Market Overview

Copart Reports Fourth Quarter Fiscal 2015 Financial Results

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DALLAS--(BUSINESS WIRE)--

Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2015.

For the three months ended July 31, 2015, revenue, gross margin and net income were $282.3 million, $118.8 million and $57.4 million, respectively. These represent a decrease in revenue of $5.2 million, or 1.8%; an increase in gross margin of $1.8 million, or 1.6%; and an increase in net income of $6.4 million, or 12.5%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.44 compared to $0.39 last year, an increase of 12.8%.

For the year ended July 31, 2015, revenue, gross margin and net income were $1.1 billion, $483.4 million and $219.8 million, respectively. These represent a decrease in revenue of $17.4 million, or 1.5%; an increase in gross margin of $14.8 million, or 3.2%; and an increase in net income of $41.1 million, or 23.0%, respectively, from the same period last year. Fully diluted earnings per share for the twelve months were $1.67 compared to $1.36 last year, an increase of 22.8%.

Included in the operating results for the three months ended July 31, 2015 and 2014 was the impact of the beneficial resolution of uncertain tax positions, which increased diluted earnings per share each period by $0.03.

Included in the operating results of the prior year was an impairment charge of $29.1 million recorded in the third quarter resulting primarily from the abandonment of work previously capitalized in connection with the development of a third-party enterprise operating system.

On Wednesday, September 23, 2015, 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/copart092315. A replay of the call will be available through November 22, 2015 by calling (877) 919-4059. Use confirmation code # 13231770.

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, 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, 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.

 

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

 
Three Months Ended
July 31,
Twelve Months Ended
July 31,
2015   2014 2015   2014
Service revenues and vehicle sales:
Service revenues $ 243,671 $ 241,273 $ 985,363 $ 958,413
Vehicle sales 38,622   46,177   160,716   205,076  
Total service revenues and vehicle sales 282,293 287,450 1,146,079 1,163,489
Operating expenses:
Yard operations 122,034 122,709 489,158 481,597
Cost of vehicle sales 32,718 38,497 136,412 174,493
Yard depreciation and amortization 8,262 8,551 34,917 36,216
Yard stock-based payment compensation 495   754   2,216   2,610  
Gross margin 118,784 116,939 483,376 468,573
General and administrative 24,640 32,173 111,381 127,536
General and administrative depreciation and amortization 3,010 4,825 11,656 17,510
General and administrative stock-based payment compensation 4,369 4,083 15,938 19,489
Impairment of long-lived assets       29,104  
Total operating expenses 195,528   211,592   801,678   888,555  
Operating income 86,765 75,858 344,401 274,934
Other (expense) income:
Interest expense, net (5,372 ) (2,051 ) (17,304 ) (8,277 )
Other income, net 53   77   4,972   3,378  
Total other expense (5,319 ) (1,974 ) (12,332 ) (4,899 )
Income before income taxes 81,446 73,884 332,069 270,035
Income taxes 24,034   22,841   112,286   91,348  
Net income $ 57,412   $ 51,043   $ 219,783   $ 178,687  
 
Basic net income per common share $ 0.46   $ 0.41   $ 1.75   $ 1.42  
Weighted average common shares outstanding 124,743   125,959   125,914   125,693  
 
Diluted net income per common share $ 0.44   $ 0.39   $ 1.67   $ 1.36  
Diluted weighted average common shares outstanding 130,205   131,629   131,425   131,230  
 
 

Copart, Inc.

 

Consolidated Balance Sheets

(In thousands)

(Unaudited)

   
July 31, 2015 July 31, 2014
ASSETS
Current assets:
Cash and cash equivalents $ 456,012 $ 158,668
Accounts receivable, net 215,696 196,985
Vehicle pooling costs and inventories 33,562 31,697
Income taxes receivable 6,092 2,288
Deferred income taxes 3,396 1,803
Prepaid expenses and other assets 19,824   20,850  
Total current assets 734,582 412,291
Property and equipment, net 700,402 692,383
Intangibles, net 17,857 25,242
Goodwill 271,850 283,780
Deferred income taxes 28,840 36,721
Other assets 46,421   56,387  
Total assets $ 1,799,952   $ 1,506,804  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 147,452 $ 152,156
Deferred revenue 3,724 4,170
Income taxes payable 8,279 8,284
Current portion of long-term debt and capital lease obligations 53,671   79,674  
Total current liabilities 213,126 244,284
Deferred income taxes 5,322 7,372
Income taxes payable 21,157 23,771
Long-term debt and capital lease obligations, net of discount 592,135 223,227
Other liabilities 3,748   4,651  
Total liabilities 835,488 503,305
Commitments and contingencies
Stockholders' equity:
Preferred stock
Common stock 12 13
Additional paid-in capital 407,808 404,542
Accumulated other comprehensive loss (68,793 ) (20,060 )
Retained earnings 625,437   619,004  
Total stockholders' equity 964,464   1,003,499  
Total liabilities and stockholders' equity $ 1,799,952   $ 1,506,804  
 
 

Copart, Inc.

 

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
Twelve Months Ended
July 31,
2015   2014
Cash flows from operating activities:
Net income $ 219,783 $ 178,687

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

Depreciation and amortization 48,893 53,726
Allowance for doubtful accounts (578 ) 1,087
Impairment of long-lived assets 29,104
Stock-based payment compensation 18,154 22,099
Excess tax benefits from stock-based payment compensation (2,971 ) (2,289 )
Gain on sale of property and equipment (918 ) (1,461 )
Deferred income taxes 4,365 (10,838 )
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable (20,417 ) (12,870 )
Vehicle pooling costs and inventories (2,622 ) 399
Prepaid expenses and other current assets 69 (4,500 )
Other assets 10,125 (8,900 )
Accounts payable and accrued liabilities (3,926 ) 5,425
Deferred revenue (438 ) (661 )
Income taxes receivable (806 ) 9,267
Income taxes payable (1,971 ) 2,816
Other liabilities (1,666 ) 1,503  
Net cash provided by operating activities 265,076 262,594
 
Cash flows from investing activities:
Purchases of property and equipment including acquisitions, net of cash acquired (79,153 ) (95,810 )
Investment in unconsolidated affiliate (4,500 )
Proceeds from sale of property and equipment 1,738   3,707  
Net cash used in investing activities (81,915 ) (92,103 )
 
Cash flows from financing activities:
Proceeds from the exercise of stock options 3,634 10,412
Excess tax benefit from stock-based payment compensation 2,971 2,289
Proceeds from the issuance of Employee Stock Purchase Plan shares 3,079 2,339
Repurchases of common stock (237,306 ) (572 )
Change in bank overdraft (16,291 )
Proceeds from the issuance of long-term debt, net of discount 698,939
Debt offering costs (955 )
Principal payments on long-term debt (350,000 ) (75,000 )
Net cash provided by (used in) financing activities 120,362 (76,823 )
Effect of foreign currency translation (6,179 ) 1,369  
Net increase in cash and cash equivalents 297,344 95,037
Cash and cash equivalents at beginning of period 158,668   63,631  
Cash and cash equivalents at end of period $ 456,012   $ 158,668  
Supplemental disclosure of cash flow information:
Interest paid $ 18,121   $ 8,768  
Income taxes paid, net of refunds $ 109,925   $ 82,813  
 

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

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