Copart Reports Fourth Quarter Fiscal 2022 Financial Results
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
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