Copart, Inc. (NASDAQ: CPRT) today reported financial results for
the quarter and year ended July 31, 2020.
For the three months ended July 31, 2020, revenue, gross profit,
and net income were $525.7 million, $250.4 million, and $165.5
million, respectively. These represent a decrease in revenue of
$16.9 million, or 3.1%; an increase in gross profit of $7.8
million, or 3.2%; and an increase in net income of $12.0 million,
or 7.8%, respectively, from the same period last year. Fully
diluted earnings per share for the three months ended July 31, 2020
were $0.69 compared to $0.64 last year, an increase of 7.8%.
For the year ended July 31, 2020, revenue, gross profit, and net
income were $2.2 billion, $1.0 billion, and $699.9 million,
respectively. These represent an increase in revenue of $163.6
million, or 8.0%; an increase in gross profit of $109.5 million, or
12.2%; and an increase in net income of $108.2 million, or 18.3%,
respectively, from the same period last year. Fully diluted
earnings per share for the year ended July 31, 2020 were $2.93
compared to $2.46 last year, an increase of 19.1%.
Excluding the impact of discrete income tax items, disposal of
non-operating assets, reserve for legacy sales tax liabilities,
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 and year ended July 31, 2020 and 2019, were $0.69, $0.60,
$2.57 and $2.25, 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, September 3, 2020, at 11:00 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/copart090320. A replay of the
call will be available through November 2, 2020 by calling (877)
919-4059. Use confirmation code: 38708517.
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, reserve for legacy sales tax liabilities,
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,
reserve for legacy sales tax liabilities, 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 July
31,
Twelve Months Ended
July 31,
2020
2019
2020
2019
Service revenues and vehicle sales:
Service revenues
$
457,668
$
470,399
$
1,947,140
$
1,755,694
Vehicle sales
67,991
72,176
258,443
286,263
Total service revenues and vehicle
sales
525,659
542,575
2,205,583
2,041,957
Operating expenses:
Yard operations
197,186
217,089
889,733
819,753
Cost of vehicle sales
54,643
65,552
225,294
255,504
Yard depreciation and amortization
21,615
15,745
76,999
63,167
Yard stock-based compensation
1,784
1,570
5,755
5,191
Gross profit
250,431
242,619
1,007,802
898,342
General and administrative
34,643
39,772
149,745
141,885
General and administrative depreciation
and amortization
5,764
5,770
24,391
21,728
General and administrative stock-based
compensation
4,309
4,275
17,567
18,254
Total operating expenses
319,944
349,773
1,389,484
1,325,482
Operating income
205,715
192,802
816,099
716,475
Other expense:
Interest expense, net
(4,803
)
(4,255
)
(18,871
)
(17,585
)
Other income (expense), net
971
(1,477
)
3,611
6,061
Total other expense
(3,832
)
(5,732
)
(15,260
)
(11,524
)
Income before income taxes
201,883
187,070
800,839
704,951
Income tax expense
36,350
33,574
100,932
113,258
Net income
$
165,533
$
153,496
$
699,907
$
591,693
Basic net income per common share
$
0.70
$
0.67
$
3.00
$
2.57
Weighted average common shares
outstanding
234,863
229,204
233,202
230,489
Diluted net income per common share
$
0.69
$
0.64
$
2.93
$
2.46
Diluted weighted average common shares
outstanding
238,927
238,354
238,656
240,453
Copart, Inc.
Consolidated Balance
Sheets
(In thousands)
(Unaudited)
July 31, 2020
July 31, 2019
ASSETS
Current assets:
Cash, cash equivalents, and restricted
cash
$
477,718
$
186,319
Accounts receivable, net
350,207
367,265
Vehicle pooling costs
73,684
76,548
Inventories
20,080
20,941
Income taxes receivable
26,740
19,526
Prepaid expenses and other assets
15,330
16,568
Total current assets
963,759
687,167
Property and equipment, net
1,941,719
1,427,726
Operating lease right-of-use assets
118,455
—
Intangibles, net
47,772
55,156
Goodwill
343,622
333,321
Deferred income taxes
213
411
Other assets
39,721
43,836
Total assets
$
3,455,261
$
2,547,617
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
318,530
$
270,918
Deferred revenue
8,233
6,466
Income taxes payable
3,709
3,482
Current portion of operating lease
liabilities
24,821
—
Current portion of finance lease
obligations
751
1,138
Total current liabilities
356,044
282,004
Deferred income taxes
71,686
48,683
Income taxes payable
44,965
35,116
Operating lease liabilities, net of
current portion
95,584
—
Long-term debt and finance lease
obligations, net of discount
397,036
400,091
Other liabilities
430
3,342
Total liabilities
965,745
769,236
Commitments and contingencies
Stockholders’ equity:
Preferred stock
—
—
Common stock
24
23
Additional paid-in capital
672,727
572,559
Accumulated other comprehensive loss
(121,088
)
(132,529
)
Retained earnings
1,937,853
1,338,328
Total stockholders’ equity
2,489,516
1,778,381
Total liabilities and stockholders’
equity
$
3,455,261
$
2,547,617
Copart, Inc.
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Year Ended July 31,
2020
2019
Cash flows from operating
activities:
Net income
$
699,907
$
591,693
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization, including
debt cost
104,257
85,334
Allowance for doubtful accounts
1,670
(429
)
Impairment of long-lived assets
—
—
Equity in losses of unconsolidated
affiliates
1,401
419
Stock-based compensation
23,322
23,445
Gain on sale of property and equipment
(1,913
)
(3,073
)
Deferred income taxes
23,082
23,167
Changes in operating assets and
liabilities, net of effects from acquisitions:
Accounts receivable
15,993
(60,808
)
Vehicle pooling costs
2,590
(16,418
)
Inventories
1,348
(4,719
)
Prepaid expenses and other current and
non-current assets
141
(12,265
)
Operating lease right-of-use assets and
lease liabilities
(572
)
—
Accounts payable and accrued
liabilities
41,648
11,126
Deferred revenue
1,615
2,056
Income taxes receivable
(7,216
)
(4,215
)
Income taxes payable
10,114
10,669
Other liabilities
498
664
Net cash provided by operating
activities
917,885
646,646
Cash flows from investing
activities:
Purchases of property and equipment,
including acquisitions
(603,674
)
(374,628
)
Proceeds from sale of property and
equipment
2,466
18,361
Net cash used in investing activities
(601,208
)
(356,267
)
Cash flows from financing
activities:
Proceeds from the exercise of stock
options
71,640
34,398
Proceeds from the issuance of Employee
Stock Purchase Plan shares
8,276
7,183
Repurchases of common stock
—
(364,997
)
Payments for employee stock-based tax
withholdings
(103,451
)
(46,888
)
Debt offering costs
(2,814
)
—
Payments of finance lease obligations
(1,065
)
—
Net cash used in financing activities
(27,414
)
(370,304
)
Effect of foreign currency translation
2,136
(8,276
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
291,399
(88,201
)
Cash, cash equivalents, and restricted
cash at beginning of period
186,319
274,520
Cash, cash equivalents, and restricted
cash at end of period
$
477,718
$
186,319
Supplemental disclosure of cash flow
information:
Interest paid
$
19,728
$
19,289
Income taxes paid, net of refunds
$
83,770
$
82,448
Copart, Inc.
Additional Financial
Information
Reconciliation of GAAP to
Non-GAAP Financial Measures
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended July
31,
Twelve Months Ended
July 31,
2020
2019
2020
2019
GAAP net income
$
165,533
$
153,496
$
699,907
$
591,693
Effect of discrete income tax items
4,740
—
1,732
(10,170
)
Effect of disposal of non-operating
assets, net of tax
—
—
—
(1,598
)
Effect of reserve for legacy sales tax
liabilities, net of tax
—
978
—
978
Effect of foreign currency-related (gains)
losses, net of tax
(268
)
48
(1,436
)
(256
)
Effect of recognizing tax benefit on
exercise of employee stock options
(6,586
)
(12,007
)
(92,548
)
(46,103
)
Effect of payroll taxes on certain
executive stock compensation, net of tax
—
—
2,867
1,295
Non-GAAP net income
$
163,419
$
142,515
$
610,522
$
535,839
GAAP net income per diluted common
share
$
0.69
$
0.64
$
2.93
$
2.46
Non-GAAP net income per diluted common
share
$
0.69
$
0.60
$
2.57
$
2.25
GAAP diluted weighted average common
shares outstanding
238,927
238,354
238,656
240,453
Effect on common equivalent shares from
ASU 2016-09
(656
)
(1,633
)
(911
)
(1,870
)
Non-GAAP diluted weighted average common
shares outstanding
238,271
236,721
237,745
238,583
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200902005931/en/
Melissa Hunter, Executive Support Manager, Office of the Chief
Financial Officer 972-391-5090 or melissa.hunter@copart.com
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