Copart (CPRT) 8-K Copart Reports Third Quarter Fiscal 2015 Financial Results

Copart, Inc.

For Immediate Release

Copart Reports Third Quarter Fiscal 2015 Financial Results

Dallas, Texas. (May 27, 2015) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and nine months ended April 30, 2015.

For the three months ended April 30, 2015, revenue, gross margin and net income were $297.1 million, $127.4 million and $57.6 million, respectively. These represent a decrease in revenue of $12.6 million, or 4.1%; a decrease in gross margin of $4.8 million, or 3.7%; and an increase in net income of $16.7 million, or 40.8%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.44 compared to $0.31 last year, an increase of 41.9%.

For the nine months ended April 30, 2015, revenue, gross margin and net income were $863.8 million, $364.6 million and $162.4 million, respectively. These represent a decrease in revenue of $12.3 million, or 1.4%; an increase in gross margin of $13.0 million, or 3.7%; and an increase in net income of $34.7 million, or 27.2%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $1.23 compared to $0.97 last year, an increase of 26.8%.

Included in the operating results of the prior year is an impairment charge of $29.1 million recorded in the third quarter resulting primarily from the abandonment of work previously capitalized in connection with the development of a third-party enterprise operating system.

On Thursday, May 28, 2015, 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 athttp://stream.conferenceamerica.com/copart052815. A replay of the call will be available through July 27 by calling(877) 919-4059. Use confirmation code #33373930.

About Copart

Copart, founded in 1982, provides vehicle sellers with a full range of remarketing services to process and sell salvage and clean title vehicles to dealers, dismantlers, rebuilders, exporters and, in some states, to end users. Copart remarkets the vehicles through Internet sales utilizing its VB3 technology. Copart sells vehicles on behalf of insurance companies, banks, finance companies, fleet operators, dealers, car dealerships and others as well as cars sourced from the general public. The company currently operates in the United States and Canada (www.copart.com), the United Kingdom (www.copart.co.uk), Brazil (www.copart.com.br), Germany (www.copart.de), the United Arab Emirates (www.copartmea.com), and Spain (www.autoresiduos.com). Copart links sellers to more than 750,000 members in over 150 countries worldwide through its multi-channel platform. Copart was recently ranked at the top of Deloitte’s “Exceptional 100” list of companies, which reviewed U.S. publicly traded companies based upon a multidimensional approach to measuring financial performance. For more information, or to become a member, visitwww.copart.com.

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

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 are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected or implied by our statements and comments. For a more complete discussion of the risks that could affect our business, please review the “Management's Discussion and Analysis” and the other risks identified in Copart’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission. We encourage investors to review these disclosures carefully. We do not undertake to update any forward-looking statement that may be made from time to time on our behalf.

Contact:	Wendy Lucero, Assistant to the Chief Financial Officer
	972-391-5043 or wendy.lucero@copart.com

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)

	Three Months Ended						Nine Months Ended
	April 30,						April 30,
	2015			2014			2015			2014
Service revenues and vehicle sales:
Service revenues	$	256,564		$	255,045		$	741,692		$	717,140
Vehicle sales		40,578			54,677			122,094			158,899
Total service revenues and vehicle
sales		297,142			309,722			863,786			876,039
Operating expenses:
Yard operations		125,348			122,422			367,124			358,888
Cost of vehicle sales		34,503			46,263			103,694			135,996
Yard depreciation and amortization		9,248			8,110			26,655			27,665
Yard stock-based payment compensation		626			675			1,721			1,856
Gross margin		127,417			132,252			364,592			351,634
General and administrative		25,940			29,908			86,741			95,364
General and administrative depreciation
and amortization		2,916			4,659			8,646			12,684
General and administrative stock-based
payment compensation		3,794			5,948			11,569			15,406
Impairment of long-lived assets		—			29,104			—			29,104
Total operating expenses		202,375			247,089			606,150			676,963
Operating income		94,767			62,633			257,636			199,076
Other (expense) income:
Interest expense, net		(5,656	)		(2,023	)		(11,932	)		(6,226	)
Other income, net		(815	)		708			4,919			3,301
Total other expense		(6,471	)		(1,315	)		(7,013	)		(2,925	)
Income before income taxes		88,296			61,318			250,623			196,151
Income taxes		30,733			20,441			88,252			68,507
Net income	$	57,563		$	40,877		$	162,371		$	127,644
Basic net income per common share	$	0.46		$	0.32		$	1.29		$	1.02
Weighted average common shares
outstanding		126,415			125,794			126,309			125,604
Diluted net income per common share	$	0.44		$	0.31		$	1.23		$	0.97
Diluted weighted average common shares
outstanding		132,124			131,486			131,837			131,095

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

Consolidated Balance Sheets
(In thousands)
(Unaudited)

	April 30,			July 31,
	2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	678,742		$	158,668
Accounts receivable, net		217,003			196,985
Vehicle pooling costs and inventories		32,762			31,697
Income taxes receivable		2,587			2,288
Deferred income taxes		5,053			1,803
Prepaid expenses and other assets		18,312			20,850
Total current assets		954,459			412,291
Property and equipment, net		683,956			692,383
Intangibles, net		19,715			25,242
Goodwill		271,484			283,780
Deferred income taxes		29,116			36,721
Other assets		44,247			56,387
Total assets	$	2,002,977		$	1,506,804
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	154,255		$	152,156
Deferred revenue		4,612			4,170
Income taxes payable		5,660			8,284
Current portion of long-term debt and capital lease obligations		64,921			79,674
Total current liabilities		229,448			244,284
Deferred income taxes		6,334			7,372
Income taxes payable		26,982			23,771
Long-term debt and capital lease obligations, net of discount		599,951			223,227
Other liabilities		4,294			4,651
Total liabilities		867,009			503,305
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—			—
Common stock		13			13
Additional paid-in capital		422,194			404,542
Accumulated other comprehensive loss		(66,594	)		(20,060	)
Retained earnings		780,355			619,004
Total stockholders’ equity		1,135,968			1,003,499
Total liabilities and stockholders’ equity	$	2,002,977		$	1,506,804

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Nine Months Ended
	April 30,
	2015			2014
Cash flows from operating activities:
Net income	$	162,371		$	127,644
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization		37,579			40,349
Allowance for doubtful accounts		(453	)		936
Impairment of long-lived assets		—			29,104
Stock-based payment compensation		13,290			17,262
Excess tax benefits from stock-based payment compensation		(1,279	)		(1,219	)
Gain on sale of property and equipment		(735	)		(1,696	)
Deferred income taxes		3,641			(12,609	)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable		(21,763	)		(9,161	)
Vehicle pooling costs and inventories		(1,874	)		(170	)
Prepaid expenses and other current assets		1,480			(3,539	)
Other assets		7,584			(12,133	)
Accounts payable and accrued liabilities		2,042			15,269
Deferred revenue		445			316
Income taxes receivable		985			7,305
Income taxes payable		1,313			8,229
Other liabilities		(1,257	)		1,747
Net cash provided by operating activities		203,369			207,634
Cash flows from investing activities:
Purchases of property and equipment including acquisitions, net of cash
acquired		(49,079	)		(78,078	)
Proceeds from sale of property and equipment		1,087			3,271
Net cash used in investing activities		(47,992	)		(74,807	)
Cash flows from financing activities:
Proceeds from the exercise of stock options		3,372			5,680
Excess tax benefit from stock-based payment compensation		1,279			1,219
Proceeds from the issuance of Employee Stock Purchase Plan shares		1,495			1,115
Principal payments on long-term debt		(331,250	)		(56,250	)
Proceeds from the issuance of long-term debt, net of discount		698,939			—
Debt offering costs		(955	)		—
Change in bank overdraft		—			(16,291	)
Repurchases of common stock		(1,737	)		(80	)
Net cash provided by (used in) financing activities		371,143			(64,607	)
Effect of foreign currency translation		(6,446	)		981
Net increase in cash and cash equivalents		520,074			69,201
Cash and cash equivalents at beginning of period		158,668			63,631
Cash and cash equivalents at end of period	$	678,742		$	132,832
Supplemental disclosure of cash flow information:
Interest paid	$	9,705		$	6,599
Income taxes paid, net of refunds	$	81,995		$	65,769

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000