Copart Reports Third Quarter Fiscal 2021 Financial Results

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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