Copart Reports Fourth Quarter Fiscal 2021 Financial Results
Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2021.
For the three months ended July 31, 2021, revenue, gross profit, and net income were $748.6 million, $357.5 million, and $256.0 million, respectively. These represent an increase in revenue of $223.0 million, or 42.4%; an increase in gross profit of $107.1 million, or 42.7%; and an increase in net income of $90.4 million, or 54.6%, respectively, from the same period last year. Fully diluted earnings per share for the three months ended July 31, 2021 were $1.06 compared to $0.69 last year, an increase of 53.6%.
For the year ended July 31, 2021, revenue, gross profit, and net income were $2.7 billion, $1.3 billion, and $936.5 million, respectively. These represent an increase in revenue of $486.9 million, or 22.1%; an increase in gross profit of $335.3 million, or 33.3%; and an increase in net income of $236.6 million, or 33.8%, respectively, from the same period last year. Fully diluted earnings per share for the year ended July 31, 2021 were $3.90 compared to $2.93 last year, an increase of 33.1%.
Excluding the impact of certain discrete income tax items, acquisition related integration charges, foreign currency-related gains and losses, and certain income tax benefits, non-GAAP fully diluted earnings per share for the three months ended July 31, 2021 and 2020, were $1.03 and $0.68, respectively, which was an increase of 51.5%. Excluding the impact of certain discrete income tax items, acquisition related integration charges, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to stock-based compensation, non-GAAP fully diluted earnings per share for the year ended July 31, 2021 and 2020, were $3.70 and $2.56, respectively, which was an increase of 44.5%. 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 9, 2021, 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 December 2021 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, foreign currency-related gains and losses, certain income tax benefits and payroll taxes 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,
2021
2020
% Change
2021
2020
% Change
Service revenues and vehicle sales:
Service revenues
$
620,048
$
457,668
35.5
%
$
2,291,867
$
1,947,140
17.7
%
Vehicle sales
128,582
67,991
89.1
%
400,644
258,443
55.0
%
Total service revenues and vehicle sales
748,630
525,659
42.4
%
2,692,511
2,205,583
22.1
%
Operating expenses:
Yard operations
250,396
197,186
27.0
%
897,086
889,733
0.8
%
Cost of vehicle sales
113,641
54,643
108.0
%
346,128
225,294
53.6
%
Yard depreciation and amortization
26,567
21,615
22.9
%
100,917
76,999
31.1
%
Yard stock-based compensation
543
1,784
(69.6
)%
5,289
5,755
(8.1
)%
Gross profit
357,483
250,431
42.7
%
1,343,091
1,007,802
33.3
%
General and administrative
39,652
34,643
14.5
%
149,978
149,745
0.2
%
General and administrative depreciation and amortization
3,097
5,764
(46.3
)%
21,054
24,391
(13.7
)%
General and administrative stock-based compensation
13,234
4,309
207.1
%
35,633
17,567
102.8
%
Total operating expenses
447,130
319,944
39.8
%
1,556,085
1,389,484
12.0
%
Operating income
301,500
205,715
46.6
%
1,136,426
816,099
39.3
%
Other expense:
Interest expense, net
(5,020
)
(4,803
)
4.5
%
(20,247
)
(18,871
)
7.3
%
Other income, net
2,564
971
164.1
%
5,667
3,611
56.9
%
Total other expense
(2,456
)
(3,832
)
(35.9
)%
(14,580
)
(15,260
)
(4.5
)%
Income before income taxes
299,044
201,883
48.1
%
1,121,846
800,839
40.1
%
Income tax expense
43,070
36,350
18.5
%
185,351
100,932
83.6
%
Net income
$
255,974
$
165,533
54.6
%
$
936,495
$
699,907
33.8
%
Basic net income per common share
$
1.08
$
0.70
54.3
%
$
3.96
$
3.00
32.0
%
Weighted average common shares outstanding
236,679
234,863
0.8
%
236,252
233,202
1.3
%
Diluted net income per common share
$
1.06
$
0.69
53.6
%
$
3.90
$
2.93
33.1
%
Diluted weighted average common shares outstanding
240,714
238,927
0.7
%
240,290
238,656
0.7
%
Copart, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
July 31, 2021
July 31, 2020
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash
$
1,048,260
$
477,718
Accounts receivable, net
480,628
350,207
Vehicle pooling costs
94,449
73,684
Inventories
44,968
20,080
Income taxes receivable
20,012
26,740
Prepaid expenses and other assets
14,294
15,330
Total current assets
1,702,611
963,759
Property and equipment, net
2,296,624
1,941,719
Operating lease right-of-use assets
119,487
118,455
Intangibles, net
45,873
47,772
Goodwill
355,717
343,622
Other assets
41,831
39,934
Total assets
$
4,562,143
$
3,455,261
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
369,826
$
318,530
Deferred revenue
20,973
8,233
Income taxes payable
7,760
3,709
Current portion of operating and finance lease liabilities
22,472
25,572
Total current liabilities
421,031
356,044
Deferred income taxes
63,969
71,686
Income taxes payable
52,345
44,965
Operating and finance lease liabilities, net of current portion
97,961
96,150
Long-term debt and other liabilities, net of discount
397,636
396,900
Total liabilities
1,032,942
965,745
Commitments and contingencies
Stockholders’ equity:
Preferred stock
—
—
Common stock
24
24
Additional paid-in capital
761,834
672,727
Accumulated other comprehensive loss
(100,860)
(121,088)
Retained earnings
2,868,203
1,937,853
Total stockholders’ equity
3,529,201
2,489,516
Total liabilities and stockholders’ equity
$
4,562,143
$
3,455,261
Copart, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year Ended July 31,
2021
2020
Cash flows from operating activities:
Net income
$
936,495
$
699,907
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including debt cost
123,084
104,257
Allowance for credit loss
(1,121
)
1,670
Equity in (earnings) losses of unconsolidated affiliates
(3,240
)
1,401
Stock-based compensation
40,922
23,322
Gain on sale of property and equipment
(1,480
)
(1,913
)
Deferred income taxes
(7,951
)
23,082
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable
(127,513
)
15,993
Vehicle pooling costs
(20,476
)
2,590
Inventories
(24,602
)
1,348
Prepaid expenses and other current and non-current assets
7,025
141
Operating lease right-of-use assets and lease liabilities
570
(572
)
Accounts payable and accrued liabilities
44,613
41,648
Deferred revenue
8,781
1,615
Income taxes receivable
6,739
(7,216
)
Income taxes payable
9,045
10,114
Other liabilities
—
498
Net cash provided by operating activities
990,891
917,885
Cash flows from investing activities:
Purchases of property and equipment
(462,996
)
(591,972
)
Purchases of assets and liabilities in connection with acquisitions, net of cash acquired
(5,000
)
(11,702
)
Proceeds from sale of property and equipment
2,530
2,466
Net cash used in investing activities
(465,466
)
(601,208
)
Cash flows from financing activities:
Proceeds from the exercise of stock options
39,049
71,640
Proceeds from the issuance of Employee Stock Purchase Plan shares
9,136
8,276
Payments for employee stock-based tax withholdings
(6,145
)
(103,451
)
Debt offering costs
—
(2,814
)
Payments of finance lease obligations
(1,118
)
(1,065
)
Net cash provided by (used in) financing activities
40,922
(27,414
)
Effect of foreign currency translation
4,195
2,136
Net increase in cash, cash equivalents, and restricted cash
570,542
291,399
Cash, cash equivalents, and restricted cash at beginning of period
477,718
186,319
Cash, cash equivalents, and restricted cash at end of period
$
1,048,260
$
477,718
Supplemental disclosure of cash flow information:
Interest paid
$
19,723
$
19,728
Income taxes paid, net of refunds
$
178,241
$
83,770
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,
2021
2020
2021
2020
GAAP net income
$
255,974
$
165,533
$
936,495
$
699,907
Effect of certain discrete income tax items
—
4,740
(19,764
)
1,732
Effect of acquisition related integration charges, net of tax
2,713
—
2,713
—
Effect of foreign currency-related losses (gains), net of tax
(422
)
(268
)
73
(1,436
)
Effect of recognizing tax benefit on exercise of stock-based compensation
(10,962
)
(6,586
)
(29,812
)
(92,548
)
Effect of payroll taxes on certain executive stock-based compensation, net of tax
—
—
—
2,867
Non-GAAP net income
$
247,303
$
163,419
$
889,705
$
610,522
GAAP net income per diluted common share
$
1.06
$
0.69
$
3.90
$
2.93
Non-GAAP net income per diluted common share
$
1.03
$
0.68
$
3.70
$
2.56
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