10-KPeriod: FY2013

COPART INC Annual Report, Year Ended Jul 31, 2013

Filed September 30, 2013For Securities:CPRT

Summary

Copart, Inc. (CPRT) operates as a leading provider of online auctions and vehicle remarketing services across the United States, Canada, the United Kingdom, and Brazil, with additional presence in the UAE, Germany, and Spain. The company primarily serves insurance companies, banks, charities, and dealerships by processing and selling vehicles, predominantly salvage or recovered stolen vehicles, through its proprietary Virtual Bidding Second Generation (VB2) internet auction platform. This technology expands the buyer pool globally, enhancing competition and sales prices. Financially, for the fiscal year ended July 31, 2013, Copart reported revenues of $1,046.4 million and operating income of $283.0 million. The company has been actively expanding its physical footprint through acquisitions and greenfield developments in various international markets, including Brazil, the UAE, Germany, and Spain, as well as a significant number of facilities in North America. This aggressive expansion strategy, coupled with its technology-driven auction model and value-added services, positions Copart for continued growth in the vehicle remarketing industry.

Financial Highlights

53 data points
Beta

Revenue

$1.05B

84.0% Gross Margin

Net Income

$180.03M

17.2% Net Margin

EPS (Diluted)

$0.17

Total Assets

$1.33B

Cash & Equivalents

$63.63M

Free Cash Flow

$69.06M

Financial Statements
Beta
Revenue$1.05B
Cost of Revenue$167.24M
Gross Profit$879.15M
Operating Income$282.99M
Interest Expense$10.27M
Net Income$180.03M
EPS (Basic)$0.18
EPS (Diluted)$0.17
Shares Outstanding (Basic)999.30M
Shares Outstanding (Diluted)1.04B

Key Highlights

  • 1Copart reported revenues of $1,046.4 million for the fiscal year ended July 31, 2013, demonstrating significant top-line growth.
  • 2The company continues its aggressive expansion strategy, acquiring 43 new facilities in North America and expanding into Brazil, UAE, Germany, and Spain during fiscal year 2013.
  • 3Copart's proprietary VB2 (Virtual Bidding Second Generation) internet auction platform is a key competitive advantage, enabling global buyer access and enhancing sales efficiency.
  • 4Insurance companies remain the primary vehicle sellers, accounting for 82% of total vehicles processed, highlighting a strong and consistent supplier base.
  • 5No single customer accounted for more than 10% of revenues, indicating a diversified customer base among sellers.
  • 6The company is in the process of implementing a new Enterprise Resource Planning (ERP) system, scheduled for completion through fiscal years 2014 and 2015, which is expected to enhance operational efficiency.
  • 7Copart repurchased 500,000 shares of its common stock in fiscal year 2013 as part of its ongoing stock repurchase program.

Frequently Asked Questions

Copart's primary business is providing online auctions and vehicle remarketing services, predominantly for insurance companies. They generate revenue mainly through fees charged to vehicle sellers and buyers for each transaction, as well as related fees for services like towing and storage. In some regions, like the UK, they also operate on a principal basis, purchasing vehicles and reselling them for their own account.

Copart is actively expanding its global footprint through both acquisitions of existing facilities and greenfield development. In fiscal year 2013 alone, they acquired 43 facilities in North America and established operations in Brazil, the UAE, Germany, and Spain, demonstrating a commitment to international growth.

Key risks include dependence on a limited number of major vehicle sellers, potential adverse impacts from international expansion, risks associated with operating in foreign markets (political, regulatory, economic), potential issues with implementing the new ERP system, competition, environmental liabilities, and the impact of macroeconomic factors like fuel prices and economic downturns on business volume.

No, Copart has not paid a cash dividend since becoming a public company in 1994. The company currently intends to retain earnings for use in its business and is considering various uses for its cash, including stock repurchases, debt repayment, and potential acquisitions, but dividends are not a current priority.