Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports Fourth Quarter Financial Results
Fairfield, Calif. (September 26, 2007) — Copart, Inc. (NASDAQ: CPRT) today reported the results for the fourth quarter ended July 31, 2007.
During the three months ended July 31, 2007, revenue and income from continuing operations were $154.0 million and $36.7 million, respectively. This represents increases in revenue of $16.8 million, or 12.2%, and in income from continuing operations of $5.9 million, or 19.3%, over the same quarter last year. Fully diluted earnings per share (EPS) from continuing operations for the three months were $0.40 compared to $0.33 last year, an increase of 21.2%.
For the fiscal year ended July 31, 2007, revenue and income from continuing operations were $560.7 million and $136.3 million, respectively. This represents increases in revenue of $32.1 million, or 6.1%, and in income from continuing operations of $23.7 million, or 21.0%, over the same period last year. Fully diluted earnings per share (EPS) from continuing operations for the fiscal year were $1.46 compared to $1.21 for the same period last year, an increase of 20.7%.
Included in the results for this quarter and for the fiscal year are the results of operations of our United Kingdom subsidiary, Universal Salvage, from the date of its acquisition, June 14, 2007, through the end of our fiscal year. During this period, Universal Salvage generated $14.8 million and $1.0 million in revenue and income from continuing operations, respectively. The results of Universal Salvage increased our fully diluted EPS for the quarter and for the year by $0.01 per share.
The operating results for the three and twelve months ended July 31, 2006 were adversely affected by incremental costs incurred as a result of hurricanes in the Gulf coast region and were estimated to be approximately $2.1 million and $14.1 million, respectively. At the end of the second quarter of fiscal 2007, virtually all of the incremental salvage vehicles received as a result of the hurricanes had been sold. The processing of the hurricane vehicles has had, in certain historical periods, a negative impact on gross and operating margin percentages.
On Thursday, September 27, 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=vlllrnrlcwlvwdcxz. A replay of the call will be available through October 27, 2007 by calling (888) 203-1112. Use confirmation code #4413725.
Copart, Inc. ~ 4665 Business Center Drive, Fairfield, California 94534 ~ (707) 639-5000
Copart, founded in 1982, provides vehicle suppliers, primarily insurance companies, with a full range of vehicle remarketing services through a completely virtual auction-style trading platform, principally to licensed dismantlers, rebuilders and used vehicle dealers and exporters. 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 135 facilities in the United States, Canada and the United Kingdom. It also provides services in other locations through a network of independent salvage vehicle remarketers.
Cautionary Note About Forward-Looking Statements
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. We recently acquired Universal Salvage plc and Century Salvage Sales Limited, whose business operations are located in the United Kingdom. We do not have any historic experience operating outside of North America, and completion of the acquisitions will result in the Company facing new risks associated with operating in international markets. 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.
Contact: | | Simon Rote, Vice President of Finance |
| | (707) 639-5000 |
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
| | Three months ended
July 31, | | Twelve months ended
July 31, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
Revenues | | $ | 153,982 | | $ | 137,220 | | $ | 560,680 | | $ | 528,571 | |
Operating costs and expenses: | | | | | | | | | |
Yard operations (including depreciation and amortization of $7,813 and $30,704 for the three and twelve months ending July 31, 2007) | | 82,465 | | 74,244 | | 293,898 | | 298,023 | |
General and administrative (including depreciation and amortization of $1,857 and $5,717 for the three and twelve months ending July 31, 2007) | | 17,657 | | 15,779 | | 63,637 | | 58,986 | |
Total operating expenses | | 100,122 | | 90,023 | | 357,535 | | 357,009 | |
Operating income | | 53,860 | | 47,197 | | 203,145 | | 171,562 | |
Other income (expense): | | | | | | | | | |
Interest income, net | | 3,793 | | 2,724 | | 13,644 | | 8,110 | |
Other income | | 696 | | 136 | | 2,848 | | 1,634 | |
Equity in losses of unconsolidated investment | | — | | (4,357 | ) | (2,216 | ) | (6,784 | ) |
Total other income (expense) | | 4,489 | | (1,497 | ) | 14,276 | | 2,960 | |
Income from continuing operations before income taxes | | 58,349 | | 45,700 | | 217,421 | | 174,522 | |
Income taxes | | 21,615 | | 14,912 | | 81,083 | | 61,862 | |
Income from continuing operations | | 36,734 | | 30,788 | | 136,338 | | 112,660 | |
Discontinued operations: | | | | | | | | | |
Income (loss) from discontinued operations, net of income tax effects | | — | | 785 | | — | | (15,713 | ) |
Net income | | $ | 36,734 | | $ | 31,573 | | $ | 136,338 | | $ | 96,947 | |
Earnings per share-basic | | | | | | | | | |
Income from continuing operations | | $ | 0.41 | | $ | 0.34 | | $ | 1.50 | | $ | 1.24 | |
Income (loss) from discontinued operations | | — | | 0.01 | | — | | (0.17 | ) |
Basic net income per share | | $ | 0.41 | | $ | 0.35 | | $ | 1.50 | | $ | 1.07 | |
Weighted average common shares outstanding | | 90,101 | | 90,398 | | 90,651 | | 90,372 | |
| | | | | | | | | |
Earnings per share-diluted | | | | | | | | | |
Income from continuing operations | | $ | 0.40 | | $ | 0.33 | | $ | 1.46 | | $ | 1.21 | |
Income (loss) from discontinued operations | | — | | 0.01 | | — | | (0.17 | ) |
Diluted net income per share | | $ | 0.40 | | $ | 0.34 | | $ | 1.46 | | $ | 1.04 | |
Weighted average common shares and dilutive potential common shares outstanding | | 92,799 | | 92,828 | | 93,455 | | 92,925 | |
Supplemental Financial Information
(in thousands)
(Unaudited)
| | Three months ended
July 31, | | Twelve months ended
July 31, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
Revenues: | | | | | | | | | |
North America | | $ | 139,163 | | $ | 137,220 | | $ | 545,861 | | $ | 528,571 | |
United Kingdom | | 14,819 | | — | | 14,819 | | — | |
Total | | $ | 153,982 | | $ | 137,220 | | $ | 560,680 | | $ | 528,571 | |
| | | | | | | | | |
Yard operations expense: | | | | | | | | | |
North America | | $ | 72,026 | | $ | 74,244 | | $ | 283,459 | | $ | 298,023 | |
United Kingdom | | 10,439 | | — | | 10,439 | | — | |
Total | | $ | 82,465 | | $ | 74,244 | | $ | 293,898 | | $ | 298,023 | |
| | | | | | | | | |
General and administrative expenses: | | | | | | | | | |
North America | | $ | 14,665 | | $ | 15,779 | | $ | 60,645 | | $ | 58,986 | |
United Kingdom | | 2,992 | | — | | 2,992 | | — | |
Total | | $ | 17,657 | | $ | 15,779 | | $ | 63,637 | | $ | 58,986 | |
| | | | | | | | | |
Operating income: | | | | | | | | | |
North America | | $ | 52,472 | | $ | 47,197 | | $ | 201,757 | | $ | 171,562 | |
United Kingdom | | 1,388 | | — | | 1,388 | | — | |
Total | | $ | 53,860 | | $ | 47,197 | | $ | 203,145 | | $ | 171,562 | |
Income from continuing operations: | | | | | | | | | |
North America | | $ | 35,776 | | $ | 30,788 | | $ | 135,380 | | $ | 112,660 | |
United Kingdom | | 958 | | — | | 958 | | — | |
Total | | $ | 36,734 | | $ | 30,788 | | $ | 136,338 | | $ | 112,660 | |
Consolidated Balance Sheets
(in thousands)
(Unaudited)
| | July 31,
2007 | | July 31,
2006 | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 98,365 | | $ | 126,590 | |
Short-term investments | | 102,625 | | 148,725 | |
Accounts receivable, net | | 109,895 | | 99,959 | |
Vehicle pooling costs | | 28,842 | | 28,177 | |
Inventories | | 5,999 | | 971 | |
Income taxes receivable | | 3,208 | | 2,064 | |
Prepaid expenses and other assets | | 5,518 | | 4,864 | |
Total current assets | | 354,452 | | 411,350 | |
Restricted cash and investments | | 9,148 | | — | |
Property and equipment, net | | 420,664 | | 341,943 | |
Intangibles, net | | 27,442 | | 1,874 | |
Goodwill | | 161,645 | | 112,291 | |
Deferred income taxes | | 7,785 | | 5,137 | |
Land purchase options and other assets | | 24,208 | | 22,110 | |
Total assets | | $ | 1,005,344 | | $ | 894,705 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Accounts payable and accrued liabilities | | $ | 85,082 | | $ | 60,770 | |
Deferred revenue | | 13,897 | | 15,372 | |
Income taxes payable | | 3,930 | | — | |
Deferred income taxes | | 3,219 | | 7,191 | |
Other current liabilities | | 474 | | — | |
Total current liabilities | | 106,602 | | 83,333 | |
Deferred income taxes | | 13,998 | | — | |
Other liabilities | | 3,878 | | 1,402 | |
Total liabilities | | 124,478 | | 84,735 | |
Commitments and contingencies | | | | | |
Shareholders’ equity: | | | | | |
Common stock, no par value - 180,000 shares authorized; 88,334 and 90,445 shares issued and outstanding at July 31, 2007 and July 31, 2006, respectively | | 206,126 | | 276,052 | |
Accumulated other comprehensive income (loss) | | 4,447 | | (37 | ) |
Retained earnings | | 670,293 | | 533,955 | |
Total shareholders’ equity | | 880,866 | | 809,970 | |
Total liabilities and shareholders’ equity | | $ | 1,005,344 | | $ | 894,705 | |
