Copart Reports Fourth Quarter Fiscal 2023 Financial Results
Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2023.
For the three months ended July 31, 2023, revenue, gross profit, and net income were $997.6 million, $457.6 million, and $347.8 million, respectively. These represent an increase in revenue of $114.2 million, or 12.9%; an increase in gross profit of $76.0 million, or 19.9%; and an increase in net income of $84.1 million, or 31.9%, respectively, from the same period last year. Fully diluted earnings per share for the three months ended July 31, 2023 were $0.36 compared to $0.27 last year, an increase of 33.3%.
For the year ended July 31, 2023, revenue, gross profit, and net income were $3.9 billion, $1.7 billion, and $1.2 billion, respectively. These represent an increase in revenue of $368.6 million, or 10.5%; an increase in gross profit of $130.8 million, or 8.1%; and an increase in net income of $147.6 million, or 13.5%, respectively, from the same period last year. Fully diluted earnings per share for the year ended July 31, 2023 were $1.28 compared to $1.13 last year, an increase of 13.3%.
Excluding the impact of certain discrete income tax items, the effect of 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, 2023 and 2022, were $0.34 and $0.28, respectively, which was an increase of 21.4%. Excluding the impact of certain discrete income tax items, income, certain legal matters, the effect of extinguishment of debt, and certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the year ended July 31, 2023 and 2022, were $1.26 and $1.12, respectively, which was an increase of 12.5%. 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 14, 2023, at 5:30 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 at www.copart.com/investorrelations. A replay of the call will be available through November 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 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, income, certain legal matters, the effect of extinguishment of debt, 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. 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,
2023
2022
% Change
2023
2022
% Change
Service revenues and vehicle sales:
Service revenues
$
834,242
$
707,816
17.9
%
$
3,198,128
$
2,853,040
12.1
%
Vehicle sales
163,349
175,572
(7.0
)%
671,390
647,881
3.6
%
Total service revenues and vehicle sales
997,591
883,388
12.9
%
3,869,518
3,500,921
10.5
%
Operating expenses:
Yard operations
348,332
307,717
13.2
%
1,369,006
1,186,457
15.4
%
Cost of vehicle sales
149,216
161,255
(7.5
)%
614,498
585,203
5.0
%
Yard depreciation and amortization
40,577
31,530
28.7
%
142,097
117,913
20.5
%
Yard stock-based compensation
1,888
1,314
43.7
%
6,926
5,127
35.1
%
Gross profit
457,578
381,572
19.9
%
1,736,991
1,606,221
8.1
%
General and administrative
55,522
43,257
28.4
%
200,294
177,314
13.0
%
General and administrative depreciation and amortization
4,058
4,803
(15.5
)%
17,381
20,072
(13.4
)%
General and administrative stock-based compensation
7,381
8,719
(15.3
)%
32,747
33,838
(3.2
)%
Total operating expenses
606,974
558,595
8.7
%
2,382,949
2,125,924
12.1
%
Operating income
390,617
324,793
20.3
%
1,486,569
1,374,997
8.1
%
Other income (expense):
Interest income (expense), net
29,148
(2,656
)
(1197.4
)%
65,928
(16,688
)
(495.1
)%
Loss on extinguishment of debt
—
(16,759
)
100.0
%
—
(16,759
)
100.0
%
Other income (expense), net
3,927
(1,910
)
(305.6
)%
1,831
(596
)
(407.2
)%
Total other income (expense)
33,075
(21,325
)
(255.1
)%
67,759
(34,043
)
(299.0
)%
423,692
303,468
39.6
%
1,554,328
1,340,954
15.9
%
Income tax expense
75,907
39,733
91.0
%
316,587
250,824
26.2
%
Net income
$
347,785
$
263,735
31.9
%
$
1,237,741
$
1,090,130
13.5
%
Basic net income per common share
$
0.36
$
0.28
28.6
%
$
1.30
$
1.15
13.0
%
Weighted average common shares outstanding
955,773
951,364
0.5
%
953,574
949,676
0.4
%
Diluted net income per common share
$
0.36
$
0.27
33.3
%
$
1.28
$
1.13
13.3
%
Diluted weighted average common shares outstanding
970,255
962,944
0.8
%
966,647
964,604
0.2
%
Copart, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
July 31, 2023
July 31, 2022
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash
$
957,395
$
1,384,236
Investment in held to maturity securities
1,406,589
—
Accounts receivable, net
702,038
578,573
Vehicle pooling costs
123,725
112,242
Inventories
39,973
58,791
Income taxes receivable
6,574
49,882
Prepaid expenses and other assets
26,310
18,731
Total current assets
3,262,604
2,202,455
Property and equipment, net
2,844,339
2,485,764
Operating lease right-of-use assets
108,139
116,303
Intangibles, net
62,702
54,680
394,289
401,954
Other assets
65,806
47,708
Total assets
$
6,737,879
$
5,308,864
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
440,810
$
399,034
Deferred revenue
26,117
20,061
Income taxes payable
4,374
—
Current portion of operating and finance lease liabilities
21,468
21,794
Total current liabilities
492,769
440,889
Deferred income taxes
89,492
80,060
Income taxes payable
69,193
64,637
Operating and finance lease liabilities, net of current portion
88,082
95,683
Long-term debt and other liabilities, net of discount
10,903
1,996
Total liabilities
750,439
683,265
Commitments and contingencies
Stockholders’ equity:
Preferred stock
—
—
Common stock
96
96
Additional paid-in capital
938,910
838,460
Accumulated other comprehensive loss
(141,006
)
(169,365
)
Retained earnings
5,189,440
3,956,408
Total stockholders’ equity
5,987,440
4,625,599
Total liabilities and stockholders’ equity
$
6,737,879
$
5,308,864
Copart, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year Ended July 31,
2023
2022
Cash flows from operating activities:
Net income
$
1,237,741
$
1,090,130
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including debt cost
159,684
138,605
Allowance for credit losses (gains)
1,946
1,349
Equity in losses (earnings) of unconsolidated affiliates
5,347
284
Stock-based compensation
39,673
38,965
Gain on sale of property and equipment
(1,846
)
(939
)
Loss on extinguishment of debt
—
16,759
Deferred income taxes
9,946
17,017
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable
(123,207
)
(97,750
)
Vehicle pooling costs
(10,989
)
(18,342
)
Inventories
26,549
(10,851
)
Prepaid expenses and other current and non-current assets
(59,949
)
(5,156
)
Operating lease right-of-use assets and lease liabilities
350
715
Accounts payable and accrued liabilities
18,010
36,306
Deferred revenue
5,896
(574
)
Income taxes receivable
33,193
(29,884
)
Income taxes payable
21,866
49
Net cash provided by operating activities
1,364,210
1,176,683
Cash flows from investing activities:
Purchase of short-term investments
(1,406,588
)
(374,866
)
Purchases of property and equipment
(516,636
)
(337,448
)
Purchases of assets and liabilities in connection with acquisitions
—
(106,604
)
Proceeds from sale of property and equipment
33,919
4,333
Proceeds from the sale of held to maturity securities
—
374,866
Investment in unconsolidated affiliate
(2,744
)
(2,591
)
Net cash used in investing activities
(1,892,049
)
(442,310
)
Cash flows from financing activities:
Proceeds from the exercise of stock options
49,679
28,108
Proceeds from the issuance of Employee Stock Purchase Plan shares
11,098
9,625
Payments for employee stock-based tax withholdings
(4,709
)
(1,925
)
Issuance of principal on revolver facility
44,494
—
Principal payments on revolver facility
(33,924
)
—
Debt offering costs
—
(1,212
)
Principal payments on long-term debt
—
(416,759
)
Payments of finance lease obligations
(23
)
(530
)
Net cash provided by (used in) financing activities
66,615
(382,693
)
Effect of foreign currency translation
34,383
(15,704
)
Net (decrease) increase in cash, cash equivalents, and restricted cash
(426,841
)
335,976
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
$
957,395
$
1,384,236
Supplemental disclosure of cash flow information:
Interest paid
$
2,614
$
18,539
Income taxes paid, net of refunds
$
257,514
$
263,226
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,
2023
2022
2023
2022
GAAP net income
$
347,785
$
263,735
$
1,237,741
$
1,090,130
Effect of certain discrete income tax items
(1,448
)
—
(1,448
)
(17,490
)
Effect of certain legal matters, net of tax
—
—
—
5,092
Effect of extinguishment of debt, net of tax
—
12,929
—
12,929
Effect of recognizing tax benefit on exercise of stock-based compensation
(15,911
)
(5,077
)
(21,021
)
(14,274
)
Non-GAAP net income
$
330,426
$
271,587
$
1,215,272
$
1,076,387
GAAP net income per diluted common share
$
0.36
$
0.27
$
1.28
$
1.13
Non-GAAP net income per diluted common share
$
0.34
$
0.28
$
1.26
$
1.12
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