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 [phone]. 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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