10-QPeriod: Q1 FY2009

COPART INC Quarterly Report for Q1 Ended Oct 31, 2008

Filed December 10, 2008For Securities:CPRT

Summary

Copart, Inc. reported net income of $37.3 million for the three months ended October 31, 2008, a slight decrease from $37.6 million in the prior year period. While revenues saw a modest increase of 4.1% to $191.6 million, driven by North American growth, the UK segment experienced a revenue decline. Operating costs rose slightly, and other income decreased due to lower cash balances and yields. The company continued its expansion efforts, opening new facilities and making acquisitions, primarily in the UK. Liquidity remained strong with $50.8 million in cash and cash equivalents and $106.0 million in working capital. Capital expenditures increased year-over-year, reflecting ongoing investment in facilities. Copart also has a $200 million revolving credit facility, which remained undrawn as of the reporting period. The company anticipates sufficient operating cash flow for the next twelve months, but may seek additional financing for significant future growth.

Key Highlights

  • 1Revenue increased by 4.1% to $191.6 million for the three months ended October 31, 2008, compared to $184.0 million in the prior year.
  • 2Net income for the quarter was $37.3 million, a slight decrease from $37.6 million in the same period last year.
  • 3The company continued its expansion, opening new facilities in North America and integrating recent UK acquisitions.
  • 4Cash and cash equivalents increased to $50.8 million as of October 31, 2008, from $38.9 million at the end of the previous fiscal quarter.
  • 5Capital expenditures increased to $29.2 million for the quarter, reflecting ongoing investment in facilities and equipment.
  • 6Copart maintains a $200 million revolving credit facility, with no outstanding balance as of October 31, 2008.
  • 7The UK segment experienced a revenue decline of $4.4 million, partly due to foreign currency translation effects.

Frequently Asked Questions

For the three months ended October 31, 2008, Copart reported revenue of $191.6 million, an increase of 4.1% compared to $183.9 million in the same period of 2007. Net income was $37.3 million, a slight decrease from $37.6 million in the prior year's quarter.

As of October 31, 2008, Copart had $50.8 million in cash and cash equivalents and $106.0 million in working capital. The company believes its current cash and cash equivalents, along with cash generated from operations, will be sufficient for its operating and working capital needs for at least the next 12 months.

Revenue growth was primarily driven by North America, which saw an increase of $9.4 million from same-store sales and an additional $2.6 million from new facilities. However, revenue in the UK declined by $4.4 million, partly due to a $5.2 million negative impact from currency translation rates.

Yes, Copart has been actively expanding. In fiscal 2008, they acquired eight new facilities in the UK and one in North America, and opened six new facilities in North America. In fiscal 2009, they opened two new facilities in Louisville, Kentucky and Richmond, Virginia. Their international presence was significantly bolstered by the acquisition of Universal Salvage plc in the UK in June 2007.