Copart Reports Second Quarter Fiscal 2014 Financial Results

  Copart Reports Second Quarter Fiscal 2014 Financial Results  Business Wire  DALLAS -- February 25, 2014  Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended January 31, 2014.  For the three months ended January 31, 2014, revenue, operating income and net income were $286.4 million, $71.5 million and $45.3 million, respectively. These represent increases in revenue of $20.2 million, or 7.6%; in operating income of $8.7 million, or 13.9%; and in net income of $5.7 million, or 14.4%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.35 compared to $0.31 last year, an increase of 12.9%.  For the six months ended January 31, 2014, revenue, operating income and net income were $566.3 million, $136.4 million and $86.8 million, respectively. These represent an increase in revenue of $61.3 million, or 12.1%; a decrease in operating income of $0.7 million, or 0.5%; and an increase in net income of $1.3 million, or 1.5%, respectively, from the same quarter last year. Fully diluted earnings per share for the six months were $0.66 for both periods.  Included in the financial results for the most recent quarter are the severance, relocation and lease termination costs of $4.5 million associated with the integration of the QCSA acquisition, which we closed on May 30, 2013, and the relocation of the technology department from Fairfield, California to Dallas, Texas. We expect severance and lease termination costs to continue into our fourth quarter of this fiscal year.  On Wednesday, February 26, 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://64.202.98.81/conferenceamerica. A replay of the call will be available through April 27, 2014 by calling (877) 919-4059. Use confirmation code #91488337.  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.  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) (Unaudited)                         Three months ended         Six months ended                          January 31,                 January 31,                          2014         2013          2014         2013 Service revenues and vehicle sales: Service revenues         $ 235,732     $ 216,920     $ 462,095     $ 412,099 Vehicle sales             50,702       49,265       104,222      92,952 Total service revenues and vehicle     $ 286,434     $ 266,185     $ 566,317     $ 505,051 sales Operating costs and expenses: Yard operations            121,786       116,501       237,647       204,522 Cost of vehicle            43,642        42,204        89,733        78,515 sales Yard depreciation         9,460        10,663       19,555       19,761 and amortization Gross margin               111,546       96,817        219,382       202,253 General and                36,447        30,098        74,914        57,436 administrative General and administrative            3,615        3,949        8,025        7,690 depreciation and amortization Total operating           214,950      203,415      429,874      367,924 expenses Operating income           71,484        62,770        136,443       137,127 Other income (expense): Interest expense,          (2,066  )     (2,397  )     (4,203  )     (4,873  ) net Other income              1,170        744          2,593        451 Total other expense       (896    )    (1,653  )    (1,610  )    (4,422  ) Income before income       70,588        61,117        134,833       132,705 taxes Income taxes              25,243       21,477       48,066       47,220 Net income               $ 45,345      $ 39,640      $ 86,767      $ 85,485 Earnings per                                                     share-basic Basic net income per     $ 0.36        $ 0.32        $ 0.69        $ 0.69 share                                                                               Weighted average common shares             125,550      124,709      125,505      124,505 outstanding                                                                               Earnings per                                                     share-diluted Diluted net income       $ 0.35        $ 0.31        $ 0.66        $ 0.66 per share Diluted weighted average common            131,087      129,520      130,751      128,997 shares outstanding                                                                                 Copart, Inc.  Consolidated Balance Sheets (in thousands) (Unaudited)                                                 January 31,    July 31,                                                  2014            2013 ASSETS                                                                               Current assets: Cash and cash equivalents                        $ 46,199        $ 63,631 Accounts receivable, net                           222,104         182,714 Vehicle pooling costs and inventories              33,597          31,202 Income taxes receivable                            5,628           9,416 Deferred income taxes                              3,829           2,216 Prepaid expenses and other assets                  20,069          15,344 Assets held for sale                              1,503          1,929 Total current assets                               332,929         306,452 Property and equipment, net                        707,379         677,517 Intangibles, net                                   19,709          17,706 Goodwill                                           291,227         267,463 Deferred income taxes                              30,654          30,117 Other assets                                      56,595         35,226 Total assets                                     $ 1,438,493     $ 1,334,481                                                                               LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities         $ 154,871       $ 136,648 Bank overdraft                                     17,034          16,291 Deferred revenue                                   5,179           4,832 Income taxes payable                               5,539           4,741 Current portion of long-term debt and             77,028         76,047 capital lease obligations Total current liabilities                          259,651         238,559 Deferred income taxes                              7,461           8,071 Income taxes payable                               24,165          23,091 Long-term debt and capital lease obligations       261,182         296,410 Other liabilities                                 5,310          5,949 Total liabilities                                 557,769        572,080 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.0001 par value – 5,000,000 shares authorized; no shares             —               — issued and outstanding at January 31, 2014 and July 31, 2013 respectively Common stock, $0.0001 par value – 180,000,000 shares authorized; 125,860,010 and 125,494,995 shares issued and                  13              13 outstanding at January 31, 2014 and July 31, 2013, respectively Additional paid-in capital                         384,947         368,769 Accumulated other comprehensive loss               (31,718   )     (47,161   ) Retained earnings                                 527,482        440,780 Total stockholders’ equity                        880,724        762,401 Total liabilities and stockholders’ equity       $ 1,438,493     $ 1,334,481                                                                                 Copart, Inc.  Consolidated Statements of Cash Flows (in thousands) (Unaudited)                                                   Three Months Ended                                                    January 31,                                                    2014          2013 Cash flows from operating activities: Net income                                         $ 86,767       $ 85,485 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization                        27,580         27,451 Allowance for doubtful accounts                      884            184 Stock-based compensation                             10,639         9,920 Excess tax benefits from stock-based                 (1,171   )     (5,293   ) compensation Gain on sale of property and equipment               (1,743   )     (183     ) Deferred income taxes                                (5,982   )     (6,986   ) Changes in operating assets and liabilities, net of effects from acquisitions: Accounts receivable                                  (38,928  )     (58,315  ) Vehicle pooling costs and inventories                (1,718   )     (6,860   ) Prepaid expenses and other current assets            (4,266   )     (3,529   ) Other assets                                         (12,602  )     (7,014   ) Accounts payable and accrued liabilities             7,724          17,845 Deferred revenue                                     347            (28      ) Income taxes receivable                              4,799          (4,776   ) Income taxes payable                                 1,494          4,918 Other liabilities                                   1,967         271 Net cash provided by operating activities           75,791        53,090                                                                               Cash flows from investing activities: Purchases of property and equipment including        (65,996  )     (116,925 ) acquisitions Proceeds from sale of property and assets held      2,576         1,851 for sale Net cash used in investing activities               (63,420  )    (115,074 )                                                                               Cash flows from financing activities: Proceeds from the exercise of stock options          4,550          16,358 Excess tax benefit from stock-based payment          1,171          5,293 compensation Proceeds from the issuance of Employee Stock         1,115          951 Purchase Plan shares Change in bank overdraft                             743            — Principal payments on long-term debt                 (37,500  )     (37,505  ) Repurchases of common stock                         (80      )    (14,512  ) Net cash used in financing activities               (30,001  )    (29,415  )                                                                               Effect of foreign currency translation              198           797                                                                               Net decrease in cash and cash equivalents            (17,432)       (90,602  )                                                                               Cash and cash equivalents at beginning of           63,631        140,112 period Cash and cash equivalents at end of period         $46,199        $ 49,510                                                                               Supplemental disclosure of cash flow information: Interest paid                                      $4,495         $ 5,220 Income taxes paid                                  $47,891        $ 55,874                                                                                Contact:  Copart, Inc. Cindy Cross, 707-646-2123 Assistant to the Chief Financial Officer cynthia.cross@copart.com  
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