Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2022.

For the three months ended July 31, 2022, revenue, gross profit, and net income were $883.4 million, $381.6 million, and $263.7 million, respectively. These represent an increase in revenue of $134.8 million, or 18.0%; an increase in gross profit of $24.1 million, or 6.7%; and an increase in net income of $7.8 million, or 3.0%, respectively, from the same period last year. Fully diluted earnings per share for the three months ended July 31, 2022 were $1.10 compared to $1.06 last year, an increase of 3.8%.

For the year ended July 31, 2022, revenue, gross profit, and net income were $3.5 billion, $1.6 billion, and $1.1 billion, respectively. These represent an increase in revenue of $808.4 million, or 30.0%; an increase in gross profit of $263.1 million, or 19.6%; and an increase in net income of $153.6 million, or 16.4%, respectively, from the same period last year. Fully diluted earnings per share for the year ended July 31, 2022 were $4.52 compared to $3.90 last year, an increase of 15.9%.

Excluding the impact of acquisition related integration charges, extinguishment of debt, and certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the three months ended July 31, 2022 and 2021, were $1.13 and $1.03, respectively, which was an increase of 9.7%. Excluding the impact of certain discrete income tax items, acquisition related integration charges, extinguishment of debt, certain legal matters, and certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the year ended July 31, 2022 and 2021, were $4.46 and $3.70, respectively, which was an increase of 20.5%. 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 8, 2022, 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 www.copart.com/investorrelations. A replay of the call will be available through November 2022 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 vehicles to dealers, dismantlers, rebuilders, exporters, and to the general public. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers, vehicle rental companies, and individuals. With operations at over 200 locations in 11 countries, Copart has more than 250,000 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, acquisition related integration charges, extinguishment of debt, certain legal matters, and certain income tax benefits 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.

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,

 

 

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Service revenues and vehicle sales:

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues

 

$

707,816

 

 

$

620,048

 

 

14.2

%

 

$

2,853,040

 

 

$

2,291,867

 

 

24.5

%

Vehicle sales

 

 

175,572

 

 

 

128,582

 

 

36.5

%

 

 

647,881

 

 

 

400,644

 

 

61.7

%

Total service revenues and vehicle sales

 

 

883,388

 

 

 

748,630

 

 

18.0

%

 

 

3,500,921

 

 

 

2,692,511

 

 

30.0

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Yard operations

 

 

307,717

 

 

 

250,396

 

 

22.9

%

 

 

1,186,457

 

 

 

897,086

 

 

32.3

%

Cost of vehicle sales

 

 

161,255

 

 

 

113,641

 

 

41.9

%

 

 

585,203

 

 

 

346,128

 

 

69.1

%

Yard depreciation and amortization

 

 

31,530

 

 

 

26,567

 

 

18.7

%

 

 

117,913

 

 

 

100,917

 

 

16.8

%

Yard stock-based compensation

 

 

1,314

 

 

 

543

 

 

142.0

%

 

 

5,127

 

 

 

5,289

 

 

(3.1

) %

Gross profit

 

 

381,572

 

 

 

357,483

 

 

6.7

%

 

 

1,606,221

 

 

 

1,343,091

 

 

19.6

%

General and administrative

 

 

43,257

 

 

 

39,652

 

 

9.1

%

 

 

177,314

 

 

 

149,978

 

 

18.2

%

General and administrative depreciation and amortization

 

 

4,803

 

 

 

3,097

 

 

55.1

%

 

 

20,072

 

 

 

21,054

 

 

(4.7

) %

General and administrative stock-based compensation

 

 

8,719

 

 

 

13,234

 

 

(34.1

) %

 

 

33,838

 

 

 

35,633

 

 

(5.0

) %

Total operating expenses

 

 

558,595

 

 

 

447,130

 

 

24.9

%

 

 

2,125,924

 

 

 

1,556,085

 

 

36.6

%

Operating income

 

 

324,793

 

 

 

301,500

 

 

7.7

%

 

 

1,374,997

 

 

 

1,136,426

 

 

21.0

%

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(2,656

)

 

 

(5,020

)

 

(47.1

) %

 

 

(16,688

)

 

 

(20,247

)

 

(17.6

) %

Loss on extinguishment of debt

 

 

(16,759

)

 

 

 

 

100.0

%

 

 

(16,759

)

 

 

 

 

100.0

%

Other income, net

 

 

(1,910

)

 

 

2,564

 

 

(174.5

) %

 

 

(596

)

 

 

5,667

 

 

(110.5

) %

Total other expense

 

 

(21,325

)

 

 

(2,456

)

 

768.3

%

 

 

(34,043

)

 

 

(14,580

)

 

133.5

%

Income before income taxes

 

 

303,468

 

 

 

299,044

 

 

1.5

%

 

 

1,340,954

 

 

 

1,121,846

 

 

19.5

%

Income tax expense

 

 

39,733

 

 

 

43,070

 

 

(7.7

) %

 

 

250,824

 

 

 

185,351

 

 

35.3

%

Net income

 

$

263,735

 

 

$

255,974

 

 

3.0

%

 

$

1,090,130

 

 

$

936,495

 

 

16.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

1.11

 

 

$

1.08

 

 

2.8

%

 

$

4.59

 

 

$

3.96

 

 

15.9

%

Weighted average common shares outstanding

 

 

237,841

 

 

 

236,679

 

 

0.5

%

 

 

237,419

 

 

 

236,252

 

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

1.10

 

 

$

1.06

 

 

3.8

%

 

$

4.52

 

 

$

3.90

 

 

15.9

%

Diluted weighted average common shares outstanding

 

 

240,736

 

 

 

240,714

 

 

%

 

 

241,151

 

 

 

240,290

 

 

0.4

%

Copart, Inc. Consolidated Balance Sheets (In thousands) (Unaudited)

 

 

 

July 31, 2022

 

July 31, 2021

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents, and restricted cash

 

$

1,384,236

 

 

$

1,048,260

 

Accounts receivable, net

 

 

578,573

 

 

 

480,628

 

Vehicle pooling costs

 

 

112,242

 

 

 

94,449

 

Inventories

 

 

58,791

 

 

 

44,968

 

Income taxes receivable

 

 

49,882

 

 

 

20,012

 

Prepaid expenses and other assets

 

 

18,731

 

 

 

14,294

 

Total current assets

 

 

2,202,455

 

 

 

1,702,611

 

Property and equipment, net

 

 

2,485,764

 

 

 

2,296,624

 

Operating lease right-of-use assets

 

 

116,303

 

 

 

119,487

 

Intangibles, net

 

 

54,680

 

 

 

45,873

 

Goodwill

 

 

401,954

 

 

 

355,717

 

Other assets

 

 

47,708

 

 

 

41,831

 

Total assets

 

$

5,308,864

 

 

$

4,562,143

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

399,034

 

 

$

369,826

 

Deferred revenue

 

 

20,061

 

 

 

20,973

 

Income taxes payable

 

 

 

 

 

7,760

 

Current portion of operating and finance lease liabilities

 

 

21,794

 

 

 

22,472

 

Total current liabilities

 

 

440,889

 

 

 

421,031

 

Deferred income taxes

 

 

80,060

 

 

 

63,969

 

Income taxes payable

 

 

64,637

 

 

 

52,345

 

Operating and finance lease liabilities, net of current portion

 

 

95,683

 

 

 

97,961

 

Long-term debt and other liabilities, net of discount

 

 

1,996

 

 

 

397,636

 

Total liabilities

 

 

683,265

 

 

 

1,032,942

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

24

 

 

 

24

 

Additional paid-in capital

 

 

838,532

 

 

 

761,834

 

Accumulated other comprehensive loss

 

 

(169,365

)

 

 

(100,860

)

Retained earnings

 

 

3,956,408

 

 

 

2,868,203

 

Total stockholders’ equity

 

 

4,625,599

 

 

 

3,529,201

 

Total liabilities and stockholders’ equity

 

$

5,308,864

 

 

$

4,562,143

 

Copart, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited)

 

 

 

Year Ended July 31,

 

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

Net income

 

$

1,090,130

 

 

$

936,495

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization, including debt cost

 

 

138,605

 

 

 

123,084

 

Allowance for credit loss

 

 

1,349

 

 

 

(1,121

)

Equity in (earnings) losses of unconsolidated affiliates

 

 

284

 

 

 

(3,240

)

Stock-based compensation

 

 

38,965

 

 

 

40,922

 

Gain on sale of property and equipment

 

 

(939

)

 

 

(1,480

)

Loss on extinguishment of debt

 

 

16,759

 

 

 

 

Deferred income taxes

 

 

17,017

 

 

 

(7,951

)

Changes in operating assets and liabilities, net of effects from acquisitions:

 

 

 

 

Accounts receivable

 

 

(97,750

)

 

 

(127,513

)

Vehicle pooling costs

 

 

(18,342

)

 

 

(20,476

)

Inventories

 

 

(10,851

)

 

 

(24,602

)

Prepaid expenses and other current and non-current assets

 

 

(5,156

)

 

 

7,025

 

Operating lease right-of-use assets and lease liabilities

 

 

715

 

 

 

570

 

Accounts payable and accrued liabilities

 

 

36,306

 

 

 

44,613

 

Deferred revenue

 

 

(574

)

 

 

8,781

 

Income taxes receivable

 

 

(29,884

)

 

 

6,739

 

Income taxes payable

 

 

49

 

 

 

9,045

 

Net cash provided by operating activities

 

 

1,176,683

 

 

 

990,891

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

 

(337,448

)

 

 

(462,996

)

Purchases of assets and liabilities in connection with acquisitions, net of cash acquired

 

 

(106,604

)

 

 

(5,000

)

Proceeds from sale of property and equipment

 

 

4,333

 

 

 

2,530

 

Purchase of held to maturity securities

 

 

(374,866

)

 

 

 

Proceeds from the sale of held to maturity securities

 

 

374,866

 

 

 

 

Investment in unconsolidated affiliate

 

 

(2,591

)

 

 

 

Net cash used in investing activities

 

 

(442,310

)

 

 

(465,466

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from the exercise of stock options

 

 

28,108

 

 

 

39,049

 

Proceeds from the issuance of Employee Stock Purchase Plan shares

 

 

9,625

 

 

 

9,136

 

Payments for employee stock-based tax withholdings

 

 

(1,925

)

 

 

(6,145

)

Debt offering costs

 

 

(1,212

)

 

 

 

Principal payments on long-term debt

 

 

(416,759

)

 

 

 

Payments of finance lease obligations

 

 

(530

)

 

 

(1,118

)

Net cash (used in) provided by financing activities

 

 

(382,693

)

 

 

40,922

 

Effect of foreign currency translation

 

 

(15,704

)

 

 

4,195

 

Net increase in cash, cash equivalents, and restricted cash

 

 

335,976

 

 

 

570,542

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

1,048,260

 

 

 

477,718

 

Cash, cash equivalents, and restricted cash at end of period

 

$

1,384,236

 

 

$

1,048,260

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid

 

$

18,539

 

 

$

19,723

 

Income taxes paid, net of refunds

 

$

263,226

 

 

$

178,241

 

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,

 

 

2022

 

2021

 

2022

 

2021

GAAP net income

 

$

263,735

 

 

$

255,974

 

 

$

1,090,130

 

 

$

936,495

 

Effect of certain discrete income tax items

 

 

 

 

 

 

 

 

(17,490

)

 

 

(19,764

)

Effect of certain legal matters, net of tax

 

 

 

 

 

 

 

 

5,092

 

 

 

 

Effect of extinguishment of debt, net of tax

 

 

12,929

 

 

 

 

 

 

12,929

 

 

 

 

Effect of acquisition related integration charges, net of tax

 

 

 

 

 

2,713

 

 

 

 

 

 

2,713

 

Effect of recognizing tax benefit on exercise of stock-based compensation

 

 

(5,077

)

 

 

(10,962

)

 

 

(14,274

)

 

 

(29,812

)

Non-GAAP net income

 

$

271,587

 

 

$

247,725

 

 

$

1,076,387

 

 

$

889,632

 

 

 

 

 

 

 

 

 

 

GAAP net income per diluted common share

 

$

1.10

 

 

$

1.06

 

 

$

4.52

 

 

$

3.90

 

Non-GAAP net income per diluted common share

 

$

1.13

 

 

$

1.03

 

 

$

4.46

 

 

$

3.70

 

 

Brooke Boston, Executive Assistant, Office of the Chief Financial Officer brooke.boston@copart.com

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