Copart Reports Second Quarter Financial Results
FAIRFIELD, Calif.--Copart, Inc. the largest provider of vehicle salvage disposition services in the United States, today reported results for the second quarter ended January 31, 2007.
During the three months ended January 31, 2007, revenue and income from continuing operations were $128.9 million and $30.4 million, respectively. This represents a growth in revenue of $3.8 million or 3% and a growth in income from continuing operations of $4.3 million or 16% over the same quarter last year. Fully diluted earnings per share (EPS) from continuing operations for the three months was $.32 compared to $.28 last year, an increase of 14%.
For the six months ended January 31, 2007, revenue and income from continuing operations were $261.0 million and $60.7 million, respectively. This represents a growth in revenue of $19.2 million or 8% and a growth in income from continuing operations of $12.0 million or 25% over the same period last year. Fully diluted earnings per share (EPS) from continuing operations for the six months was $.65 compared to $.53 for the same period last year, an increase of 23%.
Same store sales, excluding the revenue associated with the public auction business which we exited in fiscal 2006, increased by 3% and 8% for the three and six months ended January 31, 2007, respectively.
The operating results for the first and second quarters of 2006 were adversely affected by incremental costs incurred as a result of hurricanes in the Gulf coast region and were estimated to be approximately $4.9 million and $9.5 million for the three and six month periods ended January 31, 2006, respectively. At the end of the current quarter, virtually all of the incremental salvage vehicles received as a result of the hurricanes have been sold. The processing of the hurricane vehicles has had, in certain historical periods, a negative impact on gross and operating margin percentages.
On Wednesday, March 7, 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=vlllrznrsssvrxsll. A replay of the call will be available through March 13, 2007 by calling (888) 203-1112. Use confirmation code #1943979.
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.
NOTE: This press release contains forward-looking statements within the meaning of federal securities laws, and these forward-looking statements are subject to substantial risks and uncertainties. Our business has become increasingly reliant on proprietary and non-proprietary technologies, and it is difficult to forecast with accuracy what impact these changes in our business model will have. 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 "Risk Factors" in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We encourage investors to review these disclosures carefully.
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Consolidated Statements of Income (in thousands, except per share data) (Unaudited) |
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| Three months ended January 31, | Six months ended January 31, | |||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||
| Revenues | $ | 128,925 | $ | 125,099 | $ | 261,046 | $ | 241,839 | ||||
| Operating costs and expenses: | ||||||||||||
| Yard operations | 68,536 | 74,524 | 138,767 | 143,731 | ||||||||
| General and administrative | 15,225 | 13,560 | 30,223 | 27,093 | ||||||||
| Total operating expenses | 83,761 | 88,084 | 168,990 | 170,824 | ||||||||
| Operating income | 45,164 | 37,015 | 92,056 | 71,015 | ||||||||
| Other income (expense): | ||||||||||||
| Interest income, net | 3,283 | 1,805 | 6,310 | 3,581 | ||||||||
| Other income, net | 245 | 753 | 895 | 1,388 | ||||||||
| Equity in losses of unconsolidated investment | ─ | (849) | (2,216) |
(849) |
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| Total other income | 3,528 | 1,709 | 4,989 | 4,120 | ||||||||
| Income from continuing operations before income taxes | 48,692 | 38,724 | 97,045 | 75,135 | ||||||||
| Income taxes | 18,300 | 12,606 | 36,310 | 26,441 | ||||||||
| Income from continuing operations | 30,392 | 26,118 | 60,735 | 48,694 | ||||||||
| Discontinued operations: | ||||||||||||
| Loss from discontinued operations, net of income tax effects | ─ | (18,265) | ─ | (18,027) | ||||||||
| Net income | $ | 30,392 | $ | 7,853 | $ | 60,735 | $ | 30,667 | ||||
| Earnings per share-basic | ||||||||||||
| Income from continuing operations | $ | 0.33 | $ | 0.29 | $ | 0.67 | $ | 0.54 | ||||
| Loss from discontinued operations | ─ | (0.20) | ─ | (0.20) | ||||||||
| Basic net income per share | $ | 0.33 | $ | 0.09 | $ | 0.67 | $ | 0.34 | ||||
| Weighted average shares outstanding | 90,752 | 90,401 | 90,625 | 90,393 | ||||||||
| Earnings per share-diluted | ||||||||||||
| Income from continuing operations | $ | 0.32 | $ | 0.28 | $ | 0.65 | $ | 0.53 | ||||
| Loss from discontinued operations | ─ | (0.20) | ─ | (0.20) | ||||||||
| Diluted net income per share | $ | 0.32 | $ | 0.08 | $ | 0.65 | $ | 0.33 | ||||
| Weighted average shares and dilutive potential common shares outstanding | 93,682 | 92,636 | 93,523 | 92,248 | ||||||||
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Consolidated Balance Sheets (in thousands) (Unaudited) |
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January 31, 2007 |
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July 31, 2006 |
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| ASSETS | ||||||
| Current assets: | ||||||
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Cash and cash equivalents |
$ | 124,053 | $ | 126,590 | ||
| Short-term investments | 195,885 | 148,725 | ||||
| Accounts receivable, net | 112,174 | 99,959 | ||||
| Vehicle pooling costs | 31,171 | 29,148 | ||||
| Income taxes receivable | 5,340 | 2,064 | ||||
| Prepaid expenses and other assets | 3,999 | 4,864 | ||||
| Total current assets | 472,622 | 411,350 | ||||
| Property and equipment, net | 352,385 | 341,943 | ||||
| Intangibles, net | 1,507 | 1,874 | ||||
| Goodwill | 112,291 | 112,291 | ||||
| Deferred income taxes | 7,184 | 5,137 | ||||
| Land purchase options and other assets | 23,038 | 22,110 | ||||
| Total assets | $ | 969,027 | $ | 894,705 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued liabilities | $ | 58,787 | $ | 60,770 | ||
| Deferred revenue | 14,728 | 15,372 | ||||
| Deferred income taxes | 7,225 | 7,191 | ||||
| Total current liabilities | 80,740 | 83,333 | ||||
| Other liabilities | 1,502 | 1,402 | ||||
| Total liabilities | 82,242 | 84,735 | ||||
| Commitments and contingencies | ||||||
| Shareholders’ equity: | ||||||
| Common stock, no par value - 180,000 shares authorized; 91,232 and 90,445 shares issued and outstanding at January 31, 2007 and July 31, 2006, respectively | 292,200 | 276,052 | ||||
| Accumulated other comprehensive loss | (105) | (37) | ||||
| Retained earnings | 594,690 | 533,955 | ||||
| Total shareholders’ equity | 886,785 | 809,970 | ||||
| Total liabilities and shareholders’ equity | $ | 969,027 | $ | 894,705 | ||