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Copart Exceeds Estimates

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Copart, Inc. (CPRT - Free Report) posted a robust 54% increase in profits to 71 cents per share (excluding impairment charges) in the second quarter of its fiscal year ended January 31, 2012 from 46 cents per share in the same quarter of the prior fiscal year.

The company’s profits exceeded the Zacks Consensus Estimate by 12 cents per share. In absolute terms, profits went up 30% to $49.4 million (excluding impairment charges) from $37.9 million in the second quarter of fiscal 2011.

Revenues in the quarter grew 10% to $227.9 million, which is higher than the Zacks Consensus Estimate of $219 million. Service revenues scaled up 9% to $189.7 million while Vehicle revenues escalated 14% to $38.2 million.

Operating profit rose 6% to $63.5 million, reflecting an operating margin of 28% during the quarter.

Under the existing share repurchase program, Copart repurchased 1.97 million shares of its common stock at a weighted average price of $46.34 during the quarter. Since the beginning of fiscal 2011, the company has repurchased 21.89 shares of its common stock for $39.75 per share. At the end of the quarter, the company had 25.51 shares available for repurchase under the repurchase program.

Copart had cash and cash equivalents of $127.6 million as of January 31, 2012, up from $74.0 million as of July 31, 2011. Long-term debt and capital lease obligations amounted to $481.7 million as of January 31, 2012, up from $375.8 million as of July 31, 2011. Consequently, the debt-to-capitalization ratio increased to 48.7% as of January 31, 2012 from 40.4% as of July 31, 2011.

In the six months ended January 31, 2012, the company’s net cash flow was $90.3 million from operating activities, down from $93.3 million in the prior-year period. The decline in cash flow was attributable to lower accounts payable and accrued liabilities and lower deferred income taxes compared with the prior-year period. Capital expenditures (net) fell significantly to $14.3 million from $22.1 million in the first half of fiscal 2011.

Copart, a Zacks #2 Rank (Buy) stock, is headquartered in Fairfield, California. The company provides online auctions and vehicle remarketing services in the U.S., Canada and the U.K. It offers a range of services for processing and selling vehicles over the Internet through its Virtual Bidding Second Generation Internet auction-style sales technology, to vehicle sellers, primarily insurance companies, banks and financial institutions, charities, car dealerships, fleet operators, and vehicle rental companies.

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