Copart Reports First Quarter Financial Results

FAIRFIELD, Calif.--(BUSINESS WIRE)--Copart, Inc. (NASDAQ:CPRT) today reported the results for its first quarter ended October 31, 2009.

For the three months ended October 31, 2009, revenue, operating income and net income were $185.5 million, $56.5 million and $35.3 million, respectively. These represent decreases in revenue of $6.1 million, or 3.2%; in operating income of $3.0 million, or 5.0%; and in net income of $2.0 million, or 5.3%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months ended October 31, 2009 were $0.42 compared to $0.44 last year, a decrease of 4.5%.

On Wednesday, December 2, 2009, 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://webcast.premiereglobal.com/view/wl/r.htm?e=178703&s=1&k=7469D34A97C68BE02AC8F0B2127614A6. A replay of the call will be available through January 2, 2010 by calling (888) 203-1112. Use confirmation code #4290239.

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, the general public and others. The company currently operates 147 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 October 31,
		2009						2008
Service revenues and vehicle sales:
Service revenues		$	153,765					$	156,325
Vehicle sales			31,696						35,244
Total service revenues and vehicle sales			185,461						191,569
Operating costs and expenses:
Yard operations		69,925						73,718
Yard depreciation and amortization		8,522						8,336
Cost of vehicle sales		24,429						29,945
Gross margin		82,585						79,570
General and administrative		23,920						17,543
General and administrative depreciation and amortization		2,173						2,542
Total operating expenses		128,969						132,084
Operating income		56,492						59,485
Other income (expense):
Interest income (expense), net		(71				)		581
Other income		631						1,254
Total other income		560						1,835
Income before income taxes		57,052						61,320
Income taxes		21,782						24,066
Net income		$		35,270				$	37,254
Earnings per share-basic
Basic net income per share		$			0.42			$	0.45
Weighted average common shares outstanding		84,045						83,283
Earnings per share-diluted
Diluted net income per share		$		0.42				$	0.44
Weighted average common shares and dilutive potential common shares outstanding		84,948						85,320

Consolidated Balance Sheets (in thousands) (Unaudited)
		October 31, 2009			July 31, 2009
ASSETS
Current assets:
Cash and cash equivalents		$	218,279		$	162,691
Accounts receivable, net		109,715			109,248
Inventories and vehicle pooling costs		32,249			33,352
Income taxes receivable		—			5,426
Prepaid expenses and other assets		6,237			5,216
Total current assets		366,480			315,933
Property and equipment, net		546,088			530,886
Intangibles, net		14,212			15,212
Goodwill		166,575			166,327
Deferred income taxes		9,757			7,759
Land purchase options and other assets		20,228			21,915
Total assets		$	1,123,340		$	1,058,032
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	93,636		$	82,773
Deferred revenue		12,299			13,165
Income taxes payable		18,154			5,269
Deferred income taxes		1,843			1,948
Other current liabilities		440			429
Total current liabilities		126,372			103,584
Deferred income taxes		11,099			10,997
Income taxes payable		21,330			20,266
Other liabilities		1,603			1,726
Total liabilities		160,404			136,573
Commitments and contingencies
Shareholders’ equity:
Common stock, no par value - 180,000 shares authorized; 84,146 and 83,939 shares issued and outstanding at October 31, 2009 and July 31, 2009, respectively		342,257			334,440
Accumulated other comprehensive loss		(25,542)			(27,082)
Retained earnings		646,221			614,101
Total shareholders’ equity		962,936			921,459
Total liabilities and shareholders’ equity		$	1,123,340		$	1,058,032

Consolidated Statements of Cash Flows (in thousands) (Unaudited)
		Three Months Ended October 31,
		2009				2008
Cash flows from operating activities:
Net income		$	35,270			$	37,254
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,614				10,709
Allowance for doubtful accounts		176				(56		)
Deferred rent		(125		)		(73		)
Share-based compensation		4,285				1,500
Excess tax benefits from stock-based compensation		(2,429		)		(54		)
(Gain)loss on sale of property and equipment		(18		)		527
Deferred income taxes		(2,053		)		1,721
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable		(580		)		(8,828		)
Vehicle pooling costs		861				(2,521		)
Inventory		271				225
Prepaid expenses and other current assets		(1,013		)		(1,020		)
Land purchase options and other assets		251				(276		)
Accounts payable and accrued liabilities		10,825				(8,308		)
Deferred revenue		(868		)		921
Income taxes receivable		5,590				11,831
Income taxes payable		16,634				8,812
Net cash provided by operating activities		77,691				52,364
Cash flows from investing activities:
Purchases of property and equipment		(23,512		)		(29,200		)
Proceeds from sale of property and equipment		605				165
Net cash used in investing activities		(22,907		)		(29,035		)
Cash flows from financing activities:
Proceeds from the exercise of stock options		1,026				620
Excess tax benefit from share-based payment arrangements		2,429				54
Repurchase of common stock		(3,532		)		—
Change in book overdraft		—				(9,923		)
Net cash used in financing activities		(77		)		(9,249		)
Effect of foreign currency translation		881				(2,264		)
Net increase in cash and cash equivalents		55,588				11,816
Cash and cash equivalents at beginning of period		162,691				38,954
Cash and cash equivalents at end of period		$	218,279			$	50,770
Supplemental disclosure of cash flow information:
Interest paid		$	149			$	31
Income taxes paid		$	1,607			$	2,016