had about 10% of those Sandy -- Hurricane Sandy vehicles still remaining. How much did those contribute to revenue and gross profit in the fourth quarter? William E. Franklin: Very little in terms of margin. Let me get that number for you. They're about -- that's about less than $10 million of revenue. William R. Armstrong - CL King & Associates, Inc., Research Division: Less than $10 million? William E. Franklin: Yes. Less than $1 million [indiscernible]. Less than $1 million revenue and very little gross margin William R. Armstrong - CL King & Associates, Inc., Research Division: So it's a lot less than $10 million, okay. A. Jayson Adair: We're making a little a calculation on the fly here. Over here we're punching the calculator on the call. William R. Armstrong - CL King & Associates, Inc., Research Division: Sorry. I didn't mean to cause any stress.

We'll go next to John Healy with Northcoast Research. John M. Healy - Northcoast Research: I wanted to ask a little bit about your expectation for how inventories will continue to build based on the share you've won with customers and the conversations you're having with the insurance companies, assuming accident rates kind of remain stable from here. How long will we continue, do you think, to see this type of inventory build? And is there a point at this year where you think your sales of vehicles will start to supersede kind of your inventory build, and at that point, we'll really see kind of a step-up in the gross margins? And maybe when do you think that might occur? A. Jayson Adair: Well it's a tough question because if you'd ask us at the beginning of the fiscal year last year, the beginning of '13, if we thought inventories would be building in the fourth quarter of fiscal '13, I'm convinced we wouldn't have said yes. I'm convinced we wouldn't have thought we'd see this kind of inventory build year-over-year. So it's unknown. It's -- you're sitting with the dynamic today where vehicles are getting older. And as we've talked about on calls before, as vehicles get older, the likelihood of those becoming total loss goes up. Of course, that has a negative effect on ASPs. And that's why I said in the call we've seen ASPs now we think hit the low trough. In the fourth quarter, they seem to be coming up in the first quarter, and we anticipate that'll happen in Q2 and Q3. So it's really tough to give you an exact number. I don't know if you've got something you'd want to add to that? William E. Franklin: Well I think there's 2 elements to our inventory build. One is just we're processing more volume, and that's, I think, what Jay's talking about being predictable. If we contain this growth, then inventories will continue, obviously, to build. The other is the insurance companies have really not caught up after Sandy in their cycle time. So a part of the reason that inventory is built and I'd say it's less than 10% of that -- excuse me, less than half of it -- half of the 20% is due to the insurance companies delaying their cycle time, and they're starting to catch up now. So we're going to see, I think, inventories start to come down over the next few quarters. But on a year-over basis, I wouldn't see them coming below the 10% growth. William R. Armstrong - CL King & Associates, Inc., Research Division: That makes sense. And I'd be interested in your thoughts in terms of salvage frequency. You make a good point, there, Jay, with the average age in the vehicle and that coupled with the used car market moderating a bit. Where have you guys believed that, or at least when you speak with insurance companies, where do you think salvage frequency could potentially go over the next couple of years? William E. Franklin: Well, I mean, I wouldn't know how to predict that. It's really -- it's the move of between a number of different variables: repair cost, used car pricing and auction results. And depending how those 3 elements move, that has an impact on your salvage frequency. A. Jayson Adair: When I started, it was about 10%. And today, it's over 15% and, as Will just stated it, part of that is we're seeing a different return on salvage today than we did 20 years ago when it was just live auction. Now with the advent of the Internet and that, so -- and, of course, with the advent of repair cost, with the advent of safety, airbags and all those types of safety elements, they raised the repair cost. So my instincts are the trend is up, not down. That might help you. I don't know if it's going to end up at 20% or not, but my instincts are the number will continue to rise over time, not go down, just because all the elements from returns to cost of repair seem to be going in an upward direction. John M. Healy - Northcoast Research: Fair enough. I appreciate that. And just final question. I know with the REIT item on the table this year, I don't know if it's coincidental, but you guys have historically been a very, very consistent repurchaser of your own stock and I was just just kind of curious how you guys look at share buyback and maybe with -- and the business looking really well and maybe the strategic things fighting the battle a little bit more. How do you view that as an item on the priority list? A. Jayson Adair: We've always been consistent about not laying out when we're going to buy stock or not buy stock back. I think it's pretty obvious why we didn't buy stock back. With the acquisitions and the cash we used in the quarter and you can see how much cash we finished the quarter with -- 60-something million in cash. So we're not sitting with a -- we weren't sitting in a position without taking on more debt to bring out a lot of cash. And if you look in the last 1.5 years or 2 years, we've taken the debt from roughly $500 million to below $400 million, so we're slowly paying off the debt and I would say that being very pragmatic about when we want to buy stock back and using cash for buying companies when the opportunity exists.

Our next question comes from Bret Jordan with BB&T Capital Markets. Bret David Jordan - BB&T Capital Markets, Research Division: A couple of quick questions. But I guess one relates to inventory growth. And is there anything, I guess -- sequentially last quarter, inventory was up 16 and now we're up about 20. Is there any inflation in the inventory cost that isn't -- that should be -- you can't pass along? Is inventory somehow becoming less profitable? I guess you talked about title value or tow prices going up. Is there any change in the costs of inventory acquisition that we're seeing sequentially? William E. Franklin: Well the inventory numbers that we reported are simply units of inventory. Bret David Jordan - BB&T Capital Markets, Research Division: Right. I'm just wondering whether the units are coming to you at a higher price? William E. Franklin: No, I mean, there's -- you mean the cost to process them? No. Jay alluded to the change in accounting treatment. So the way the accounting works is we actually recognize a loss every time we put a unit in our inventory. Bret David Jordan - BB&T Capital Markets, Research Division: Right. Yes, but is the loss greater than it was previously? I guess is there some different profit profile on the inventory? William E. Franklin: No, I would say no. I'd say it's -- well I'd say it's up slightly. Yes, it is up slightly. Bret David Jordan - BB&T Capital Markets, Research Division: Okay. And then is that something you can pass along, I guess, when you build that into your outbound or...? A. Jayson Adair: I would say that it's very slight. The increase we were seeing is -- I wouldn't be too alarmed by that. Let's put it that way. William E. Franklin: Yes. No, it's not passed along. It's simply once you're finished, it's part of the total transaction. It's just a matter of timing when you recognize all the revenue and all of the expenses. Bret David Jordan - BB&T Capital Markets, Research Division: Okay. And then I guess on the tech investment. I mean, we've been dealing with ERP and some spend there. If you could sort of refresh us on our quarterly spend and sort of what the -- how long do you expect to be spending incrementally more on the technology? And also is that going up because we're now spending on adopting the same processes within Quad City? A. Jayson Adair: Well I'll let Will talk to the numbers. With respect to adopting the same process, we are -- there are some things that we're adopting in Quad Cities, but I don't think they add expense. There are some coating changes that we'll be making and then they exist in our process forever going forward. And then there is some operational process that has nothing to do with technology that we'll be adopting. So I don't see anything there that's an issue, but yes, the technology -- first of all, 2 things, and then Will can talk to the numbers. The technology change has been a big undertaking. We're talking about brand new operating system, brand new mobile platform, brand new website. We do 100% of our business online. We're 100% web- and mobile-transacted company. So we're talking about major changes, but with that said, they've taken longer than what we expected them to take. And candidly, they've talked -- they've cost more than we thought they would cost, so we're dealing with that and we're going to get that dealt with. We're going to get that where it's completed and then we'll be ratcheting down expenses. So I doubt it'll happen in fiscal '14, but in fiscal '15, we expect to be seeing improvements in G&A and lowering costs because we've got a number of duplicate costs that exists on the technology front. William E. Franklin: Yes, so we basically have 2 projects that we're pursuing at this point. One is the transitioning from in-sourcing our infrastructure and our supports to outsourcing that. So we've got 2 data centers; 1 in Reno and 1 in Las Vegas packed full of computers and servers. And we're in the process of outsourcing that, as well as the support that goes along with that -- the operation of the knock [ph]. With the other is the transition from our operating platform, which internally we call cast [ph] to ASP. So we track on a quarterly basis the extra cost we have that we wouldn't have but for that transition. And like Jay said, it is a continuing project and so we've stopped calling them out. But for last quarter, it was $1.9 million. We're going to have that transition cost throughout fiscal '14 and they should abate sometimes during '15. Bret David Jordan - BB&T Capital Markets, Research Division: Okay. And then I guess one last question, sort of trying to get a core number x the Quad Cities deal. Or could you give us at least a feel for maybe what the Quad City revenue run rate was? I mean, it sounds like we're going to be calling a certain number of the physical sites, but do you expect to keep the sales that were associated with those? And then I guess, as you comment in the press release on expectations for operating margin contribution in the second half '14, is that you expect them to be accretive to your aggregate operating margin in the second half or you just expect them to generate a positive operating margin in the second half? William E. Franklin: I'm not sure of the differences. They'll generate operating profit margin in the second half. And so when you -- we called out their revenue in the press release, $11.2 million. Bret David Jordan - BB&T Capital Markets, Research Division: Right. I'm trying to get a feeling for an annual run rate on that revenue because that clearly was not a full quarter, and you're changing the physical structure of the business a little bit. So just trying to get a feeling for how big Quad Cities looks to you now? William E. Franklin: Well we bought them the end of May, so that's basically 2 parts [ph]. And again, in terms of optimal development contribution from Quad Cities, it's impossible to tell you. But I can tell you -- what we do know is if we had taken their volume and layered it over the Copart's model, simply added to -- it would have added at least $5 million of EBIT in the quarter. But we're not going to get all that. I was just saying if that was incremental volume of Copart, it'd be well over $5 million. So the ultimate yield on this acquisition is going to be somewhere between that and obviously where we were in the quarter for them, which was negative $3.5 million. And hopefully, we're much closer to Copart.

Our next question comes from Ryan Brinkman with JPMorgan. Samik Chatterjee - JP Morgan Chase & Co, Research Division: This is Samik here on behalf of Ryan Brinkman. I just want to run through the -- your decision of not swing a REIT option [ph] at this point. Can you just shed some light on what the likely motivation was for that? Was it because of capital towards growth investments or was the benefit not adequate to pursue such a conversion right now? A. Jayson Adair: No, I really don't have a lot of comments on the REIT. We have an investor that did an analysis and came out with a report that said that they felt that the company could be a REIT from their analysis that they did on the outside, not looking at the inside of Copart. We hired advisors to come in and review our process and report that to the board. And the board felt that it didn't make sense to pursue becoming a REIT. And that's really all I've got to say about it. Samik Chatterjee - JP Morgan Chase & Co, Research Division: Okay, okay. And when I think about the acquisition costs that you -- these costs related to the acquisition that you incurred in this quarter and looks like you're seeing it starts to sort of go down starting from Q2, but does it actually go up in Q1? Or does it sort of remain at a similar amount in Q1? William E. Franklin: I think Q1 is going to be similar. I think we were really not going to see the benefit of what we have in place and what we're executing on now until, like Jay said, towards the end of Q2. Samik Chatterjee - JP Morgan Chase & Co, Research Division: All right. And in terms of the cost toward the inventory build that you referred to and you're expecting sort of where your inventories are up 20% year-on-year right now they sort of go down and being up 10% maybe in the first quarter or second quarter. Does that give you a benefit on that cost of inventory build and can you sort of quantify that -- how much that will be on a sequential basis? William E. Franklin: No, I can't quantify it because I don't know how the inventory will move. I can just give you in general terms when the inventory goes down, our margins go up. And that's simply because we recognize a little bit of the revenue associated with the total transaction upfront, but the majority of the costs, when I say upfront, I'm talking about when we put the car into inventory. Then 2 months later when the car's ultimately sold, we generate most of the revenue with a very little of cost. And that's just the way the accounting rules apply to our business. Samik Chatterjee - JP Morgan Chase & Co, Research Division: Okay, I get that. And just a final question on your working capital for this quarter. Typically, you have an outflow in the fourth quarter, but it seemed to be a bigger drag on this quarter compared to last year. Is that something we need to take note of there? William E. Franklin: No, I just think there's just fluctuations in the balance sheet that account for that. It's not too different. I think our operating cash flow and Q4 of last -- there's about $16 million difference in the operating cash flow year-over. And that's just -- ascribed to changes -- for example, we had a large growth in accounts receivable due to the QCSA acquisition. So it's simply moving the balance sheet.

[Operator Instructions] We'll go next to Amy Norflus with Neuberger Berman.

Two questions. One, can you talk about your market share gain, how much you're getting, where is it coming from, is it organic, is it coming from Quad City? And then secondly, can you help us a little bit more and quantify some of the costs that you're having of running the duplicate facilities? You quantified it a little bit, but I think that was just towards ASP and not towards overhead personnel, IT, all that stuff. A. Jayson Adair: Yes, sure. Well the market share gains don't count Quad Cities. We talk about Quad Cities as an acquisition. So when we talk about market share gains, it's about gaining business organically across the country, which is separate from the fact that we believe the overall market is increasing in size right now. So I believe that have we not gained market share, we would have seen additional units coming in because the market is also increasing. The way we quantify that is by giving you the inventory number. We don't get into units, so we've told you that the inventory is built up and Will pointed out that, that excluded already on the -- pointed out that excluded Quad Cities, so that's a Copart-only piece. And then from a cost standpoint, Amy, we're hesitant to go out and tell you what we think we're going to generate. I gave earlier in the call that we believe we can achieve the same type of margin with the new business. We may achieve better than that because there's so many incremental units coming through, but I would rather under-promise than over-deliver as a company than have us say that we think we're going to achieve that. So we'll be happy if we can complete the integration and upon doing that, generate the same type of margin per unit as we do with Copart. That's our -- that's the position we're giving today.

And that's all the questions we have in queue. I'll now turn the call back over to our presenters for any additional or closing remarks. A. Jayson Adair: All right. Thank you, all, for coming. I'll just -- just to reiterate because we did get a couple of questions on the call, I think, were duplicates, so I want to make sure there's no confusion. We will not be completing the integration in the quarter that we're in now, that will not be until Q2, that will not be completed until Q3, so you're going to see margin improvement in Q2 and Q3, and we don't anticipate to see improvement in the quarter that we're in today. So we look forward to reporting the first quarter to you pretty soon here as this is the fiscal year where you get to come back pretty quickly on the first quarter. Will and I look forward to doing that and then reporting the quarters throughout the year as we do make improvements in the integration of our companies. Again, thank you for coming on the call, and that concludes our call.

Once again, that does conclude today's conference, and we thank you for your participation.