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Copart Reports Second Quarter Fiscal 2022 Financial Results

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

For the three months ended January 31, 2022, revenue, gross profit, and net income were $867.5 million, $403.3 million, and $287.4 million, respectively. These represent an increase in revenue of $250.4 million, or 40.6%; an increase in gross profit of $95.8 million, or 31.2%; and an increase in net income of $94.0 million, or 48.6%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $1.19 compared to $0.81 last year, an increase of 46.9%.

For the six months ended January 31, 2022, revenue, gross profit, and net income were $1,677.6 million, $788.4 million, and $547.8 million, respectively. These represent an increase in revenue of $467.6 million, or 38.6%; an increase in gross profit of $184.1 million, or 30.5%; and an increase in net income of $154.1 million, or 39.1%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $2.27 compared to $1.64 last year, an increase of 38.4%.

Excluding the impact of discrete income tax items, and certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the three months ended January 31, 2022 and 2021 were $1.10, and $0.80, respectively, which was an increase of 37.5%. Excluding the impact of discrete income tax items, and certain income tax benefits related to stock-based compensation, , non-GAAP fully diluted earnings per share for the six months ended January 31, 2022 and 2021, were $2.17, and $1.59, respectively, which was an increase of 36.5%. 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, February 17, 2022, 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 via hyperlink at www.copart.com/investorrelations. A replay of the call will be available through May 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.

Copart, Inc.

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, 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

January 31,

 

 

 

Six Months Ended

January 31,

 

 

2022

 

 

2021

 

 

% Change

 

2022

 

 

2021

 

 

% Change

Service revenues and vehicle sales:

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues

 

$ 711,090

 

 

$ 532,601

 

 

33.5

%

 

$ 1,378,908

 

 

$ 1,047,973

 

 

31.6

%

Vehicle sales

 

156,370

 

 

84,430

 

 

85.2

%

 

298,684

 

 

161,998

 

 

84.4

%

Total service revenues and vehicle sales

 

867,460

 

 

617,031

 

 

40.6

%

 

1,677,592

 

 

1,209,971

 

 

38.6

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Yard operations

 

294,098

 

 

208,910

 

 

40.8

%

 

565,374

 

 

415,896

 

 

35.9

%

Cost of vehicle sales

 

140,304

 

 

73,629

 

 

90.6

%

 

266,712

 

 

137,989

 

 

93.3

%

Yard depreciation and amortization

 

28,301

 

 

25,180

 

 

12.4

%

 

54,738

 

 

48,474

 

 

12.9

%

Yard stock-based compensation

 

1,415

 

 

1,814

 

 

(22.0

) %

 

2,396

 

 

3,345

 

 

(28.4

) %

Gross profit

 

403,342

 

 

307,498

 

 

31.2

%

 

788,372

 

 

604,267

 

 

30.5

%

General and administrative

 

42,754

 

 

36,014

 

 

18.7

%

 

83,869

 

 

71,152

 

 

17.9

%

General and administrative depreciation and amortization

 

5,013

 

 

6,212

 

 

(19.3

) %

 

10,336

 

 

11,867

 

 

(12.9

) %

General and administrative stock-based compensation

 

8,247

 

 

7,051

 

 

17.0

%

 

16,718

 

 

14,433

 

 

15.8

%

Total operating expenses

 

520,132

 

 

358,810

 

 

45.0

%

 

1,000,143

 

 

703,156

 

 

42.2

%

Operating income

 

347,328

 

 

258,221

 

 

34.5

%

 

677,449

 

 

506,815

 

 

33.7

%

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(4,433

)

 

(4,849

)

 

(8.6

) %

 

(9,540

)

 

(9,881

)

 

(3.5

) %

Other income, net

 

(840

)

 

(920

)

 

(8.7

) %

 

(28

)

 

2,333

 

 

(101.2

) %

Total other expense

 

(5,273

)

 

(5,769

)

 

(8.6

) %

 

(9,568

)

 

(7,548

)

 

26.8

%

Income before income taxes

 

342,055

 

 

252,452

 

 

35.5

%

 

667,881

 

 

499,267

 

 

33.8

%

Income tax expense

 

54,643

 

 

59,012

 

 

(7.4

) %

 

120,106

 

 

105,542

 

 

13.8

%

Net income

 

$ 287,412

 

 

$ 193,440

 

 

48.6

%

 

$ 547,775

 

 

$ 393,725

 

 

39.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$ 1.21

 

 

$ 0.82

 

 

47.6

%

 

$ 2.31

 

 

$ 1.67

 

 

38.3

%

Weighted average common shares outstanding

 

237,186

 

 

236,152

 

 

0.4

%

 

237,167

 

 

235,971

 

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$ 1.19

 

 

$ 0.81

 

 

46.9

%

 

$ 2.27

 

 

$ 1.64

 

 

38.4

%

Diluted weighted average common shares outstanding

 

241,187

 

 

240,280

 

 

0.4

%

 

241,244

 

 

240,124

 

 

0.5

%

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

January 31, 2022

 

July 31, 2021

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents, and restricted cash

 

$ 1,346,517

 

 

$ 1,048,260

 

Accounts receivable, net

 

630,629

 

 

480,628

 

Vehicle pooling costs

 

123,896

 

 

94,449

 

Inventories

 

52,979

 

 

44,968

 

Income taxes receivable

 

15,426

 

 

20,012

 

Prepaid expenses and other assets

 

19,926

 

 

14,294

 

Total current assets

 

2,189,373

 

 

1,702,611

 

Property and equipment, net

 

2,376,013

 

 

2,296,624

 

Operating lease right-of-use assets

 

120,309

 

 

119,487

 

Intangibles, net

 

42,731

 

 

45,873

 

Goodwill

 

352,908

 

 

355,717

 

Other assets

 

55,622

 

 

41,831

 

Total assets

 

$ 5,136,956

 

 

$ 4,562,143

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$ 367,699

 

 

$ 369,826

 

Deferred revenue

 

20,577

 

 

20,973

 

Income taxes payable

 

6,458

 

 

7,760

 

Current portion of operating and finance lease liabilities

 

23,126

 

 

22,472

 

Total current liabilities

 

417,860

 

 

421,031

 

Deferred income taxes

 

69,759

 

 

63,969

 

Income taxes payable

 

57,193

 

 

52,345

 

Operating and finance lease liabilities, net of current portion

 

98,459

 

 

97,961

 

Long-term debt and other liabilities, net of discount

 

403,829

 

 

397,636

 

Total liabilities

 

1,047,100

 

 

1,032,942

 

Commitments and contingencies

 

 

 

 

Stockholders' equity:

 

 

 

 

Preferred stock

 

 

 

 

Common stock

 

24

 

 

24

 

Additional paid-in capital

 

797,955

 

 

761,834

 

Accumulated other comprehensive loss

 

(123,502

)

 

(100,860

)

Retained earnings

 

3,415,379

 

 

2,868,203

 

Total stockholders' equity

 

4,089,856

 

 

3,529,201

 

Total liabilities and stockholders' equity

 

$ 5,136,956

 

 

$ 4,562,143

 

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Six Months Ended January 31,

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

Net income

 

$ 547,775

 

 

$ 393,725

 

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

 

 

 

 

Depreciation and amortization, including debt cost

 

65,627

 

 

60,898

 

Allowance for credit loss

 

1,695

 

 

213

 

Equity in losses (earnings) of unconsolidated affiliates

 

685

 

 

(1,343

)

Stock-based compensation

 

19,114

 

 

17,778

 

Gain on sale of property and equipment

 

(755

)

 

(1,145

)

Deferred income taxes

 

6,003

 

 

9,442

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(152,763

)

 

(111,148

)

Vehicle pooling costs

 

(29,623

)

 

(19,099

)

Inventories

 

(8,589

)

 

(9,772

)

Prepaid expenses and other current and non-current assets

 

(19,889

)

 

5,802

 

Operating lease right-of-use assets and lease liabilities

 

657

 

 

470

 

Accounts payable and accrued liabilities

 

10,741

 

 

10,041

 

Deferred revenue

 

(309

)

 

6,098

 

Income taxes receivable

 

4,577

 

 

20,243

 

Income taxes payable

 

1,655

 

 

10,838

 

Other liabilities

 

(53

)

 

 

Net cash provided by operating activities

 

446,548

 

 

393,041

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

(156,200

)

 

(283,214

)

Purchase of assets in connection with acquisitions

 

(469

)

 

 

Proceeds from sale of property and equipment

 

1,252

 

 

129

 

Net cash used in investing activities

 

(155,417

)

 

(283,085

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from the exercise of stock options

 

11,986

 

 

23,112

 

Proceeds from the issuance of Employee Stock Purchase Plan shares

 

5,022

 

 

4,880

 

Payments for employee stock-based tax withholdings

 

(599

)

 

(787

)

Payments of finance lease obligations

 

(314

)

 

(622

)

Net cash provided by financing activities

 

16,095

 

 

26,583

 

Effect of foreign currency translation

 

(8,969

)

 

2,146

 

Net increase in cash, cash equivalents, and restricted cash

 

298,257

 

 

138,685

 

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

 

$ 1,346,517

 

 

$ 616,403

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid

 

$ 9,311

 

 

$ 7,614

 

Income taxes paid, net of refunds

 

$ 128,972

 

 

$ 64,860

 

Copart, Inc.

Additional Financial Information

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended

January 31,

 

Six Months Ended

January 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

GAAP net income

 

$ 287,412

 

 

$ 193,440

 

 

$ 547,775

 

 

$ 393,725

 

Effect of certain discrete income tax items

 

(17,490

)

 

 

 

(17,490

)

 

 

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

 

(3,965

)

 

(2,167

)

 

(6,952

)

 

(13,939

)

Non-GAAP net income

 

$ 265,957

 

 

$ 191,273

 

 

$ 523,333

 

 

$ 379,786

 

 

 

 

 

 

 

 

 

 

GAAP net income per diluted common share

 

$ 1.19

 

 

$ 0.81

 

 

$ 2.27

 

 

$ 1.64

 

Non-GAAP net income per diluted common share

 

$ 1.10

 

 

$ 0.80

 

 

$ 2.17

 

 

$ 1.59

 

 

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