Copart Reports Third Quarter Fiscal 2016 Financial Results

DALLAS--()--Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended April 30, 2016.

For the three months ended April 30, 2016, revenue, gross margin, and net income were $347.2 million, $157.6 million, and $74.0 million, respectively. These represent an increase in revenue of $50.1 million, or 16.9%; an increase in gross margin of $30.2 million, or 23.7%; and an increase in net income of $16.5 million, or 28.6%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.64 compared to $0.44 last year, an increase of 45.5%.

For the nine months ended April 30, 2016, revenue, gross margin, and net income were $935.8 million, $403.1 million and $185.4 million, respectively. These represent an increase in revenue of $72.0 million, or 8.3%; an increase in gross margin of $38.5 million, or 10.6%; and an increase in net income of $23.0 million, or 14.2%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $1.51 compared to $1.23 last year, an increase of 22.8%.

On Thursday, May 26, 2016, 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://stream.conferenceamerica.com/copart05262016. A replay of the call will be available through July 25, 2016 by calling (877) 919-4059. Use confirmation code # 73323554.

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 locations, to end users. Copart remarkets the vehicles through Internet sales utilizing its VB3 technology. Copart sells vehicles on behalf of insurance companies, banks, financial institutions, charities, car dealerships, fleet operators, vehicle rental companies, 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, Oman and Bahrain (www.copartmea.com), Spain (www.autoresiduos.com), Ireland (www.copart.ie), and India (www.copart.in). Copart links sellers to more than 750,000 members in over 150 countries worldwide through its multi-channel platform. Copart was recently ranked at the top of Deloitte’s “Exceptional 100” list of companies, which reviewed U.S. publicly traded companies based upon a multidimensional approach to measuring financial performance. 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.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

 
Three Months Ended
April 30,
Nine Months Ended
April 30,
2016   2015 2016   2015
Service revenues and vehicle sales:
Service revenues $ 303,507 $ 256,564 $ 814,891 $ 741,692
Vehicle sales 43,739   40,578   120,899   122,094  
Total service revenues and vehicle sales 347,246 297,142 935,790 863,786
Operating expenses:
Yard operations 142,802 125,348 401,721 367,124
Cost of vehicle sales 37,744 34,503 103,939 103,694
Yard depreciation and amortization 8,339 9,248 24,932 26,655
Yard stock-based payment compensation 714   626   2,076   1,721  
Gross margin 157,647 127,417 403,122 364,592
General and administrative 27,360 25,940 78,447 86,741
General and administrative depreciation and amortization 4,019 2,916 10,638 8,646
General and administrative stock-based payment compensation 4,320   3,794   13,758   11,569  
Total operating expenses 225,298   202,375   635,511   606,150  
Operating income 121,948 94,767 300,279 257,636
Other (expense) income:
Interest expense, net (5,419 ) (5,656 ) (15,900 ) (11,932 )
Other income, net 39   (815 ) 5,501   4,919  
Total other expenses (5,380 ) (6,471 ) (10,399 ) (7,013 )
Income before income taxes 116,568 88,296 289,880 250,623
Income taxes 42,552   30,733   104,488   88,252  
Net income $ 74,016   $ 57,563   $ 185,392   $ 162,371  
 
Basic net income per common share $ 0.67   $ 0.46   $ 1.58   $ 1.29  
Weighted average common shares outstanding 110,543   126,415   117,071   126,309  
 
Diluted net income per common share $ 0.64   $ 0.44   $ 1.51   $ 1.23  
Diluted weighted average common shares outstanding 116,388   132,124   122,692   131,837  
 
   

Copart, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 
April 30, 2016 July 31, 2015
ASSETS
Current assets:
Cash and cash equivalents $ 137,653 $ 456,012
Accounts receivable, net 263,292 215,696
Vehicle pooling costs and inventories 41,210 33,562
Income taxes receivable 2,772 6,092
Deferred income taxes 668 3,396
Prepaid expenses and other assets 18,910   19,824  
Total current assets 464,505 734,582
Property and equipment, net 806,973 700,402
Intangibles, net 13,390 17,857
Goodwill 267,367 271,850
Deferred income taxes 31,245 28,840
Other assets 40,655   46,421  
Total assets $ 1,624,135   $ 1,799,952  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 150,298 $ 147,452
Deferred revenue 5,745 3,724
Income taxes payable 17,169 8,279
Current portion of long-term debt, revolving credit facility, and capital lease obligations 30,369   53,671  
Total current liabilities 203,581 213,126
Deferred income taxes 5,001 5,322
Income taxes payable 25,675 21,157
Long-term debt and capital lease obligations, net of discount 670,507 592,135
Other liabilities 2,844   3,748  
Total liabilities 907,608 835,488
Commitments and contingencies
Stockholders' equity:
Preferred stock
Common stock 11 12
Additional paid-in capital 393,351 407,808
Accumulated other comprehensive loss (83,791 ) (68,793 )
Retained earnings 406,956   625,437  
Total stockholders' equity 716,527   964,464  
Total liabilities and stockholders' equity $ 1,624,135   $ 1,799,952  
 
 

Copart, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
Nine Months Ended April 30,
2016   2015
Cash flows from operating activities:
Net income $ 185,392 $ 162,371
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 35,900 37,579
Allowance for doubtful accounts 1,227 (453 )
Equity in losses of unconsolidated affiliates 768
Stock-based payment compensation 15,834 13,290
Excess tax benefits from stock-based payment compensation (848 ) (1,279 )
Gain on sale of property and equipment (188 ) (735 )
Deferred income taxes (325 ) 3,641
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable (49,594 ) (21,763 )
Vehicle pooling costs and inventories (8,121 ) (1,874 )
Prepaid expenses and other current assets 293 1,480
Other assets 3,206 7,584
Accounts payable and accrued liabilities 5,024 2,042
Deferred revenue 2,038 445
Income taxes receivable 4,172 985
Income taxes payable 13,858 1,313
Other liabilities (1,138 ) (1,257 )
Net cash provided by operating activities 207,498 203,369
 
Cash flows from investing activities:
Purchases of property and equipment (143,833 ) (49,079 )
Proceeds from sale of property and equipment 485 1,087
Purchases of marketable securities (21,119 )
Proceeds from sale of marketable securities 21,498    
Net cash used in investing activities (142,969 ) (47,992 )
 
Cash flows from financing activities:
Proceeds from the exercise of stock options 4,989 3,372
Excess tax benefit from stock-based payment compensation 848 1,279
Proceeds from the issuance of Employee Stock Purchase Plan shares 1,640 1,495
Repurchases of common stock (442,855 ) (1,737 )
Proceeds from the issuance of long-term debt, net of discount 93,468 698,939
Debt offering costs (165 ) (955 )
Principal payments on long-term debt (37,500 ) (331,250 )
Net cash (used in) provided by financing activities (379,575 ) 371,143
Effect of foreign currency translation (3,313 ) (6,446 )
Net (decrease) increase in cash and cash equivalents (318,359 ) 520,074
Cash and cash equivalents at beginning of period 456,012   158,668  
Cash and cash equivalents at end of period $ 137,653   $ 678,742  
Supplemental disclosure of cash flow information:
Interest paid $ 16,996   $ 9,705  
Income taxes paid, net of refunds $ 86,243   $ 81,995  

Contacts

Copart, Inc.
Christopher M. Smith, 972-391-5021
Senior Analyst
Office of the Chief Financial Officer
christopher.smith3@copart.com

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