Copart Reports Fourth Quarter Financial Results

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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 operations107,29285,907417,462344,566
Cost of vehicle sales43,09032,914167,236136,971
Yard depreciation and amortization10,2438,30940,76633,038
Gross margin103,07299,426420,922409,616
General and administrative35,78226,404121,96899,376
General and administrative depreciation and amortization4,2383,52815,96215,116
Impairment8,771
Total operating expenses200,645157,062763,394637,838
Operating income63,05269,494282,992286,353
Other income (expense):
Interest expense, net(2,356)(3,015)(9,629)(10,984)
Other income1,4669993,5092,687
Total other expense(890)(2,016)(6,120)(8,297)
Income before income taxes62,16267,478276,872278,056
Income taxes20,85822,58296,84795,937
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 outstanding125,380126,112124,912128,120
 
Earnings per share-diluted        
Diluted net income per share$0.32$0.35$1.39$1.39
Diluted weighted average common shares outstanding130,613129,853129,781131,428
 

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, net182,714137,900
Inventories and vehicle pooling costs31,20224,222
Income taxes receivable9,4162,312
Deferred income taxes2,2163,600
Prepaid expenses and other assets15,3449,155
Assets held for sale1,929 3,926 
Total current assets306,452321,227
Property and equipment, net677,517587,163
Intangibles, net17,7067,985
Goodwill267,463196,438
Deferred income taxes30,11722,280
Other assets35,226 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 overdraft16,291
Deferred revenue4,8325,390
Income taxes payable4,7413,082
Current portion of long-term debt and capital lease obligations76,04775,170
Other current liabilities 785 
Total current liabilities238,559186,319
Deferred income taxes8,0717,186
Income taxes payable23,09122,531
Long-term debt and capital lease obligations296,410368,950
Other liabilities5,949 7,897 
Total liabilities572,080 592,883 
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, respectively1312
Additional paid in capital368,769326,187
Accumulated other comprehensive loss(47,161)(38,043)
Retained earnings440,780 272,961 
Total stockholders' equity762,401 561,117 
Total liabilities and stockholders' equity$1,334,481 $1,154,000 
 
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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 amortization56,72848,167
Allowance for doubtful accounts(356)(192)
Stock-based compensation19,55721,791
Excess tax benefits from stock-based compensation(6,097)(4,367)
Impairment of long-lived assets8,771
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 liabilities14,749

(3,805

)
Deferred revenue(871)(243)
Income taxes receivable(752)7,082
Income taxes payable1,609(2,545)
Other liabilities5601,622
Net cash provided by operating activities199,326229,673
 
Cash flows from investing activities:
Purchases of property and equipment including acquisitions(214,287)(57,396)
Proceeds from sale of property and equipment6,2669,309
Net cash used in investing activities(208,021)(48,087)
 
Cash flows from financing activities:
Proceeds from the exercise of stock options21,44213,651
Proceeds from the issuance of Employee Stock Purchase Plan shares1,9481,957
Repurchase of common stock(15,009)(203,285)
Excess tax benefit from stock-based compensation6,0974,367
Proceeds from issuance of long-term debt125,000
Debt offering costs(313