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Copart Reports Third Quarter Fiscal 2023 Financial Results

Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended April 30, 2023.

For the three months ended April 30, 2023, revenue, gross profit, and net income were $1,021.8 million, $483.4 million, and $350.4 million, respectively. These represent an increase in revenue of $81.9 million, or 8.7%; an increase in gross profit of $47.2 million, or 10.8%; and an increase in net income of $71.8 million, or 25.8%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.72 compared to $0.58 last year, an increase of 24.1%.

For the nine months ended April 30, 2023, revenue, gross profit, and net income were $2,871.9 million, $1,279.4 million, and $890.0 million, respectively. These represent an increase in revenue of $254.4 million, or 9.7%; an increase in gross profit of $54.8 million, or 4.5%; and an increase in net income of $63.6 million, or 7.7%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $1.84 compared to $1.71 last year, an increase of 7.6%.

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 April 30, 2023 and 2022 were $0.72, and $0.58, respectively, which was an increase of 24.1%. Excluding the impact of certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the nine months ended April 30, 2023 and 2022, were $1.83, and $1.67, respectively, which was an increase of 9.6%. 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 Wednesday, May 17, 2023, at 5 p.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 August 2023 by visiting www.copart.com/investorrelations.

About Copart

Copart, Inc., founded in 1982, is a global leader in online vehicle auctions and vehicle remarketing services. 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, fleet operators, dealers, vehicle rental companies, charities, 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 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. 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,

 

 

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

Service revenues and vehicle sales:

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues

 

$

847,249

 

$

766,316

 

 

10.6

%

 

 

2,363,886

 

 

$

2,145,224

 

 

10.2

%

Vehicle sales

 

 

174,582

 

 

173,625

 

 

0.6

%

 

 

508,041

 

 

 

472,309

 

 

7.6

%

Total service revenues and vehicle sales

 

 

1,021,831

 

 

939,941

 

 

8.7

%

 

 

2,871,927

 

 

 

2,617,533

 

 

9.7

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Yard operations

 

 

343,617

 

 

313,365

 

 

9.7

%

 

 

1,020,674

 

 

 

878,740

 

 

16.2

%

Cost of vehicle sales

 

 

159,443

 

 

157,236

 

 

1.4

%

 

 

465,282

 

 

 

423,948

 

 

9.7

%

Yard depreciation and amortization

 

 

33,090

 

 

31,646

 

 

4.6

%

 

 

101,520

 

 

 

86,383

 

 

17.5

%

Yard stock-based compensation

 

 

2,251

 

 

1,417

 

 

58.9

%

 

 

5,038

 

 

 

3,813

 

 

32.1

%

Gross profit

 

 

483,430

 

 

436,277

 

 

10.8

%

 

 

1,279,413

 

 

 

1,224,649

 

 

4.5

%

General and administrative

 

 

52,395

 

 

50,188

 

 

4.4

%

 

 

144,772

 

 

 

134,057

 

 

8.0

%

General and administrative depreciation and amortization

 

 

4,281

 

 

4,933

 

 

(13.2

) %

 

 

13,323

 

 

 

15,269

 

 

(12.7

) %

General and administrative stock-based compensation

 

 

7,830

 

 

8,401

 

 

(6.8

) %

 

 

25,366

 

 

 

25,119

 

 

1.0

%

Total operating expenses

 

 

602,907

 

 

567,186

 

 

6.3

%

 

 

1,775,975

 

 

 

1,567,329

 

 

13.3

%

Operating income

 

 

418,924

 

 

372,755

 

 

12.4

%

 

 

1,095,952

 

 

 

1,050,204

 

 

4.4

%

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

17,878

 

 

(4,492

)

 

(498.0

) %

 

 

36,780

 

 

 

(14,032

)

 

(362.1

) %

Other income (expense), net

 

 

3,628

 

 

1,342

 

 

170.3

%

 

 

(2,096

)

 

 

1,314

 

 

(259.5

) %

Total other income (expense)

 

 

21,506

 

 

(3,150

)

 

(782.7

) %

 

 

34,684

 

 

 

(12,718

)

 

(372.7

) %

Income before income taxes

 

 

440,430

 

 

369,605

 

 

19.2

%

 

 

1,130,636

 

 

 

1,037,486

 

 

9.0

%

Income tax expense

 

 

89,999

 

 

90,985

 

 

(1.1

) %

 

 

240,680

 

 

 

211,091

 

 

14.0

%

Net income

 

$

350,431

 

$

278,620

 

 

25.8

%

 

$

889,956

 

 

$

826,395

 

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.73

 

$

0.59

 

 

23.7

%

 

$

1.87

 

 

$

1.74

 

 

7.5

%

Weighted average common shares outstanding

 

 

476,787

 

 

475,010

 

 

0.4

%

 

 

476,417

 

 

 

474,554

 

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

0.72

 

$

0.58

 

 

24.1

%

 

$

1.84

 

 

$

1.71

 

 

7.6

%

Diluted weighted average common shares outstanding

 

 

483,690

 

 

481,448

 

 

0.5

%

 

 

482,718

 

 

 

482,576

 

 

%

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

April 30, 2023

 

July 31, 2022

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents, and restricted cash

 

$

2,114,183

 

 

$

1,384,236

 

Accounts receivable, net

 

 

693,834

 

 

 

578,573

 

Vehicle pooling costs

 

 

119,724

 

 

 

112,242

 

Inventories

 

 

44,999

 

 

 

58,791

 

Income taxes receivable

 

 

428

 

 

 

49,882

 

Prepaid expenses and other assets

 

 

27,862

 

 

 

18,731

 

Total current assets

 

 

3,001,030

 

 

 

2,202,455

 

Property and equipment, net

 

 

2,710,933

 

 

 

2,485,764

 

Operating lease right-of-use assets

 

 

105,260

 

 

 

116,303

 

Intangibles, net

 

 

49,676

 

 

 

54,680

 

Goodwill

 

 

406,640

 

 

 

401,954

 

Other assets

 

 

76,266

 

 

 

47,708

 

Total assets

 

$

6,349,805

 

 

$

5,308,864

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

441,466

 

 

$

399,034

 

Deferred revenue

 

 

25,664

 

 

 

20,061

 

Income taxes payable

 

 

18,534

 

 

 

 

Current portion of operating and finance lease liabilities

 

 

20,900

 

 

 

21,794

 

Total current liabilities

 

 

506,564

 

 

 

440,889

 

Deferred income taxes

 

 

76,690

 

 

 

80,060

 

Income taxes payable

 

 

65,745

 

 

 

64,637

 

Operating and finance lease liabilities, net of current portion

 

 

86,016

 

 

 

95,683

 

Long-term debt and other liabilities

 

 

22,368

 

 

 

1,996

 

Total liabilities

 

 

757,383

 

 

 

683,265

 

Commitments and contingencies

 

 

 

 

Stockholders' equity:

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

48

 

 

 

48

 

Additional paid-in capital

 

 

901,495

 

 

 

838,508

 

Accumulated other comprehensive loss

 

 

(152,459

)

 

 

(169,365

)

Retained earnings

 

 

4,843,338

 

 

 

3,956,408

 

Total stockholders' equity

 

 

5,592,422

 

 

 

4,625,599

 

Total liabilities and stockholders' equity

 

$

6,349,805

 

 

$

5,308,864

 

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended April 30,

 

 

2023

 

2022

Cash flows from operating activities:

 

 

 

 

Net income

 

$

889,956

 

 

$

826,395

 

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

 

 

 

 

Depreciation and amortization, including debt cost

 

 

115,320

 

 

 

102,333

 

Allowance for credit loss

 

 

1,480

 

 

 

1,456

 

Equity in losses of unconsolidated affiliates

 

 

5,446

 

 

 

794

 

Stock-based compensation

 

 

30,404

 

 

 

28,932

 

Gain on sale of property and equipment

 

 

(965

)

 

 

(1,280

)

Deferred income taxes

 

 

(3,236

)

 

 

14,582

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(115,098

)

 

 

(109,636

)

Vehicle pooling costs

 

 

(7,300

)

 

 

(20,029

)

Inventories

 

 

14,870

 

 

 

(13,367

)

Prepaid expenses, other current and non-current assets

 

 

(33,830

)

 

 

(37,842

)

Operating lease right-of-use assets and lease liabilities

 

 

595

 

 

 

436

 

Accounts payable, accrued liabilities and other liabilities

 

 

30,314

 

 

 

45,745

 

Deferred revenue

 

 

5,516

 

 

 

388

 

Income taxes receivable

 

 

49,430

 

 

 

18,416

 

Income taxes payable

 

 

22,731

 

 

 

6,531

 

Net cash provided by operating activities

 

 

1,005,633

 

 

 

863,854

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

 

(346,524

)

 

 

(234,810

)

Purchase of assets in connection with acquisitions

 

 

 

 

 

(493

)

Proceeds from sale of property and equipment

 

 

20,509

 

 

 

2,622

 

Purchase of held to maturity securities

 

 

 

 

 

(374,866

)

Proceeds from the sale of held to maturity securities

 

 

 

 

 

149,977

 

Investment in unconsolidated affiliate

 

 

(2,744

)

 

 

 

Net cash used in investing activities

 

 

(328,759

)

 

 

(457,570

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from the exercise of stock options

 

 

27,220

 

 

 

16,108

 

Proceeds from the issuance of Employee Stock Purchase Plan shares

 

 

5,363

 

 

 

5,026

 

Payments for employee stock-based tax withholdings

 

 

(3,026

)

 

 

(872

)

Drawdown on revolving loan facility

 

 

21,481

 

 

 

 

Debt offering costs

 

 

 

 

 

(1,212

)

Payments of finance lease obligations

 

 

(18

)

 

 

(472

)

Net cash provided by financing activities

 

 

51,020

 

 

 

18,578

 

Effect of foreign currency translation

 

 

2,053

 

 

 

(18,304

)

Net increase in cash, cash equivalents, and restricted cash

 

 

729,947

 

 

 

406,558

 

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

 

$

2,114,183

 

 

$

1,454,818

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid

 

$

1,586

 

 

$

14,485

 

Income taxes paid, net of refunds

 

$

171,438

 

 

$

195,521

 

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,

 

 

2023

 

2022

 

2023

 

2022

GAAP net income

 

$

350,431

 

 

$

278,620

 

 

$

889,956

 

 

$

826,395

 

Effect of certain discrete income tax items

 

 

 

 

 

 

 

 

 

 

 

(17,490

)

Effect of certain legal matters, net of tax

 

 

 

 

 

5,092

 

 

 

 

 

 

5,092

 

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

 

 

(4,370

)

 

 

(2,244

)

 

 

(5,110

)

 

 

(9,197

)

Non-GAAP net income

 

$

346,061

 

 

$

281,468

 

 

$

884,846

 

 

$

804,800

 

 

 

 

 

 

 

 

 

 

GAAP net income per diluted common share

 

$

0.72

 

 

$

0.58

 

 

$

1.84

 

 

$

1.71

 

Non-GAAP net income per diluted common share

 

$

0.72

 

 

$

0.58

 

 

$

1.83

 

 

$

1.67

 

 

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