Copart Reports Second Quarter Financial Results

FAIRFIELD, Calif.--()--Copart, Inc. (NASDAQ: CPRT) today reported the results for the quarter ended January 31, 2012, the second quarter of its 2012 fiscal year.

For the three months ended January 31, 2012, revenue, operating income and net income were $227.9 million, $63.5 million and $40.6 million, respectively. These represent increases in revenue of $20.5 million, or 9.9%; in operating income of $3.3 million, or 5.6%; and in net income of $2.7 million, or 7.2%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.62 compared to $0.46 last year, an increase of 34.8%.

For the six months ended January 31, 2012, revenue, operating income and net income were $453.5 million, $128.9 million and $81.8 million, respectively. These represent increases in revenue of $33.5 million, or 8.0%; in operating income of $9.1 million, or 7.6%; and in net income of $6.0 million, or 8.0%, respectively, from the same period last year. Fully diluted earnings per share for the six months ended January 31, 2012 were $1.23 compared to $0.91 last year, an increase of 35.2%.

During the second quarter of fiscal 2012 the Company recorded an impairment of $8.8 million associated with the write down to fair market value of certain assets, primarily real estate, computer hardware and its fleet of private aircraft which have been removed from operations and, if not disposed of during the quarter, are reflected in assets held for sale on the balance sheet. The Company has determined that the commercial airline services offered at its new headquarters in Dallas, Texas are sufficient to allow for the disposal of its fleet of private aircraft. This impairment reduced diluted earnings per share by $0.09.

During the second quarter of fiscal 2012 the Company repurchased 1,970,456 shares of its common stock at a weighted average price of $46.34 per share under its share repurchase program. Since the beginning of our fiscal 2011, the Company has repurchased 21,894,759 shares of its common stock at a weighted average price of $39.75 per share. At the end of the quarter, Copart had 25,506,609 shares available for repurchase under its share repurchase program.

On Wednesday, February 29, 2012, 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=408062&s=1&k=06624B3AB0987FABD43D92D1B4D565CE. A replay of the call will be available through March 29, 2012 by calling (888) 203-1112. Use confirmation code #9217184.

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 currently operates 154 facilities in the United States, Canada and the United Kingdom. Salvage vehicles are either damaged vehicles deemed a total loss for insurance or business purposes or are recovered stolen vehicles for which an insurance settlement with the vehicle owner has already been made. 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
January 31,

Six months ended

January 31,

2012 2011   2012 2011
Net sales and revenue:
Service revenues $ 189,671 $ 173,742 $ 375,318 $ 353,322
Vehicle sales   38,233   33,638   78,212   66,725

Total service revenues and vehicle sales

$ 227,904 $ 207,380 $ 453,530 $ 420,047
Operating costs and expenses:
Yard operations 86,422 85,116 174,427 171,629
Cost of vehicle sales 33,605 27,002 67,799 55,208
Yard depreciation and amortization 8,181 9,357 16,383 18,809
Gross margin 99,696 85,905 194,921 174,401
General and administrative 23,416 23,703 49,371 50,331
General and administrative depreciation and amortization 3,970 2,007 7,864 4,280
Impairment of long-lived assets 8,771 - 8,771 -
Total operating expenses 164,365 147,185 324,615 300,257
Operating income 63,539 60,195 128,915 119,790
Other income (expense):
Interest (expense) income, net (2,914 ) (284 ) (5,039 ) (218 )
Other income 1,591 806 2,155 1,311
Total other income (expense) (1,323 ) 522 (2,884 ) 1,093
Income before income taxes 62,216 60,717 126,031 120,883
Income taxes 21,613 22,824 44,279 45,164
Net income $ 40,603 $ 37,893 $ 81,752 $ 75,719
Earnings per share-basic              
Basic net income per share $ 0.63 $ 0.47 $ 1.26 $ 0.92
 
Weighted average common shares outstanding 64,153 81,240 64,935 82,492
 
Earnings per share-diluted                
Diluted net income per share $ 0.62 $ 0.46 $ 1.23 $ 0.91

Weighted average common shares and dilutive
potential common shares outstanding

65,795 81,955 66,348 83,180

Consolidated Balance Sheets

(in thousands)

(Unaudited)

   
January 31,

2012

July 31,

2011

ASSETS
 
Current assets:
Cash and cash equivalents $ 127,640 $ 74,009
Accounts receivable, net 151,903 122,859
Inventories and vehicle pooling costs 23,844 25,042
Income taxes receivable 2,977 5,145
Assets held for sale 14,640
Prepaid expenses and other assets 7,208 14,813
Total current assets 328,212 241,868
Property and equipment, net 568,816 600,388
Intangibles, net 10,184 12,748
Goodwill 194,954 198,620
Deferred income taxes 18,284 9,425
Other assets 19,208 21,387
Total assets $ 1,139,658 $ 1,084,436
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 100,441 $ 101,708
Deferred revenue 6,331 5,636
Income taxes payable 3,350 3,543
Deferred income taxes 95 440
Current portion of long-term debt and capital lease obligations 75,180 50,370
Other current liabilities 785 4,929
Total current liabilities 186,182 166,626
Deferred income taxes 9,063 10,057
Income taxes payable 24,796 24,773
Long-term debt and capital lease obligations 406,536 325,386
Other liabilities 5,709 2,422
Total liabilities 632,286 529,264
Commitments and contingencies
Stockholders’ equity:

Preferred stock, $0.0001 par value - 5,000,000 shares
authorized; no shares issued and outstanding at January 31,
2012 and July 31, 2011, respectively

Common stock, $0.0001 par value - 180,000,000 shares
authorized; 63,262,727 and 66,005,517 shares issued and
outstanding at January 31, 2012 and July 31, 2011, respectively

6 7
Additional paid in capital 317,765 313,933
Accumulated other comprehensive loss (35,912) (23,225)
Retained earnings 225,513 264,457
Total stockholders’ equity 507,372 555,172
Total liabilities and stockholders’ equity $ 1,139,658 $ 1,084,436

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 
Six Months Ended
January 31,
2012 2011
Cash flows from operating activities:
Net income $ 81,752 $ 75,719
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 24,247 23,089
Allowance for doubtful accounts (99 ) 280
Stock-based compensation 11,028 9,116
Excess tax benefits from stock-based compensation (1,104 ) (1,043 )
Impairment of long-lived assets 8,771 -
(Gain)/loss on sale of property and equipment (963 ) 2,256
Deferred income taxes (9,068 ) (3,434 )
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable (29,549 ) (28,225 )
Vehicle pooling costs 268 9,810
Inventory 498 (817 )
Prepaid expenses and other current assets 5,933 (5,157 )
Other Assets 247 (105 )
Accounts payable and accrued liabilities (5,431 ) 6,030
Deferred revenue 697 (3,682 )
Income taxes receivable 3,281 7,534
Income taxes payable (12 ) 2,234
Other liabilities (148 ) (282 )
Net cash provided by operating activities 90,348 93,323
 
Cash flows from investing activities:
Purchases of property and equipment including acquisitions (15,055 ) (42,351 )
Proceeds from sale of property and equipment 761 20,216
Net cash used in investing activities (14,294 ) (22,135 )
 
Cash flows from financing activities:
Proceeds from the exercise of stock options 6,335 2,861
Proceeds from the issuance of Employee Stock Purchase Plan shares 1,019 1,077
Repurchase of common stock (135,395 ) (538,997 )
Excess tax benefit from stock-based payment arrangements 1,104 1,043
Proceeds from issuance of debt 125,000 400,000
Debt issuance costs (313 ) (2,023 )
Principal payments on notes payable (18,750 )
Net cash used in financing activities (21,000 ) (136,039 )
 
Effect of exchange rate changes on cash (1,423 ) 617
 
Net increase (decrease) in cash and cash equivalents 53,631 (64,234 )
 
Cash and cash equivalents at beginning of period 74,009 268,188
Cash and cash equivalents at end of period $ 127,640 $ 203,954
 
Supplemental disclosure of cash flow information:
Interest paid $ 5,221 $ 80
Income taxes paid $ 50,019 $ 38,817

Contacts

Copart, Inc.
Cindy Cross, Assistant to the Chief Financial Officer
707-639-5427

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Contacts

Copart, Inc.
Cindy Cross, Assistant to the Chief Financial Officer
707-639-5427