CPRT Copart Inc

Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and nine months ended April 30, 2015.

For the three months ended April 30, 2015, revenue, gross margin and net income were $297.1 million, $127.4 million and $57.6 million, respectively. These represent a decrease in revenue of $12.6 million, or 4.1%; a decrease in gross margin of $4.8 million, or 3.7%; and an increase in net income of $16.7 million, or 40.8%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.44 compared to $0.31 last year, an increase of 41.9%.

For the nine months ended April 30, 2015, revenue, gross margin and net income were $863.8 million, $364.6 million and $162.4 million, respectively. These represent a decrease in revenue of $12.3 million, or 1.4%; an increase in gross margin of $13.0 million, or 3.7%; and an increase in net income of $34.7 million, or 27.2%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $1.23 compared to $0.97 last year, an increase of 26.8%.

Included in the operating results of the prior year is 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 Thursday, May 28, 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/copart052815. A replay of the call will be available through July 27 by calling (877) 919-4059. Use confirmation code # 33373930.

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.copartmea.com), 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

April 30,

Nine Months Ended

April 30,

2015     2014   2015     2014 Service revenues and vehicle sales: Service revenues $ 256,564 $ 255,045 $ 741,692 $ 717,140 Vehicle sales   40,578   54,677   122,094   158,899

Total service revenues and vehicle sales

 

297,142

309,722

863,786

876,039

Operating expenses:

Yard operations 125,348 122,422 367,124 358,888 Cost of vehicle sales 34,503 46,263 103,694 135,996 Yard depreciation and amortization 9,248 8,110 26,655 27,665 Yard stock-based payment compensation 626 675 1,721 1,856

Gross margin

127,417 132,252 364,592 351,634 General and administrative 25,940 29,908 86,741 95,364 General and administrative depreciation and amortization 2,916 4,659 8,646 12,684 General and administrative stock-based payment compensation 3,794 5,948 11,569 15,406 Impairment of long-lived assets - 29,104 - 29,104   Total operating expenses 202,375 247,089 606,150 676,963   Operating income 94,767 62,633 257,636 199,076 Other (expense) income: Interest expense, net (5,656 ) (2,023 ) (11,932 ) (6,226 ) Other income, net (815 ) 708 4,919 3,301   Total other expense (6,471 ) (1,315 ) (7,013 ) (2,925 ) Income before income taxes 88,296 61,318 250,623 196,151 Income taxes 30,733 20,441 88,252 68,507   Net income $ 57,563 $ 40,877 $ 162,371 $ 127,644     Basic net income per common share $ 0.46 $ 0.32 $ 1.29 $ 1.02   Weighted average common shares outstanding 126,415 125,794 126,309 125,604     Diluted net income per common share $ 0.44 $ 0.31 $ 1.23 $ 0.97   Diluted weighted average common shares outstanding   132,124 131,486 131,837 131,095                      

Copart, Inc.

 

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

April 30,

2015

July 31,

2014

ASSETS   Current assets: Cash and cash equivalents $ 678,742 $ 158,668 Accounts receivable, net 217,003 196,985 Vehicle pooling costs and inventories 32,762 31,697 Income taxes receivable 2,587 2,288 Deferred income taxes 5,053 1,803 Prepaid expenses and other assets 18,312 20,850   Total current assets 954,459 412,291 Property and equipment, net 683,956 692,383 Intangibles, net 19,715 25,242 Goodwill 271,484 283,780 Deferred income taxes 29,116 36,721 Other assets 44,247 56,387   Total assets $ 2,002,977 $ 1,506,804     LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 154,255 $ 152,156 Deferred revenue 4,612 4,170 Income taxes payable 5,660 8,284 Current portion of long-term debt and capital lease obligations 64,921 79,674   Total current liabilities 229,448 244,284 Deferred income taxes 6,334 7,372 Income taxes payable 26,982 23,771 Long-term debt and capital lease obligations, net of discount 599,951 223,227 Other liabilities 4,294 4,651   Total liabilities 867,009 503,305 Commitments and contingencies Stockholders’ equity: Preferred stock — — Common stock 13 13 Additional paid-in capital 422,194 404,542 Accumulated other comprehensive loss (66,594

)

 

(20,060 ) Retained earnings 780,355 619,004   Total stockholders’ equity 1,135,968 1,003,499   Total liabilities and stockholders’ equity $ 2,002,977 $ 1,506,804              

Copart, Inc.

 

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

  Nine Months EndedApril 30,   2015           2014   Cash flows from operating activities: Net income $ 162,371 $ 127,644 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 37,579 40,349 Allowance for doubtful accounts (453 ) 936 Impairment of long-lived assets — 29,104 Stock-based payment compensation 13,290 17,262 Excess tax benefits from stock-based payment compensation (1,279 ) (1,219 ) Gain on sale of property and equipment (735 ) (1,696 ) Deferred income taxes 3,641 (12,609 ) Changes in operating assets and liabilities, net of effects from acquisitions: Accounts receivable (21,763 ) (9,161 ) Vehicle pooling costs and inventories (1,874 ) (170 ) Prepaid expenses and other current assets 1,480 (3,539 ) Other assets 7,584 (12,133 ) Accounts payable and accrued liabilities 2,042 15,269 Deferred revenue 445 316 Income taxes receivable 985 7,305 Income taxes payable 1,313 8,229 Other liabilities (1,257 ) 1,747 Net cash provided by operating activities 203,369 207,634   Cash flows from investing activities: Purchases of property and equipment including acquisitions, net of cash acquired (49,079 ) (78,078 ) Proceeds from sale of property and equipment 1,087 3,271 Net cash used in investing activities (47,992 ) (74,807 )   Cash flows from financing activities: Proceeds from the exercise of stock options 3,372 5,680 Excess tax benefit from stock-based payment compensation 1,279 1,219 Proceeds from the issuance of Employee Stock Purchase Plan shares 1,495 1,115 Principal payments on long-term debt (331,250 ) (56,250) Proceeds from the issuance of long-term debt, net of discount 698,939 — Debt offering costs (955 ) — Change in bank overdraft — (16,291 ) Repurchases of common stock (1,737 ) (80 ) Net cash provided by (used in) financing activities 371,143 (64,607 )   Effect of foreign currency translation (6,446 ) 981   Net increase in cash and cash equivalents 520,074 69,201 Cash and cash equivalents at beginning of period 158,668 63,631 Cash and cash equivalents at end of period $ 678,742 $ 132,832   Supplemental disclosure of cash flow information: Interest paid $ 9,705 $ 6,599 Income taxes paid, net of refunds $ 81,995 $ 65,769

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Copart, Inc.Wendy Lucero, 972-391-5043Assistant to the Chief Financial Officerwendy.lucero@copart.com