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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