Copart Reports Fourth Quarter Financial Results

Copart Reports Fourth Quarter Financial Results

DALLAS--(BUSINESS WIRE)-- Copart, Inc. (NAS: CPRT) today reported financial results for the quarter and year ended July 31, 2013.

For the three months ended July 31, 2013, revenue, operating income and net income were $263.7 million, $63.1 million and $41.3 million, respectively. These represent an increase in revenue of $37.1 million, or 16.4%; and decreases in operating income of $6.4 million, or 9.3%; and in net income of $3.6 million, or 8.0%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.32 compared to $0.35 last year, a decrease of 8.6%.


For the twelve months ended July 31, 2013, revenue, operating income and net income were $1,046.4 million, $283.0 million and $180.0 million, respectively. These represent increases in revenue of $122.2 million, or 13.2%; and decreases in operating income of $3.4, million or 1.2%; and in net income of $2.1 million, or 1.1%, respectively, from the same period last year. Fully diluted earnings per share for the twelve months ended July 31, 2013 and July 31, 2012 were $1.39.

Included in the financial results for the most recent quarter are the results of our QCSA acquisition, which we closed on May 30, 2013. These results included revenues of $11.2 million and expenses, including operational, general and administrative and deal-specific costs, of $13.7 million. We expect our QCSA acquisition to contribute to our operating margin by our third quarter of fiscal year 2014.

Copart also announced today that its Board of Directors has concluded its investigation into the possibility of converting to a real estate investment trust (REIT). As previously disclosed the Board began this review in 2012 and retained outside, expert advisors to assist it in conducting the review. Following this process, Copart's board unanimously determined that Copart would not pursue a REIT conversion at this time.

On Wednesday, September 25, 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=682297&s=1&k=53B067B7327E8356C223CD689A7999D0. A replay of the call will be available through October 23, 2013 by calling (888) 203-1112. Use confirmation code #7330277.

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 has facilities 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), the United Arab Emirates (www.copart.ae) and Spain (www.autoresiduos.com). 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.

Consolidated Statements of Income

(in thousands, except per share data)

(Unaudited)

Three months ended
July 31,

Twelve months ended
July 31,

2013

2012

2013

2012

Service revenues and vehicle sales:

Service revenues

$

213,591

$

187,464

$

849,667

$

757,272

Vehicle sales

50,106

39,092

196,719

166,919

Total service revenues and vehicle sales

$

263,697

$

226,556

$

1,046,386

$

924,191

Operating costs and expenses:

Yard operations

107,292

85,907

417,462

344,566

Cost of vehicle sales

43,090

32,914

167,236

136,971

Yard depreciation and amortization

10,243

8,309

40,766

33,038

Gross margin

103,072

99,426

420,922

409,616

General and administrative

35,782

26,404

121,968

99,376

General and administrative depreciation and amortization

4,238

3,528

15,962

15,116

Impairment

8,771

Total operating expenses

200,645

157,062

763,394

637,838

Operating income

63,052

69,494

282,992

286,353

Other income (expense):

Interest expense, net

(2,356

)

(3,015

)

(9,629

)

(10,984

)

Other income

1,466

999

3,509

2,687

Total other expense

(890

)

(2,016

)

(6,120

)

(8,297

)

Income before income taxes

62,162

67,478

276,872

278,056

Income taxes

20,858

22,582

96,847

95,937

Net income

$

41,304

$

44,896

$

180,025

$

182,119

Earnings per share-basic

Basic net income per share

$

0.33

$

0.36

$

1.44

$

1.42

Weighted average common shares outstanding

125,380

126,112

124,912

128,120

Earnings per share-diluted

Diluted net income per share

$

0.32

$

0.35

$

1.39

$

1.39

Diluted weighted average common shares outstanding

130,613

129,853

129,781

131,428

Consolidated Balance Sheets

(in thousands)

(Unaudited)

July 31,

2013

July 31,

2012

ASSETS

Current assets:

Cash and cash equivalents

$

63,631

$

140,112

Accounts receivable, net

182,714

137,900

Inventories and vehicle pooling costs

31,202

24,222

Income taxes receivable

9,416

2,312

Deferred income taxes

2,216

3,600

Prepaid expenses and other assets

15,344

9,155

Assets held for sale

1,929

3,926

Total current assets

306,452

321,227

Property and equipment, net

677,517

587,163

Intangibles, net

17,706

7,985

Goodwill

267,463

196,438

Deferred income taxes

30,117

22,280

Other assets

35,226

18,907

Total assets

$

1,334,481

$

1,154,000

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

136,648

$

101,892

Bank overdraft

16,291

Deferred revenue

4,832

5,390

Income taxes payable

4,741

3,082

Current portion of long-term debt and capital lease obligations

76,047

75,170

Other current liabilities

785

Total current liabilities

238,559

186,319

Deferred income taxes

8,071

7,186

Income taxes payable

23,091

22,531

Long-term debt and capital lease obligations

296,410

368,950

Other liabilities

5,949

7,897

Total liabilities

572,080

592,883

Commitments and contingencies

Stockholders' equity:

Preferred stock, $0.0001 par value - 5,000,000 shares authorized; no shares issued and outstanding at July 31, 2013 and July 31, 2012, respectively

Common stock, $0.0001 par value - 180,000,000 shares authorized; 125,494,995 and 124,393,700 shares issued and outstanding at July 31, 2013 and July 31, 2012, respectively

13

12

Additional paid in capital

368,769

326,187

Accumulated other comprehensive loss

(47,161

)

(38,043

)

Retained earnings

440,780

272,961

Total stockholders' equity

762,401

561,117

Total liabilities and stockholders' equity

$

1,334,481

$

1,154,000

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

Twelve Months Ended
July 31,

2013

2012

Cash flows from operating activities:

Net income

$

180,025

$

182,119

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

56,728

48,167

Allowance for doubtful accounts

(356

)

(192

)

Stock-based compensation

19,557

21,791

Excess tax benefits from stock-based compensation

(6,097

)

(4,367

)

Impairment of long-lived assets

8,771

Gain on sale of property and equipment

(962

)

(143

)

Deferred income taxes

(3,605

)

(17,579

)

Changes in operating assets and liabilities, net of effects from acquisitions:

Accounts receivable

(31,171

)

(16,004

)

Vehicle pooling costs and inventories

(5,403

)

924

Prepaid expenses and other current assets

(5,971

)

6,026

Other assets

(18,714

)

(1,951

)

Accounts payable and accrued liabilities

14,749

(3,805

)

Deferred revenue

(871

)

(243

)

Income taxes receivable

(752

)

7,082

Income taxes payable

1,609

(2,545

)

Other liabilities

560

1,622

Net cash provided by operating activities

199,326

229,673

Cash flows from investing activities:

Purchases of property and equipment including acquisitions

(214,287

)

(57,396

)

Proceeds from sale of property and equipment

6,266

9,309

Net cash used in investing activities

(208,021

)

(48,087

)

Cash flows from financing activities:

Proceeds from the exercise of stock options

21,442

13,651

Proceeds from the issuance of Employee Stock Purchase Plan shares

1,948

1,957

Repurchase of common stock

(15,009

)

(203,285

)

Excess tax benefit from stock-based compensation

6,097

4,367

Proceeds from issuance of long-term debt

125,000

Debt offering costs

(313