Copart Reports Third Quarter Fiscal 2022 Financial Results

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DALLASCopart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended April 30, 2022.

For the three months ended April 30, 2022, revenue, gross profit, and net income were $939.9 million, $436.3 million, and $278.6 million, respectively. These represent an increase in revenue of $206.0 million, or 28.1%; an increase in gross profit of $54.9 million, or 14.4%; and a decrease in net income of $(8.2) million, or (2.9)%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $1.16 compared to $1.19 last year, a decrease of (2.5)%.

For the nine months ended April 30, 2022, revenue, gross profit, and net income were $2,617.5 million, $1,224.6 million, and $826.4 million, respectively. These represent an increase in revenue of $673.7 million, or 34.7%; an increase in gross profit of $239.0 million, or 24.3%; and an increase in net income of $145.9 million, or 21.4%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $3.42 compared to $2.83 last year, an increase of 20.8%.

Excluding the impact of certain income tax benefits related to stock-based compensation and certain legal matters, non-GAAP fully diluted earnings per share for the three months ended April 30, 2022 and 2021 were $1.17, and $1.09, respectively, which was an increase of 7.3%. Excluding the impact of certain income tax benefits related to stock-based compensation, certain legal matters and discrete income tax items, non-GAAP fully diluted earnings per share for the nine months ended April 30, 2022 and 2021, were $3.34, and $2.68, respectively, which was an increase of 24.6%. 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 Thursday, May 19, 2022, 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 and can be accessed via hyperlink at www.copart.com/investorrelations. A replay of the call will be available through August 2022 by visiting www.copart.com/investorrelations.

About Copart

Copart, Inc., founded in 1982, is a global leader in online vehicle auctions. Copart’s innovative technology and online auction platform links sellers to more than 750,000 members in over 170 countries. Copart offers services to process and sell vehicles to dealers, dismantlers, rebuilders, exporters, and to the general public. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers, vehicle rental companies, and individuals. With operations at over 200 locations in 11 countries, Copart has more than 250,000 vehicles available online every day. Copart currently operates in the United States (Copart.com), Canada (Copart.ca), the United Kingdom (Copart.co.uk), Brazil (Copart.com.br), the Republic of Ireland (Copart.ie), Germany (Copart.de), Finland (Copart.fi), the United Arab Emirates, Oman and Bahrain (Copartmea.com), and Spain (Copart.es). For more information, or to become a Member, visit Copart.com/Register.

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 exclude the impact of certain income tax benefits related to stock-based compensation, certain legal matters and discrete income tax items. 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.

Cautionary Note About Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including statements concerning the potential impact of the COVID-19 pandemic on our business, operations, and operating results. 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 amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended
April 30,

 

Nine Months Ended
April 30,

 

 

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Service revenues and vehicle sales:

 

 

 

 

 

 

Service revenues

$

766,316

 

$

623,846

 

22.8

%

$

2,145,224

 

$

1,671,819

 

28.3

%

Vehicle sales

 

173,625

 

 

110,064

 

57.7

%

 

472,309

 

 

272,062

 

73.6

%

Total service revenues and vehicle sales

 

939,941

 

 

733,910

 

28.1

%

 

2,617,533

 

 

1,943,881

 

34.7

%

Operating expenses:

 

 

 

 

 

 

Yard operations

 

313,365

 

 

230,794

 

35.8

%

 

878,740

 

 

646,690

 

35.9

%

Cost of vehicle sales

 

157,236

 

 

94,498

 

66.4

%

 

423,948

 

 

232,487

 

82.4

%

Yard depreciation and amortization

 

31,646

 

 

25,876

 

22.3

%

 

86,383

 

 

74,350

 

16.2

%

Yard stock-based compensation

 

1,417

 

 

1,401

 

1.1

%

 

3,813

 

 

4,746

 

(19.7

)%

Gross profit

 

436,277

 

 

381,341

 

14.4

%

 

1,224,649

 

 

985,608

 

24.3

%

General and administrative

 

50,188

 

 

39,174

 

28.1

%

 

134,057

 

 

110,326

 

21.5

%

General and administrative depreciation and amortization

 

4,933

 

 

6,090

 

(19.0

)%

 

15,269

 

 

17,957

 

(15.0

)%

General and administrative stock-based compensation

 

8,401

 

 

7,966

 

5.5

%

 

25,119

 

 

22,399

 

12.1

%

Total operating expenses

 

567,186

 

 

405,799

 

39.8

%

 

1,567,329

 

 

1,108,955

 

41.3

%

Operating income

 

372,755

 

 

328,111

 

13.6

%

 

1,050,204

 

 

834,926

 

25.8

%

Other expense:

 

 

 

 

 

 

Interest expense, net

 

(4,492

)

 

(5,346

)

(16.0

)%

 

(14,032

)

 

(15,227

)

(7.8

)%

Other income, net

 

1,342

 

 

770

 

74.3

%

 

1,314

 

 

3,103

 

(57.7

)%

Total other expense

 

(3,150

)

 

(4,576

)

(31.2

)%

 

(12,718

)

 

(12,124

)

4.9

%

Income before income taxes

 

369,605

 

 

323,535

 

14.2

%

 

1,037,486

 

 

822,802

 

26.1

%

Income tax expense

 

90,985

 

 

36,739

 

147.7

%

 

211,091

 

 

142,281

 

48.4

%

Net income

$

278,620

 

$

286,796

 

(2.9

)%

$

826,395

 

$

680,521

 

21.4

%

 

 

 

 

 

 

 

Basic net income per common share

$

1.17

 

$

1.21

 

(3.3

)%

$

3.48

 

$

2.88

 

20.8

%

Weighted average common shares outstanding

 

237,505

 

 

236,396

 

0.5

%

 

237,277

 

 

236,110

 

0.5

%

 

 

 

 

 

 

 

Diluted net income per common share

$

1.16

 

$

1.19

 

(2.5

)%

$

3.42

 

$

2.83

 

20.8

%

Diluted weighted average common shares outstanding

 

240,724

 

 

240,208

 

0.2

%

 

241,288

 

 

240,149

 

0.5

%

 

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

April 30, 2022

 

July 31, 2021

ASSETS

 

 

Current assets:

 

 

Cash, cash equivalents, and restricted cash

$

1,454,818

 

$

1,048,260

 

Investment in held to maturity securities

 

224,889

 

 

 

Accounts receivable, net

 

585,914

 

 

480,628

 

Vehicle pooling costs

 

114,028

 

 

94,449

 

Inventories

 

56,988

 

 

44,968

 

Income taxes receivable

 

1,581

 

 

20,012

 

Prepaid expenses and other assets

 

19,208

 

 

14,294

 

Total current assets

 

2,457,426

 

 

1,702,611

 

Property and equipment, net

 

2,402,809

 

 

2,296,624

 

Operating lease right-of-use assets

 

121,006

 

 

119,487

 

Intangibles, net

 

40,854

 

 

45,873

 

Goodwill

 

348,000

 

 

355,717

 

Other assets

 

73,779

 

 

41,831

 

Total assets

$

5,443,874

 

$

4,562,143

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

Current liabilities:

 

 

Accounts payable and accrued liabilities

$

398,414

 

$

369,826

 

Deferred revenue

 

21,087

 

 

20,973

 

Income taxes payable

 

6,907

 

 

7,760

 

Current portion of operating and finance lease liabilities

 

22,687

 

 

22,472

 

Total current liabilities

 

449,095

 

 

421,031

 

Deferred income taxes

 

78,023

 

 

63,969

 

Income taxes payable

 

61,359

 

 

52,345

 

Operating and finance lease liabilities, net of current portion

 

99,610

 

 

97,961

 

Long-term debt and other liabilities, net of discount

 

402,733

 

 

397,636

 

Total liabilities

 

1,090,820

 

 

1,032,942

 

Commitments and contingencies

 

 

Stockholders' equity:

 

 

Preferred stock

 

 

 

 

Common stock

 

24

 

 

24

 

Additional paid-in capital

 

811,900

 

 

761,834

 

Accumulated other comprehensive loss

 

(152,596

)

 

(100,860

)

Retained earnings

 

3,693,726

 

 

2,868,203

 

Total stockholders' equity

 

4,353,054

 

 

3,529,201

 

Total liabilities and stockholders' equity

$

5,443,874

 

$

4,562,143

 

 

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

Nine Months Ended April 30,

 

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

Net income

 

$

826,395

 

 

$

680,521

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization, including debt cost

 

 

102,333

 

 

 

93,141

 

Allowance for credit loss

 

 

1,456

 

 

 

(1,429

)

Equity in losses (earnings) of unconsolidated affiliates

 

 

794

 

 

 

(2,121

)

Stock-based compensation

 

 

28,932

 

 

 

27,145

 

Gain on sale of property and equipment

 

 

(1,280

)

 

 

(1,257

)

Deferred income taxes

 

 

14,582

 

 

 

(14,130

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(109,636

)

 

 

(81,593

)

Vehicle pooling costs

 

 

(20,029

)

 

 

(12,777

)

Inventories

 

 

(13,367

)

 

 

(18,788

)

Prepaid expenses, other current and non-current assets

 

 

(37,842

)

 

 

6,879

 

Operating lease right-of-use assets and lease liabilities

 

 

436

 

 

 

389

 

Accounts payable, accrued liabilities and other liabilities

 

 

45,745

 

 

 

47,914

 

Deferred revenue

 

 

388

 

 

 

8,467

 

Income taxes receivable

 

 

18,416

 

 

 

16,152

 

Income taxes payable

 

 

6,531

 

 

 

13,692

 

Net cash provided by operating activities

 

 

863,854

 

 

 

762,205

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

 

(234,810

)

 

 

(364,395

)

Purchase of assets in connection with acquisitions

 

 

(493

)

 

 

 

Proceeds from sale of property and equipment

 

 

2,622

 

 

 

599

 

Purchase of held to maturity securities

 

 

(374,866

)

 

 

 

Proceeds from the sale of held to maturity securities

 

 

149,977

 

 

 

 

Net cash used in investing activities

 

 

(457,570

)

 

 

(363,796

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from the exercise of stock options

 

 

16,108

 

 

 

28,829

 

Proceeds from the issuance of Employee Stock Purchase Plan shares

 

 

5,026

 

 

 

4,880

 

Payments for employee stock-based tax withholdings

 

 

(872

)

 

 

(938

)

Debt offering costs

 

 

(1,212

)

 

 

 

Payments of finance lease obligations

 

 

(472

)

 

 

(962

)

Net cash provided by financing activities

 

 

18,578

 

 

 

31,809

 

Effect of foreign currency translation

 

 

(18,304

)

 

 

3,954

 

Net increase in cash, cash equivalents, and restricted cash

 

 

406,558

 

 

 

434,172

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

1,048,260

 

 

 

477,718

 

Cash, cash equivalents, and restricted cash at end of period

 

$

1,454,818

 

 

$

911,890

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid

 

$

14,485

 

 

$

14,736

 

Income taxes paid, net of refunds

 

$

195,521

 

 

$

126,303

 

 

Copart, Inc.

Additional Financial Information

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended
April 30,

 

Nine Months Ended
April 30,

 

 

2022

 

2021

 

2022

 

2021

GAAP net income

 

$

278,620

 

 

$

286,796

 

 

$

826,395

 

 

$

680,521

 

Effect of certain discrete income tax items

 

 

 

 

 

(19,764

)

 

 

(17,490

)

 

 

(19,764

)

Effect of certain legal matters, net of tax

 

 

5,092

 

 

 

 

 

 

5,092

 

 

 

 

Effect of recognizing tax benefit on exercise of stock-based compensation

 

 

(2,244

)

 

 

(4,910

)

 

 

(9,197

)

 

 

(18,850

)

Non-GAAP net income

 

$

281,468

 

 

$

262,122

 

 

$

804,800

 

 

$

641,907

 

 

 

 

 

 

 

 

 

 

GAAP net income per diluted common share

 

$

1.16

 

 

$

1.19

 

 

$

3.42

 

 

$

2.83

 

Non-GAAP net income per diluted common share

 

$

1.17

 

 

$

1.09

 

 

$

3.34

 

 

$

2.68

 

 

Brooke Boston, Executive Assistant, Office of the Chief Financial Officer
brooke.boston@copart.com

Source: Copart, Inc.