Copart Reports Fourth Quarter and Fiscal 2005 Financial Results
FAIRFIELD, Calif.--Sept. 28, 2005--Copart, Inc. today reported results for the fourth quarter and fiscal year ended July 31, 2005.In the fourth quarter of fiscal 2005 Copart earned net income of $25.0 million on revenues of $112.6 million. In the same period last year the company earned $21.4 million on revenues of $100.1 million. These represent increases in net income and revenue of 17% and 12%, respectively. Fully diluted earnings per share (EPS) for the quarter was $.27 compared to $.23 last year, an increase of 17%.
For fiscal 2005 Copart earned net income of $102.1 million on revenues of $457.1 million. In the same period last year the company earned $79.2 million on revenues of $400.8 million. These represent increases in net income and revenue of 29% and 14%, respectively. Fully diluted earnings per share for the twelve months was $1.10 compared to $.87 last year, an increase of 26%.
Included in the results of the prior year's fourth quarter was a net positive adjustment relating to accruals for insurance claims and sales taxes totaling $3.6 million, pretax. These adjustments had a positive impact on our diluted EPS for that quarter and for the 2004 fiscal year of $.02.
We have reviewed our revenue recognition policy relative to EITF 00-21 Revenue Arrangements with Multiple Deliverables and SAB 104 Revenue Recognition and determined that the recognition of revenue for certain fees should be deferred. Specifically, certain seller fees which were previously recognized at the time of the auction are now recognized when the payment is received from the buyer, buyer relist fees which were previously recognized when assessed are now recognized when payment is received, and certain post auction services which were recognized at the time of the auction are now recognized when performance is complete. The Company recorded a cumulative adjustment to reflect this deferral, the effect of which was to reduce revenue, net income and diluted earnings per share by $4.4 million, $1.5 million and $.01, respectively for the fourth quarter and fiscal year ended July 31, 2005. As this adjustment is cumulative to this fiscal year, future results will not be affected by this change.
On Thursday, September 29, 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=vlllrswnwclvlcmxx. A replay of the call will be available through October 5, 2005 by calling (888) 203-1112, use confirmation code #7053804.
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 120 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,
2005 2004
----------------------------------------------------------------------
Revenues $ 112,561 $ 100,077
---------- ----------
Operating costs and expenses:
Yard and fleet 54,953 49,097
General and administrative 12,381 9,244
Depreciation and amortization 7,795 7,676
---------- ----------
Total operating expenses 75,129 66,017
---------- ----------
Operating income 37,432 34,060
---------- ----------
Other income (expense):
Interest income, net 1,823 582
(Loss)/gain on sale of fleet equipment (7) 169
Other income 632 832
---------- ----------
Total other income 2,448 1,583
---------- ----------
Income before income taxes 39,880 35,643
---------- ----------
Income taxes 14,874 14,195
---------- ----------
Net income $ 25,006 $ 21,448
========== ==========
Basic net income per share $ .28 $ .24
========== ==========
Weighted average shares outstanding 90,267 89,937
========== ==========
Diluted net income per share $ .27 $ .23
========== ==========
Weighted average shares and dilutive potential
common shares outstanding 93,257 92,821
========== ==========
Consolidated Statements of Income -- 2
(Dollars in thousands, except per share data)
Fiscal Year Ended
July 31,
2005 2004
----------------------------------------------------------------------
Revenues $ 457,111 $ 400,796
---------- ----------
Operating costs and expenses:
Yard and fleet 225,816 208,757
General and administrative 42,370 36,466
Depreciation and amortization 32,049 30,808
---------- ----------
Total operating expenses 300,235 276,031
---------- ----------
Operating income 156,876 124,765
---------- ----------
Other income (expense):
Interest income, net 4,857 1,506
(Loss)/gain on sale of fleet
equipment (56) 1,359
Other income 3,410 2,666
---------- ----------
Total other income 8,211 5,531
---------- ----------
Income before income taxes 165,087 130,296
---------- ----------
Income taxes 62,953 51,076
---------- ----------
Net income $ 102,134 $ 79,220
========== ==========
Basic net income per share $ 1.13 $ .89
========== ==========
Weighted average shares outstanding 90,162 89,457
========== ==========
Diluted net income per share $ 1.10 $ .87
========== ==========
Weighted average shares and dilutive
potential common shares outstanding 92,984 91,537
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Other Data
Number of auction facilities 117 107
Consolidated Balance Sheets -- 3
(in thousands, except share data)
July 31, July 31,
2005 2004
----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 252,548 $ 5,720
Short-term investments - 172,600
Accounts receivable, net 91,323 81,633
Vehicle pooling costs 25,431 23,966
Prepaid expenses and other assets 6,826 5,437
Equipment held for sale - 3,755
---------- ----------
Total current assets 376,128 293,111
Land purchase options and other assets 6,138 6,613
Property and equipment, net 292,949 257,667
Intangibles, net 1,938 2,941
Goodwill 115,622 112,691
---------- ----------
Total assets $ 792,775 $ 673,023
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 56,193 $ 44,080
Deferred revenue 12,477 9,721
Income taxes payable 6,847 3,819
Deferred income taxes 3,487 5,438
Other current liabilities 126 165
---------- ----------
Total current liabilities 79,130 63,223
Deferred income taxes 2,987 6,355
Other liabilities 1,160 1,182
---------- ----------
Total liabilities 83,277 70,760
---------- ----------
Commitments and contingencies
Shareholders' equity:
Common stock, no par value -- 180,000,000
shares authorized; 90,337,643 and
90,075,843 shares issued and outstanding
at July 31, 2005 and 2004, respectively 272,118 267,276
Accumulated other comprehensive income 354 95
Retained earnings 437,026 334,892
---------- ----------
Total shareholders' equity 709,498 602,263
---------- ----------
Total liabilities and shareholders'
equity $ 792,775 $ 673,023
========== ==========
Consolidated Cash Flows -- 4
(in thousands)
Three Months Ended
July 31,
2005 2004
----------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 25,006 $ 21,448
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 7,795 7,676
Allowance for doubtful accounts (829) 645
Deferred rent (100) (21)
Gain on sale of fleet equipment and
other property and equipment (55) (226)
Deferred income taxes (7,051) (2,552)
Changes in operating assets and
liabilities:
Accounts receivable 3,957 2,219
Vehicle pooling costs (484) 692
Prepaid expenses and other current
assets 369 1,880
Land purchase options and other
assets 505 (345)
Accounts payable and accrued
liabilities 6,166 (3,266)
Deferred revenue (265) (168)
Income taxes (2,735) (4,452)
---------- ----------
Net cash provided by operating
activities 32,279 23,530
---------- ----------
Cash flows from investing activities:
Purchase of short-term investments (414,400) (28,825)
Sale of short-term investments 414,400 16,575
Purchase of property and equipment (24,087) (13,521)
Proceeds from sale of property and
equipment 129 3,263
Purchase of net current assets in
connection with acquisitions (201) (713)
Purchase of property and equipment in
connection with acquisitions (79) (41)
Purchase of goodwill and intangible assets
in connection with acquisitions (901) (3,139)
Other net intangible asset changes - 58
---------- ----------
Net cash used in investing
activities (25,139) (26,343)
---------- ----------
Cash flows from financing activities:
Proceeds from the exercise of stock options 710 2,474
Proceeds from the issuance of Employee
Stock
Purchase Plan shares 782 647
---------- ----------
Net cash provided by financing
activities 1,492 3,121
---------- ----------
Effect of foreign currency translation 13 123
---------- ----------
Net increase in cash and cash
equivalents 8,645 431
Cash and equivalents at beginning of period 243,903 5,289
---------- ----------
Cash and equivalents at end of period $ 252,548 $ 5,720
========== ==========
Supplemental disclosure of cash flow
information:
Interest paid $ 61 $ 0
========== ==========
Income taxes paid $ 25,279 $ 21,194
========== ==========
Consolidated Cash Flows -- 5
(in thousands)
Years Ended July 31,
2005 2004
----------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 102,134 $ 79,220
Adjustments to reconcile net income
net cash provided by operating activities:
Depreciation and amortization 32,049 30,808
Allowance for doubtful accounts (517) 760
Deferred rent (14) (74)
Gain on sale of fleet equipment and
other property and equipment (752) (1,239)
Deferred income taxes (5,320) (122)
Changes in operating assets and
liabilities:
Accounts receivable (8,882) (10,629)
Vehicle pooling costs (1,251) (375)
Prepaid expenses and other current
assets (1,390) 400
Land purchase options and other
assets 476 1,244
Accounts payable and accrued
liabilities 12,478 5,663
Deferred revenue 2,757 13
Income taxes 4,223 9,441
---------- ----------
Net cash provided by operating
activities 135,991 115,110
---------- ----------
Cash flows from investing activities:
Purchase of short-term investments (755,420) (140,180)
Sale of short-term investments 928,020 78,935
Purchase of property and equipment (66,258) (64,551)
Proceeds from sale of property and
equipment 5,649 19,891
Purchase of net current assets in
connection with acquisitions (504) (867)
Purchase of property and equipment in
connection with acquisitions (79) (41)
Purchase of goodwill and intangible assets
in connection with acquisitions (3,960) (3,825)
Other net intangible asset changes - 58
---------- ----------
Net cash provided by (used in)
investing activities 107,448 (110,580)
---------- ----------
Cash flows from financing activities:
Proceeds from the exercise of stock options 1,791 5,082
Proceeds from the issuance of Employee
Stock Purchase Plan shares 1,444 1,345
Repurchases of common stock - (10,723)
---------- ----------
Net cash provided by (used in)
financing activities 3,235 (4,296)
---------- ----------
Effect of foreign currency translation 154 95
---------- ----------
Net increase in cash and cash equivalents 246,828 329
Cash and equivalents at beginning of period 5,720 5,391
---------- ----------
Cash and equivalents at end of period $ 252,548 $ 5,720
========== ==========
Supplemental disclosure of cash flow
information:
Interest paid 62 3
========== ==========
Income taxes paid $ 64,670 $ 41,753
========== ==========