10-KPeriod: FY2009

COPART INC Annual Report, Year Ended Jul 31, 2009

Filed September 29, 2009For Securities:CPRT

Summary

Copart, Inc. operates as a leading provider of online auctions and vehicle remarketing services. For the fiscal year ended July 31, 2009, the company generated revenues of approximately $743.1 million and an operating income of approximately $225.3 million. The company's primary business model involves facilitating the sale of vehicles, predominantly from insurance companies, to licensed dismantlers, rebuilders, dealers, and exporters through its proprietary VB2 internet auction platform. Copart continues to expand its global footprint, notably through acquisitions in the UK, and is focused on enhancing its service offerings and leveraging technology to drive efficiency and maximize sales prices. The company highlights its competitive advantages in national coverage, value-added services, proven acquisition integration capabilities, and advanced technology. Despite a challenging economic environment, Copart's diversified revenue streams and strategic growth initiatives position it for continued operation within the vehicle remarketing sector.

Financial Highlights

32 data points
Beta

Revenue

$743.08M

85.7% Gross Margin

Net Income

$141.10M

19.0% Net Margin

EPS (Diluted)

$0.10

Cash & Equivalents

$162.69M

Free Cash Flow

$124.43M

Financial Statements
Beta
Revenue$743.08M
Cost of Revenue$106.03M
Gross Profit$637.05M
Operating Expenses$517.76M
Operating Income$225.32M
Interest Expense$274K
Net Income$141.10M
EPS (Basic)$0.11
EPS (Diluted)$0.10
Shares Outstanding (Basic)1.34B
Shares Outstanding (Diluted)1.36B

Key Highlights

  • 1For the fiscal year ended July 31, 2009, Copart reported revenues of $743.1 million and operating income of $225.3 million.
  • 2The company's core business is facilitating vehicle remarketing and online auctions, primarily for insurance companies, through its VB2 internet platform.
  • 3Copart has expanded its international presence, particularly in the UK, through strategic acquisitions.
  • 4The company emphasizes its competitive advantages, including extensive national coverage, value-added services, technological integration (VB2), and a proven track record of successful acquisitions.
  • 5Copart generated significant revenue from service fees charged to both sellers and buyers, with vehicle sales revenue predominantly from UK operations.
  • 6The company's financial performance was influenced by factors such as foreign currency exchange rates (GBP to USD), commodity prices, used car pricing, and operational expansion.
  • 7Copart maintains a strong liquidity position with $162.7 million in cash and cash equivalents as of July 31, 2009, and believes its operating cash flow is sufficient for its needs over the next 12 months.

Frequently Asked Questions

Copart provides online auctions and vehicle remarketing services. It generates revenue primarily through service fees charged to vehicle sellers and buyers for facilitating the sale of vehicles, predominantly total loss or recovered stolen vehicles from insurance companies. In the UK, the company also operates on a principal basis, purchasing vehicles and reselling them.

Copart's growth strategy includes acquiring and developing new facilities in key domestic and international markets, pursuing national and regional vehicle supply agreements, expanding its online auction and remarketing service offerings to both sellers and buyers, and further leveraging its VB2 technology in new markets.

Copart's expansion into the UK, primarily through acquisitions like Universal Salvage plc, has increased its global footprint and revenue. However, it also introduced operational complexities, currency exchange rate risks (GBP to USD fluctuations), and a shift towards a principal-based sales model in the UK, which impacts gross margin percentages and inventory risks compared to the agent-based model in North America.

Key risks include dependence on a limited number of major vehicle sellers, challenges integrating international acquisitions, potential impairment of goodwill, operational risks in the UK due to the principal model, technology risks associated with its VB2 platform, fluctuating market conditions (commodity prices, used car values, fuel costs), intense competition, and potential environmental liabilities.