Copart, Inc. (NASDAQ: CPRT) today reported financial results for
the quarter ended April 30, 2019.
For the three months ended April 30, 2019, revenue, gross
profit, and net income were $553.1 million, $251.6 million, and
$192.7 million, respectively. These represent an increase in
revenue of $74.9 million, or 15.7%; an increase in gross profit of
$32.5 million, or 14.8%; and an increase in net income of $65.4
million, or 51.3%, respectively, from the same period last year.
Fully diluted earnings per share for the three months were $0.81
compared to $0.52 last year, an increase of 55.8%.
For the nine months ended April 30, 2019, revenue, gross profit,
and net income were $1.5 billion, $655.7 million, and $438.2
million, respectively. These represent an increase in revenue of
$142.9 million, or 10.5%; an increase in gross profit of $81.8
million, or 14.2%; and an increase in net income of $130.1 million,
or 42.2%, respectively, from the same period last year. Fully
diluted earnings per share for the nine months were $1.82 compared
to $1.28 last year, an increase of 42.2%.
The operating results for the three and nine months ended April
30, 2018 were adversely affected by abnormal costs of $7.4 million
and $79.7 million, respectively, incurred as a result of Hurricane
Harvey. These costs included temporary storage facilities;
abnormally high costs for subhaulers; increased labor costs due to
overtime; travel and lodging due to the reassignment of employees
to the affected region; and equipment lease expenses to handle the
increased volume, as well as cost of vehicle sales. These costs,
net of the associated revenues of $3.5 million and $66.9 million,
respectively, generated pre-tax loss for the three months ended
April 30, 2018 of $3.9 million and a pre-tax loss for the nine
months ended April 30, 2018 of $12.8 million.
Excluding the impact of income taxes on the deemed repatriation
of foreign earnings, net of deferred tax changes, discrete
income tax items, disposals of non-operating assets, foreign
currency-related gains and losses, certain income tax benefits and
payroll taxes related to accounting for stock option exercises, and
the effect on common equivalent shares from ASU 2016-09, non-GAAP
fully diluted earnings per share for the three months ended
April 30, 2019 and 2018, were $0.66 and $0.52, respectively.
Non-GAAP fully diluted earnings per share for the nine months ended
April 30, 2019 and 2018, were $1.64 and $1.31, 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 Thursday, May 23, 2019, at 9 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 at
http://stream.conferenceamerica.com/copart052319. A replay of the
call will be available through July 22, 2019 by calling (877)
919-4059. Use confirmation code # 77347431.
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 cases, to end users. Copart sells vehicles
on behalf of insurance companies, banks, finance companies,
charities, fleet operators, dealers and also sells vehicles sourced
from individual owners. With operations at over 200 locations in 11
countries, Copart has more than 125,000 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 (avk.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 income taxes on the deemed repatriation of
foreign earnings, net of deferred tax changes, discrete income
tax items, disposals of non-operating assets, foreign
currency-related gains and losses, certain income tax benefits and
payroll taxes related to accounting for stock option exercises, and
the effect on common equivalent shares from ASU 2016-09. 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
income taxes on the deemed repatriation of foreign earnings, net of
deferred tax changes, discrete income tax items, disposals of
non-operating assets, foreign currency-related gains and losses,
certain income tax benefits and payroll taxes related to accounting
for stock option exercises, and the effect on common equivalent
shares from ASU 2016-09.
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
amounts)
(Unaudited)
Three Months Ended April 30, Nine
Months Ended April 30, 2019 2018
2019 2018 Service revenues and vehicle sales:
Service revenues $ 473,682 $ 410,762 $ 1,285,295 $ 1,186,841
Vehicle sales 79,434 67,436 214,087 169,631
Total service revenues and vehicle sales 553,116 478,198
1,499,382 1,356,472 Operating expenses: Yard operations 213,804
189,346 602,664 599,854 Cost of vehicle sales 70,984 57,538 189,952
146,148 Yard depreciation and amortization 15,398 11,188 47,422
33,617 Yard stock-based compensation 1,351 1,058
3,621 2,912 Gross profit 251,579 219,068 655,723
573,941 General and administrative 34,072 34,181 102,113 93,377
General and administrative depreciation and amortization 5,714
5,385 15,958 16,729 General and administrative stock-based
compensation 4,299 4,883 13,979 14,327
Total operating expenses 345,622 303,579 975,709
906,964 Operating income 207,494 174,619 523,673
449,508 Other (expense) income: Interest expense, net (5,084 )
(4,134 ) (13,330 ) (15,093 ) Other income (expense), net 1,719
731 7,538 (4,633 ) Total other expense (3,365
) (3,403 ) (5,792 ) (19,726 ) Income before income taxes 204,129
171,216 517,881 429,782 Income tax expense 11,388 43,811
79,684 121,516 Net income 192,741 127,405
438,197 308,266 Net income attributable to noncontrolling interest
— 57 — 147 Net income attributable to
Copart, Inc. $ 192,741 $ 127,348 $ 438,197 $
308,119 Basic net income per common share $ 0.85
$ 0.55 $ 1.90 $ 1.33 Weighted average
common shares outstanding 227,984 232,010 230,922
231,387 Diluted net income per common share $
0.81 $ 0.52 $ 1.82 $ 1.28 Diluted
weighted average common shares outstanding 237,892 242,960
241,158 241,030
Copart, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
April 30, 2019 July 31, 2018
ASSETS Current assets: Cash and cash equivalents $ 102,826 $
274,520 Accounts receivable, net 376,564 351,601 Vehicle pooling
costs 75,289 34,284 Inventories 22,309 16,734 Income taxes
receivable 18,902 15,312 Prepaid expenses and other assets 17,695
16,665 Total current assets 613,585 709,116 Property
and equipment, net 1,340,692 1,163,425 Intangibles, net 57,627
64,892 Goodwill 337,725 337,235 Deferred income taxes 333 470 Other
assets 41,801 32,560 Total assets $ 2,391,763
$ 2,307,698
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities: Accounts payable and accrued
liabilities $ 279,779 $ 270,944 Deferred revenue 7,988 4,488 Income
taxes payable 1,583 673 Current portion of revolving loan facility
and capital lease obligations 7,556 1,151 Total
current liabilities 296,906 277,256 Deferred income taxes 40,165
19,733 Income taxes payable 33,634 27,277 Long-term debt, revolving
loan facility and capital lease obligations, net of discount
398,835 398,747 Other liabilities 3,371 3,586 Total
liabilities 772,911 726,599 Commitments and contingencies
Stockholders' equity: Preferred stock — — Common stock 23 23
Additional paid-in capital 545,895 526,858 Accumulated other
comprehensive loss (113,191 ) (107,928 ) Retained earnings
1,186,125 1,162,146 Total stockholders' equity
1,618,852 1,581,099 Total liabilities and
stockholders' equity $ 2,391,763 $ 2,307,698
Copart, Inc.
Consolidated Statements of Cash
Flows
(In thousands)
(Unaudited)
Nine Months Ended April 30, 2019
2018 Cash flows from operating activities: Net income
$ 438,197 $ 308,266 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization,
including debt cost 63,709 50,678 Allowance for doubtful accounts
341 1,096 Equity in (earnings) losses of unconsolidated affiliates
(1,852 ) 679 Stock-based compensation 17,600 17,239 (Gain) loss on
sale of property and equipment (3,753 ) 4,044 Deferred income taxes
14,583 (17 ) Changes in operating assets and liabilities: Accounts
receivable (69,920 ) (43,361 ) Vehicle pooling costs (15,026 )
(1,590 ) Inventories (5,721 ) (6,700 ) Prepaid expenses and other
current assets (1,436 ) (371 ) Other assets (7,169 ) (413 )
Accounts payable and accrued liabilities 17,747 27,981 Deferred
revenue 3,512 849 Income taxes receivable (3,578 ) 5,043 Income
taxes payable 7,304 14,025 Other liabilities (1,042 ) (251 ) Net
cash provided by operating activities 453,496 377,197
Cash flows from investing activities: Purchases of property
and equipment, including acquisitions (260,081 ) (188,482 )
Proceeds from sale of property and equipment 17,928 3,368
Net cash used in investing activities (242,153 ) (185,114 )
Cash flows from financing activities: Proceeds from
the exercise of stock options 17,261 23,816 Proceeds from the
issuance of Employee Stock Purchase Plan shares 3,501 2,723
Repurchases of common stock (364,997 ) — Payments for employee
stock-based tax withholdings (45,594 ) (3 ) Net proceeds
(repayments) on revolving loan facility 7,000 (231,000 )
Distributions to noncontrolling interest — (55 ) Net cash
used in financing activities (382,829 ) (204,519 ) Effect of
foreign currency translation (208 ) 6,611 Net decrease in
cash and cash equivalents (171,694 ) (5,825 ) Cash and cash
equivalents at beginning of period 274,520 210,100
Cash and cash equivalents at end of period $ 102,826 $
204,275
Supplemental disclosure of cash flow
information: Interest paid $ 14,700 $ 15,406
Income taxes paid, net of refunds $ 60,926 $ 102,762
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, 2019 2018
2019 2018 GAAP net income attributable to
Copart, Inc. $ 192,741 $ 127,348 $ 438,197 $ 308,119 Effect of
deemed repatriation of foreign earnings, net of deferred tax
changes — 1,000 — 11,000 Effect of discrete income tax items
(10,170 ) — (10,170 ) — Effect of disposal of non-operating assets,
net of tax — — (1,598 ) 2,994 Effect of foreign currency-related
losses (gains), net of tax 94 (261 ) (304 ) 777 Effect of
recognizing tax benefit on exercise of employee stock options
(29,074 ) (3,085 ) (34,096 ) (9,448 ) Effect of payroll taxes on
certain executive stock compensation, net of tax 1,295 —
1,295 — Non-GAAP net income attributable to
Copart, Inc. $ 154,886 $ 125,002 $ 393,324 $
313,442 GAAP net income per diluted common share $
0.81 $ 0.52 $ 1.82 $ 1.28 Non-GAAP net
income per diluted common share $ 0.66 $ 0.52 $ 1.64
$ 1.31 GAAP diluted weighted average common
shares outstanding 237,892 242,960 241,158 241,030 Effect on common
equivalent shares from ASU 2016-09 (1,731 ) (3,090 ) (1,949 )
(1,030 ) Non-GAAP diluted weighted average common shares
outstanding 236,161 239,870 239,209 240,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190522005862/en/
Melissa Hunter, Executive Support Manager, Office of the Chief
Financial Officer972-391-5090 or melissa.hunter@copart.com
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