Copart Achieves Record Profitability
BENICIA, Calif.--Sept. 17, 2002--Copart, Inc. today reported record profits for the fourth quarter and fiscal year ended July 31, 2002.Copart earned net income of $15,535,000 in the fourth quarter of fiscal 2002, generating a 13% increase in earnings per share over Q4 2001 to $.17 per diluted share on revenues of $82,632,600. In the fourth quarter of fiscal 2001, Copart earned net income of $12,931,400, or $.15 per diluted share, on revenues of $68,631,200.
For fiscal 2002, Copart earned net income of $57,389,200, or $.63 per diluted share, on revenues of $316,455,800. Copart reported net income of $42,685,000, or $.50 per diluted share, on revenues of $253,889,400 for fiscal 2001.
"We are very pleased with our performance this quarter and for the year," said A. Jayson Adair, Copart's president. "Fiscal 2002 revenues grew by 25% and annual earnings per share grew by 26% compared to last year thanks to great results from innovations like virtual bidding coupled with strong same-store sales growth and the contribution from new stores. In the fourth quarter, same-store sales grew by 15%, and they increased by 20% for the entire fiscal year."
As discussed last quarter, the company has adopted the provisions of Financial Accounting Standards Board (FASB) No.142 regarding goodwill amortization. Accordingly, the company no longer amortizes goodwill from business acquisitions. The current effect of this accounting change is to eliminate approximately $2.6 million of annual goodwill amortization. The effect on the current quarter was a reduction of amortization expense by approximately $668,700. On a pro forma basis, if Copart had applied FASB No. 142 during the corresponding quarter a year ago, amortization expense would be reduced by approximately $610,400 and basic earnings per share would have remained unchanged from the reported $.16 and diluted earnings per share would have remained unchanged from the reported $.15.
The Company is also making public that its diluted earnings per share forecast for the first quarter ending October 31, 2002, is approximately 16 cents. For the fiscal year ending July 31, 2003, our May 2002 forecast assumed a return of normal weather patterns and market share gains similar to those achieved in prior years. Due to an increasingly competitive market and the forecast by the National Oceanic and Atmosphere Administration (NOAA) for the current drought conditions affecting nearly half of the country to continue into March 2003, the company currently estimates that its annual earnings growth rate will be approximately 10% to 15%. The company will update its earnings forecast as circumstances change.
On Wednesday, September 18, 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 vcall.com. A replay of the call will be available through September 25, by calling (877) 660-6853 with account number 1628 and call ID 43638.
Copart, founded in 1982, provides vehicle suppliers, primarily insurance companies, with a full range of services to process and sell salvage vehicles through auctions, principally to licensed dismantlers, rebuilders and used vehicle dealers. Salvage vehicles are either damaged vehicles deemed a total loss for insurance or business purposes or are recovered stolen vehicles for which an insurance settlement with the vehicle owner has already been made. The Company operates 96 facilities in 40 states. It also provides services in other locations through its national network of independent salvage vehicle processors.
NOTE: This press release contains forward-looking statements within the meaning of federal securities laws, including statements concerning our projected earnings and earnings growth rates. Our actual results could differ materially from those projected in these forward-looking statements as a result of a number of factors, many of which are outside our control. In particular, our inventory levels and revenues are highly dependent on weather conditions in the United States, and we experience seasonality in our business as a result of changing weather conditions and related fluctuations in vehicle accident rates. Weather conditions in the last nine months have been generally mild, and continued mild weather could adversely affect our inventory levels, revenues, and operating results. Our historical revenue and earnings growth rates have been relatively high, reflecting both internal growth of our salvage business as well as growth through acquisitions. We may not be able to maintain these revenue and earnings growth rates as our business becomes larger. We are investing in new but related businesses such as auto auctions, but revenues from these businesses have been modest relative to our total revenues, and we cannot predict what effect they will have on our future revenues or growth rates. We depend on a limited number of major suppliers of salvage vehicles. If we are unable to maintain these supply relationships, our revenues and operating results would be adversely affected. In addition, our revenues, operating results, financial condition, and growth rates are subject to numerous other risks, including our ability to complete and integrate new acquisitions, environmental and regulatory risks, and the other factors described under the caption "Factors that may effect future results" in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We encourage investors to review these disclosures carefully.
Copart, Inc.
Consolidated Statements of Income -- 1
(Dollars in thousands, except per share data)
Three Months Ended July 31,
2002 2001
-------- --------
Revenues $ 82,633 $ 68,631
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Operating costs and expenses:
Yard and fleet 47,575 39,363
General and administrative 5,846 5,082
Depreciation and amortization 4,907 3,917
-------- --------
Total operating expenses 58,328 48,362
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Operating income 24,305 20,269
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Other income:
Interest income, net 612 342
Other income 587 1,086
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Total other income 1,199 1,428
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Income before income taxes 25,504 21,697
-------- --------
Income taxes 9,969 8,766
-------- --------
Net income $ 15,535 $ 12,931
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Basic net income per share $ .17 $ .16
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Weighted average shares outstanding 91,614 82,855
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Diluted net income per share $ .17 $ .15
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Weighted average shares and
dilutive potential common
shares outstanding 94,046 85,813
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Other Data
Gross proceeds $305,674 $279,244
Number of auction facilities 96 84
Copart, Inc.
Consolidated Statements of Income - 2
(Dollars in thousands, except per share data)
Fiscal Year Ended July 31,
2002 2001
Revenues $316,456 $253,889
-------- --------
Operating costs and expenses:
Yard and fleet 186,952 152,052
General and administrative 23,256 19,370
Depreciation and amortization 16,308 14,350
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Total operating expenses 226,516 185,772
-------- --------
Operating income 89,940 68,117
-------- --------
Other income:
Interest income, net 1,830 1,004
Other income 1,888 1,923
-------- --------
Total other income 3,718 2,927
-------- --------
Income before income taxes 93,658 71,044
-------- --------
Income taxes 36,269 28,359
-------- --------
Net income $ 57,389 $ 42,685
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Basic net income per share $ .65 $ .52
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Weighted average shares outstanding 88,718 82,340
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Diluted net income per share $ .63 $ .50
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Weighted average shares and dilutive
potential common shares outstanding 91,251 84,614
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Other Data
Gross proceeds $ 1,208,795 $ 1,054,169
Number of auction facilities 96 84
Consolidated Balance Sheets -- 3
(in thousands, except share data)
As of July 31,
2002 2001
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ASSETS
Current Assets:
Cash and cash equivalents $ 132,690 $ 15,245
Accounts receivable, net 64,072 64,907
Vehicle pooling costs 20,014 19,846
Prepaid expenses and other assets 9,216 7,866
---------- ----------
Total current assets 225,992 107,864
Deferred income taxes - 1,084
Property and equipment, net 197,769 114,998
Intangibles and other assets, net 9,167 8,365
Goodwill 102,920 82,753
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Total assets $ 535,848 $ 315,064
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of
long-term debt $ 325 $ 303
Accounts payable and
accrued liabilities 31,894 26,770
Deferred revenue 8,352 8,863
Income taxes payable 2,632 4,975
Deferred income taxes 3,647 2,982
Other current liabilities 198 197
----------- -----------
Total current liabilities 47,048 44,090
Deferred income taxes 1,063 -
Long-term debt, less
current portion 85 409
Other liabilities 1,436 1,413
----------- -----------
Total liabilities 49,632 45,912
Shareholders' equity:
Common stock, no par value
- 180,000,000 shares authorized;
92,239,900 and 83,000,445 shares
issued and outstanding at July 31,
2002 and 2001, respectively 287,767 128,092
Retained earnings 198,449 141,060
----------- -----------
Total shareholders' equity 486,216 269,152
----------- -----------
Commitments and contingencies
Total liabilities and
shareholders' equity $ 535,848 $ 315,064
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