Copart Reports Third Quarter Financial Results

Copart Reports Third Quarter Financial Results

DALLAS--(BUSINESS WIRE)-- Copart, Inc. (NAS: CPRT) today reported financial results for the quarter ended April 30, 2013, the third quarter of its 2013 fiscal year.

For the three months ended April 30, 2013, revenue, operating income and net income were $277.6 million, $82.8 million and $53.2 million, respectively. These represent an increase in revenue of $33.5 million, or 13.7%; and decreases in operating income of $5.1 million, or 5.8%; and in net income of $2.2 million, or 4.0%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.41 compared to $0.43 last year, a decrease of 4.7%.


For the nine months ended April 30, 2013, revenue, operating income and net income were $782.7 million, $219.9 million and $138.7 million, respectively. These represent increases in revenue of $85.1 million, or 12.2%; in operating income of $3.1, million or 1.4%; and in net income of $1.5 million, or 1.1%, respectively, from the same period last year. Fully diluted earnings per share for the nine months ended April 30, 2013 were $1.07 compared to $1.04 last year, an increase of 2.9%.

The operating results for the third quarter were adversely affected by abnormal costs incurred as a result of hurricane Sandy. These costs include the additional towing, payroll, equipment, travel, housing and facilities expenses directly related to the operating conditions created by hurricane Sandy. Also included are costs associated with our international expansion and the incremental towing and processing costs tied to the 21% year over year growth in inventory.

Included in general and administrative cost for our third quarter are the non-capitalizable costs associated with the implementation of our ERP system and the incremental costs associated with the outsourcing of our network infrastructure and our technical support functions, which together totaled $1.7 million. These costs are expected to abate upon completion of the implementation, which is currently expected to occur sometime in our 2014 fiscal year. Also included are the costs associated with our expanded international operations which totaled $1.4 million and will continue.

On Friday, May 31, 2013, at 11 a.m. Eastern time, Copart will conduct a conference call to discuss the results for the quarter. The call will be webcast live at http://w.on24.com/r.htm?e=619533&s=1&k=7DA8D85F9B7D206FEB6915BBAAFCE40C. A replay of the call will be available through June 30, 2013 by calling (888) 203-1112. Use confirmation code #8903126.

About Copart

Copart, founded in 1982, provides vehicle sellers with a full range of remarketing services to process and sell salvage and clean title vehicles to dealers, dismantlers, rebuilders, exporters and, in some states, to end users. Copart remarkets the vehicles through Internet sales utilizing its patented VB2 technology. Copart sells vehicles on behalf of insurance companies, banks, finance companies, fleet operators, dealers, car dealerships and others as well as cars sourced from the general public. The company currently operates 164 facilities; with operations in the United States and Canada (www.copart.com), the United Kingdom (www.copart.co.uk), Brazil (www.copart.com.br), Germany (www.copart.de) and the United Arab Emirates (www.copart.ae). Copart links sellers to more than 750,000 members in over 140 countries worldwide through our online multi-channel platform. For more information, or to become a member, visit www.copart.com.

Cautionary Note About Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, and these forward-looking statements are subject to substantial risks and uncertainties. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected or implied by our 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 other risks identified in Copart's latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission. We encourage investors to review these disclosures carefully. We do not undertake to update any forward-looking statement that may be made from time to time on our behalf.

     

Copart, Inc.

Consolidated Statements of Income

(in thousands, except per share data)

(Unaudited)

 
Three months endedNine months ended
April 30,April 30,
20132012

 

20132012
Service revenues and vehicle sales:
Service revenues$223,977$200,140$636,076$569,808
Vehicle sales 53,661 43,965 146,613 127,827

Total service revenues and vehicle sales

$277,638$244,105$782,689$697,635
Operating costs and expenses:
Yard operations105,64884,232310,169258,659
Cost of vehicle sales45,63136,258124,146104,057
Yard depreciation and amortization 10,762 8,346 30,524 24,729
Gross margin115,597115,269317,850310,190
General and administrative28,75023,60286,18672,973
General and administrative depreciation and amortization4,0343,72311,72411,587
Impairment of long-lived assets    8,771
Total operating expenses 194,825 156,161 562,749 480,776
Operating income82,81387,944219,940216,859
Other income (expense):
Interest expense, net(2,400)(2,930)(7,273)(7,969)
Other income (expense) 1,592 (467) 2,043 1,688

Total other expense

 (808) (3,397) (5,230) (6,281)
Income before income taxes82,00584,547214,710210,578
Income taxes 28,769 29,076 75, 989 73,355
Net income$53,236$55,471$138,721$137,223
Earnings per share-basic    
Basic net income per share$0.42$0.44$1.11$1.07
 
Weighted average common shares outstanding 125,270 126,596 124,755 128,794
 
Earnings per share-diluted    
Diluted net income per share$0.41$0.43$1.07$1.04
Diluted weighted average common shares outstanding 130,530 130,451 129,502 131,959
 
   

Copart, Inc.

Consolidated Balance Sheets

(in thousands)

(Unaudited)

 
April 30,July 31,
20132012
ASSETS
 
Current assets:
Cash and cash equivalents$139,331$140,112
Accounts receivable, net164,155138,966
Inventories and vehicle pooling costs28,40724,222
Income taxes receivable4,3842,312
Deferred income taxes4,1623,600
Prepaid expenses and other assets10,7949,155
Assets held for sale 1,929 3,926
Total current assets353,162322,293
Property and equipment, net676,698587,163
Intangibles, net13,1007,985
Goodwill208,580196,438
Deferred income taxes23,87222,280
Other assets 23,270 18,907
Total assets$1,298,682$1,155,066
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities$129,001$102,958
Deferred revenue5,4055,390
Income taxes payable8,0343,082
Current portion of long-term debt and capital lease obligations75,93775,170
Other current liabilities  785
Total current liabilities218,377187,385
Deferred income taxes8,6387,186
Income taxes payable26,18522,531
Long-term debt and capital lease obligations314,230368,950
Other liabilities 6,858 7,897
Total liabilities 574,288 593,949
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value - 5,000,000 shares authorized; no shares issued and outstanding at April 30, 2013 and July 31, 2012, respectively
Common stock, $0.0001 par value - 180,000,000 shares authorized; 125,436,992 and 124,393,700 shares issued and outstanding at April 30, 2013 and July 31, 2012, respectively1312
Additional paid in capital361,585326,187
Accumulated other comprehensive loss(37,078)(38,043)
Retained earnings 399,874 272,961
Total stockholders' equity 724,394 561,117
Total liabilities and stockholders' equity$1,298,682$1,155,066
 
   

Copart, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 
Nine Months Ended
April 30,
20132012
Cash flows from operating activities:
Net income$138,721$137,223
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization42,24836,316
Allowance for doubtful accounts234(254)
Stock-based compensation14,67116,342
Excess tax benefits from stock-based compensation(6,164)(2,696)
Impairment of long-lived assets8,771
Gain on sale of property and equipment(922)(1,298)
Deferred income taxes(3,372)(11,705)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable(24,769)(6,402)
Vehicle pooling costs and inventories(4,304)1,740
Prepaid expenses and other current assets(2,877)7,434
Other assets(6,145)576
Accounts payable and accrued liabilities22,321815
Deferred revenue15733
Income taxes receivable4,2133,825
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