Copart Reports Fourth Quarter Fiscal 2016 Financial Results

Dienstag, 20.09.2016 22:11



DALLAS --(BUSINESS WIRE)--

Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2016.

For the three months ended July 31, 2016, revenue, gross margin, operating income, and net income were $332.7 million, $141.5 million, $106.2 million, and $84.1 million, respectively. These represent an increase in revenue of $50.4 million, or 17.8%; an increase in gross margin of $22.7 million, or 19.1%; an increase in operating income of $19.4 million, or 22.4%; and an increase in net income of $26.7 million, or 46.5%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.71 compared to $0.44 last year, an increase of 61.4%.

For the year ended July 31, 2016, revenue, gross margin, operating income, and net income were $1.3 billion, $544.6 million, $406.5 million, and $270.4 million, respectively. These represent an increase in revenue of $122.4 million, or 10.7%; an increase in gross margin of $61.2 million, or 12.7%; an increase in operating income of $62.1 million, or 18.0%; and an increase in net income of $50.6 million, or 23.0%, respectively, from the same period last year. Fully diluted earnings per share for the year ended July 31, 2016 were $2.21 compared to $1.67 last year, an increase of 32.3%.

Excluding the impact of changes in foreign currency exchange rates, and certain tax benefits and foreign income tax credit limitations related to accounting for stock option exercises, non-GAAP fully diluted earnings per share for the three months and year ended July 31, 2016, were $0.59 and $2.10, respectively. A reconciliation of non-GAAP financial measures to the most directly comparable financial measures computed in accordance with U.S. generally accepted accounting principles (GAAP) can be found in the tables attached to this press release.

On Wednesday, September 21, 2016, 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/copart092116. A replay of the call will be available through November 20, 2016 by calling (877) 919-4059. Use confirmation code # 55146557.

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 using its VB3 technology. Copart sells vehicles on behalf of insurance companies, banks, financial institutions, charities, car dealerships, fleet operators, vehicle rental companies, as well as vehicles sourced from the general public. The company currently operates in the United States (www.copart.com), Canada (www.copart.ca), 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), Spain (www.copart.es), Ireland (www.copart.ie), and India (www.copart.in). Copart links sellers to more than 750,000 Members in more than 150 countries worldwide through its multi-channel platform. In 2015, Copart was ranked at the top of Deloitte’s “The 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.

Use of Non-GAAP Financial Measures

Included in this release are certain non-GAAP financial measures, including non-GAAP net income per diluted share, which reflect the impact of changes in foreign currency exchange rates, and certain tax benefits and foreign income tax credit limitations, related to accounting for stock option exercises. These non-GAAP financial measures do not represent alternative financial measures under GAAP. In addition, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Furthermore, these non-GAAP financial measures do not reflect a comprehensive view of Copart’s operations in accordance with GAAP and should only be read in conjunction with the corresponding GAAP financial measures. This information constitutes non-GAAP financial measures within the meaning of Regulation G adopted by the U.S. Securities and Exchange Commission. Accordingly, Copart has presented herein, and will present in other information it publishes that contains these non-GAAP financial measures, a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Copart believes the presentation of non-GAAP net income per diluted share included in this release in conjunction with the corresponding GAAP financial measures provides meaningful information for investors, analysts and management in assessing Copart’s business trends and financial performance. From a financial planning and analysis perspective, Copart management analyzes its operating results with and without the impact of changes in foreign currency exchange rates, and certain tax benefits and foreign income tax credit limitations related to accounting for stock option exercises.

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.

         

Copart, Inc.

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

 
Three Months Ended Twelve Months Ended
July 31, July 31,
2016     2015 2016     2015
Service revenues and vehicle sales:
Service revenues $ 289,488 $ 243,671 $ 1,104,379 $ 985,363
Vehicle sales 43,171   38,622   164,070   160,716  
Total service revenues and vehicle sales 332,659 282,293 1,268,449 1,146,079
Operating expenses:
Yard operations 144,859 122,034 546,576 489,158
Cost of vehicle sales 37,020 32,718 140,959 136,412
Yard depreciation and amortization 8,722 8,262 33,658 34,917
Yard stock-based payment compensation 594   495   2,670   2,216  
Gross margin 141,464 118,784 544,586 483,376
General and administrative 26,561 24,640 105,005 111,381
General and administrative depreciation and amortization 4,276 3,010 14,917 11,656
General and administrative stock-based payment compensation 4,436   4,369   18,194   15,938  
Total operating expenses 226,468   195,528   861,979   801,678  
Operating income 106,191 86,765 406,470 344,401
Other (expense) income:
Interest expense, net (6,257 ) (5,372 ) (22,157 ) (17,304 )
Other income, net 6,051   53   11,552   4,972  
Total other expenses (206 ) (5,319 ) (10,605 ) (12,332 )
Income before income taxes 105,985 81,446 395,865 332,069
Income taxes 21,863   24,034   125,505   112,286  
Net income $ 84,122   $ 57,412   $ 270,360   $ 219,783  
 
Basic net income per common share $ 0.77   $ 0.46   $ 2.36   $ 1.75  
Weighted average common shares outstanding 109,578   124,743   114,423   125,914  
 
Diluted net income per common share $ 0.71   $ 0.44   $ 2.21   $ 1.67  
Diluted weighted average common shares outstanding 118,519   130,205   122,147   131,425  
 
         
Copart, Inc.
Consolidated Balance Sheets

(In thousands)

(Unaudited)

 
July 31, 2016 July 31, 2015
ASSETS
Current assets:
Cash and cash equivalents $ 155,849 $ 456,012
Accounts receivable, net 266,270 215,696
Vehicle pooling costs and inventories 38,987 33,562
Income taxes receivable 18,751 6,092
Deferred income taxes 1,444 3,396
Prepaid expenses and other assets 18,005   19,824  
Total current assets 499,306 734,582
Property and equipment, net 816,791 700,402
Intangibles, net 11,761 17,857
Goodwill 260,198 271,850
Deferred income taxes 23,506 28,840
Other assets 38,258   45,129  
Total assets $ 1,649,820   $ 1,798,660  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 192,379 $ 147,452
Deferred revenue 4,628 3,724
Income taxes payable 5,625 8,279
Current portion of long-term debt, revolving credit facility, and capital lease obligations 76,151   53,671  
Total current liabilities 278,783 213,126
Deferred income taxes 3,816 5,322
Income taxes payable 25,641 21,157
Long-term debt and capital lease obligations, net of discount 564,341 590,843
Other liabilities 2,783   3,748  
Total liabilities 875,364 834,196
Commitments and contingencies
Stockholders’ equity:
Preferred stock
Common stock 11 12
Additional paid-in capital 392,445 407,808
Accumulated other comprehensive loss (109,194 ) (68,793 )
Retained earnings 491,194   625,437  
Total stockholders’ equity 774,456   964,464  
Total liabilities and stockholders’ equity $ 1,649,820   $ 1,798,660  
 
     
Copart, Inc.
Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
Twelve Months Ended
July 31,
2016     2015
Cash flows from operating activities:
Net income $ 270,360 $ 219,783
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 49,643 48,893
Allowance for doubtful accounts 1,175 (578 )
Equity in losses of unconsolidated affiliates 895
Stock-based payment compensation 20,864 18,154
Excess tax benefits from stock-based payment compensation (2,971 )
Gain on sale of property and equipment (54 ) (918 )
Deferred income taxes 5,740 4,365
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable (54,213 ) (20,417 )
Vehicle pooling costs and inventories (6,646 ) (2,622 )
Prepaid expenses and other current assets (738 ) 69
Other assets 4,164 10,125
Accounts payable and accrued liabilities 48,347 (3,926 )
Deferred revenue 983 (438 )
Income taxes receivable (12,649 ) (806 )
Income taxes payable 2,788 (1,971 )
Other liabilities 1,839   (1,666 )
Net cash provided by operating activities 332,498 265,076
Cash flows from investing activities:
Purchases of property and equipment (173,917 ) (79,153 )
Investment in unconsolidated affiliate (4,500 )
Proceeds from sale of property and equipment 662 1,738
Purchases of marketable securities (21,119 )
Proceeds from sale of marketable securities 21,498    
Net cash used in investing activities (172,876 ) (81,915 )
Cash flows from financing activities:
Proceeds from the exercise of stock options 13,240 3,634
Excess tax benefit from stock-based payment compensation 2,971
Proceeds from the issuance of Employee Stock Purchase Plan shares 3,369 3,079
Repurchases of common stock (457,894 ) (237,306 )
Proceeds from the issuance of long-term debt, net of discount 93,468 698,939
Proceeds from revolving loan facility, net of repayments 238,000
Debt offering costs (1,179 ) (955 )
Principal payments on long-term debt (337,500 ) (350,000 )
Net cash (used in) provided by financing activities (448,496 ) 120,362
Effect of foreign currency translation (11,289 ) (6,179 )
Net (decrease) increase in cash and cash equivalents (300,163 ) 297,344
Cash and cash equivalents at beginning of period 456,012   158,668  
Cash and cash equivalents at end of period $ 155,849   $ 456,012  
Supplemental disclosure of cash flow information:
Interest paid $ 23,606   $ 18,121  
Income taxes paid, net of refunds $ 127,981   $ 109,925  
 
         
Copart, Inc.
Additional Financial Information
Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands)

(Unaudited)

 
Three Months Ended Twelve Months Ended
July 31, July 31,
2016     2015 2016     2015
GAAP net income $ 84,122 $ 57,412 $ 270,360 $ 219,783
Effect of changes in foreign currency exchange rates, net of tax (3,521 ) 1,610 (4,860 ) 534
Effect of tax benefit of ASU 2016-09 adoption and limitations of foreign income tax credits(1) (11,594 )   (12,440 )
Non-GAAP net income $ 69,007   $ 59,022   $ 253,060   $ 220,317
 
GAAP diluted net income per common share $ 0.71   $ 0.44   $ 2.21   $ 1.67
Non-GAAP diluted net income per common share $ 0.59   $ 0.45   $ 2.10   $ 1.68
 
GAAP diluted weighted average common shares outstanding 118,519 130,205 122,147 131,425
Effect on common equivalent shares from ASU 2016-09 adoption(1) (2,286 )   (1,864 )
Non-GAAP diluted weighted average commons shares outstanding 116,233   130,205   120,283   131,425
 
(1)        

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. Under this standard, all excess tax benefits and tax deficiencies related to exercises of stock options are recognized as income tax expense or benefit in the income statement as discrete items in the reporting period in which they occur. Additionally, excess tax benefits are classified as an operating activity on the consolidated statements of cash flows. The Company early adopted ASU 2016-09 during the fourth quarter of fiscal 2016 on a modified retrospective basis. For a more complete discussion, please review the Company's Annual Report on Form 10-K, to be filed with the Securities and Exchange Commission on or before September 29, 2016.

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