Copart, Inc. (NASDAQ: CPRT) today reported financial results for
the quarter and year ended July 31, 2016.
For the three months ended July 31, 2016, revenue, gross margin,
operating income, and net income were $332.7 million, $141.5
million, $106.2 million, and $84.1 million, respectively. These
represent an increase in revenue of $50.4 million, or 17.8%; an
increase in gross margin of $22.7 million, or 19.1%; an increase in
operating income of $19.4 million, or 22.4%; and an increase in net
income of $26.7 million, or 46.5%, respectively, from the same
quarter last year. Fully diluted earnings per share for the three
months were $0.71 compared to $0.44 last year, an increase of
61.4%.
For the year ended July 31, 2016, revenue, gross margin,
operating income, and net income were $1.3 billion, $544.6 million,
$406.5 million, and $270.4 million, respectively. These represent
an increase in revenue of $122.4 million, or 10.7%; an increase in
gross margin of $61.2 million, or 12.7%; an increase in operating
income of $62.1 million, or 18.0%; and an increase in net income of
$50.6 million, or 23.0%, respectively, from the same period last
year. Fully diluted earnings per share for the year ended July 31,
2016 were $2.21 compared to $1.67 last year, an increase of
32.3%.
Excluding the impact of changes in foreign currency exchange
rates, and certain tax benefits and foreign income tax credit
limitations related to accounting for stock option exercises,
non-GAAP fully diluted earnings per share for the three months and
year ended July 31, 2016, were $0.59 and $2.10, respectively. 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 Wednesday, September 21, 2016, 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 at
http://stream.conferenceamerica.com/copart092116. A replay of the
call will be available through November 20, 2016 by calling (877)
919-4059. Use confirmation code # 55146557.
About Copart
Copart, founded in 1982, provides vehicle sellers with a full
range of remarketing services to process and sell salvage and clean
title vehicles to dealers, dismantlers, rebuilders, exporters and,
in some states, to end users. Copart remarkets the vehicles through
Internet sales using its VB3 technology. Copart sells vehicles on
behalf of insurance companies, banks, financial institutions,
charities, car dealerships, fleet operators, vehicle rental
companies, as well as vehicles sourced from the general public. The
company currently operates in the United States (www.copart.com),
Canada (www.copart.ca), the United Kingdom (www.copart.co.uk),
Brazil (www.copart.com.br), Germany (www.copart.de), the United
Arab Emirates, Oman and Bahrain (www.copartmea.com), Spain
(www.copart.es), Ireland (www.copart.ie), and India
(www.copart.in). Copart links sellers to more than 750,000 Members
in more than 150 countries worldwide through its multi-channel
platform. In 2015, Copart was ranked at the top of Deloitte’s “The
Exceptional 100” list of companies, which reviewed U.S. publicly
traded companies based upon a multidimensional approach to
measuring financial performance. For more information, or to become
a Member, visit www.copart.com.
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
reflect the impact of changes in foreign currency exchange rates,
and certain tax benefits and foreign income tax credit limitations,
related to accounting for stock option exercises. 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
changes in foreign currency exchange rates, and certain tax
benefits and foreign income tax credit limitations related to
accounting for stock option exercises.
Cautionary Note About Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of federal securities laws, and 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 data)
(Unaudited)
Three Months Ended Twelve Months Ended July
31, July 31, 2016 2015
2016 2015 Service revenues and vehicle
sales: Service revenues $ 289,488 $ 243,671 $ 1,104,379 $ 985,363
Vehicle sales 43,171 38,622 164,070 160,716
Total service revenues and vehicle sales 332,659 282,293
1,268,449 1,146,079 Operating expenses: Yard operations 144,859
122,034 546,576 489,158 Cost of vehicle sales 37,020 32,718 140,959
136,412 Yard depreciation and amortization 8,722 8,262 33,658
34,917 Yard stock-based payment compensation 594 495
2,670 2,216 Gross margin 141,464 118,784 544,586
483,376 General and administrative 26,561 24,640 105,005 111,381
General and administrative depreciation and amortization 4,276
3,010 14,917 11,656 General and administrative stock-based payment
compensation 4,436 4,369 18,194 15,938
Total operating expenses 226,468 195,528 861,979
801,678 Operating income 106,191 86,765 406,470
344,401 Other (expense) income: Interest expense, net (6,257 )
(5,372 ) (22,157 ) (17,304 ) Other income, net 6,051 53
11,552 4,972 Total other expenses (206 )
(5,319 ) (10,605 ) (12,332 ) Income before income taxes 105,985
81,446 395,865 332,069 Income taxes 21,863 24,034
125,505 112,286 Net income $ 84,122 $ 57,412
$ 270,360 $ 219,783 Basic net income
per common share $ 0.77 $ 0.46 $ 2.36 $ 1.75
Weighted average common shares outstanding 109,578
124,743 114,423 125,914 Diluted net
income per common share $ 0.71 $ 0.44 $ 2.21 $
1.67 Diluted weighted average common shares outstanding
118,519 130,205 122,147 131,425
Copart, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
July 31, 2016 July 31, 2015 ASSETS
Current assets: Cash and cash equivalents $ 155,849 $ 456,012
Accounts receivable, net 266,270 215,696 Vehicle pooling costs and
inventories 38,987 33,562 Income taxes receivable 18,751 6,092
Deferred income taxes 1,444 3,396 Prepaid expenses and other assets
18,005 19,824 Total current assets 499,306 734,582
Property and equipment, net 816,791 700,402 Intangibles, net 11,761
17,857 Goodwill 260,198 271,850 Deferred income taxes 23,506 28,840
Other assets 38,258 45,129 Total assets $ 1,649,820
$ 1,798,660
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities: Accounts payable and accrued
liabilities $ 192,379 $ 147,452 Deferred revenue 4,628 3,724 Income
taxes payable 5,625 8,279 Current portion of long-term debt,
revolving credit facility, and capital lease obligations 76,151
53,671 Total current liabilities 278,783 213,126
Deferred income taxes 3,816 5,322 Income taxes payable 25,641
21,157 Long-term debt and capital lease obligations, net of
discount 564,341 590,843 Other liabilities 2,783 3,748
Total liabilities 875,364 834,196 Commitments and
contingencies Stockholders’ equity: Preferred stock — — Common
stock 11 12 Additional paid-in capital 392,445 407,808 Accumulated
other comprehensive loss (109,194 ) (68,793 ) Retained earnings
491,194 625,437 Total stockholders’ equity 774,456
964,464 Total liabilities and stockholders’ equity $
1,649,820 $ 1,798,660
Copart, Inc. Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Twelve Months Ended July 31, 2016
2015 Cash flows from operating
activities: Net income $ 270,360 $ 219,783 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 49,643 48,893 Allowance for doubtful
accounts 1,175 (578 ) Equity in losses of unconsolidated affiliates
895 — Stock-based payment compensation 20,864 18,154 Excess tax
benefits from stock-based payment compensation — (2,971 ) Gain on
sale of property and equipment (54 ) (918 ) Deferred income taxes
5,740 4,365 Changes in operating assets and liabilities, net of
effects from acquisitions: Accounts receivable (54,213 ) (20,417 )
Vehicle pooling costs and inventories (6,646 ) (2,622 ) Prepaid
expenses and other current assets (738 ) 69 Other assets 4,164
10,125 Accounts payable and accrued liabilities 48,347 (3,926 )
Deferred revenue 983 (438 ) Income taxes receivable (12,649 ) (806
) Income taxes payable 2,788 (1,971 ) Other liabilities 1,839
(1,666 ) Net cash provided by operating activities 332,498
265,076
Cash flows from investing activities: Purchases of
property and equipment (173,917 ) (79,153 ) Investment in
unconsolidated affiliate — (4,500 ) Proceeds from sale of property
and equipment 662 1,738 Purchases of marketable securities (21,119
) — Proceeds from sale of marketable securities 21,498 —
Net cash used in investing activities (172,876 ) (81,915 )
Cash flows from financing activities: Proceeds from the
exercise of stock options 13,240 3,634 Excess tax benefit from
stock-based payment compensation — 2,971 Proceeds from the issuance
of Employee Stock Purchase Plan shares 3,369 3,079 Repurchases of
common stock (457,894 ) (237,306 ) Proceeds from the issuance of
long-term debt, net of discount 93,468 698,939 Proceeds from
revolving loan facility, net of repayments 238,000 — Debt offering
costs (1,179 ) (955 ) Principal payments on long-term debt (337,500
) (350,000 ) Net cash (used in) provided by financing activities
(448,496 ) 120,362 Effect of foreign currency translation (11,289 )
(6,179 ) Net (decrease) increase in cash and cash equivalents
(300,163 ) 297,344 Cash and cash equivalents at beginning of period
456,012 158,668 Cash and cash equivalents at end of
period $ 155,849 $ 456,012
Supplemental disclosure
of cash flow information: Interest paid $ 23,606 $
18,121 Income taxes paid, net of refunds $ 127,981 $
109,925
Copart,
Inc. Additional Financial Information Reconciliation
of GAAP to Non-GAAP Financial Measures
(In thousands)
(Unaudited)
Three Months Ended Twelve Months Ended July
31, July 31, 2016 2015
2016 2015 GAAP net income $ 84,122 $
57,412 $ 270,360 $ 219,783 Effect of changes in foreign currency
exchange rates, net of tax (3,521 ) 1,610 (4,860 ) 534 Effect of
tax benefit of ASU 2016-09 adoption and limitations of foreign
income tax credits(1) (11,594 ) — (12,440 ) — Non-GAAP net
income $ 69,007 $ 59,022 $ 253,060 $ 220,317
GAAP diluted net income per common share $ 0.71 $
0.44 $ 2.21 $ 1.67 Non-GAAP diluted net income per
common share $ 0.59 $ 0.45 $ 2.10 $ 1.68
GAAP diluted weighted average common shares outstanding
118,519 130,205 122,147 131,425 Effect on common equivalent shares
from ASU 2016-09 adoption(1) (2,286 ) — (1,864 ) — Non-GAAP
diluted weighted average commons shares outstanding 116,233
130,205 120,283 131,425 (1)
In March 2016, the FASB issued ASU No.
2016-09, Improvements to Employee Share-Based Payment Accounting.
Under this standard, all excess tax benefits and tax deficiencies
related to exercises of stock options are recognized as income tax
expense or benefit in the income statement as discrete items in the
reporting period in which they occur. Additionally, excess tax
benefits are classified as an operating activity on the
consolidated statements of cash flows. The Company early adopted
ASU 2016-09 during the fourth quarter of fiscal 2016 on a modified
retrospective basis. For a more complete discussion, please review
the Company's Annual Report on Form 10-K, to be filed with the
Securities and Exchange Commission on or before September 29,
2016.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160920006925/en/
Copart, Inc.Melissa Perry, 972-391-5090Executive Support
Manager, Office of the Chief Financial
Officermelissa.perry@copart.com
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