Copart Reports Third Quarter Fiscal 2022 Financial Results

DALLAS–(BUSINESS WIRE)–Copart, 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

 

Contacts

Brooke Boston, Executive Assistant, Office of the Chief Financial Officer

[email protected]