Copart Reports First Quarter Financial Results
FAIRFIELD, Calif.--Dec. 2, 2005--Copart, Inc. today reported results for the quarter ended October 31, 2005, the first quarter of its 2006 fiscal year.In the quarter Copart earned net income of $22.8 million on revenues of $119.0 million. In the same period last year the Company earned $22.7 million on revenues of $104.1 million. During the quarter revenue increased 14% over the same period last year. Fully diluted earnings per share (EPS) for the current quarter was $.25 compared to $.24 last year. Included in the quarter is virtually no revenue from the sale of vehicles assigned to the Company as a result of hurricanes Katrina and Rita. The Company has been assigned a substantial number of vehicles as a result of the hurricanes, and revenue from disposition of these vehicles will be realized in succeeding quarters.
The operating results for the current quarter were adversely affected by additional costs incurred as a result of hurricanes Katrina and Rita. These additional costs, characterized as "abnormal" in FAS 151: Inventory Costs, were recognized in the current quarter and resulted in an increase in yard expense. These costs include the additional subhauling, payroll, equipment and facilities expenses directly related to the operating conditions created by the hurricanes and will continue. These costs do not include the normal expenses associated with the increased unit volume created by the hurricanes, which are deferred until the sale of the unit and are reflected in vehicle pooling costs on the balance sheet. At the end of the quarter, substantially all the vehicles received as a result of the hurricanes were unsold. The normal costs that have been capitalized will be recognized as yard expense as the vehicles are sold. Legislation currently pending in Louisiana, which we expect to be enacted, would require that vehicles suffering water damage to the powertrain, computer, or electrical systems as a result of the hurricanes can only be dismantled or crushed. As a result, enactment of this legislation could have an adverse effect on selling prices for vehicles received from Louisiana as a result of the hurricanes, which could have an adverse effect on margins until the hurricane-damaged vehicles are sold.
Copart, founded in 1982, provides vehicle suppliers, primarily insurance companies, with a full range of services to process and sell salvage vehicles through a completely virtual auction-style trading platform, 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 124 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 October 31,
2005 2004
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Revenues $ 119,025 $ 104,110
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Operating costs and expenses:
Yard operations (including depreciation
of $6,234 and $6,657 in 2005 and 2004,
respectively) 70,969 59,381
General and administrative (including
depreciation of $1,058 and $948 in
2005 and 2004, respectively) 13,830 9,661
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Total operating expenses 84,799 69,042
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Operating income 34,226 35,068
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Other income (expense):
Interest income, net 1,779 779
Gain on sale of fleet equipment - 125
Other income 643 1,070
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Total other income 2,422 1,974
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Income before income taxes 36,648 37,042
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Income taxes 13,835 14,372
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Net income $ 22,813 $ 22,670
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Basic net income per share $ .25 $ .25
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Weighted average shares outstanding 90,385 90,081
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Diluted net income per share $ .25 $ .24
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Weighted average shares and dilutive
potential common shares outstanding 92,730 92,634
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Other Data
Number of auction facilities 120 107
Copart, Inc.
Consolidated Balance Sheets -- 2
(in thousands, except share data)
October 31, July 31,
2005 2005
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ASSETS
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Current assets:
Cash and cash equivalents $ 105,768 $ 252,548
Short-term investments 149,720 -
Accounts receivable, net 92,194 89,003
Vehicle pooling costs 29,920 25,983
Prepaid expenses and other assets 10,909 8,594
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Total current assets 388,511 376,128
Deferred income taxes 676 -
Property and equipment, net 306,917 292,949
Intangibles, net 1,913 1,938
Goodwill 119,306 116,375
Land purchase options and other assets 11,239 6,138
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Total assets $ 828,562 $ 793,528
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
Accounts payable and accrued liabilities $ 56,247 $ 56,965
Deferred revenue 14,989 12,477
Income taxes payable 15,498 7,248
Deferred income taxes 5,444 3,295
Other current liabilities 133 126
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Total current liabilities 92,311 80,111
Deferred income taxes - 2,878
Other liabilities 1,094 1,160
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Total liabilities 93,405 84,149
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Commitments and contingencies
Shareholders' equity:
Common stock, no par value - 180,000,000
shares authorized; 90,446,076 and
90,337,643 shares issued and outstanding
at October 31, 2005 and July 31, 2005,
respectively 274,968 272,017
Accumulated other comprehensive income 368 354
Retained earnings 459,821 437,008
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Total shareholders' equity 735,157 709,379
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Total liabilities and shareholders'
equity $ 828,562 $ 793,528
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