Copart Reports Fourth Quarter and Fiscal 2004 Financial Results
FAIRFIELD, Calif.--Sept. 14, 2004--Copart, Inc. today reported results for the fourth quarter and fiscal year ended July 31, 2004.In the fourth quarter of fiscal 2004 Copart earned net income of $21.4 million on revenues of $100.1 million. In the same period last year the company earned $13.3 million on revenues of $87.2 million. These represent increases in net income and revenue of 61% and 15%, respectively. Fully diluted earnings per share (EPS) for the quarter was $.23 compared to $.15 last year, an increase of 53%.
For fiscal 2004 Copart earned net income of $79.2 million on revenues of $400.8 million. In the same period last year the company earned $57.2 million on revenues of $347.4 million. These represent increases in net income and revenue of 38% and 15%, respectively. Fully diluted earnings per share for the twelve months was $.87 compared to $.62 last year, an increase of 40%.
Included in our fourth quarter results are net positive adjustments relating to accruals for insurance claims and sales taxes totaling $3.6 million, pretax. These adjustments had a corresponding positive impact on our net income and EPS for the quarter and the fiscal year. In particular, the adjustments had a favorable EPS effect of $0.02 for the quarter and the fiscal year.
"VB2 continues to prove that its unique method within the marketplace removes barriers between buyers and sellers," states A. Jayson Adair, President of Copart. "Sales of vehicles during the fourth quarter to buyers outside the state where the vehicle is located accounted for 43% of total vehicles sold; 25% out of state and 18% out of country."
One example of the breadth and versatility of VB2 occurred recently in Florida. VB2 allowed Copart's Tampa, Florida facility to complete its scheduled sale despite being engulfed by Hurricane Charlie. On the day that Charlie struck the Tampa area, with the facility closed and all employees evacuated, 448 vehicles were sold to buyers throughout the world. Of the 448 vehicles sold, 11% were sold to buyers outside the state, and 30% were sold to buyers outside the United States.
"VB2 removes barriers between our vehicle suppliers and buyers navigating the virtual marketplace," concluded Mr. Adair.
On Wednesday, September 15, 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 https://cis.premconf.com/sc/scw.dll/usr?cid=vlllrwznmmnvmrlrz. A replay of the call will be available through September 21, 2004 by calling (888) 203-1112, use confirmation code #977046.
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 107 facilities in the United States and Canada. It also provides services in other locations through its national network of independent salvage vehicle processors.
Copart, Inc.
Consolidated Statements of Income -- 1
(Dollars in thousands, except per share data)
Three Months Ended July 31,
2004 2003
------------ ------------
Revenues $100,076 $87,216
------------ ------------
Operating costs and expenses:
Yard and fleet 49,097 51,331
General and administrative 9,245 7,720
Depreciation and amortization 7,676 7,153
------------ ------------
Total operating expenses 66,018 66,204
------------ ------------
Operating income 34,058 21,012
------------ ------------
Other income (expense):
Interest income, net 582 359
Gain on sale of fleet equipment 169 45
Other income 832 448
------------ ------------
Total other income 1,583 852
------------ ------------
Income before income taxes 35,641 21,864
------------ ------------
Income taxes 14,195 8,527
------------ ------------
Net income $21,446 $13,337
============ ============
Basic net income per share $.24 $.15
============ ============
Weighted average shares outstanding 89,937 89,814
============ ============
Diluted net income per share $.23 $.15
============ ============
Weighted average shares and dilutive
potential common shares outstanding 92,821 91,342
============ ============
Consolidated Statements of Income -- 2
(Dollars in thousands, except per share data)
Fiscal Year Ended July 31,
2004 2003
------------- -------------
Revenues $400,796 $347,423
------------- -------------
Operating costs and expenses:
Yard and fleet 208,757 202,420
General and administrative 36,466 28,703
Depreciation and amortization 30,808 25,545
------------- -------------
Total operating expenses 276,031 256,668
------------- -------------
Operating income 124,765 90,755
------------- -------------
Other income:
Interest income, net 1,506 1,630
Gain on sale of fleet equipment 1,359 255
Other income 2,666 1,527
------------- -------------
Total other income 5,531 3,412
------------- -------------
Income before income taxes 130,296 94,167
------------- -------------
Income taxes 51,076 36,945
------------- -------------
Net income $79,220 $57,222
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Basic net income per share $.89 $.63
============= =============
Weighted average shares outstanding 89,457 91,408
============= =============
Diluted net income per share $.87 $.62
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Weighted average shares and dilutive
potential common shares outstanding 91,537 93,018
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Other Data
Number of auction facilities 107 102
Consolidated Balance Sheets -- 3
(in thousands, except share data)
July 31, July 31,
2004 2003
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $178,320 $116,746
Accounts receivable, net 81,633 71,553
Vehicle pooling costs 23,966 23,381
Income taxes receivable - 4,018
Prepaid expenses and other assets 5,437 5,391
Equipment held for sale 3,755 -
--------- ---------
Total current assets 293,111 221,089
Other assets 6,613 8,132
Property and equipment, net 257,667 244,361
Intangibles, net 2,941 4,404
Goodwill 112,691 109,114
--------- ---------
Total assets $673,023 $587,100
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $7 $91
Accounts payable and accrued liabilities 44,080 38,309
Deferred revenue 9,721 9,708
Income taxes payable 3,819 -
Deferred income taxes 5,438 5,902
Other current liabilities 158 174
--------- ---------
Total current liabilities 63,223 54,184
Deferred income taxes 6,355 6,014
Long-term debt, less current portion 9 16
Other liabilities 1,173 1,247
--------- ---------
Total liabilities 70,760 61,461
--------- ---------
Commitments and contingencies
Shareholders' equity:
Common stock, no par value - 180,000,000 shares
authorized; 90,075,843 and 89,883,412 shares
issued and outstanding at July 31, 2004 and
2003, respectively 267,276 269,968
Accumulated other comprehensive gain 95 -
Retained earnings 334,892 255,671
--------- ---------
Total shareholders' equity 602,263 525,639
--------- ---------
Total liabilities and shareholders' equity $673,023 $587,100
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Consolidated Cash Flows -- 4
(in thousands)
Three Months Ended
July 31,
2004 2003
---------- ---------
Cash flows from operating activities:
Net income $21,449 $ 13,336
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 7,676 7,153
Allowance for doubtful accounts 645 (175)
Deferred rent (21) (153)
Gain on sale of fleet equipment and other
property and equipment (227) (2)
Deferred income taxes (2,552) 1,322
Changes in operating assets and liabilities:
Accounts receivable 2,219 (3,717)
Vehicle pooling costs 692 (1,537)
Prepaid expenses and other current assets 1,880 1,119
Other non current assets (345) (121)
Accounts payable and accrued liabilities (3,264) 3,308
Deferred revenue (168) 750
Income taxes (4,452) (7,701)
---------- ---------
Net cash provided by operating activities 23,532 13,582
---------- ---------
Cash flows from investing activities:
Purchase of property and equipment (13,521) (8,806)
Proceeds from sale of property and equipment 3,263 134
Purchase of net current assets in connection
with acquisitions (713) 192
Purchase of property and equipment in
connection with acquisitions (41) -
Purchase of goodwill and intangible assets in
connection with acquisitions (3,139) -
Intangibles, net 58 -
---------- ---------
Net cash used in investing activities (14,093) (8,480)
---------- ---------
Cash flows from financing activities:
Proceeds from the exercise of stock options 2,474 37
Proceeds from the issuance of Employee Stock
Purchase Plan shares 647 795
Principal payments on notes payable (2) (85)
---------- ---------
Net cash provided by financing activities 3,119 747
---------- ---------
Effect of foreign currency translation 123 -
---------- ---------
Net increase in cash and cash equivalents 12,681 5,849
Cash and equivalents at beginning of period 165,639 110,897
---------- ---------
Cash and equivalents at end of period $178,320 $116,746
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Supplemental disclosure of cash flow information:
Interest paid $0 $3
========== =========
Income taxes paid $21,194 $14,936
========== =========
Consolidated Cash Flows -- 5
(in thousands)
Years Ended July 31,
2004 2003
---------- ----------
Cash flows from operating activities:
Net income $79,220 $57,222
Adjustments to reconcile net income net cash
provided by operating activities:
Depreciation and amortization 30,808 25,545
Allowance for doubtful accounts 760 (175)
Deferred rent (74) (189)
Gain on sale of fleet equipment and other
property and equipment (1,239) (190)
Deferred income taxes (122) 7,206
Changes in operating assets and liabilities:
Accounts receivable (10,629) (7,447)
Vehicle pooling costs (375) (3,332)
Prepaid expenses and other current assets 400 (226)
Other non current assets 1,244 (915)
Accounts payable and accrued liabilities 5,754 6,497
Deferred revenue 13 1,356
Income taxes 9,441 (6,272)
---------- ----------
Net cash provided by operating
activities 115,201 79,080
---------- ----------
Cash flows from investing activities:
Purchase of property and equipment (64,551) (70,721)
Proceeds from sale of property and equipment 19,891 808
Purchase of net current assets in connection
with acquisitions (867) (92)
Purchase of property and equipment in
connection with acquisitions (41) (301)
Purchase of goodwill and intangible assets in
connection with acquisitions (3,825) (6,211)
Intangibles, net 58 -
---------- ----------
Net cash used in investing activities (49,335) (76,517)
---------- ----------
Cash flows from financing activities:
Proceeds from the exercise of stock options 5,082 397
Proceeds from the issuance of Employee Stock
Purchase Plan shares 1,345 1,873
Repurchases of common stock (10,723) (20,447)
Principal payments on notes payable (91) (330)
---------- ----------
Net cash used in financing activities (4,387) (18,507)
---------- ----------
Effect of foreign currency translation 95 -
---------- ----------
Net increase (decrease) in cash and cash
equivalents 61,574 (15,944)
Cash and equivalents at beginning of period 116,746 132,690
---------- ----------
Cash and equivalents at end of period $178,320 $116,746
========== ==========
Supplemental disclosure of cash flow
information:
Interest paid $3 $21
========== ==========
Income taxes paid $41,753 $36,002
========== ==========