Market Overview

Copart Reports Second Quarter Fiscal 2016 Financial Results

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DALLAS--(BUSINESS WIRE)--

Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended January 31, 2016.

For the three months ended January 31, 2016, revenue, gross margin and net income were $299.7 million, $124.6 million, and $59.0 million, respectively. These represent an increase in revenue of $23.4 million, or 8.5%; an increase in gross margin of $9.7 million, or 8.5%; and an increase in net income of $6.8 million, or 13.0%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.48 compared to $0.40 last year, an increase of 20.0%.

For the six months ended January 31, 2016, revenue, gross margin and net income were $588.5 million, $245.5 million and $111.4 million, respectively. These represent an increase in revenue of $21.9 million, or 3.9%; an increase in gross margin of $8.3 million, or 3.5%; and an increase in net income of $6.6 million, or 6.3%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $0.90 compared to $0.80 last year, an increase of 12.5%.

On Wednesday, February 24, 2016, 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://stream.conferenceamerica.com/copart022416. A replay of the call will be available through April 24, 2016 by calling (877) 919-4059. Use confirmation code # 92806653.

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 locations, to end users. Copart remarkets the vehicles through Internet sales utilizing its VB3 technology. Copart sells vehicles on behalf of insurance companies, banks, financial institutions, charities, car dealerships, fleet operators, vehicle rental companies, 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, Oman and Bahrain (www.copartmea.com), India (www.copart.in), and Spain (www.autoresiduos.com). Copart links sellers to more than 750,000 members in over 150 countries worldwide through its multi-channel platform. Copart was recently ranked at the top of Deloitte's "Exceptional 100" list of companies, which reviewed U.S. publicly traded companies based upon a multidimensional approach to measuring financial performance. 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.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

 
  Three Months Ended
January 31,
  Six Months Ended
January 31,
2016   2015 2016   2015
Service revenues and vehicle sales:
Service revenues $ 260,417 $ 238,508 $ 511,384 $ 485,128
Vehicle sales 39,289   37,750   77,160   81,516  
Total service revenues and vehicle sales 299,706 276,258 588,544 566,644
Operating expenses:
Yard operations 132,041 120,181 258,919 241,780
Cost of vehicle sales 34,127 32,118 66,195 69,191
Yard depreciation and amortization 8,248 8,543 16,593 17,403
Yard stock-based payment compensation 676   549   1,362   1,095  
Gross margin 124,614 114,867 245,475 237,175
General and administrative 24,376 27,587 51,087 60,804
General and administrative depreciation and amortization 3,443 2,857 6,619 5,727
General and administrative stock-based payment compensation 4,710   3,955   9,438   7,775  
Total operating expenses 207,621   195,790   410,213   403,775  
Operating income 92,085 80,468 178,331 162,869
Other (expense) income:
Interest expense, net (4,968 ) (4,505 ) (10,481 ) (6,276 )
Other income, net 4,435   4,141   5,462   5,734  
Total other expenses (533 ) (364 ) (5,019 ) (542 )
Income before income taxes 91,552 80,104 173,312 162,327
Income taxes 32,589   27,911   61,936   57,519  
Net income $ 58,963   $ 52,193   $ 111,376   $ 104,808  
 
Basic net income per common share $ 0.50   $ 0.41   $ 0.94   $ 0.83  
Weighted average common shares outstanding 117,306   126,300   118,731   126,258  
 
Diluted net income per common share $ 0.48   $ 0.40   $ 0.90   $ 0.80  
Diluted weighted average common shares outstanding 122,908   131,872   124,240   131,694  
 
 

Copart, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 
  January 31, 2016   July 31, 2015
ASSETS
Current assets:
Cash and cash equivalents $ 141,416 $ 456,012
Accounts receivable, net 281,227 215,696
Vehicle pooling costs and inventories 39,152 33,562
Income taxes receivable 7,734 6,092
Deferred income taxes 685 3,396
Prepaid expenses and other assets 36,644   19,824  
Total current assets 506,858 734,582
Property and equipment, net 744,224 700,402
Intangibles, net 14,408 17,857
Goodwill 264,128 271,850
Deferred income taxes 31,432 28,840
Other assets 43,314   46,421  
Total assets $ 1,604,364   $ 1,799,952  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 147,839 $ 147,452
Deferred revenue 5,478 3,724
Income taxes payable 12,629 8,279
Current portion of long-term debt, revolving credit facility, and capital lease obligations 99,171   53,671  
Total current liabilities 265,117 213,126
Deferred income taxes 4,868 5,322
Income taxes payable 23,696 21,157
Long-term debt and capital lease obligations, net of discount 576,501 592,135
Other liabilities 2,782   3,748  
Total liabilities 872,964 835,488
Commitments and contingencies
Stockholders' equity:
Preferred stock
Common stock 11 12
Additional paid-in capital 394,002 407,808
Accumulated other comprehensive loss (103,071 ) (68,793 )
Retained earnings 440,458   625,437  
Total stockholders' equity 731,400   964,464  
Total liabilities and stockholders' equity $ 1,604,364   $ 1,799,952  
 
 

Copart, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
  Six Months Ended January 31,
2016   2015
Cash flows from operating activities:
Net income $ 111,376 $ 104,808
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 23,294 25,367
Allowance for doubtful accounts 1,270 (242 )
Equity in losses of unconsolidated affiliates 483
Stock-based payment compensation 10,800 8,870
Excess tax benefits from stock-based payment compensation (241 ) (534 )
Gain on sale of property and equipment (106 ) (457 )
Deferred income taxes (106 ) (2,317 )
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable (68,683 ) (40,908 )
Vehicle pooling costs and inventories (6,449 ) (3,351 )
Prepaid expenses and other current assets (216 ) 1,747
Other assets 448 5,368
Accounts payable and accrued liabilities 3,702 (4,173 )
Deferred revenue 1,810 351
Income taxes receivable (1,410 ) (4,938 )
Income taxes payable 7,897 103
Other liabilities (789 ) (811 )
Net cash provided by operating activities 83,080 88,883
 
Cash flows from investing activities:
Purchases of property and equipment (77,763 ) (39,459 )
Proceeds from sale of property and equipment 396 742
Purchases of marketable securities (21,119 )  
Net cash used in investing activities (98,486 ) (38,717 )
 
Cash flows from financing activities:
Proceeds from the exercise of stock options 944 2,303
Excess tax benefit from stock-based payment compensation 241 534
Proceeds from the issuance of Employee Stock Purchase Plan shares 1,640 1,495
Repurchases of common stock (325,000 ) (1,121 )
Proceeds from the issuance of long-term debt, net of discount 698,939
Proceeds from revolving loan facility, net of repayments 68,000
Debt offering costs (955 )
Principal payments on long-term debt (37,500 ) (312,500 )
Net cash (used in) provided by financing activities (291,675 ) 388,695
Effect of foreign currency translation (7,515 ) (7,163 )
Net (decrease) increase in cash and cash equivalents (314,596 ) 431,698
Cash and cash equivalents at beginning of period 456,012   158,668  
Cash and cash equivalents at end of period $ 141,416   $ 590,366  
Supplemental disclosure of cash flow information:
Interest paid $ 11,294   $ 3,788  
Income taxes paid, net of refunds $ 55,413   $ 64,432  
 

Copart, Inc.
Christopher M. Smith, 972-391-5021
Senior Analyst, Office of the Chief Financial Officer
christopher.smith3@copart.com


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