Copart Reports Fourth Quarter Financial Results
FAIRFIELD, Calif.--Copart, Inc. the largest provider of vehicle salvage disposition services in the United States, today reported results for the fourth quarter and fiscal year ended July 31, 2006.
During the three months ended July 31, 2006, revenue and income from continuing operations were $137.2 million and $30.8 million, respectively. This represents a growth in revenue of $26.6 million or 24% and a growth in income from continuing operations of $5.7 million or 23% over the same quarter last year. Fully diluted earnings per share (EPS) from continuing operations for the three months were $.33 compared to $.27 last year, an increase of 22%.
For the fiscal year ended July 31, 2006, revenue and income from continuing operations were $528.6 million and $112.7 million, respectively. This represents a growth in revenue of $80.8 million or 18% and a growth in income from continuing operations of $10.8 million or 11% over the same period last year. Fully diluted earnings per share (EPS) from continuing operations for the fiscal year were $1.21 compared to $1.10 for the same period last year, an increase of 10%. Including the loss of $.17 per share from discontinued operations, fully diluted EPS for the fiscal year ended July 31, 2006 was $1.04, a decrease of $.06, or 5%.
Salvage same store sales, sales from stores owned or open more than twelve months, increased by 21% and 16% for the three and twelve months ended July 31, 2006, respectively. Excluding the incremental revenue generated by the hurricanes, the growth in same store sales would have been 11% for both the three and twelve months ended July 31, 2006.
The operating results for the quarter and the twelve-month period were adversely affected by incremental costs incurred as a result of hurricanes Katrina and Rita. These additional inventory-type costs, characterized as “abnormal” and charged to yard operations costs, were approximately $2.1 million and $14.1 million for the three and twelve months ended July 31, 2006, respectively. 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 normal expenses associated with the increased unit volume created by the hurricanes, which are deferred until the sale of the units and are recognized as vehicle pooling costs on the balance sheet. At the end of the quarter, approximately 28% of the incremental salvage vehicles received as a result of the hurricanes remained unsold and in inventory. We expect the majority of these vehicles to be disposed in the next two quarters. The processing of the hurricane vehicles has had and may continue to have a negative impact on gross and operating margin percentages.
On Thursday, October 5, 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=vlllrznxzzzvsrddn. A replay of the call will be available through October 11, 2006 by calling (888) 203-1112. Use confirmation code #9542186.
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 122 facilities in the United States and Canada. It also provides services in other locations through its national network of independent salvage vehicle processors.
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Copart, Inc. |
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Three months ended |
Twelve months ended |
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| 2006 | 2005 | 2006 | 2005 | |||||||||
| Revenues | $ | 137,220 | $ | 110,576 | $ | 528,571 | $ | 447,731 | ||||
| Operating costs and expenses: | ||||||||||||
| Yard operations | 74,244 | 59,300 | 298,023 | 245,666 | ||||||||
| General and administrative | 15,779 | 13,675 | 58,986 | 45,629 | ||||||||
| Total operating expenses | 90,023 | 72,975 | 357,009 | 291,295 | ||||||||
| Operating income | 47,197 | 37,601 | 171,562 | 156,436 | ||||||||
| Other income (expense): | ||||||||||||
| Interest income, net | 2,724 | 1,816 | 8,110 | 4,848 | ||||||||
| Other income, net | 136 | 622 | 1,634 | 3,312 | ||||||||
| Equity in losses of unconsolidated investment | (4,357) | — | (6,784) | — | ||||||||
| Total other income (expense) | (1,497) | 2,438 | 2,960 | 8,160 | ||||||||
| Income from continuing operations before income taxes | 45,700 | 40,039 | 174,522 | 164,596 | ||||||||
| Income taxes | 14,912 | 14,940 | 61,862 | 62,772 | ||||||||
| Income from continuing operations | 30,788 | 25,099 | 112,660 | 101,824 | ||||||||
| Discontinued operations: | ||||||||||||
| Income (loss) from discontinued operations, net of income tax effects | 785 | (110) | (15,713) | 293 | ||||||||
| Net income | $ | 31,573 | $ | 24,989 | $ | 96,947 | $ | 102,117 | ||||
| Earnings per share-basic | ||||||||||||
| Income from continuing operations | $ | 0.34 | $ | 0.28 | $ | 1.24 | $ | 1.13 | ||||
| Income (loss) from discontinued operations | 0.01 | (0.00) | (0.17) | 0.00 | ||||||||
| Basic net income per share | $ | 0.35 | $ | 0.28 | $ | 1.07 | $ | 1.13 | ||||
| Weighted average shares outstanding | 90,398 | 90,267 | 90,372 | 90,162 | ||||||||
| Earnings per share-diluted | ||||||||||||
| Income from continuing operations | $ | 0.33 | $ | 0.27 | $ | 1.21 | $ | 1.10 | ||||
| Income (loss) from discontinued operations | 0.01 | 0.00 | (0.17) | 0.00 | ||||||||
| Diluted net income per share | $ | 0.34 | $ | 0.27 | $ | 1.04 | $ | 1.10 | ||||
| Weighted average shares and dilutive potential common shares outstanding | 92,828 | 93,257 | 92,925 | 92,984 | ||||||||
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Copart, Inc. Consolidated Balance Sheets (in thousands) (Unaudited) |
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July 31, 2006 |
July 31, 2005 |
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| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ |
126,590 |
$ | 252,548 | ||
| Short-term investments | 148,725 | — | ||||
| Accounts receivable, net | 99,959 | 89,002 | ||||
| Vehicle pooling costs | 29,148 | 25,983 | ||||
| Income taxes receivable | 2,064 | — | ||||
| Prepaid expenses and other assets | 4,864 | 6,274 | ||||
| Assets held for sale | — | 28,730 | ||||
| Total current assets | 411,350 | 402,537 | ||||
| Property and equipment, net | 341,943 | 286,566 | ||||
| Intangibles, net | 1,874 | 1,308 | ||||
| Goodwill | 112,291 | 93,276 | ||||
| Deferred income taxes | 5,137 | — | ||||
| Land purchase options and other assets | 22,110 | 9,841 | ||||
| Total assets | $ | 894,705 | $ | 793,528 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued liabilities | $ | 60,644 | $ | 56,965 | ||
| Deferred revenue | 15,372 | 12,477 | ||||
| Income taxes payable | — | 7,248 | ||||
| Deferred income taxes | 7,191 | 3,295 | ||||
| Other current liabilities | 126 | 126 | ||||
| Total current liabilities | 83,333 | 80,111 | ||||
| Deferred income taxes | — | 2,878 | ||||
| Other liabilities | 1,402 | 1,160 | ||||
| Total liabilities | 84,735 | 84,149 | ||||
| Commitments and contingencies | ||||||
| Shareholders’ equity: | ||||||
| Common stock, no par value - 180,000 shares authorized; 90,445 and 90,338 shares issued and outstanding at July 31, 2006 and July 31, 2005, respectively | 276,052 | 272,017 | ||||
| Accumulated other comprehensive income (loss) | (37) | 354 | ||||
| Retained earnings | 533,955 | 437,008 | ||||
| Total shareholders’ equity | 809,970 | 709,379 | ||||
| Total liabilities and shareholders’ equity | $ | 894,705 | $ | 793,528 | ||