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Copart Reports Third Quarter Fiscal 2021 Financial Results

DALLAS–(BUSINESS WIRE)–#CopartEarnings–Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended April 30, 2021.

For the three months ended April 30, 2021, revenue, gross profit, and net income were $733.9 million, $381.3 million, and $286.8 million, respectively. These represent an increase in revenue of $183.6 million, or 33.4%; an increase in gross profit of $138.7 million, or 57.2%; and an increase in net income of $139.3 million, or 94.5%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $1.19 compared to $0.62 last year, an increase of 91.9%.

For the nine months ended April 30, 2021, revenue, gross profit, and net income were $1.9 billion, $985.6 million, and $680.5 million, respectively. These represent an increase in revenue of $264.0 million, or 15.7%; an increase in gross profit of $228.2 million, or 30.1%; and an increase in net income of $146.1 million, or 27.3%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $2.83 compared to $2.24 last year, an increase of 26.3%.

Excluding the impact of certain discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to stock-based compensation, non-GAAP fully diluted earnings per share for the three months ended April 30, 2021 and 2020, were $1.09, and $0.58, respectively, which was an increase of 87.9%. Excluding the impact of certain discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to stock-based compensation, non-GAAP fully diluted earnings per share for the nine months ended April 30, 2021 and 2020, were $2.67, and $1.87, respectively, which was an increase of 42.8%. 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 20, 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 August 2021 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 salvage and clean title vehicles to dealers, dismantlers, rebuilders, exporters, and in some jurisdictions, to the general public. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers and individuals. With operations at over 200 locations in 11 countries, Copart has more than 175,000 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 discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes 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. From a financial planning and analysis perspective, Copart management analyzes its operating results with and without the impact of certain discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to stock-based compensation.

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,

 

 

2021

 

2020

 

2021

 

2020

Service revenues and vehicle sales:

 

 

 

 

 

 

 

 

Service revenues

 

$

623,846

 

 

 

$

491,582

 

 

 

$

1,671,819

 

 

 

$

1,489,472

 

 

Vehicle sales

 

110,064

 

 

 

58,778

 

 

 

272,062

 

 

 

190,452

 

 

Total service revenues and vehicle sales

 

733,910

 

 

 

550,360

 

 

 

1,943,881

 

 

 

1,679,924

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Yard operations

 

230,794

 

 

 

231,985

 

 

 

646,690

 

 

 

692,547

 

 

Cost of vehicle sales

 

94,498

 

 

 

53,987

 

 

 

232,487

 

 

 

170,651

 

 

Yard depreciation and amortization

 

25,876

 

 

 

20,333

 

 

 

74,350

 

 

 

55,384

 

 

Yard stock-based compensation

 

1,401

 

 

 

1,442

 

 

 

4,746

 

 

 

3,971

 

 

Gross profit

 

381,341

 

 

 

242,613

 

 

 

985,608

 

 

 

757,371

 

 

General and administrative

 

39,174

 

 

 

37,017

 

 

 

110,326

 

 

 

115,102

 

 

General and administrative depreciation and amortization

 

6,090

 

 

 

6,382

 

 

 

17,957

 

 

 

18,627

 

 

General and administrative stock-based compensation

 

7,966

 

 

 

4,113

 

 

 

22,399

 

 

 

13,258

 

 

Total operating expenses

 

405,799

 

 

 

355,259

 

 

 

1,108,955

 

 

 

1,069,540

 

 

Operating income

 

328,111

 

 

 

195,101

 

 

 

834,926

 

 

 

610,384

 

 

Other expense:

 

 

 

 

 

 

 

 

Interest expense, net

 

(5,346

)

 

 

(5,578

)

 

 

(15,227

)

 

 

(14,068

)

 

Other income, net

 

770

 

 

 

2,277

 

 

 

3,103

 

 

 

2,640

 

 

Total other expense

 

(4,576

)

 

 

(3,301

)

 

 

(12,124

)

 

 

(11,428

)

 

Income before income taxes

 

323,535

 

 

 

191,800

 

 

 

822,802

 

 

 

598,956

 

 

Income tax expense

 

36,739

 

 

 

44,313

 

 

 

142,281

 

 

 

64,582

 

 

Net income

 

$

286,796

 

 

 

$

147,487

 

 

 

$

680,521

 

 

 

$

534,374

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

1.21

 

 

 

$

0.63

 

 

 

$

2.88

 

 

 

$

2.30

 

 

Weighted average common shares outstanding

 

236,396

 

 

 

234,133

 

 

 

236,110

 

 

 

232,647

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

1.19

 

 

 

$

0.62

 

 

 

$

2.83

 

 

 

$

2.24

 

 

Diluted weighted average common shares outstanding

 

240,208

 

 

 

238,591

 

 

 

240,149

 

 

 

238,564

 

 

 

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

April 30, 2021

 

July 31, 2020

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents, and restricted cash

 

$

911,890

 

 

 

$

477,718

 

 

Accounts receivable, net

 

434,873

 

 

 

350,207

 

 

Vehicle pooling costs

 

86,685

 

 

 

73,684

 

 

Inventories

 

39,229

 

 

 

20,080

 

 

Income taxes receivable

 

10,588

 

 

 

26,740

 

 

Prepaid expenses and other assets

 

16,106

 

 

 

15,330

 

 

Total current assets

 

1,499,371

 

 

 

963,759

 

 

Property and equipment, net

 

2,227,531

 

 

 

1,941,719

 

 

Operating lease right-of-use assets

 

125,709

 

 

 

118,455

 

 

Intangibles, net

 

42,535

 

 

 

47,772

 

 

Goodwill

 

347,515

 

 

 

343,622

 

 

Other assets

 

39,285

 

 

 

39,934

 

 

Total assets

 

$

4,281,946

 

 

 

$

3,455,261

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

359,239

 

 

 

$

318,530

 

 

Deferred revenue

 

20,660

 

 

 

8,233

 

 

Income taxes payable

 

9,140

 

 

 

3,709

 

 

Current portion of operating and finance lease liabilities

 

24,006

 

 

 

25,572

 

 

Total current liabilities

 

413,045

 

 

 

356,044

 

 

Deferred income taxes

 

57,767

 

 

 

71,686

 

 

Income taxes payable

 

55,637

 

 

 

44,965

 

 

Operating and finance lease liabilities, net of current portion

 

108,487

 

 

 

96,150

 

 

Long-term debt and other liabilities, net of discount

 

397,633

 

 

 

396,900

 

 

Total liabilities

 

1,032,569

 

 

 

965,745

 

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

24

 

 

 

24

 

 

Additional paid-in capital

 

733,581

 

 

 

672,727

 

 

Accumulated other comprehensive loss

 

(101,664

)

 

 

(121,088

)

 

Retained earnings

 

2,617,436

 

 

 

1,937,853

 

 

Total stockholders’ equity

 

3,249,377

 

 

 

2,489,516

 

 

Total liabilities and stockholders’ equity

 

$

4,281,946

 

 

 

$

3,455,261

 

 

 

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended April 30,

 

 

2021

 

2020

Cash flows from operating activities:

 

 

 

 

Net income

 

$

680,521

 

 

 

$

534,374

 

 

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

 

 

 

 

Depreciation and amortization, including debt cost

 

93,141

 

 

 

76,756

 

 

Allowance for credit loss

 

(1,429

)

 

 

1,332

 

 

Equity in (earnings) losses of unconsolidated affiliates

 

(2,121

)

 

 

1,918

 

 

Stock-based compensation

 

27,145

 

 

 

17,229

 

 

Gain on sale of property and equipment

 

(1,257

)

 

 

(1,745

)

 

Deferred income taxes

 

(14,130

)

 

 

9,265

 

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(81,593

)

 

 

19,102

 

 

Vehicle pooling costs

 

(12,777

)

 

 

661

 

 

Inventories

 

(18,788

)

 

 

1,209

 

 

Prepaid expenses and other current and non-current assets

 

6,879

 

 

 

6,268

 

 

Operating lease right-of-use assets and lease liabilities

 

389

 

 

 

(221

)

 

Accounts payable and accrued liabilities

 

47,914

 

 

 

(15,636

)

 

Deferred revenue

 

8,467

 

 

 

1,365

 

 

Income taxes receivable

 

16,152

 

 

 

(12,076

)

 

Income taxes payable

 

13,692

 

 

 

9,168

 

 

Other liabilities

 

 

 

 

1,999

 

 

Net cash provided by operating activities

 

762,205

 

 

 

650,968

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment, including acquisitions

 

(364,395

)

 

 

(490,998

)

 

Proceeds from sale of property and equipment

 

599

 

 

 

2,153

 

 

Net cash used in investing activities

 

(363,796

)

 

 

(488,845

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from the exercise of stock options

 

28,829

 

 

 

55,656

 

 

Proceeds from the issuance of Employee Stock Purchase Plan shares

 

4,880

 

 

 

3,955

 

 

Payments for employee stock-based tax withholdings

 

(938

)

 

 

(102,191

)

 

Payments of finance lease obligations

 

(962

)

 

 

 

 

Net cash provided by (used in) financing activities

 

31,809

 

 

 

(42,580

)

 

Effect of foreign currency translation

 

3,954

 

 

 

525

 

 

Net increase in cash, cash equivalents, and restricted cash

 

434,172

 

 

 

120,068

 

 

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

 

477,718

 

 

 

186,319

 

 

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

 

$

911,890

 

 

 

$

306,387

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid

 

$

14,736

 

 

 

$

14,514

 

 

Income taxes paid, net of refunds

 

$

126,303

 

 

 

$

59,302

 

 

 

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,

 

 

2021

 

2020

 

2021

 

2020

GAAP net income

 

$

286,796

 

 

 

$

147,487

 

 

 

$

680,521

 

 

 

$

534,374

 

 

Effect of certain discrete income tax items

 

(19,764

)

 

 

 

 

 

(19,764

)

 

 

(3,008

)

 

Effect of foreign currency-related losses (gains), net of tax

 

303

 

 

 

(490

)

 

 

351

 

 

 

(1,169

)

 

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

 

(4,910

)

 

 

(8,768

)

 

 

(18,850

)

 

 

(85,965

)

 

Effect of payroll taxes on certain executive stock-based compensation, net of tax

 

 

 

 

 

 

 

 

 

 

2,867

 

 

Non-GAAP net income

 

$

262,425

 

 

 

$

138,229

 

 

 

$

642,258

 

 

 

$

447,099

 

 

 

 

 

 

 

 

 

 

 

GAAP net income per diluted common share

 

$

1.19

 

 

 

$

0.62

 

 

 

$

2.83

 

 

 

$

2.24

 

 

Non-GAAP net income per diluted common share

 

$

1.09

 

 

 

$

0.58

 

 

 

$

2.67

 

 

 

$

1.87

 

 

 

Contacts

Melissa Hunter, Executive Support Manager, Office of the Chief Financial Officer

972-391-5090 or melissa.hunter@copart.com

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