Copart Reports First Quarter Fiscal 2014 Financial Results

DALLAS--(BUSINESS WIRE)--

Copart, Inc. CPRT today reported financial results for the quarter ended October 31, 2013.

For the three months ended October 31, 2013, revenue, operating income and net income were $279.9 million, $65.0 million and $41.4 million, respectively. These represent an increase in revenue of $41.0 million, or 17.2%; and decreases in operating income of $9.4 million, or 12.6%; and in net income of $4.4 million, or 9.6%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.32 compared to $0.36 last year, a decrease of 11.1%.

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 $17.2 million and expenses, excluding severance and lease termination costs, of $17.9 million. We expect our QCSA acquisition to contribute to our operating profit by our third quarter of this fiscal year. During the quarter, severance and lease termination costs totaled $3.7 million. We expect severance and lease termination costs to continue into our third quarter of this fiscal year.

On Tuesday, November 26, 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=723058&s=1&k=E6381375F4F886EED7BA2F166873679E. A replay of the call will be available through December 24, 2013 by calling (888) 203-1112. Use confirmation code #9392710.

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 VB3 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 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.

Copart, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
		Three months ended October 31,
		2013			2012
Service revenues and vehicle sales:
Service revenues		$	226,363		$	195,179
Vehicle sales		53,520			43,687
Total service revenues and vehicle sales		279,883			238,866
Operating costs and expenses:
Yard operations		115,861			88,021
Cost of vehicle sales		46,091			36,311
Yard depreciation and amortization		10,095			9,098
Gross margin		107,836			105,436
General and administrative		38,468			27,338
General and administrative depreciation and amortization		4,409			3,741
Total operating expenses		214,924			164,509
Operating income		64,959			74,357
Other (expense) income:
Interest expense		(2,137		)	(2,476		)
Other income (expense) , net		1,423			(293		)
Total other expense		(714		)	(2,769		)
Income before income taxes		64,245			71,588
Income taxes		22,823			25,743
Net income		$	41,422		$	45,845
Earnings per share-basic
Basic net income per share		$	0.33		$	0.37
Weighted average common shares outstanding		125,460			124,302
Earnings per share-diluted
Diluted net income per share		$	0.32		$	0.36
Weighted average common shares and dilutive potential common shares outstanding		130,706			128,473

Copart, Inc.
Consolidated Balance Sheets
(in thousands)
(Unaudited)
		October 31, 2013			July 31, 2013
ASSETS
Current assets:
Cash and cash equivalents		$	77,052		$	63,631
Accounts receivable, net		187,615			182,714
Vehicle pooling costs and inventories		30,507			31,202
Income taxes receivable		1,846			9,416
Deferred income taxes		2,656			2,216
Prepaid expenses and other assets		19,350			15,344
Assets held for sale		1,929			1,929
Total current assets		320,955			306,452
Property and equipment, net		692,398			677,517
Intangibles, net		15,907			17,706
Goodwill		281,447			267,463
Deferred income taxes		29,029			30,117
Other assets		57,652			35,226
Total assets		$	1,397,388		$	1,334,481
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	154,847		$	136,648
Bank overdraft		—			16,291
Deferred revenue		4,179			4,832
Income taxes payable		21,576			4,741
Current portion of long-term debt and capital lease obligations		77,305			76,047
Total current liabilities		257,907			238,559
Deferred income taxes		7,475			8,071
Income taxes payable		23,399			23,091
Long term debt and capital lease obligations		280,121			296,410
Other liabilities		5,839			5,949
Total liabilities		574,741			572,080
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.0001 par value – 5,000,000 shares authorized; no shares issued and outstanding at October 31, 2013 and July 31, 2013 respectively		—			—
Common stock, $0.0001 par value - 180,000,000 shares authorized; 125,547,268 and 125,494,995 shares issued and outstanding at October 31, 2013 and July 31, 2013, respectively		13			13
Additional paid-in capital		373,177			368,769
Accumulated other comprehensive loss		(32,680		)	(47,161		)
Retained earnings		482,137			440,780
Total shareholders' equity		822,647			762,401
Total liabilities and shareholders' equity		$	1,397,388		$	1,334,481

Copart, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
		Three Months Ended October 31,
		2013			2012
Cash flows from operating activities:
Net income		$	41,422		$	45,845
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,504			12,839
Allowance for doubtful accounts		350			—
Stock-based compensation		4,867			5,174
Excess tax benefits from stock-based compensation		(58		)	(1,922		)
Gain on sale of property and equipment		(674		)	(204		)
Deferred income taxes		(3,010		)	(3,778		)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable		(4,706		)	(9,596		)
Vehicle pooling costs and inventories		1,066			982
Prepaid expenses and other current assets		(3,699		)	(635		)
Other assets		(15,027		)	(6,039		)
Accounts payable and accrued liabilities		6,483			8,108
Deferred revenue		(654		)	(174		)
Income taxes receivable		7,633			3,067
Income taxes payable		16,909			21,517
Other liabilities		2,309			131
Net cash provided by operating activities		67,715			75,315
Cash flows from investing activities:
Purchases of property and equipment including acquisitions		(21,595		)	(48,069		)
Proceeds from sale of property		853			894
Investment in escrow		—			(11,167		)
Net cash used in investing activities		(20,742		)	(58,342		)
Cash flows from financing activities:
Proceeds from the exercise of stock options		312			4,148
Excess tax benefit from stock-based payment arrangements		58			1,922
Change in bank overdraft		(16,291		)	—
Principal payments on long-term debt		(18,750		)	(18,755		)
Repurchase of common stock		(310		)	(13,885		)
Net cash used in financing activities		(34,981		)	(26,570		)
Effect of foreign currency translation		1,429			915
Net increase (decrease) in cash and cash equivalents		13,421			(8,682		)
Cash and cash equivalents at beginning of period		63,631			140,112
Cash and cash equivalents at end of period		$	77,052		$	131,430
Supplemental disclosure of cash flow information:
Interest paid		$	2,286		$	2,584
Income taxes paid		$	1,548		$	4,949