Home Business Wire Copart Reports Second Quarter Fiscal 2021 Financial Results

Copart Reports Second Quarter Fiscal 2021 Financial Results

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DALLAS–(BUSINESS WIRE)–#CopartEarnings–Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended January 31, 2021.

For the three months ended January 31, 2021, revenue, gross profit, and net income were $617.0 million, $307.5 million, and $193.4 million, respectively. These represent an increase in revenue of $41.9 million, or 7.3%; an increase in gross profit of $47.6 million, or 18.3%; and an increase in net income of $24.7 million, or 14.7%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.81 compared to $0.71 last year, an increase of 14.1%.

For the six months ended January 31, 2021, revenue, gross profit, and net income were $1.2 billion, $604.3 million, and $393.7 million, respectively. These represent an increase in revenue of $80.4 million, or 7.1%; an increase in gross profit of $89.5 million, or 17.4%; and an increase in net income of $6.8 million, or 1.8%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $1.64 compared to $1.62 last year, an increase of 1.2%.

Excluding the impact of discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises, non-GAAP fully diluted earnings per share for the three months ended January 31, 2021 and 2020, were $0.80, and $0.64, respectively, which was an increase of 25.0%. Excluding the impact of discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises, non-GAAP fully diluted earnings per share for the six months ended January 31, 2021 and 2020, were $1.58, and $1.29, respectively, which was an increase of 22.5%. 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 Friday, February 19, 2021, 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 at http://public.viavid.com/index.php?id=143555 or via hyperlink at www.copart.com/investorrelations. A replay of the call will be available through May 2021 by visiting www.copart.com/investorrelations or http://public.viavid.com/index.php?id=143555.

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 salvage and clean title vehicles to dealers, dismantlers, rebuilders, exporters, and in some jurisdictions, to the general public. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers and individuals. With operations at over 200 locations in 11 countries, Copart has more than 175,000 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, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises. 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. From a financial planning and analysis perspective, Copart management analyzes its operating results with and without the impact of discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises.

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,

 

 

2021

 

2020

 

2021

 

2020

Service revenues and vehicle sales:

 

 

 

 

 

 

 

 

Service revenues

 

$

532,601

 

 

$

510,034

 

 

$

1,047,973

 

 

$

997,890

 

Vehicle sales

 

84,430

 

 

65,106

 

 

161,998

 

 

131,674

 

Total service revenues and vehicle sales

 

617,031

 

 

575,140

 

 

1,209,971

 

 

1,129,564

 

Operating expenses:

 

 

 

 

 

 

 

 

Yard operations

 

208,910

 

 

237,683

 

 

415,896

 

 

460,562

 

Cost of vehicle sales

 

73,629

 

 

57,900

 

 

137,989

 

 

116,664

 

Yard depreciation and amortization

 

25,180

 

 

18,231

 

 

48,474

 

 

35,051

 

Yard stock-based compensation

 

1,814

 

 

1,437

 

 

3,345

 

 

2,529

 

Gross profit

 

307,498

 

 

259,889

 

 

604,267

 

 

514,758

 

General and administrative

 

36,014

 

 

39,242

 

 

71,152

 

 

78,085

 

General and administrative depreciation and amortization

 

6,212

 

 

6,051

 

 

11,867

 

 

12,245

 

General and administrative stock-based compensation

 

7,051

 

 

4,704

 

 

14,433

 

 

9,145

 

Total operating expenses

 

358,810

 

 

365,248

 

 

703,156

 

 

714,281

 

Operating income

 

258,221

 

 

209,892

 

 

506,815

 

 

415,283

 

Other expense:

 

 

 

 

 

 

 

 

Interest expense, net

 

(4,849)

 

 

(4,464)

 

 

(9,881)

 

 

(8,490)

 

Other income, net

 

(920)

 

 

(354)

 

 

2,333

 

 

363

 

Total other expense

 

(5,769)

 

 

(4,818)

 

 

(7,548)

 

 

(8,127)

 

Income before income taxes

 

252,452

 

 

205,074

 

 

499,267

 

 

407,156

 

Income tax expense

 

59,012

 

 

36,367

 

 

105,542

 

 

20,269

 

Net income

 

$

193,440

 

 

$

168,707

 

 

$

393,725

 

 

$

386,887

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.82

 

 

$

0.73

 

 

$

1.67

 

 

$

1.67

 

Weighted average common shares outstanding

 

236,152

 

 

232,671

 

 

235,971

 

 

231,920

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

0.81

 

 

$

0.71

 

 

$

1.64

 

 

$

1.62

 

Diluted weighted average common shares outstanding

 

240,280

 

 

238,470

 

 

240,124

 

 

238,566

 

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

January 31, 2021

 

July 31, 2020

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents, and restricted cash

 

$

616,403

 

 

$

477,718

 

Accounts receivable, net

 

462,405

 

 

350,207

 

Vehicle pooling costs

 

92,928

 

 

73,684

 

Inventories

 

30,203

 

 

20,080

 

Income taxes receivable

 

6,498

 

 

26,740

 

Prepaid expenses and other assets

 

17,030

 

 

15,330

 

Total current assets

 

1,225,467

 

 

963,759

 

Property and equipment, net

 

2,175,346

 

 

1,941,719

 

Operating lease right-of-use assets

 

107,602

 

 

118,455

 

Intangibles, net

 

44,270

 

 

47,772

 

Goodwill

 

346,966

 

 

343,622

 

Deferred income taxes

 

221

 

 

213

 

Other assets

 

34,566

 

 

39,721

 

Total assets

 

$

3,934,438

 

 

$

3,455,261

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

324,108

 

 

$

318,530

 

Deferred revenue

 

14,431

 

 

8,233

 

Income taxes payable

 

8,672

 

 

3,709

 

Current portion of operating lease liabilities

 

22,554

 

 

24,821

 

Current portion of finance lease liabilities

 

1,250

 

 

751

 

Total current liabilities

 

371,015

 

 

356,044

 

Deferred income taxes

 

81,316

 

 

71,686

 

Income taxes payable

 

51,177

 

 

44,965

 

Operating lease liabilities, net of current portion

 

85,307

 

 

95,584

 

Long-term debt and finance lease liabilities, net of discount

 

402,703

 

 

397,036

 

Other liabilities

 

328

 

 

430

 

Total liabilities

 

991,846

 

 

965,745

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock

 

 

 

 

Common stock

 

24

 

 

24

 

Additional paid-in capital

 

718,497

 

 

672,727

 

Accumulated other comprehensive loss

 

(106,720)

 

 

(121,088)

 

Retained earnings

 

2,330,791

 

 

1,937,853

 

Total stockholders’ equity

 

2,942,592

 

 

2,489,516

 

Total liabilities and stockholders’ equity

 

$

3,934,438

 

 

$

3,455,261

 

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Six Months Ended January 31,

 

 

2021

 

2020

Cash flows from operating activities:

 

 

 

 

Net income

 

$

393,725

 

 

$

386,887

 

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

 

 

 

 

Depreciation and amortization, including debt cost

 

60,898

 

 

48,097

 

Allowance for credit loss

 

213

 

 

1,301

 

Equity in (earnings) losses of unconsolidated affiliates

 

(1,343)

 

 

3,124

 

Stock-based compensation

 

17,778

 

 

11,674

 

Gain on sale of property and equipment

 

(1,145)

 

 

(1,315)

 

Deferred income taxes

 

9,442

 

 

6,719

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(111,148)

 

 

(78,510)

 

Vehicle pooling costs

 

(19,099)

 

 

(13,921)

 

Inventories

 

(9,772)

 

 

2,765

 

Prepaid expenses and other current and non-current assets

 

5,802

 

 

7,184

 

Operating lease right-of-use assets and lease liabilities

 

470

 

 

331

 

Accounts payable and accrued liabilities

 

10,041

 

 

24,862

 

Deferred revenue

 

6,098

 

 

1,021

 

Income taxes receivable

 

20,243

 

 

(48,722)

 

Income taxes payable

 

10,838

 

 

5,794

 

Other liabilities

 

 

 

(371)

 

Net cash provided by operating activities

 

393,041

 

 

356,920

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment, including acquisitions

 

(283,214)

 

 

(400,352)

 

Proceeds from sale of property and equipment

 

129

 

 

1,639

 

Net cash used in investing activities

 

(283,085)

 

 

(398,713)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from the exercise of stock options

 

23,112

 

 

32,594

 

Proceeds from the issuance of Employee Stock Purchase Plan shares

 

4,880

 

 

3,955

 

Payments for employee stock-based tax withholdings

 

(787)

 

 

(101,422)

 

Net proceeds on revolving loan facility

 

 

 

13,600

 

Payments of finance lease obligations

 

(622)

 

 

 

Net cash provided by (used in) financing activities

 

26,583

 

 

(51,273)

 

Effect of foreign currency translation

 

2,146

 

 

258

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

138,685

 

 

(92,808)

 

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

 

477,718

 

 

186,319

 

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

 

$

616,403

 

 

$

93,511

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid

 

$

7,614

 

 

$

9,007

 

Income taxes paid, net of refunds

 

$

64,860

 

 

$

57,591

 

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,

 

 

2021

 

2020

 

2021

 

2020

GAAP net income

 

$

193,440

 

 

$

168,707

 

 

$

393,725

 

 

$

386,887

 

Effect of discrete income tax items

 

 

 

 

 

 

 

(3,008)

 

Effect of foreign currency-related losses (gains), net of tax

 

238

 

 

(416)

 

 

48

 

 

(679)

 

Effect of recognizing tax benefit on exercise of employee stock options

 

(2,167)

 

 

(14,829)

 

 

(13,939)

 

 

(77,194)

 

Effect of payroll taxes on certain executive stock compensation, net of tax

 

 

 

 

 

 

 

2,867

 

Non-GAAP net income

 

$

191,511

 

 

$

153,462

 

 

$

379,834

 

 

$

308,873

 

 

 

 

 

 

 

 

 

 

GAAP net income per diluted common share

 

$

0.81

 

 

$

0.71

 

 

$

1.64

 

 

$

1.62

 

Non-GAAP net income per diluted common share

 

$

0.80

 

 

$

0.64

 

 

$

1.58

 

 

$

1.29

 

 

Contacts

Melissa Hunter, Executive Support Manager, Office of the Chief Financial Officer

972-391-5090 or [email protected]

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