Welcome!

News Feed Item

Copart Reports Third Quarter Fiscal 2014 Financial Results

Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended April 30, 2014.

For the three months ended April 30, 2014, revenue, gross margin and net income were $309.7 million, $132.3 million and $40.9 million, respectively. These represent increases in revenue of $32.1 million, or 11.6%; and in gross margin of $16.7 million, or 14.4%; and a decrease in net income of $12.4 million, or 23.2%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.31 compared to $0.41 last year, a decrease of 24.4%.

For the nine months ended April 30, 2014, revenue, gross margin and net income were $876.0 million, $351.6 million and $127.6 million, respectively. These represent increases in revenue of $93.4 million, or 11.9%; and in gross margin of $33.8 million, or 10.6%; and a decrease in net income of $11.1 million, or 8.0%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $0.97 compared to $1.07 last year, a decrease of 9.3%.

Included in operating results of the current quarter is an impairment charge of $29.1 million. In a prior fiscal year, the Company initiated the development of a third-party enterprise operating system to address its international expansion needs and to eventually replace its proprietary operating system, which is currently utilized in the United States, Canada, the United Kingdom and the United Arab Emirates. During the quarter, the Company reassessed this strategy based on the projected cost to complete, deployment risk and certain other factors. As a result of this assessment, the Company decided to cease development of the third-party enterprise operating system and address its international technology needs through an internally-developed proprietary solution. Accordingly, during the quarter, the Company recognized an impairment charge resulting primarily from the abandonment of work previously capitalized in connection with the development of the third-party solution.

Included in the operating results of the third quarter of the prior fiscal year were the incremental revenues and operating expenses associated with incremental unit volume generated by Hurricane Sandy, which were estimated to be $12.7 million and $7.2 million, respectively.

Excluding the impacts of the impairment charge during the current quarter and the effects of Hurricane Sandy during the same quarter last year, for the three months ended April 30, 2014, non-GAAP revenue, gross margin and net income were $309.7 million, $132.3 million and $60.3 million, respectively. These represent increases in non-GAAP revenue of $44.8 million, or 16.9%; in non-GAAP gross margin of $22.1 million, or 20.1%; and in non-GAAP net income of $10.6 million, or 21.4%, respectively, from the non-GAAP results from the same quarter last year. Non-GAAP fully diluted earnings per share for the three months were $0.46 compared to $0.38 last year, an increase of 21.1%. A reconciliation of non-GAAP financial measures to the most directly comparable financial measures computed in accordance with U.S. generally accepted accounting principles (GAAP) can be found in the tables attached to this press release.

For the nine months ended April 30, 2014, non-GAAP revenue, gross margin and net income were $876.0 million, $351.6 million and $146.6 million, respectively. These represent increases in non-GAAP revenue of $124.5 million, or 16.6%; in non-GAAP gross margin of $29.4 million, or 9.1%; and in non-GAAP net income of $5.0 million, or 3.5%, respectively, from the non-GAAP results from the same period last year. Non-GAAP fully diluted earnings per share for the nine months were $1.12 compared to $1.09 last year, an increase of 2.8%.

On Thursday, May 29, 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 July 28, 2014 by calling (877) 919-4059. Use confirmation code #17312559.

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.

Use of Non-GAAP Financial Measures

Included in this release are certain non-GAAP financial measures, including non-GAAP revenue, non-GAAP gross margin, non-GAAP net income and non-GAAP net income per diluted share, which reflect the impact of an impairment charge in the quarter ended April 30, 2014, and revenues and expenses associated with salvage cars processed as a result of Hurricane Sandy. These non-GAAP financial measures do not represent alternative financial measures under GAAP. In addition, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Furthermore, these non-GAAP financial measures do not reflect a comprehensive view of Copart’s operations in accordance with GAAP and should only be read in conjunction with the corresponding GAAP financial measures. This information constitutes non-GAAP financial measures within the meaning of Regulation G adopted by the U.S. Securities and Exchange Commission. Accordingly, Copart has presented herein, and will present in other information it publishes that contains these non-GAAP financial measures, a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Copart believes the presentation of non-GAAP revenue, non-GAAP gross margin, non-GAAP net income and non-GAAP net income per diluted share included in this release in conjunction with the corresponding GAAP financial measures provides meaningful information for investors, analysts and management in assessing Copart’s business trends and financial performance. From a financial planning and analysis perspective, Copart management analyzes its operating results with and without the impact of impairment charges and the effects of Hurricane Sandy.

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

(Unaudited)

 

Three months ended
April 30,

Nine months ended
April 30,

(In thousands, except per share data)

2014 2013 2014 2013
Service revenues and vehicle sales:
Service revenues $ 255,045 $ 223,977 $ 717,140 $ 636,076
Vehicle sales 54,677 53,661 158,899 146,613

Total service revenues and vehicle sales

309,722 277,638 876,039 782,689
Operating costs and expenses:
Yard operations 123,097 105,648 360,744 310,169
Cost of vehicle sales 46,263 45,631 135,996 124,146
Yard depreciation and amortization 8,110 10,762 27,665 30,524
Gross margin 132,252 115,597 351,634 317,850
General and administrative 35,856 28,750 110,770 86,186
General and administrative depreciation and amortization 4,659 4,034 12,684 11,724
Impairment of long-lived assets 29,104 29,104
Total operating expenses 247,089 194,825 676,963 562,749
Operating income 62,633 82,813 199,076 219,940
Other (expense) income:
Interest expense, net (2,023 ) (2,400 ) (6,226 ) (7,273 )
Other income 708 1,592 3,301 2,043
Total other expense (1,315 ) (808 ) (2,925 ) (5,230 )
Income before income taxes 61,318 82,005 196,151 214,710
Income taxes 20,441 28,769 68,507 75,989
Net income $ 40,877 $ 53,236 $ 127,644 $ 138,721
Earnings per share-basic
Basic net income per share $ 0.32 $ 0.42 $ 1.02 $ 1.11
 
Weighted average common shares outstanding 125,794 125,270 125,604 124,755
 
Earnings per share-diluted
Diluted net income per share $ 0.31 $ 0.41 $ 0.97 $ 1.07
Diluted weighted average common shares outstanding 131,486 130,530 131,095 129,502

 

 

Copart, Inc.

 

Condensed Consolidated Balance Sheets

 

(In thousands)

April 30,

2014

July 31,

2013

(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 132,832 $ 63,631
Accounts receivable, net 192,610 182,714
Vehicle pooling costs and inventories 32,216 31,202
Income taxes receivable 3,358 9,416
Deferred income taxes 4,950 2,216
Prepaid expenses and other assets 18,443 15,344
Assets held for sale 1,345 1,929
Total current assets 385,754 306,452
Property and equipment, net 685,707 677,517
Goodwill and intangibles, net 313,437 285,169
Deferred income taxes 33,971 30,117
Other assets 57,803 35,226
Total assets $ 1,476,672 $ 1,334,481
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 164,218 $ 136,648
Bank overdraft 16,291
Deferred revenue 5,146 4,832
Income taxes payable 11,207 4,741
Current portion of long-term debt and capital lease obligations 76,171 76,047
Total current liabilities 256,742 238,559
Deferred income taxes 7,494 8,071
Income taxes payable 25,378 23,091
Long-term debt and capital lease obligations 242,106 296,410
Other liabilities 5,191 5,949
Total liabilities 536,911 572,080
Commitments and contingencies
Stockholders’ equity:
Preferred stock
Common stock 13 13
Additional paid-in capital 393,225 368,769
Accumulated other comprehensive loss (21,829 ) (47,161 )
Retained earnings 568,352 440,780
Total stockholders’ equity 939,761 762,401
Total liabilities and stockholders’ equity $ 1,476,672 $ 1,334,481
 

Copart, Inc.

 

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 
Nine Months Ended
April 30,

(In thousands)

2014 2013
Cash flows from operating activities:
Net income $ 127,644 $ 138,721
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 40,349 42,248
Allowance for doubtful accounts 936 234
Impairment of long-lived assets 29,104
Stock-based compensation 17,262 14,671
Excess tax benefits from stock-based compensation (1,219 ) (6,164 )
Gain on sale of property and equipment (1,696 ) (922 )
Deferred income taxes (12,609 ) (3,372 )
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable (9,161 ) (24,414 )
Vehicle pooling costs and inventories (170 ) (4,304 )
Prepaid expenses and other current assets (3,539 ) (2,877 )
Other assets (12,133 ) (6,145 )
Accounts payable and accrued liabilities 15,269 21,966
Deferred revenue 316 15
Income taxes receivable 7,305 4,213
Income taxes payable 8,229 8,695
Other liabilities 1,747 438
Net cash provided by operating activities 207,634 183,003
 
Cash flows from investing activities:
Purchases of property and equipment including acquisitions (78,078 ) (145,508 )
Proceeds from sale of property and assets held for sale 3,271 5,470
Net cash used in investing activities (74,807 ) (140,038 )
 
Cash flows from financing activities:
Proceeds from the exercise of stock options 5,680 19,579
Excess tax benefit from stock-based payment compensation 1,219 6,164
Proceeds from the issuance of Employee Stock Purchase Plan shares 1,115 951
Change in bank overdraft (16,291 )
Principal payments on long-term debt (56,250 ) (56,255 )
Repurchases of common stock (80 ) (14,512 )
Net cash used in financing activities (64,607 ) (44,073 )
 
Effect of foreign currency translation 981 327
 
Net increase (decrease) in cash and cash equivalents 69,201 (781 )
 
Cash and cash equivalents at beginning of period 63,631 140,112
Cash and cash equivalents at end of period $ 132,832 $ 139,331
 
Supplemental disclosure of cash flow information:
Interest paid $ 6,599 $ 7,758
Income taxes paid $ 65,769 $ 68,179
 

Copart, Inc.

 

Additional Financial Information

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

 

(In thousands, except per share data)

Three months ended

April 30,

Nine months ended

April 30,

2014   2013 2014   2013
GAAP total revenue $ 309,722 $ 277,638 $ 876,039 $ 782,689
Effect of Hurricane Sandy     (12,736 )     (31,161)
Non-GAAP total revenue $ 309,722 $ 264,902 $ 876,039 $ 751,528
 
GAAP gross margin $ 132,252 $ 115,597 $ 351,634 $ 317,850
Effect of Hurricane Sandy     (5,494 )     4,392
Non-GAAP gross margin $ 132,252 $ 110,103 $ 351,634 $ 322,242
 
GAAP net income $ 40,877 $ 53,236 $ 127,644 $ 138,721
Impairment of long-lived assets, net of tax 19,402 18,939
Effect of Hurricane Sandy, net of tax     (3,567 )     2,838
Non-GAAP net income $ 60,279 $ 49,669 $ 146,583 $ 141,559
 
Earnings per share-diluted
GAAP diluted net income per share $ 0.31 $ 0.41 $ 0.97 $ 1.07
Non-GAAP diluted net income per share $ 0.46 $ 0.38 $ 1.12 $ 1.09
Diluted weighted average common shares outstanding   131,486   130,530   131,095   129,502

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
With more than 30 Kubernetes solutions in the marketplace, it's tempting to think Kubernetes and the vendor ecosystem has solved the problem of operationalizing containers at scale or of automatically managing the elasticity of the underlying infrastructure that these solutions need to be truly scalable. Far from it. There are at least six major pain points that companies experience when they try to deploy and run Kubernetes in their complex environments. In this presentation, the speaker will d...
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations might...
The deluge of IoT sensor data collected from connected devices and the powerful AI required to make that data actionable are giving rise to a hybrid ecosystem in which cloud, on-prem and edge processes become interweaved. Attendees will learn how emerging composable infrastructure solutions deliver the adaptive architecture needed to manage this new data reality. Machine learning algorithms can better anticipate data storms and automate resources to support surges, including fully scalable GPU-c...
When building large, cloud-based applications that operate at a high scale, it's important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. "Fly two mistakes high" is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Le...
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by ...
As Cybric's Chief Technology Officer, Mike D. Kail is responsible for the strategic vision and technical direction of the platform. Prior to founding Cybric, Mike was Yahoo's CIO and SVP of Infrastructure, where he led the IT and Data Center functions for the company. He has more than 24 years of IT Operations experience with a focus on highly-scalable architectures.
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
CI/CD is conceptually straightforward, yet often technically intricate to implement since it requires time and opportunities to develop intimate understanding on not only DevOps processes and operations, but likely product integrations with multiple platforms. This session intends to bridge the gap by offering an intense learning experience while witnessing the processes and operations to build from zero to a simple, yet functional CI/CD pipeline integrated with Jenkins, Github, Docker and Azure...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
Dhiraj Sehgal works in Delphix's product and solution organization. His focus has been DevOps, DataOps, private cloud and datacenters customers, technologies and products. He has wealth of experience in cloud focused and virtualized technologies ranging from compute, networking to storage. He has spoken at Cloud Expo for last 3 years now in New York and Santa Clara.
Enterprises are striving to become digital businesses for differentiated innovation and customer-centricity. Traditionally, they focused on digitizing processes and paper workflow. To be a disruptor and compete against new players, they need to gain insight into business data and innovate at scale. Cloud and cognitive technologies can help them leverage hidden data in SAP/ERP systems to fuel their businesses to accelerate digital transformation success.
Containers and Kubernetes allow for code portability across on-premise VMs, bare metal, or multiple cloud provider environments. Yet, despite this portability promise, developers may include configuration and application definitions that constrain or even eliminate application portability. In this session we'll describe best practices for "configuration as code" in a Kubernetes environment. We will demonstrate how a properly constructed containerized app can be deployed to both Amazon and Azure ...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
Predicting the future has never been more challenging - not because of the lack of data but because of the flood of ungoverned and risk laden information. Microsoft states that 2.5 exabytes of data are created every day. Expectations and reliance on data are being pushed to the limits, as demands around hybrid options continue to grow.