COPART INC - FORM 8-K - EX-99.1 - September 24, 2014

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8-K - 8-K - COPART INC	d31683.htm

Copart, Inc.

For Immediate Release

Copart Reports Fourth Quarter Financial Results

Dallas, Texas. (September 23, 2014) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2014.

For the three months ended July 31, 2014, revenue, gross margin and net income were $287.5 million, $116.9 million and $51.0 million, respectively. These represent increases in revenue of $23.8 million, or 9.0%; in gross margin of $13.9 million, or 13.5%; and in net income of $9.7 million, or 23.6%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.39 compared to $0.32 last year, an increase of 21.9%.

For the twelve months ended July 31, 2014, revenue, gross margin and net income were $1,163.5 million, $468.6 million and $178.7 million, respectively. These represent increases in revenue of $117.1 million, or 11.2%; in gross margin of $47.7 million or 11.3%; and a decrease in net income of $1.3 million, or 0.7%, respectively, from the same period last year. Fully diluted earnings per share for the twelve months were $1.36 compared to $1.39 last year, a decrease of 2.2%.

Included in the operating results of the prior fiscal year were incremental revenues and operating expenses associated with unit volume generated by Hurricane Sandy, which were estimated to be $31.2 million and $35.6 million, respectively. Included in the operating results of the current year was an impairment charge of $29.1 million recorded in the third quarter resulting primarily from the abandonment of work previously capitalized in connection with the development of a third-party enterprise operating system.

On Wednesday, September 24, 2014, 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://live.conferenceamerica.com:5840/live. A replay of the call will be available through November 23, 2014 by calling (877) 919-4059. Use confirmation code #74916381.

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 (www.copart.com), the United Kingdom (www.copart.co.uk), Brazil (www.copart.com.br), Germany (www.copart.de), the United Arab Emirates (www.copart.ae) and Spain (www.autoresiduos.com). 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 www.copart.com.

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

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.

Contact:

Carol Morrison, Assistant to the Chief Financial Officer

972-391-5302 or carol.morrison@copart.com

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

Consolidated Statements of Income

(in thousands, except per share data)

(Unaudited)


	Three months ended July 31,							Twelve months ended July 31,
	2014				2013			2014					2013
Service revenues and vehicle sales:
Service revenues	$	241,273			$	213,591		$	958,413				$	849,667
Vehicle sales		46,177				50,106			205,076					196,719
Total service revenues and vehicle sales		287,450				263,697			1,163,489					1,046,386
Operating costs and expenses:
Yard operations	123,463				107,292			484,207					417,462
Cost of vehicle sales	38,497				43,090			174,493					167,236
Yard depreciation and amortization	8,551				10,243			36,216					40,766
Gross margin	116,939				103,072			468,573					420,922
General and administrative	36,256				35,782			147,025					121,968
General and administrative depreciation and amortization	4,825				4,238			17,510					15,962
Impairment of long-lived assets	—				—			29,104					—
Total operating expenses	211,592				200,645			888,555					763,394
Operating income	75,858				63,052			274,934					282,992
Other income (expense):
Interest expense, net	(2,051			)	(2,356		)	(8,277				)	(9,629		)
Other income	77				1,466			3,378					3,509
Total other expense	(1,974			)	(890		)	(4,899				)	(6,120		)
Income before income taxes	73,884				62,162			270,035					276,872
Income taxes	22,841				20,858			91,348					96,847
Net income	$	51,043			$	41,304		$			178,687		$	180,025

Earnings per share-basic
Basic net income per share	$	0.41			$	0.33		$		1.42			$	1.44
Weighted average common shares outstanding	125,959				125,380			125,693					124,912

Earnings per share-diluted
Diluted net income per share	$		0.39		$	0.32		$			1.36		$	1.39
Diluted weighted average common shares outstanding	131,629				130,613			131,230					129,781

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

Consolidated Balance Sheets

(in thousands)

(Unaudited)


	July 31, 2014			July 31, 2013
ASSETS

Current assets:
Cash and cash equivalents	$	158,668		$	63,631
Accounts receivable, net	196,985			182,714
Vehicle pooling costs and inventories	31,697			31,202
Income taxes receivable	2,288			9,416
Deferred income taxes	1,803			2,216
Prepaid expenses and other assets	19,505			15,344
Assets held for sale	1,345			1,929
Total current assets	412,291			306,452
Property and equipment, net	692,383			677,517
Goodwill and intangibles, net	309,022			285,169
Deferred income taxes	36,721			30,117
Other assets	56,387			35,226
Total assets	$		1,506,804	$	1,334,481

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$		152,156	$	136,648
Bank overdraft	—			16,291
Deferred revenue	4,170			4,832
Income taxes payable	8,284			4,741
Current portion of long-term debt and capital lease obligations	79,674			76,047
Total current liabilities	244,284			238,559
Deferred income taxes	7,372			8,071
Income taxes payable	23,771			23,091
Long-term debt and capital lease obligations	223,227			296,410
Other liabilities	4,651			5,949
Total liabilities	503,305			572,080
Commitments and contingencies
Stockholders’ equity:
Preferred stock	—			—
Common stock	13			13
Additional paid-in capital	404,542			368,769
Accumulated other comprehensive loss	(20,060)			(47,161)
Retained earnings	619,004			440,780
Total stockholders’ equity	1,003,499			762,401
Total liabilities and stockholders’ equity	$	1,506,804		$	1,334,481

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Twelve Months Ended July 31,
	2014			2013
Cash flows from operating activities:
Net income	$	178,687		$		180,025
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	53,726			56,728
Allowance for doubtful accounts	1,087			(356			)
Impairment of long-lived assets	29,104			—
Stock-based compensation	22,099			19,557
Excess tax benefits from stock-based compensation	(2,289		)	(6,097			)
Gain on sale of property and equipment	(1,461		)	(962			)
Deferred income taxes	(10,838		)	(3,605			)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	(12,870		)	(31,171			)
Vehicle pooling costs and inventories	399			(5,403			)
Prepaid expenses and other current assets	(4,500		)	(5,971			)
Other assets	(8,900		)	(18,714			)
Accounts payable and accrued liabilities	5,425			14,749
Deferred revenue	(661		)	(871			)
Income taxes receivable	9,267			(752			)
Income taxes payable	2,816			1,609
Other liabilities	1,503			560
Net cash provided by operating activities	262,594			199,326

Cash flows from investing activities:
Purchases of property and equipment including acquisitions	(95,810		)	(214,287			)
Proceeds from sale of property and assets held for sale	3,707			6,266
Net cash used in investing activities	(92,103		)	(208,021			)

Cash flows from financing activities:
Proceeds from the exercise of stock options	10,412			21,442
Excess tax benefits from stock-based compensation	2,289			6,097
Proceeds from the issuance of Employee Stock Purchase Plan shares	2,339			1,948
Repurchases of common stock	(572		)	(15,009			)
Change in bank overdraft	(16,291		)	16,291
Principal payments on long-term debt	(75,000		)	(96,660			)
Net cash used in financing activities	(76,823		)	(65,891			)

Effect of foreign currency translation	1,369			(1,895			)

Net increase (decrease) in cash and cash equivalents	95,037			(76,481			)

Cash and cash equivalents at beginning of period	63,631			140,112
Cash and cash equivalents at end of period	$	158,668		$		63,631

Supplemental disclosure of cash flow information:
Interest paid	$	8,768		$	10,267
Income taxes paid	$	82,813		$	95,182

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

COPART INC - FORM 8-K - EX-99.1 - September 24, 2014

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COPART INC Reports