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Copart Reports Fourth Quarter Fiscal 2022 Financial Results

·11 min read

DALLAS, September 07, 2022--(BUSINESS WIRE)--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

View source version on businesswire.com: https://www.businesswire.com/news/home/20220907006175/en/

Contacts

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