Copart Reports First Quarter Fiscal 2023 Financial Results

DALLAS–(BUSINESS WIRE)–Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended October 31, 2022.

For the three months ended October 31, 2022, revenue, gross profit, and net income were $893.4 million, $369.5 million, and $245.8 million, respectively. These represent an increase in revenue of $83.2 million, or 10.3%; a decrease in gross profit of $15.5 million, or 4.0%; and a decrease in net income of $14.5 million, or 5.6%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.51 compared to $0.54 last year, a decrease of 5.6%.

On September 28th, 2022, Hurricane Ian, a Category 4 hurricane, came ashore in Florida, with sustained winds of 150mph, the first such Category 4 storm to impact Southwest Florida since Hurricane Charley in 2004. Hurricane Ian adversely impacted the operating results for the three months ended October 31, 2022 resulting in additional costs of approximately $25 million. These costs included premiums for subhaulers, labor costs incurred from overtime, and travel and lodging due to the reassignment of employees to the affected region.

Excluding the impact of certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the three months ended October 31, 2022 and 2021 were $0.51, and $0.53, respectively, which was a decrease of 3.8%. 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, November 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 February 2023 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 190 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 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

October 31,

 

 

 

2022

 

 

 

2021

 

 

% Change

Service revenues and vehicle sales:

 

 

 

 

 

 

Service revenues

 

$

726,840

 

 

$

667,818

 

 

8.8

%

Vehicle sales

 

 

166,532

 

 

 

142,314

 

 

17.0

%

Total service revenues and vehicle sales

 

 

893,372

 

 

 

810,132

 

 

10.3

%

Operating expenses:

 

 

 

 

 

 

Yard operations

 

 

336,972

 

 

 

271,276

 

 

24.2

%

Cost of vehicle sales

 

 

151,112

 

 

 

126,408

 

 

19.5

%

Yard depreciation and amortization

 

 

34,360

 

 

 

26,437

 

 

30.0

%

Yard stock-based compensation

 

 

1,445

 

 

 

981

 

 

47.3

%

Gross profit

 

 

369,483

 

 

 

385,030

 

 

(4.0

) %

General and administrative

 

 

44,535

 

 

 

41,115

 

 

8.3

%

General and administrative depreciation and amortization

 

 

4,698

 

 

 

5,323

 

 

(11.7

) %

General and administrative stock-based compensation

 

 

8,747

 

 

 

8,471

 

 

3.3

%

Total operating expenses

 

 

581,869

 

 

 

480,011

 

 

21.2

%

Operating income

 

 

311,503

 

 

 

330,121

 

 

(5.6

) %

Other expense:

 

 

 

 

 

 

Interest income (expense), net

 

 

4,422

 

 

 

(5,107

)

 

186.6

%

Other (expense) income, net

 

 

(2,822

)

 

 

812

 

 

(447.5

) %

Total other income (expense)

 

 

1,600

 

 

 

(4,295

)

 

137.3

%

Income before income taxes

 

 

313,103

 

 

 

325,826

 

 

(3.9

) %

Income tax expense

 

 

67,255

 

 

 

65,463

 

 

2.7

%

Net income

 

$

245,848

 

 

$

260,363

 

 

(5.6

) %

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.52

 

 

$

0.55

 

 

(5.5

) %

Weighted average common shares outstanding

 

 

476,099

 

 

 

474,136

 

 

0.4

%

 

 

 

 

 

 

 

Diluted net income per common share

 

$

0.51

 

 

$

0.54

 

 

(5.6

) %

Diluted weighted average common shares outstanding

 

 

482,168

 

 

 

482,442

 

 

(0.1

) %

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

October 31, 2022

 

July 31, 2022

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents, and restricted cash

 

$

1,539,391

 

 

$

1,384,236

 

Accounts receivable, net

 

 

628,964

 

 

 

578,573

 

Vehicle pooling costs

 

 

116,526

 

 

 

112,242

 

Inventories

 

 

53,866

 

 

 

58,791

 

Income taxes receivable

 

 

5,261

 

 

 

49,882

 

Prepaid expenses and other assets

 

 

20,597

 

 

 

18,731

 

Total current assets

 

 

2,364,605

 

 

 

2,202,455

 

Property and equipment, net

 

 

2,582,481

 

 

 

2,485,764

 

Operating lease right-of-use assets

 

 

112,530

 

 

 

116,303

 

Intangibles, net

 

 

51,847

 

 

 

54,680

 

Goodwill

 

 

394,844

 

 

 

401,954

 

Other assets

 

 

87,370

 

 

 

47,708

 

Total assets

 

$

5,593,677

 

 

$

5,308,864

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

446,974

 

 

$

399,034

 

Deferred revenue

 

 

19,319

 

 

 

20,061

 

Income taxes payable

 

 

16,101

 

 

 

 

Current portion of operating and finance lease liabilities

 

 

22,083

 

 

 

21,794

 

Total current liabilities

 

 

504,477

 

 

 

440,889

 

Deferred income taxes

 

 

77,452

 

 

 

80,060

 

Income taxes payable

 

 

65,275

 

 

 

64,637

 

Operating and finance lease liabilities, net of current portion

 

 

91,670

 

 

 

95,683

 

Long-term debt and other liabilities, net of discount

 

 

1,969

 

 

 

1,996

 

Total liabilities

 

 

740,843

 

 

 

683,265

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

48

 

 

 

48

 

Additional paid-in capital

 

 

849,761

 

 

 

838,508

 

Accumulated other comprehensive loss

 

 

(198,936

)

 

 

(169,365

)

Retained earnings

 

 

4,201,961

 

 

 

3,956,408

 

Total stockholders’ equity

 

 

4,852,834

 

 

 

4,625,599

 

Total liabilities and stockholders’ equity

 

$

5,593,677

 

 

$

5,308,864

 

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Three Months Ended October 31,

 

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

Net income

 

$

245,848

 

 

$

260,363

 

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

 

 

 

 

Depreciation and amortization, including debt cost

 

 

39,327

 

 

 

32,049

 

Allowance for credit loss

 

 

1,396

 

 

 

295

 

Equity in losses of unconsolidated affiliates

 

 

2,122

 

 

 

168

 

Stock-based compensation

 

 

10,192

 

 

 

9,452

 

Gain on sale of property and equipment

 

 

(113

)

 

 

(440

)

Deferred income taxes

 

 

(1,780

)

 

 

8,319

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(53,837

)

 

 

(82,676

)

Vehicle pooling costs

 

 

(4,643

)

 

 

(21,697

)

Inventories

 

 

4,020

 

 

 

(3,463

)

Prepaid expenses, other current and non-current assets

 

 

(35,303

)

 

 

3,071

 

Operating lease right-of-use assets and lease liabilities

 

 

52

 

 

 

382

 

Accounts payable, accrued liabilities and other liabilities

 

 

40,372

 

 

 

62,013

 

Deferred revenue

 

 

(588

)

 

 

(979

)

Income taxes receivable

 

 

44,595

 

 

 

19,479

 

Income taxes payable

 

 

19,899

 

 

 

26,204

 

Net cash provided by operating activities

 

 

311,559

 

 

 

312,540

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

 

(152,655

)

 

 

(64,696

)

Proceeds from sale of property and equipment

 

 

185

 

 

 

813

 

Net cash used in investing activities

 

 

(152,470

)

 

 

(63,883

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from the exercise of stock options

 

 

1,061

 

 

 

5,572

 

Payments for employee stock-based tax withholdings

 

 

(295

)

 

 

(249

)

Payments of finance lease obligations

 

 

(7

)

 

 

(157

)

Net cash provided by financing activities

 

 

759

 

 

 

5,166

 

Effect of foreign currency translation

 

 

(4,693

)

 

 

(3,710

)

Net increase in cash, cash equivalents, and restricted cash

 

 

155,155

 

 

 

250,113

 

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

 

 

1,384,236

 

 

 

1,048,260

 

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

 

$

1,539,391

 

 

$

1,298,373

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid

 

$

64

 

 

$

5,080

 

Income taxes paid, net of refunds

 

$

5,700

 

 

$

10,089

 

Copart, Inc.

Additional Financial Information

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended

October 31,

 

 

 

2022

 

 

 

2021

 

GAAP net income

 

$

245,848

 

 

$

260,363

 

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

 

 

(625

)

 

 

(2,987

)

Non-GAAP net income

 

$

245,223

 

 

$

257,376

 

 

 

 

 

 

GAAP net income per diluted common share

 

$

0.51

 

 

$

0.54

 

Non-GAAP net income per diluted common share

 

$

0.51

 

 

$

0.53

 

 

Contacts

Brooke Boston, Executive Assistant, Office of the Co-Chief Executive Officer

brooke.boston@copart.com