Copart, Inc. (NASDAQ: CPRT) today reported financial results for
the quarter ended April 30, 2020.
For the three months ended April 30, 2020, revenue, gross
profit, and net income were $550.4 million, $242.6 million, and
$147.5 million, respectively. These represent a decrease in revenue
of $2.8 million, or 0.5%; a decrease in gross profit of $9.0
million, or 3.6%; and a decrease in net income of $45.3 million, or
23.5%, respectively, from the same period last year. Fully diluted
earnings per share for the three months were $0.62 compared to
$0.81 last year, a decrease of 23.5%.
For the nine months ended April 30, 2020, revenue, gross profit,
and net income were $1.7 billion, $757.4 million, and $534.4
million, respectively. These represent an increase in revenue of
$180.5 million, or 12.0%; an increase in gross profit of $101.6
million, or 15.5%; and an increase in net income of $96.2 million,
or 21.9%, respectively, from the same period last year. Fully
diluted earnings per share for the nine months were $2.24 compared
to $1.82 last year, an increase of 23.1%.
Excluding the impact of discrete income tax items, disposal 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 and nine months ended April 30, 2020 and 2019, were
$0.58, $0.66, $1.88 and $1.64, 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 21, 2020, 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 at
http://stream.conferenceamerica.com/copart052120. A replay of the
call will be available through July 20, 2020 by calling (877)
919-4059. Use confirmation code: 48213700.
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 150,000 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 discrete income tax items, disposal 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
discrete income tax items, disposal 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, 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,
2020
2019
2020
2019
Service revenues and vehicle sales:
Service revenues
$
491,582
$
473,682
$
1,489,472
$
1,285,295
Vehicle sales
58,778
79,434
190,452
214,087
Total service revenues and vehicle
sales
550,360
553,116
1,679,924
1,499,382
Operating expenses:
Yard operations
231,985
213,804
692,547
602,664
Cost of vehicle sales
53,987
70,984
170,651
189,952
Yard depreciation and amortization
20,333
15,398
55,384
47,422
Yard stock-based compensation
1,442
1,351
3,971
3,621
Gross profit
242,613
251,579
757,371
655,723
General and administrative
37,017
34,072
115,102
102,113
General and administrative depreciation
and amortization
6,382
5,714
18,627
15,958
General and administrative stock-based
compensation
4,113
4,299
13,258
13,979
Total operating expenses
355,259
345,622
1,069,540
975,709
Operating income
195,101
207,494
610,384
523,673
Other expense:
Interest expense, net
(5,578)
(5,084)
(14,068)
(13,330)
Other income, net
2,277
1,719
2,640
7,538
Total other expense
(3,301)
(3,365)
(11,428)
(5,792)
Income before income taxes
191,800
204,129
598,956
517,881
Income tax expense
44,313
11,388
64,582
79,684
Net income
$
147,487
$
192,741
$
534,374
$
438,197
Basic net income per common share
$
0.63
$
0.85
$
2.30
$
1.90
Weighted average common shares
outstanding
234,133
227,984
232,647
230,922
Diluted net income per common share
$
0.62
$
0.81
$
2.24
$
1.82
Diluted weighted average common shares
outstanding
238,591
237,892
238,564
241,158
Copart, Inc.
Consolidated Balance
Sheets
(In thousands)
(Unaudited)
April 30, 2020
July 31, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
306,387
$
186,319
Accounts receivable, net
346,244
367,265
Vehicle pooling costs
75,357
76,548
Inventories
19,809
20,941
Income taxes receivable
31,578
19,526
Prepaid expenses and other assets
14,777
16,568
Total current assets
794,152
687,167
Property and equipment, net
1,838,297
1,427,726
Operating lease right-of-use assets
106,634
—
Intangibles, net
48,671
55,156
Goodwill
338,039
333,321
Deferred income taxes
310
411
Other assets
35,480
43,836
Total assets
$
3,161,583
$
2,547,617
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
250,841
$
270,918
Deferred revenue
7,884
6,466
Income taxes payable
905
3,482
Current portion of operating lease
liabilities
23,395
—
Current portion of finance lease
liabilities
3,543
1,138
Total current liabilities
286,568
282,004
Deferred income taxes
57,724
48,683
Income taxes payable
46,795
35,116
Operating lease liabilities, net of
current portion
85,698
—
Long-term debt and finance lease
liabilities, net of discount
403,653
400,091
Other liabilities
134
3,342
Total liabilities
880,572
769,236
Commitments and contingencies
Stockholders' equity:
Preferred stock
—
—
Common stock
23
23
Additional paid-in capital
646,331
572,559
Accumulated other comprehensive loss
(138,923)
(132,529)
Retained earnings
1,773,580
1,338,328
Total stockholders' equity
2,281,011
1,778,381
Total liabilities and stockholders'
equity
$
3,161,583
$
2,547,617
Copart, Inc.
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended April
30,
2020
2019
Cash flows from operating
activities:
Net income
$
534,374
$
438,197
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization, including
debt cost
76,756
63,709
Allowance for doubtful accounts
1,332
341
Equity in losses (earnings) of
unconsolidated affiliates
1,918
(1,852)
Stock-based compensation
17,229
17,600
Gain on sale of property and equipment
(1,745)
(3,753)
Deferred income taxes
9,265
14,583
Changes in operating assets and
liabilities:
Accounts receivable
19,102
(69,920)
Vehicle pooling costs
661
(15,026)
Inventories
1,209
(5,721)
Prepaid expenses and other current and
non-current assets
6,268
(8,605)
Operating lease right-of-use assets and
lease liabilities
(221)
—
Accounts payable and accrued
liabilities
(15,636)
17,747
Deferred revenue
1,365
3,512
Income taxes receivable
(12,076)
(3,578)
Income taxes payable
9,168
7,304
Other liabilities
1,999
(1,042)
Net cash provided by operating
activities
650,968
453,496
Cash flows from investing
activities:
Purchases of property and equipment,
including acquisitions
(490,998)
(260,081)
Proceeds from sale of property and
equipment
2,153
17,928
Net cash used in investing activities
(488,845)
(242,153)
Cash flows from financing
activities:
Proceeds from the exercise of stock
options
55,656
17,261
Proceeds from the issuance of Employee
Stock Purchase Plan shares
3,955
3,501
Repurchases of common stock
—
(364,997)
Payments for employee stock-based tax
withholdings
(102,191)
(45,594)
Net proceeds on revolving loan
facility
—
7,000
Net cash used in financing activities
(42,580)
(382,829)
Effect of foreign currency translation
525
(208)
Net increase (decrease) in cash and cash
equivalents
120,068
(171,694)
Cash and cash equivalents at beginning of
period
186,319
274,520
Cash and cash equivalents at end of
period
$
306,387
$
102,826
Supplemental disclosure of cash flow
information:
Interest paid
$
14,514
$
14,700
Income taxes paid, net of refunds
$
59,302
$
60,926
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,
2020
2019
2020
2019
GAAP net income
$
147,487
$
192,741
$
534,374
$
438,197
Effect of discrete income tax items
—
(10,170)
(3,008)
(10,170)
Effect of disposal of non-operating
assets, net of tax
—
—
—
(1,598)
Effect of foreign currency-related (gains)
losses, net of tax
(490)
94
(1,169)
(304)
Effect of recognizing tax benefit on
exercise of employee stock options
(8,768)
(29,074)
(85,962)
(34,096)
Effect of payroll taxes on certain
executive stock compensation, net of tax
—
1,295
2,867
1,295
Non-GAAP net income
$
138,229
$
154,886
$
447,102
$
393,324
GAAP net income per diluted common
share
$
0.62
$
0.81
$
2.24
$
1.82
Non-GAAP net income per diluted common
share
$
0.58
$
0.66
$
1.88
$
1.64
GAAP diluted weighted average common
shares outstanding
238,591
237,892
238,564
241,158
Effect on common equivalent shares from
ASU 2016-09
(710)
(1,731)
(995)
(1,949)
Non-GAAP diluted weighted average common
shares outstanding
237,881
236,161
237,569
239,209
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200520005826/en/
Melissa Hunter, Executive Support Manager, Office of the Chief
Financial Officer 972-391-5090 or melissa.hunter@copart.com
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