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Copart Reports First Quarter Fiscal 2014 Financial Results

Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended October 31, 2013.

For the three months ended October 31, 2013, revenue, operating income and net income were $279.9 million, $65.0 million and $41.4 million, respectively. These represent an increase in revenue of $41.0 million, or 17.2%; and decreases in operating income of $9.4 million, or 12.6%; and in net income of $4.4 million, or 9.6%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.32 compared to $0.36 last year, a decrease of 11.1%.

Included in the financial results for the most recent quarter are the results of our QCSA acquisition, which we closed on May 30, 2013. These results included revenues of $17.2 million and expenses, excluding severance and lease termination costs, of $17.9 million. We expect our QCSA acquisition to contribute to our operating profit by our third quarter of this fiscal year. During the quarter, severance and lease termination costs totaled $3.7 million. We expect severance and lease termination costs to continue into our third quarter of this fiscal year.

On Tuesday, November 26, 2013, 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 A replay of the call will be available through December 24, 2013 by calling (888) 203-1112. Use confirmation code #9392710.

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 VB3 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 in the United States and Canada (, the United Kingdom (, Brazil (, Germany (, the United Arab Emirates ( and Spain ( Copart links sellers to more than 750,000 members in over 140 countries worldwide through our online multi-channel platform. For more information, or to become a member, visit

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)



Three months ended October 31,

2013 2012
Service revenues and vehicle sales:
Service revenues $ 226,363 $ 195,179
Vehicle sales 53,520 43,687
Total service revenues and vehicle sales 279,883 238,866
Operating costs and expenses:
Yard operations 115,861 88,021
Cost of vehicle sales 46,091 36,311
Yard depreciation and amortization 10,095 9,098
Gross margin 107,836 105,436
General and administrative 38,468 27,338
General and administrative depreciation and amortization 4,409 3,741
Total operating expenses 214,924 164,509
Operating income 64,959 74,357
Other (expense) income:
Interest expense (2,137 ) (2,476 )
Other income (expense) , net 1,423 (293 )
Total other expense (714 ) (2,769 )
Income before income taxes 64,245 71,588
Income taxes 22,823 25,743
Net income $ 41,422 $ 45,845
Earnings per share-basic
Basic net income per share $ 0.33 $ 0.37
Weighted average common shares outstanding 125,460 124,302
Earnings per share-diluted
Diluted net income per share $ 0.32 $ 0.36
Weighted average common shares and dilutive potential common shares outstanding 130,706 128,473
Copart, Inc.
Consolidated Balance Sheets

(in thousands)



October 31, 2013

July 31, 2013

Current assets:
Cash and cash equivalents $ 77,052 $ 63,631
Accounts receivable, net 187,615 182,714
Vehicle pooling costs and inventories 30,507 31,202
Income taxes receivable 1,846 9,416
Deferred income taxes 2,656 2,216
Prepaid expenses and other assets 19,350 15,344
Assets held for sale 1,929 1,929
Total current assets 320,955 306,452
Property and equipment, net 692,398 677,517
Intangibles, net 15,907 17,706
Goodwill 281,447 267,463
Deferred income taxes 29,029 30,117
Other assets 57,652 35,226
Total assets $ 1,397,388 $ 1,334,481
Current liabilities:
Accounts payable and accrued liabilities $ 154,847 $ 136,648
Bank overdraft 16,291
Deferred revenue 4,179 4,832
Income taxes payable 21,576 4,741
Current portion of long-term debt and capital lease obligations 77,305 76,047
Total current liabilities 257,907 238,559
Deferred income taxes 7,475 8,071
Income taxes payable 23,399 23,091
Long term debt and capital lease obligations 280,121 296,410
Other liabilities 5,839 5,949
Total liabilities 574,741 572,080
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.0001 par value – 5,000,000 shares authorized; no shares issued and outstanding at October 31, 2013 and July 31, 2013 respectively
Common stock, $0.0001 par value - 180,000,000 shares authorized; 125,547,268 and 125,494,995 shares issued and outstanding at October 31, 2013 and July 31, 2013, respectively 13 13
Additional paid-in capital 373,177 368,769
Accumulated other comprehensive loss (32,680 ) (47,161 )
Retained earnings 482,137 440,780
Total shareholders’ equity 822,647 762,401
Total liabilities and shareholders’ equity $ 1,397,388 $ 1,334,481
Copart, Inc.
Consolidated Statements of Cash Flows

(in thousands)


Three Months Ended October 31,
2013 2012
Cash flows from operating activities:
Net income $ 41,422 $ 45,845
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 14,504 12,839
Allowance for doubtful accounts 350
Stock-based compensation 4,867 5,174
Excess tax benefits from stock-based compensation (58 ) (1,922 )
Gain on sale of property and equipment (674 ) (204 )
Deferred income taxes (3,010 ) (3,778 )
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable (4,706 ) (9,596 )
Vehicle pooling costs and inventories 1,066 982
Prepaid expenses and other current assets (3,699 ) (635 )
Other assets (15,027 ) (6,039 )
Accounts payable and accrued liabilities 6,483 8,108
Deferred revenue (654 ) (174 )
Income taxes receivable 7,633 3,067
Income taxes payable 16,909 21,517
Other liabilities 2,309 131
Net cash provided by operating activities 67,715 75,315
Cash flows from investing activities:
Purchases of property and equipment including acquisitions (21,595 ) (48,069 )
Proceeds from sale of property 853 894
Investment in escrow (11,167 )
Net cash used in investing activities (20,742 ) (58,342 )
Cash flows from financing activities:
Proceeds from the exercise of stock options 312 4,148
Excess tax benefit from stock-based payment arrangements 58 1,922
Change in bank overdraft (16,291 )
Principal payments on long-term debt (18,750 ) (18,755 )
Repurchase of common stock (310 ) (13,885 )
Net cash used in financing activities (34,981 ) (26,570 )
Effect of foreign currency translation 1,429 915
Net increase (decrease) in cash and cash equivalents 13,421 (8,682 )
Cash and cash equivalents at beginning of period 63,631 140,112
Cash and cash equivalents at end of period $ 77,052 $ 131,430
Supplemental disclosure of cash flow information:
Interest paid $ 2,286 $ 2,584
Income taxes paid $ 1,548 $ 4,949

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