Copart Reports First Quarter Fiscal 2022 Financial Results

Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended October 31, 2021.

For the three months ended October 31, 2021, revenue, gross profit, and net income were $810.1 million, $385.0 million, and $260.4 million, respectively. These represent an increase in revenue of $217.2 million, or 36.6%; an increase in gross profit of $88.3 million, or 29.7%; and an increase in net income of $60.1 million, or 30.0%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $1.08 compared to $0.83 last year, an increase of 30.1%.

Excluding the impact of certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the three months ended October 31, 2021 and 2020, were $1.07, and $0.79, respectively, which was an increase of 35.4%. 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, November 18, 2021, 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 February 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. 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

October 31,

2021

2020

% Change

Service revenues and vehicle sales:

Service revenues

$

667,818

$

515,372

29.6

%

Vehicle sales

142,314

77,568

83.5

%

Total service revenues and vehicle sales

810,132

592,940

36.6

%

Operating expenses:

Yard operations

271,276

206,986

31.1

%

Cost of vehicle sales

126,408

64,360

96.4

%

Yard depreciation and amortization

26,437

23,294

13.5

%

Yard stock-based compensation

981

1,531

(35.9)

%

Gross profit

385,030

296,769

29.7

%

General and administrative

41,115

35,138

17.0

%

General and administrative depreciation and amortization

5,323

5,655

(5.9)

%

General and administrative stock-based compensation

8,471

7,382

14.8

%

Total operating expenses

480,011

344,346

39.4

%

Operating income

330,121

248,594

32.8

%

Other expense:

Interest expense, net

(5,107)

(5,032)

1.5

%

Other income, net

812

3,253

(75.0)

%

Total other expense

(4,295)

(1,779)

141.4

%

Income before income taxes

325,826

246,815

32.0

%

Income tax expense

65,463

46,530

40.7

%

Net income

$

260,363

$

200,285

30.0

%

Basic net income per common share

$

1.10

$

0.85

29.4

%

Weighted average common shares outstanding

237,068

235,791

0.5

%

Diluted net income per common share

$

1.08

$

0.83

30.1

%

Diluted weighted average common shares outstanding

241,221

239,968

0.5

%

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

October 31, 2021

July 31, 2021

ASSETS

Current assets:

Cash, cash equivalents, and restricted cash

$

1,298,373

$

1,048,260

Accounts receivable, net

562,637

480,628

Vehicle pooling costs

115,994

94,449

Inventories

48,194

44,968

Income taxes receivable

537

20,012

Prepaid expenses and other assets

14,045

14,294

Total current assets

2,039,780

1,702,611

Property and equipment, net

2,318,701

2,296,624

Operating lease right-of-use assets

123,254

119,487

Intangibles, net

43,914

45,873

Goodwill

354,062

355,717

Other assets

39,141

41,831

Total assets

$

4,918,852

$

4,562,143

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

411,249

$

369,826

Deferred revenue

19,951

20,973

Income taxes payable

37,175

7,760

Current portion of operating and finance lease liabilities

23,536

22,472

Total current liabilities

491,911

421,031

Deferred income taxes

72,166

63,969

Income taxes payable

51,094

52,345

Operating and finance lease liabilities, net of current portion

100,920

97,961

Long-term debt and other liabilities, net of discount

408,940

397,636

Total liabilities

1,125,031

1,032,942

Commitments and contingencies

Stockholders' equity:

Preferred stock

Common stock

24

24

Additional paid-in capital

776,858

761,834

Accumulated other comprehensive loss

(111,378)

(100,860)

Retained earnings

3,128,317

2,868,203

Total stockholders' equity

3,793,821

3,529,201

Total liabilities and stockholders' equity

$

4,918,852

$

4,562,143

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

Three Months Ended October 31,

2021

2020

Cash flows from operating activities:

Net income

$

260,363

$

200,285

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

Depreciation and amortization, including debt cost

32,049

29,227

Allowance for credit loss

295

(157)

Equity in losses (earnings) of unconsolidated affiliates

168

(1,741)

Stock-based compensation

9,452

8,913

Gain on sale of property and equipment

(440)

(1,230)

Deferred income taxes

8,319

6,239

Changes in operating assets and liabilities:

Accounts receivable

(82,676)

(57,860)

Vehicle pooling costs

(21,697)

(10,600)

Inventories

(3,463)

(8,259)

Prepaid expenses and other current and non-current assets

3,071

15,236

Operating lease right-of-use assets and lease liabilities

382

153

Accounts payable and accrued liabilities

62,013

42,880

Deferred revenue

(979)

1,251

Income taxes receivable

19,479

25,825

Income taxes payable

26,204

8,371

Net cash provided by operating activities

312,540

258,533

Cash flows from investing activities:

Purchases of property and equipment

(64,696)

(147,093)

Proceeds from sale of property and equipment

813

271

Net cash used in investing activities

(63,883)

(146,822)

Cash flows from financing activities:

Proceeds from the exercise of stock options

5,572

20,014

Payments for employee stock-based tax withholdings

(249)

(489)

Payments of finance lease obligations

(157)

(327)

Net cash provided by financing activities

5,166

19,198

Effect of foreign currency translation

(3,710)

(2,895)

Net increase in cash, cash equivalents, and restricted cash

250,113

128,014

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

$

1,298,373

$

605,732

Supplemental disclosure of cash flow information:

Interest paid

$

5,080

$

4,762

Income taxes paid, net of refunds

$

10,089

$

6,157

Copart, Inc.

Additional Financial Information

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)

 

Three Months Ended

October 31,

2021

2020

GAAP net income

$

260,363

$

200,285

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

(2,987)

(11,773)

Non-GAAP net income

$

257,376

$

188,512

GAAP net income per diluted common share

$

1.08

$

0.83

Non-GAAP net income per diluted common share

$

1.07

$

0.79

Contacts:

Melissa Hunter, Executive Support Manager, Office of the Chief Financial Officer
972-391-5090 or melissa.hunter@copart.com

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