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

Copart, Inc.

For Immediate Release

Copart Reports Fourth Quarter Fiscal 2015 Financial Results

Dallas, Texas. (September 22, 2015) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2015.

For the three months ended July 31, 2015, revenue, gross margin and net income were $282.3 million, $118.8 million and $57.4 million, respectively. These represent a decrease in revenue of $5.2 million, or 1.8%; an increase in gross margin of $1.8 million, or 1.6%; and an increase in net income of $6.4 million, or 12.5%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.44 compared to $0.39 last year, an increase of 12.8%.

For the year ended July 31, 2015, revenue, gross margin and net income were $1.1 billion, $483.4 million and $219.8 million, respectively. These represent a decrease in revenue of $17.4 million, or 1.5%; an increase in gross margin of $14.8 million, or 3.2%; and an increase in net income of $41.1 million, or 23.0%, respectively, from the same period last year. Fully diluted earnings per share for the twelve months were $1.67 compared to $1.36 last year, an increase of 22.8%.

Included in the operating results for the three months ended July 31, 2015 and 2014 was the impact of the beneficial resolution of uncertain tax positions, which increased diluted earnings per share each period by $0.03.

Included in the operating results of the prior year was 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 Wednesday, September 23, 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 at http://stream.conferenceamerica.com/copart092315. A replay of the call will be available through November 22, 2015 by calling (877) 919-4059. Use confirmation code # 13231770.

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 locations, 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, Oman and Bahrain (www.copartmea.com), India (www.copart.in), 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, visit www.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:	Christopher M. Smith, Senior Analyst, Office of the Chief Financial Officer
	972-391-5021 or christopher.smith3@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   July 31,						Twelve Months Ended   July 31,
	2015			2014			2015			2014
Service revenues and vehicle sales:
Service revenues	$	243,671		$	241,273		$	985,363		$	958,413
Vehicle sales	38,622			46,177			160,716			205,076
Total service revenues and vehicle sales	282,293			287,450			1,146,079			1,163,489
Operating expenses:
Yard operations	122,034			122,709			489,158			481,597
Cost of vehicle sales	32,718			38,497			136,412			174,493
Yard depreciation and amortization	8,262			8,551			34,917			36,216
Yard stock-based payment compensation	495			754			2,216			2,610
Gross margin	118,784			116,939			483,376			468,573
General and administrative	24,640			32,173			111,381			127,536
General and administrative depreciation and amortization	3,010			4,825			11,656			17,510
General and administrative stock-based payment compensation	4,369			4,083			15,938			19,489
Impairment of long-lived assets	—			—			—			29,104
Total operating expenses	195,528			211,592			801,678			888,555
Operating income	86,765			75,858			344,401			274,934
Other (expense) income:
Interest expense, net	(5,372		)	(2,051		)	(17,304		)	(8,277		)
Other income, net	53			77			4,972			3,378
Total other expense	(5,319		)	(1,974		)	(12,332		)	(4,899		)
Income before income taxes	81,446			73,884			332,069			270,035
Income taxes	24,034			22,841			112,286			91,348
Net income	$	57,412		$	51,043		$	219,783		$	178,687
Basic net income per common share	$	0.46		$	0.41		$	1.75		$	1.42
Weighted average common shares outstanding	124,743			125,959			125,914			125,693
Diluted net income per common share	$	0.44		$	0.39		$	1.67		$	1.36
Diluted weighted average common shares outstanding	130,205			131,629			131,425			131,230

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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)

	July 31, 2015			July 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	456,012		$	158,668
Accounts receivable, net	215,696			196,985
Vehicle pooling costs and inventories	33,562			31,697
Income taxes receivable	6,092			2,288
Deferred income taxes	3,396			1,803
Prepaid expenses and other assets	19,824			20,850
Total current assets	734,582			412,291
Property and equipment, net	700,402			692,383
Intangibles, net	17,857			25,242
Goodwill	271,850			283,780
Deferred income taxes	28,840			36,721
Other assets	46,421			56,387
Total assets	$	1,799,952		$	1,506,804
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	147,452		$	152,156
Deferred revenue	3,724			4,170
Income taxes payable	8,279			8,284
Current portion of long-term debt and capital lease obligations	53,671			79,674
Total current liabilities	213,126			244,284
Deferred income taxes	5,322			7,372
Income taxes payable	21,157			23,771
Long-term debt and capital lease obligations, net of discount	592,135			223,227
Other liabilities	3,748			4,651
Total liabilities	835,488			503,305
Commitments and contingencies
Stockholders’ equity:
Preferred stock	—			—
Common stock	12			13
Additional paid-in capital	407,808			404,542
Accumulated other comprehensive loss	(68,793		)	(20,060		)
Retained earnings	625,437			619,004
Total stockholders’ equity	964,464			1,003,499
Total liabilities and stockholders’ equity	$	1,799,952		$	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)

	Twelve Months Ended   July 31,
	2015			2014
Cash flows from operating activities:
Net income	$	219,783		$	178,687
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization	48,893			53,726
Allowance for doubtful accounts	(578		)	1,087
Impairment of long-lived assets	—			29,104
Stock-based payment compensation	18,154			22,099
Excess tax benefits from stock-based payment compensation	(2,971		)	(2,289		)
Gain on sale of property and equipment	(918		)	(1,461		)
Deferred income taxes	4,365			(10,838		)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	(20,417		)	(12,870		)
Vehicle pooling costs and inventories	(2,622		)	399
Prepaid expenses and other current assets	69			(4,500		)
Other assets	10,125			(8,900		)
Accounts payable and accrued liabilities	(3,926		)	5,425
Deferred revenue	(438		)	(661		)
Income taxes receivable	(806		)	9,267
Income taxes payable	(1,971		)	2,816
Other liabilities	(1,666		)	1,503
Net cash provided by operating activities	265,076			262,594
Cash flows from investing activities:
Purchases of property and equipment including acquisitions, net of cash acquired	(79,153		)	(95,810		)
Investment in unconsolidated affiliate	(4,500		)	—
Proceeds from sale of property and equipment	1,738			3,707
Net cash used in investing activities	(81,915		)	(92,103		)
Cash flows from financing activities:
Proceeds from the exercise of stock options	3,634			10,412
Excess tax benefit from stock-based payment compensation	2,971			2,289
Proceeds from the issuance of Employee Stock Purchase Plan shares	3,079			2,339
Repurchases of common stock	(237,306		)	(572		)
Change in bank overdraft	—			(16,291		)
Proceeds from the issuance of long-term debt, net of discount	698,939			—
Debt offering costs	(955		)	—
Principal payments on long-term debt	(350,000		)	(75,000		)
Net cash provided by (used in) financing activities	120,362			(76,823		)
Effect of foreign currency translation	(6,179		)	1,369
Net increase in cash and cash equivalents	297,344			95,037
Cash and cash equivalents at beginning of period	158,668			63,631
Cash and cash equivalents at end of period	$	456,012		$	158,668
Supplemental disclosure of cash flow information:
Interest paid	$	18,121		$	8,768
Income taxes paid, net of refunds	$	109,925		$	82,813

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