[February 27, 2013] |
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Copart Reports Second Quarter Financial Results
DALLAS --(Business Wire)--
Copart, Inc. (NASDAQ: CPRT) today reported the results for the quarter
ended January 31, 2013, the second quarter of its 2013 fiscal year.
For the three months ended January 31, 2013, revenue, operating income
and net income were $266.2 million, $62.8 million and $39.6 million,
respectively. These represent an increase in revenue of $38.3 million,
or 16.8%; and decreases in operating income of $0.8 million, or 1.2%;
and in net income of $1.0 million, or 2.4%, respectively, from the same
quarter last year. Fully diluted earnings per share for the three months
were $0.31 compared to $0.31 last year.
For the six months ended January 31, 2013, revenue, operating income and
net income were $505.1 million, $137.1 million and $85.5 million,
respectively. These represent increases in revenue of $51.5 million, or
11.4%; in operating income of $8.2, million or 6.4%; and in net income
of $3.7 million, or 4.6%, respectively, from the same period last year.
Fully diluted earnings per share for the six months ended January 31,
2013 were $0.66 compared to $0.62 last year, an increase of 6.5%.
The operating results for the second quarter were adversely affected by
abnormal costs incurred as a result of hurricane Sandy. These costs
include the additional towing, payroll, equipment, travel, housing and
facilities expenses directly related to the operating conditions created
by hurricane Sandy. These costs, net of the associated revenues,
generated a loss of $11.9 million during the quarter and had a negative
after tax impact on diluted earnings per share in the quarter of $0.06.
We expect these additional costs to continue into future quarters.
However, we believe they will be completely offset by auction revenues
and, accordingly, no future loss is anticipated.
Included in general and administrative cost for our second quarter are
the non-capitalizable costs associated with the implementation of our
ERP system and the incremental costs associated with the outsourcing of
our network infrastructure and our technical support functions, which
together totaled $1.8 million and which had a negative after tax impact
on diluted earnings per share in the quarter of $0.01. These costs will
abate upon completion, which is expected to be some time in our 2014
fiscal year. Also included are the costs associated with our expanded
international operations which totaled $1.4 million and will continue.
On Thursday, February 28, 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 http://w.on24.com/r.htm e=587593&s=1&k=BC15C71DA1CD41A3F45BD29D977FD5EA.
A replay of the call will be available through March 28, 2013 by calling
(888) 203-1112. Use confirmation code #8426731.
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 VB2 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 162
facilities; with operations 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)
and the United Arab Emirates (www.copart.ae).
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.
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Consolidated Statements of Income (in thousands,
except per share data) (Unaudited)
|
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Three months ended January 31,
|
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Six months ended January 31,
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Service revenues and vehicle sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Service revenues
|
|
|
|
$
|
216,920
|
|
|
$
|
186,852
|
|
|
$
|
412,099
|
|
|
$
|
369,668
|
|
Vehicle sales
|
|
|
|
|
49,265
|
|
|
|
41,052
|
|
|
|
92,952
|
|
|
|
83,862
|
|
Total service revenues and vehicle
sales
|
|
|
|
$
|
266,185
|
|
|
$
|
227,904
|
|
|
$
|
505,051
|
|
|
$
|
453,530
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
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Yard operations
|
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|
116,501
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|
|
86,422
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|
|
204,522
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|
|
174,427
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|
Cost of vehicle sales
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|
|
42,204
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|
|
33,605
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|
|
78,515
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|
|
67,799
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Yard depreciation and amortization
|
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|
10,663
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|
|
8,181
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|
|
19,761
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|
|
16,383
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Gross margin
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96,817
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|
99,696
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202,253
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|
|
194,921
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General and administrative
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30,098
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|
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23,415
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57,436
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|
|
49,371
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General and administrative depreciation and amortization
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|
|
3,949
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|
|
3,971
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|
|
7,690
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|
|
7,864
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Impairment of long-lived assets
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-
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|
8,771
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-
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|
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8,771
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Total operating expenses
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203,415
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164,365
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367,924
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324,615
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Operating income
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62,770
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|
|
63,539
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137,127
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|
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128,915
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Other income (expense):
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Interest expense, net
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(2,397
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)
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(2,914
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)
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(4,873
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)
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(5,039
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)
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Other income
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744
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1,591
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|
451
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2,155
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Total other expense
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(1,653
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)
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(1,323
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)
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(4,422
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)
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(2,884
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)
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Income before income taxes
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61,117
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62,216
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132,705
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126,031
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Income taxes
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|
21,477
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|
|
21,613
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|
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47,220
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44,279
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Net income
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$
|
39,640
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|
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$
|
40,603
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|
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$
|
85,485
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|
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$
|
81,752
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Earnings per share-basic
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Basic net income per share
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$
|
0.32
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$
|
0.32
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|
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$
|
0.69
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$
|
0.63
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|
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|
|
|
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Weighted average common shares outstanding
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124,709
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128,306
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|
124,505
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|
129,870
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Earnings per share-diluted
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Diluted net income per share
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$
|
0.31
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$
|
0.31
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|
|
$
|
0.66
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|
|
$
|
0.62
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Diluted weighted average common shares outstanding
|
|
|
|
129,520
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|
|
131,590
|
|
|
128,997
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|
|
132,696
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|
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Consolidated Balance Sheets (in thousands) (Unaudited)
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January 31, 2013
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July 31, 2012
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ASSETS
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Current assets:
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Cash and cash equivalents
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|
$
|
49,510
|
|
|
$
|
140,112
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Accounts receivable, net
|
|
|
|
198,805
|
|
|
138,966
|
Inventories and vehicle pooling costs
|
|
|
|
31,103
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|
|
24,222
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Income taxes receivable
|
|
|
|
12,462
|
|
|
2,312
|
Deferred income taxes
|
|
|
|
4,207
|
|
|
3,600
|
Prepaid expenses and other assets
|
|
|
|
11,633
|
|
|
9,155
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Assets held for sale
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|
|
|
4,185
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|
|
3,926
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Total current assets
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|
|
|
311,905
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322,293
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Property and equipment, net
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|
657,424
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|
587,163
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Intangibles, net
|
|
|
|
14,925
|
|
|
7,985
|
Goodwill
|
|
|
|
210,188
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|
196,438
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Deferred income taxes
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|
|
|
27,596
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|
|
22,280
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Other assets
|
|
|
|
31,908
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|
|
18,907
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Total assets
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|
|
|
$
|
1,253,946
|
|
|
$
|
1,155,066
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
|
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Accounts payable and accrued liabilities
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|
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$
|
125,400
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|
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$
|
102,958
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Deferred revenue
|
|
|
|
5,363
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|
|
5,390
|
Income taxes payable
|
|
|
|
6,083
|
|
|
3,082
|
Current portion of long-term debt and capital lease obligations
|
|
|
|
75,177
|
|
|
75,170
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Other current liabilities
|
|
|
|
788
|
|
|
785
|
Total current liabilities
|
|
|
|
212,811
|
|
|
187,385
|
Deferred income taxes
|
|
|
|
9,153
|
|
|
7,186
|
Income taxes payable
|
|
|
|
24,434
|
|
|
22,531
|
Long-term debt and capital lease obligations
|
|
|
|
333,068
|
|
|
368,950
|
Other liabilities
|
|
|
|
6,977
|
|
|
7,897
|
Total liabilities
|
|
|
|
586,443
|
|
|
593,949
|
Commitments and contingencies
|
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|
|
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Stockholders' equity:
|
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|
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|
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Preferred stock, $0.0001 par value - 5,000,000 shares authorized;
no shares issued and outstanding at January 31, 2013 and July
31, 2012, respectively
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|
-
|
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|
-
|
Common stock, $0.0001 par value - 180,000,000 shares authorized; 125,284,122
and 124,393,700 shares issued and outstanding at January 31,
2013 and July 31, 2012, respectively
|
|
|
|
13
|
|
|
12
|
Additional paid in capital
|
|
|
|
353,111
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|
|
326,187
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Accumulated other comprehensive loss
|
|
|
|
(32,270)
|
|
|
(38,043)
|
Retained earnings
|
|
|
|
346,649
|
|
|
272,961
|
Total stockholders' equity
|
|
|
|
667,503
|
|
|
561,117
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
1,253,946
|
|
|
$
|
1,155,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Consolidated Statements of Cash Flows (in thousands) (Unaudited)
|
|
|
|
|
|
|
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Six Months Ended January 31,
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
85,485
|
|
|
$
|
81,752
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
27,451
|
|
|
24,247
|
|
Allowance for doubtful accounts
|
|
|
|
184
|
|
|
(99
|
)
|
Stock-based compensation
|
|
|
|
9,920
|
|
|
11,028
|
|
Excess tax benefits from stock-based compensation
|
|
|
|
(5,293
|
)
|
|
(1,104
|
)
|
Impairment of long-lived assets
|
|
|
|
-
|
|
|
8,771
|
|
Gain on sale of property and equipment
|
|
|
|
(183
|
)
|
|
(963
|
)
|
Deferred income taxes
|
|
|
|
(6,986
|
)
|
|
(9,068
|
)
|
Changes in operating assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(59,165
|
)
|
|
(29,549
|
)
|
Vehicle pooling costs and inventories
|
|
|
|
(6,860
|
)
|
|
766
|
|
Prepaid expenses and other current assets
|
|
|
|
(3,529
|
)
|
|
5,933
|
|
Other assets
|
|
|
|
(7,014
|
)
|
|
247
|
|
Accounts payable and accrued liabilities
|
|
|
|
18,695
|
|
|
(5,431
|
)
|
Deferred revenue
|
|
|
|
(28
|
)
|
|
697
|
|
Income taxes receivable
|
|
|
|
(4,776
|
)
|
|
3,281
|
|
Income taxes payable
|
|
|
|
4,918
|
|
|
(12
|
)
|
Other liabilities
|
|
|
|
271
|
|
|
(148
|
)
|
Net cash provided by operating activities
|
|
|
|
53,090
|
|
|
90,348
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment including acquisitions
|
|
|
|
(110,554
|
)
|
|
(15,055
|
)
|
Proceeds from sale of property and equipment
|
|
|
|
1,851
|
|
|
761
|
|
Investment in escrow
|
|
|
|
(6,371
|
)
|
|
-
|
|
Net cash used in investing activities
|
|
|
|
(115,074
|
)
|
|
(14,294
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from the exercise of stock options
|
|
|
|
16,358
|
|
|
6,335
|
|
Proceeds from the issuance of Employee Stock Purchase Plan shares
|
|
|
|
951
|
|
|
1,019
|
|
Repurchase of common stock
|
|
|
|
(14,512
|
)
|
|
(135,395
|
)
|
Excess tax benefit from stock-based payment arrangements
|
|
|
|
5,293
|
|
|
1,104
|
|
Proceeds from issuance of debt
|
|
|
|
-
|
|
|
125,000
|
|
Debt offering costs
|
|
|
|
-
|
|
|
(313
|
)
|
Principal payments on long-term debt
|
|
|
|
(37,505
|
)
|
|
(18,750
|
)
|
Net cash used in financing activities
|
|
|
|
(29,415
|
)
|
|
(21,000
|
)
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency translation
|
|
|
|
797
|
|
|
(1,423
|
)
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
|
(90,602
|
)
|
|
53,631
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
140,112
|
|
|
74,009
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
49,510
|
|
|
$
|
127,640
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
$
|
5,220
|
|
|
$
|
5,221
|
|
Income taxes paid
|
|
|
|
$
|
55,874
|
|
|
$
|
50,019
|
|
|
|
|
|
|
|
|
|
|
|
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