Copart Reports First Quarter Fiscal 2015 Financial Results

Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended October 31, 2014.

For the three months ended October 31, 2014, revenue, gross margin and net income were $290.4 million, $122.3 million and $52.6 million, respectively. These represent increases in revenue of $10.5 million, or 3.8%; in gross margin of $14.5 million, or 13.4%; and in net income of $11.2 million, or 27.0%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.40 compared to $0.32 last year, an increase of 25.0%.

On Tuesday, November 25, 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 January 24, 2015 by calling [phone]. Use confirmation code # 60599057.

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 October 31,
		2014			2013
Service revenues and vehicle sales:
Service revenues		$	246,597		$	226,363
Vehicle sales		43,789			53,520
Total service revenues and vehicle sales		290,386			279,883
Operating expenses:
Yard operations		122,145			115,861
Cost of vehicle sales		37,073			46,091
Yard depreciation and amortization		8,860			10,095
Gross margin		122,308			107,836
General and administrative		37,037			38,468
General and administrative depreciation and amortization		2,870			4,409
Total operating expenses		207,985			214,924
Operating income		82,401			64,959
Other (expense) income:
Interest expense, net		(1,771		)	(2,137		)
Other income, net		1,593			1,423
Total other expense		(178		)	(714		)
Income before income taxes		82,223			64,245
Income taxes		29,608			22,823
Net income		$	52,615		$	41,422
Basic net income per common share		$	0.42		$	0.33
Weighted average common shares outstanding		126,217			125,460
Diluted net income per common share		$	0.40		$	0.32
Diluted weighted average common shares outstanding		131,517			130,706

Copart, Inc.   Consolidated Balance Sheets (in thousands) (Unaudited)
		October 31, 2014			July 31, 2014
ASSETS
Current assets:
Cash and cash equivalents		$	198,484		$	158,668
Accounts receivable, net		204,810			196,985
Vehicle pooling costs and inventories		30,986			31,697
Income taxes receivable		404			2,288
Deferred income taxes		4,031			1,803
Prepaid expenses and other assets		18,487			19,505
Assets held for sale		564			1,345
Total current assets		457,766			412,291
Property and equipment, net		691,981			692,383
Intangibles, net		24,259			25,242
Goodwill		276,889			283,780
Deferred income taxes		35,474			36,721
Other assets		50,217			56,387
Total assets		$	1,536,586		$	1,506,804
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	153,799		$	152,156
Deferred revenue		3,815			4,170
Income taxes payable		25,906			8,284
Current portion of long-term debt and capital lease obligations		76,171			79,674
Total current liabilities		259,691			244,284
Deferred income taxes		6,854			7,372
Income taxes payable		24,227			23,771
Long-term debt and capital lease obligations		203,868			223,227
Other liabilities		4,515			4,651
Total liabilities		499,155			503,305
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—			—
Common stock		13			13
Additional paid-in capital		410,629			404,542
Accumulated other comprehensive loss		(43,936		)	(20,060		)
Retained earnings		670,725			619,004
Total stockholders’ equity		1,037,431			1,003,499
Total liabilities and stockholders’ equity		$	1,536,586		$	1,506,804

Copart, Inc.   Consolidated Statements of Cash Flows (in thousands) (Unaudited)
		Three Months Ended October 31,
		2014				2013
Cash flows from operating activities:
Net income		$	52,615			$	41,422
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,967				14,504
Allowance for doubtful accounts		113				350
Stock-based compensation		4,366				4,867
Excess tax benefits from stock-based compensation		(361		)		(58		)
Gain on sale of property and equipment		(261		)		(674		)
Deferred income taxes		(1,295		)		(3,010		)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable		(9,004		)		(4,706		)
Vehicle pooling costs and inventories		272				1,066
Prepaid expenses and other current assets		633				(3,699		)
Other assets		2,586				(15,027		)
Accounts payable and accrued liabilities		(79		)		6,483
Deferred revenue		(353		)		(654		)
Income taxes receivable		2,236				7,633
Income taxes payable		18,434				16,909
Other liabilities		(503		)		2,309
Net cash provided by operating activities		83,366				67,715
Cash flows from investing activities:
Purchases of property and equipment including acquisitions		(23,388		)		(21,595		)
Proceeds from sale of property and equipment		689				853
Net cash used in investing activities		(22,699		)		(20,742		)
Cash flows from financing activities:
Proceeds from the exercise of stock options		1,931				82
Excess tax benefit from stock-based compensation		361				58
Principal payments on long-term debt		(18,750		)		(18,750		)
Change in bank overdraft		—				(16,291		)
Repurchase of common stock		(1,121		)		(80		)
Net cash used in financing activities		(17,579		)		(34,981		)
Effect of foreign currency translation		(3,272		)		1,429
Net increase in cash and cash equivalents		39,816				13,421
Cash and cash equivalents at beginning of period		158,668				63,631
Cash and cash equivalents at end of period		$	198,484			$	77,052
Supplemental disclosure of cash flow information:
Interest paid		$	1,910			$	2,286
Income taxes paid		$	10,030			$	1,548