Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports Second Quarter Financial Results
Fairfield, Calif. (March 6, 2008) — Copart, Inc. (NASDAQ: CPRT) today reported the results for the quarter ended January 31, 2008, the second quarter of its 2008 fiscal year.
For the three months ended January 31, 2008, revenue and net income were $173.5 million and $32.0 million, respectively. This represents increases in revenue of $44.5 million, or 34.5%, and in net income of $1.6 million, or 5.4%, over the same quarter last year. Fully diluted earnings per share (EPS) for the three months were $0.35 compared to $0.32 last year, an increase of 9.4%.
For the six months ended January 31, 2008, revenue and net income were $357.4 million and $69.6 million, respectively. This represents increases in revenue of $96.4 million, or 36.9%, and in net income of $8.9 million, or 14.7%, over the same period last year. Fully diluted earnings per share (EPS) for the six months were $0.76 compared to $0.65 last year, an increase of 16.9%.
For the quarter in North America, total revenue grew to $137.6 million or 6.8%. Same store sales grew by 6.3%. Excluding the impact of the Gulf Coast hurricanes in the second quarter of last year, same store sales grew by 8.5%. Gross margin was $68.6 million during the current quarter. Included in the operating results for the three and six months ended January 31, 2007 were revenues associated with the hurricanes which are estimated to be approximately $2.6 million and $6.2 million, respectively.
For the quarter in the United Kingdom (UK), total revenue was $35.8 million and gross margin was $0.4 million. Included in the results is a reserve for the estimated losses from payments made with fraudulent credit cards of $1.5 million, of which $0.4 million represents confirmed fraudulent payments, and the balance represents estimated and expected losses for the quarter. This loss is reflected as a reduction in revenue of $0.9 million previously recorded during the quarter for payments accepted for vehicles sold as a principal and a charge of $0.6 million to yard operations for vehicles sold as an agent. Also included in our operating results for the quarter are the direct incremental costs associated with integrating our UK operations estimated to be $0.5 million and includes travel and lodging for approximately 100 individuals who traveled to the UK to help staff and support the UK integration. Other costs associated with the integration are estimated to be approximately $1.7 million primarily for temporary labor and contract hauling and are included in yard operations. Finally, delays in the sales of certain vehicles as a result of the integration process had a negative impact on the quarterly unit sales volume. Consequently, during the quarter, inventory in the UK grew by approximately 27%. We are currently experiencing no delays in the sales process and we expect inventories to return to more normal levels by the end of our third fiscal quarter.
During the second quarter Copart repurchased 982,655 shares of its common stock at a weighted average price of $41.67 per share. At the end of the quarter, Copart had 20,983,640 shares available under its repurchase program.
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The Company, today, entered into an unsecured credit agreement with Bank of America, N.A. providing for a $200 million revolving credit facility. Amounts borrowed under the credit facility may be used for repurchases of stock, capital expenditure, working capital and other general corporate purposes. Amounts borrowed under the credit facility may be repaid and reborrowed until the facility matures in five years.
We have determined that, in the first quarter of fiscal 2008, we included $3.0 million in general and administrative costs and $0.4 million in general and administrative depreciation from our UK operations that, in order to be consistent with US classification should have been reflected in yard operations. The reclassifications of these costs, which have no affect on the current quarter, are reflected in the year to date results.
On Friday, March 7, 2008, 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=vlllrznwddzvwzzzw. A replay of the call will be available through April 5, 2008 by calling (888) 203-1112. Use confirmation code #6400859.
About Copart
Copart, founded in 1982, provides vehicle suppliers, primarily insurance companies, with a full range of vehicle remarketing services to process and sell salvage vehicles 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 currently operates 143 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. These forward-looking statements include, without limitation, statements about the integration process with our recent acquisition in the United Kingdom, current trends in our UK sales process, and our expectations with respect to UK inventory. 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. Since June 2007, we have acquired several salvage companies operating exclusively in the United Kingdom. We do not have any historic experience operating outside of North America, and we may experience challenges adapting our business model to international markets and integrating the acquired businesses. 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: | Heather Luck, Assistant to the Chief Financial Officer |
| (707) 639-5271 |
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Copart, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
| | Three months ended
January 31, | | Six months ended
January 31, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
Revenues | | $ | 173,459 | | $ | 128,926 | | $ | 357,416 | | $ | 261,047 | |
Operating costs and expenses: | | | | | | | | | |
Yard operations (including depreciation and amortization of $7,764 and $15,927 for the three and six months ending January 31, 2008, respectively) | | 104,851 | | 68,536 | | 210,415 | | 138,768 | |
General and administrative (including depreciation and amortization of $2,970 and $5,809 for the three and six months ending January 31, 2008, respectively) | | 21,373 | | 15,226 | | 43,138 | | 30,223 | |
Total operating expenses | | 126,224 | | 83,762 | | 253,553 | | 168,991 | |
Operating income | | 47,235 | | 45,164 | | 103,863 | | 92,056 | |
Other income (expense): | | | | | | | | | |
Interest income, net | | 2,472 | | 3,283 | | 5,216 | | 6,310 | |
Other income | | 882 | | 245 | | 1,677 | | 896 | |
Equity in losses of unconsolidated investment | | — | | — | | — | | (2,216 | ) |
Total other income | | 3,354 | | 3,528 | | 6,893 | | 4,990 | |
Income before income taxes | | 50,589 | | 48,692 | | 110,756 | | 97,046 | |
Income taxes | | 18,563 | | 18,300 | | 41,120 | | 36,310 | |
Net income | | $ | 32,026 | | $ | 30,392 | | $ | 69,636 | | $ | 60,736 | |
Earnings per share-basic | | | | | | | | | |
Basic net income per share | | $ | 0.36 | | $ | 0.33 | | $ | 0.79 | | $ | 0.67 | |
Weighted average common shares outstanding | | 88,802 | | 90,752 | | 88,684 | | 90,626 | |
| | | | | | | | | |
Earnings per share-diluted | | | | | | | | | |
Diluted net income per share | | $ | 0.35 | | $ | 0.32 | | $ | 0.76 | | $ | 0.65 | |
Weighted average common shares and dilutive potential common shares outstanding | | 91,333 | | 93,682 | | 91,261 | | 93,524 | |
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Copart, Inc.
Consolidated Balance Sheets
(in thousands)
(Unaudited)
| | January 31,
2008 | | July 31,
2007 | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 173,225 | | $ | 98,365 | |
Short-term investments | | — | | 102,625 | |
Accounts receivable, net | | 137,286 | | 109,895 | |
Inventories and vehicle pooling costs | | 42,587 | | 34,841 | |
Income taxes receivable | | 1,700 | | 3,208 | |
Prepaid expenses and other assets | | 6,820 | | 5,518 | |
Total current assets | | 361,618 | | 354,452 | |
Restricted cash and investments | | — | | 9,148 | |
Property and equipment, net | | 459,321 | | 420,664 | |
Intangibles, net | | 26,353 | | 27,442 | |
Goodwill | | 165,976 | | 161,645 | |
Deferred income taxes | | 12,120 | | 7,785 | |
Land purchase options and other assets | | 27,515 | | 24,208 | |
Total assets | | $ | 1,052,903 | | $ | 1,005,344 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Accounts payable and accrued liabilities | | $ | 90,934 | | $ | 85,082 | |
Deferred revenue | | 16,033 | | 13,897 | |
Income taxes payable | | 3,010 | | 3,930 | |
Deferred income taxes | | 2,575 | | 3,219 | |
Other current liabilities | | 462 | | 474 | |
Total current liabilities | | 113,014 | | 106,602 | |
Deferred income taxes | | 13,554 | | 13,998 | |
Other liabilities | | 4,492 | | 3,878 | |
Total liabilities | | 131,060 | | 124,478 | |
Commitments and contingencies | | | | | |
Shareholders’ equity: | | | | | |
Common stock, no par value - 180,000 shares authorized; 88,169 and 88,334 shares issued and outstanding at January 31, 2008 and July 31, 2007, respectively | | 183,937 | | 206,126 | |
Accumulated other comprehensive income | | 1,600 | | 4,447 | |
Retained earnings | | 736,306 | | 670,293 | |
Total shareholders’ equity | | 921,843 | | 880,866 | |
Total liabilities and shareholders’ equity | | $ | 1,052,903 | | $ | 1,005,344 | |
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