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Copart Reports Third Quarter Financial Results

Copart, Inc. (NASDAQ: CPRT) today reported the results for the quarter ended April 30, 2012, the third quarter of its 2012 fiscal year.

For the three months ended April 30, 2012, revenue, operating income and net income were $244.1 million, $87.9 million and $55.5 million, respectively. These represent increases in revenue of $7.4 million, or 3.1%; in operating income of $5.9 million, or 7.2%; and in net income of $5.3 million, or 10.6%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.43 compared to $0.35 last year, an increase of 22.9%.

For the nine months ended April 30, 2012, revenue, operating income and net income were $697.6 million, $216.9 million and $137.2 million, respectively. These represent increases in revenue of $40.8 million, or 6.2%; in operating income of $15.0, million or 7.4%; and in net income of $11.4 million, or 9.0%, respectively, from the same period last year. Fully diluted earnings per share for the nine months ended April 30, 2012 were $1.04 compared to $0.79 last year, an increase of 31.6%.

On Wednesday, May 30, 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=462148&s=1&k=E2F7195207CFB2141AE70E4C970205E9. A replay of the call will be available through June 30, 2012 by calling (888) 203-1112. Use confirmation code #3851084.

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 VB 2 technology. Copart sells vehicles on behalf of insurance companies, banks, finance companies, fleet operators, dealers, car dealerships and the general public. The company also buys and sells cars for its own account. 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. 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,

2012     2011   2012     2011
Net sales and revenue:
Service revenues $ 203,524 $ 196,169 $ 578,842 $ 549,492
Vehicle sales   40,581   40,586   118,793   107,312

Total service revenues and vehicle sales

$ 244,105 $ 236,755 $ 697,635 $ 656,804
Operating costs and expenses:
Yard operations 84,232 83,736 258,659 255,366
Cost of vehicle sales 36,258 34,852 104,057 90,060
Yard depreciation and amortization 8,346 9,260 24,729 28,069
Gross margin 115,269 108,907 310,190 283,309
General and administrative 23,602 24,796 72,973 75,127

General and administrative depreciation and amortization

3,723 2,067 11,587 6,347
Impairment of long-lived assets - - 8,771 -
Total operating expenses 156,161 154,711 480,776 454,969
Operating income 87,944 82,044 216,859 201,835
Other (expense) income:
Interest expense, net (2,930 ) (1,673 ) (7,969 ) (1,892 )
Other (expense) income (467 ) (21 ) 1,688 1,290
Total other expense (3,397 ) (1,694 ) (6,281 ) (602 )
Income before income taxes 84,547 80,350 210,578 201,233
Income taxes 29,076 30,214 73,355 75,379
Net income $ 55,471 $ 50,136 $ 137,223 $ 125,854
Earnings per share-basic              
Basic net income per share $ 0.44 $ 0.36 $ 1.07 $ 0.80
 
Weighted average common shares outstanding 126,596 139,613 128,794 156,714
 
Earnings per share-diluted                
Diluted net income per share $ 0.43 $ 0.35 $ 1.04 $ 0.79
Weighted average common shares and dilutive potential common shares outstanding 130,451 142,065 131,959 158,448
 
 

Copart, Inc.

           

Consolidated Balance Sheets

(in thousands)

(Unaudited)

 
April 30,

2012

July 31,

2011

ASSETS
 
Current assets:
Cash and cash equivalents $ 207,134 $ 74,009
Accounts receivable, net 129,335 122,859
Inventories and vehicle pooling costs 23,150 25,042
Income taxes receivable 3,965 5,145
Deferred income taxes 388
Prepaid expenses and other assets 19,403   14,813  
Total current assets 383,375 241,868
Property and equipment, net 574,732 600,388
Intangibles, net 9,375 12,748
Goodwill 197,808 198,620
Deferred income taxes 20,331 9,425
Other assets 19,142   21,387  
Total assets $ 1,204,763   $ 1,084,436  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 108,592 $ 101,708
Deferred revenue 6,367 5,636
Income taxes payable 8,638 3,543
Deferred income taxes 440
Current portion of long-term debt and capital lease obligations 75,174 50,370
Other current liabilities   4,929  
Total current liabilities 198,771 166,626
Deferred income taxes 9,130 10,057
Income taxes payable 25,481 24,773
Long-term debt and capital lease obligations 387,752 325,386
Other liabilities 4,897   2,422  
Total liabilities 626,031   529,264  
Commitments and contingencies
Stockholders’ equity:

Preferred stock, $0.0001 par value - 5,000,000 shares authorized; no shares issued and outstanding at April 30, 2012 and July 31, 2011, respectively

Common stock, $0.0001 par value - 180,000,000 shares authorized; 126,873,580 and 132,011,034 shares issued and outstanding at April 30, 2012 and July 31, 2011, respectively 13 13
Additional paid in capital 326,575 313,927
Accumulated other comprehensive loss (27,011 ) (23,225 )
Retained earnings 279,155   264,457  
Total stockholders’ equity 578,732   555,172  
Total liabilities and stockholders’ equity $ 1,204,763   $ 1,084,436  
 
     

Copart, Inc.

 

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 
Nine months ended April 30,
2012     2011
Cash flows from operating activities:
Net income $ 137,223 $ 125,854
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 36,316 34,363
Allowance for doubtful accounts (254 ) (10 )
Stock-based compensation 16,342 14,193
Excess tax benefits from stock-based compensation (2,696 ) (2,925 )
Impairment of long-lived assets 8,771 -
(Gain)/loss on sale of property and equipment (1,298 ) 2,076
Deferred income taxes (11,705 ) (3,155 )
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable (6,402 ) (7,086 )
Vehicle pooling costs 1,290 13,934
Inventory 450 (919 )
Prepaid expenses and other current assets 7,434 164
Other assets 576 2,049
Accounts payable and accrued liabilities 815 8,367
Deferred revenue 733 (4,459 )
Income taxes receivable 3,825 9,105
Income taxes payable 5,858 9,445
Other liabilities (327 ) (346 )
Net cash provided by operating activities 196,951 200,650
 
Cash flows from investing activities:
Purchases of property and equipment including acquisitions (28,706 ) (91,086 )
Proceeds from sale of property and equipment 1,572 20,385
Net cash used in investing activities (27,134 ) (70,701 )
 
Cash flows from financing activities:
Proceeds from the exercise of stock options 9,327 5,878
Proceeds from the issuance of Employee Stock Purchase Plan shares 1,019 1,077
Repurchase of common stock (137,655 ) (603,442 )
Excess tax benefit from stock-based payment arrangements 2,696 2,925
Proceeds from issuance of debt 125,000 400,000
Debt issuance costs (313 ) (2,023 )
Principal payments on notes payable (37,500 ) (12,500 )
Net cash used in financing activities (37,426 ) (208,085 )
 
Effect of exchange rate changes on cash 734 2,096
 
Net increase (decrease) in cash and cash equivalents 133,125 (76,040 )
 
Cash and cash equivalents at beginning of period 74,009 268,188
Cash and cash equivalents at end of period $ 207,134 $ 192,148
 
Supplemental disclosure of cash flow information:
Interest paid $ 8,227 $ 1,793
Income taxes paid $ 75,800 $ 57,440




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