Copart Reports Fourth Quarter Fiscal 2021 Financial Results

DALLAS–(BUSINESS WIRE)–#CopartEarnings–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

 

 

 

Contacts

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

972-391-5090 or [email protected]

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