Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports First Quarter Financial Results
Fairfield, Calif. (December 2, 2003) — Copart, Inc. (NASDAQ: CPRT) today reported results for the first quarter ended October 31, 2003.
Copart earned net income of $15,241,200 in the first quarter of fiscal 2004 on revenues of $91,466,600. This quarter’s net income is 4% higher than the $14,706,500 earned in the same period of fiscal 2003 on revenues of $83,494,900. Fully diluted earnings per share (EPS) for the quarter was $.17 compared to $.16 last year, an increase of 6%.
The Company announced that all of its salvage facilities have been converted to Virtual Bidding Second Generation (VB²), the Company’s new patent pending auction methodology. VB2 technology eliminates the traditional live auction and replaces it with an Internet only auction which combines two bidding processes: Preliminary Bidding, followed by a Virtual Auction.
Buyers from around the world can preview and bid on the vehicle at www.copart.com. Buyers enter the maximum price they are willing to pay for a vehicle, and VB² BID4U™ will incrementally bid the vehicle on their behalf. Buyers can come to a Copart facility for three days prior to the Virtual Auction and preview vehicles and enter preliminary bids at bidding stations located in the lobby of each facility. Local buyers and Internet buyers compete in Preliminary Bidding until one hour prior to the start of the Internet-only Virtual Auction.
During the Virtual Auction, Copart’s web server conducts the auction. Buyers participate in the Virtual Auction by logging onto Copart’s website and opening an auction window. When the Virtual Auction starts, digital images of the vehicle are displayed along with the current high bid from the Preliminary Bidding process. Any virtual buyer can now increase the bid on the vehicle. VB² BID4U™ represents the high Preliminary Bidder during the Virtual Auction. When bidding on the vehicle stops, a countdown is initiated. If no bids are made during the countdown, the vehicle is sold to the highest bidder. The process is fast, easy and user-friendly.
“VB² has exceeded our expectations,” said A. Jayson Adair, Copart’s President. “In our opinion, this innovative new auction methodology improves bidder ease and accuracy, expands the buyer base, maintains the frenzy of a live auction, and expands the bidding process. We believe VB² offers bidders a more efficient bidding process. We expect to sell in excess of 1 million vehicles over VB² in the next 12 months.”
The Company also announced that it has repurchased a total of 977,100 shares of its common stock at an average price of approximately $10.97 per share during the first quarter of fiscal 2004. The Company is authorized to repurchase an additional 5,327,700 shares of its common stock under the current stock repurchase program. Additionally, the Company announced that it expended approximately $20 million in the second quarter of fiscal 2004 to buy out leases on trucks, in connection with the Company’s decision to move from an owned transport fleet to an owner operator model. The disposal of the fleet of trucks is not expected to have a material adverse effect on the Company’s results of operations or financial position.
Copart, Inc. ~ 4665 Business Center Drive, Fairfield, California 94534 ~ (707) 639-5000
On Wednesday, December 3, 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 vcall.com. A replay of the call will be available through December 9, by calling (877) 660-6853 with account number 1628 and call ID 82606.
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 104 facilities in North America. 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, including statements concerning our projected number of units, the deployment of our VB² Internet Virtual Auction technologies, and our expectations concerning the financial impact of our buy-out of truck leases and strategic shift from maintaining a Copart-owned transport fleet to an independent contractor model. Our actual results could differ materially from those projected in these forward-looking statements as a result of a number of factors, many of which are outside our control. In particular, our VB² Internet auction model may not be as successful as we currently anticipate. The financial impact of our decision to buy out truck leases will depend on our success in reselling purchased trucks at favorable prices and contracting for trucking services at favorable rates. 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 “Factors that may effect future results” in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We encourage investors to review these disclosures carefully.
Contact: | Simon E. Rote, Vice President of Finance & Acting Chief Financial Officer (707) 639-5000 |
Copart, Inc.
Consolidated Statements of Income — 1
(in thousands, except per share data)
| | Three Months Ended October 31, | |
| | 2003 | | 2002 | |
| | | | | |
Revenues | | $ | 91,467 | | $ | 83,495 | |
| | | | | |
Operating costs and expenses: | | | | | |
Yard and fleet | | 51,662 | | 47,879 | |
General and administrative | | 8,118 | | 6,598 | |
Depreciation and amortization | | 7,400 | | 5,631 | |
Total operating expenses | | 67,180 | | 60,108 | |
Operating income | | 24,287 | | 23,387 | |
| | | | | |
Other income: | | | | | |
Interest income, net | | 294 | | 455 | |
Other income | | 611 | | 466 | |
Total other income | | 905 | | 921 | |
Income before income taxes | | 25,192 | | 24,308 | |
| | | | | |
Income taxes | | 9,951 | | 9,602 | |
Net income | | $ | 15,241 | | $ | 14,706 | |
| | | | | |
Basic net income per share | | $ | .17 | | $ | .16 | |
| | | | | |
Weighted average shares outstanding | | 89,492 | | 92,249 | |
| | | | | |
Diluted net income per share | | $ | .17 | | $ | .16 | |
| | | | | |
Weighted average shares and dilutive potential common shares outstanding | | 91,183 | | 94,056 | |
| | | | | |
Other Data | | | | | |
Number of auction facilities | | 104 | | 99 | |
Copart, Inc.
Consolidated Balance Sheets — 2
(in thousands, except share data)
| | October 31,
2003 | | July 31,
2003 | |
| | | | | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 119,463 | | $ | 116,746 | |
Accounts receivable, net | | 78,889 | | 71,553 | |
Vehicle pooling costs | | 25,139 | | 23,381 | |
Income taxes receivable | | — | | 4,018 | |
Prepaid expenses and other assets | | 10,493 | | 10,068 | |
Total current assets | | 233,984 | | 225,766 | |
Property and equipment, net | | 248,493 | | 244,361 | |
Intangibles and other assets, net | | 6,344 | | 7,859 | |
Goodwill | | 109,749 | | 109,114 | |
Total assets | | $ | 598,570 | | $ | 587,100 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Current portion of long-term debt | | $ | 7 | | $ | 91 | |
Accounts payable and accrued liabilities | | 38,827 | | 38,309 | |
Deferred revenue | | 10,715 | | 9,708 | |
Income taxes payable | | 5,750 | | — | |
Deferred income taxes | | 5,225 | | 5,902 | |
Other current liabilities | | 163 | | 174 | |
Total current liabilities | | 60,687 | | 54,184 | |
Deferred income taxes | | 6,014 | | 6,014 | |
Long-term debt, less current portion | | 14 | | 16 | |
Other liabilities | | 1,237 | | 1,247 | |
Total liabilities | | 67,952 | | 61,461 | |
Commitments and contingencies | | | | | |
| | | | | |
Shareholders’ equity: | | | | | |
Common stock, no par value – 180,000,000 shares authorized; 88,966,312 and 89,883,412 shares issued and outstanding at October 31, 2003 and July 31, 2003, respectively | | 259,641 | | 269,968 | |
Accumulated other comprehensive income | | 64 | | — | |
Retained earnings | | 270,913 | | 255,671 | |
Total shareholders’ equity | | 530,618 | | 525,639 | |
Total liabilities and shareholders’ equity | | $ | 598,570 | | $ | 587,100 | |
