Copart Reports Fourth Quarter Financial Results

DALLAS--(BUSINESS WIRE)--Copart, Inc. (NASDAQ: CPRT) today reported the results for its fourth quarter and fiscal year ended July 31, 2012.

For the three months ended July 31, 2012, revenue, operating income and net income were $226.6 million, $69.5 million and $44.9 million, respectively. These represent increases in revenue of $11.1 million, or 5.2%; in operating income of $6.0 million, or 9.5%; and in net income of $4.4 million, or 10.8% from the same quarter last year. Fully diluted earnings per share for the three months were $0.35 compared to $0.29 last year, an increase of 20.7%.

For the twelve months ended July 31, 2012, revenue, operating income and net income were $924.2 million, $286.4 million and $182.1 million, respectively. These represent increases in revenue of $51.9 million, or 6.0%; in operating income of $21.1 million, or 7.9%; and in net income of $15.7 million, or 9.5% from the same period last year. Fully diluted earnings per share for the twelve months ended July 31, 2012 were $1.39 compared to $1.08 last year, an increase of 28.7%.

Included in the fourth quarter of the Company’s 2012 fiscal year is the repurchase of 2,800,000 shares of the Company’s common stock at a weighted average price of $23.22 per share under its share repurchase program. As of July 31, 2012, Copart had 48,213,218 shares available for repurchase under its share repurchase program.

On Wednesday, September 26, 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=514931&s=1&k=02F16B705658A913E110EA819CE52F22. A replay of the call will be available through October 26, 2012 by calling [phone]. Use confirmation code #7921487.

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 156 facilities in the United States, Canada, United Kingdom and the United Arab Emirates. 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.

Copart, Inc.
Consolidated Statements of Income (in thousands, except per share data) (Unaudited)
	Three months ended July 31,							Twelve months ended July 31,
	2012				2011			2012			2011
Service revenues and vehicle sales:
Service revenues	$	187,464			$	171,040		$	757,272		$	713,093
Vehicle sales		39,092				44,403			166,919			159,153
Total service revenues and vehicle sales	$	226,556			$	215,443		$	924,191		$	872,246
Operating costs and expenses:
Yard operations	85,907				81,822			344,566			337,188
Cost of vehicle sales	32,914				35,142			136,971			125,202
Yard depreciation and amortization	8,309				8,892			33,038			36,961
Gross margin	99,426				89,587			409,616			372,895
General and administrative	26,404				23,737			99,376			98,864
General and administrative depreciation and amortization	3,528				2,394			15,116			8,741
Impairment of long-lived assets	—				—			8,771			—
Total operating expenses	157,062				151,987			637,838			606,956
Operating income	69,494				63,456			286,353			265,290
Other (expense) income:
Interest (expense) income, net	(3,015			)	(1,693		)	(10,984		)	(3,585		)
Other income, net	999				882			2,687			2,172
Total other (expense)	(2,016			)	(811		)	(8,297		)	(1,413		)
Income before income taxes	67,478				62,645			278,056			263,877
Income taxes	22,582				22,124			95,937			97,502
Net income	$	44,896			$	40,521		$	182,119		$	166,375
Earnings per share-basic
Basic net income per share	$	0.36			$	0.30		$	1.42		$	1.10
Weighted average common shares outstanding	126,112				135,230			128,120			151,298
Earnings per share-diluted
Diluted net income per share	$		0.35		$	0.29		$	1.39		$	1.08
Diluted weighted average common shares outstanding	129,853				138,232			131,428			153,352

Copart, Inc.
Consolidated Balance Sheets (in thousands) (Unaudited)
	July 31, 2012		July 31, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	140,112	$	74,009
Accounts receivable, net	138,966		122,859
Inventories and vehicle pooling costs	24,222		25,042
Income taxes receivable	2,312		5,145
Deferred income taxes	3,600		—
Prepaid expenses and other assets	9,155		14,813
Assets held for sale	3,926		—
Total current assets	322,293		241,868
Property and equipment, net	587,163		600,388
Intangibles, net	7,985		12,748
Goodwill	196,438		198,620
Deferred income taxes	22,280		9,425
Other assets	18,907		21,387
Total assets	$	1,155,066	$	1,084,436
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	102,958		101,708
Deferred revenue	5,390		5,636
Income taxes payable	3,082		3,543
Deferred income taxes	—		440
Current portion of long-term debt and capital lease obligations	75,170		50,370
Other current liabilities	785		4,929
Total current liabilities	187,385		166,626
Deferred income taxes	7,186		10,057
Income taxes payable	22,531		24,773
Long-term debt and capital lease obligations	368,950		325,386
Other liabilities	7,897		2,422
Total liabilities	593,949		529,264
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value – 5,000,000 shares authorized; no shares issued and outstanding at July 31, 2012 and July 31, 2011 respectively	—		—
Common stock, $0.0001 par value - 180,000,000 shares authorized; 124,393,700 and 132,011,034 shares issued and outstanding at July 31, 2012 and July 31, 2011, respectively	12		13
Additional paid-in capital	326,187		313,927
Accumulated other comprehensive loss	(38,043)		(23,225)
Retained earnings	272,961		264,457
Total stockholders’ equity	561,117		555,172
Total liabilities and stockholders’ equity	$	1,155,066	$	1,084,436

Copart, Inc. Consolidated Statements of Cash Flows (in thousands) (Unaudited)
	Twelve Months Ended July 31,
	2012			2011
Cash flows from operating activities:
Net income	$	182,119		$	166,375
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	48,167			45,694
Allowance for doubtful accounts	(192		)	270
Impairment	8,771			—
Stock-based compensation	21,791			19,007
Excess tax benefits from stock-based compensation	(4,367		)	(3,547		)
(Gain)/loss on sale of property and equipment	(143		)	1,882
Deferred income taxes	(17,579		)	(2,099		)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	(16,202		)	(12,865		)
Vehicle pooling costs and inventories	924			10,535
Prepaid expenses and other current assets	6,026			4,785
Other assets	(1,951		)	739
Accounts payable and accrued liabilities	(3,607		)	5,614
Deferred revenue	(243		)	(5,015		)
Income taxes receivable	7,082			9,456
Income taxes payable	(2,545		)	2,529
Other liabilities	1,622			(428		)
Net cash provided by operating activities	229,673			242,932
Cash flows from investing activities:
Purchases of property and equipment, including acquisitions	(57,396		)	(105,082		)
Proceeds from sale of property and equipment	1,268			20,602
Proceeds from sale of assets held for sale	8,041			—
Net cash used in investing activities	(48,087		)	(84,480		)
Cash flows from financing activities:
Proceeds from the exercise of stock options	13,651			7,082
Proceeds from the issuance of Employee Stock Purchase Plan shares	1,957			1,957
Repurchases of common stock	(203,285		)	(739,638		)
Excess tax benefit from stock-based payment arrangements	4,367			3,547
Proceeds from the issuance of long-term debt	125,000			400,000
Principal payments on long-term debt	(56,250		)	(25,000		)
Debt offering costs	(313		)	(2,023		)
Net cash used in financing activities	(114,873		)	(354,075		)
Effect of foreign currency translation	(610		)	1,444
Net increase (decrease) in cash and cash equivalents	66,103			(194,179		)
Cash and cash equivalents at beginning of period	74,009			268,188
Cash and cash equivalents at end of period	$	140,112		$	74,009
Supplemental disclosure of cash flow information:
Interest paid	$	11,333		$	3,894
Income taxes paid	$	106,581		$	85,145