Copart Reports Fourth Quarter Fiscal 2021 Financial Results

Rhea-AI Summary

Copart, Inc. (NASDAQ: CPRT) reported strong financial results for the quarter ending July 31, 2021, with revenue at $748.6 million, a 42.4% increase year-over-year. Gross profit reached $357.5 million (+42.7%) and net income was $256.0 million (+54.6%). Fully diluted EPS for the quarter was $1.06, up 53.6% from last year. For the fiscal year, revenue totaled $2.7 billion (+22.1%), gross profit $1.3 billion (+33.3%), and net income $936.5 million (+33.8%). Non-GAAP EPS for the quarter was $1.03, a 51.5% increase, and for the year $3.70, up 44.5%.

Positive

• Quarterly revenue increased by $223.0 million, or 42.4%.
• Gross profit rose by $107.1 million, or 42.7%.
• Net income grew by $90.4 million, or 54.6%.
• Fully diluted EPS for the quarter increased by 53.6% to $1.06.
• Annual revenue increased by $486.9 million, or 22.1%.
• Annual gross profit improved by $335.3 million, or 33.3%.
• Net income for the year rose by $236.6 million, or 33.8%.
• Non-GAAP EPS for the quarter increased by 51.5% to $1.03.
• Non-GAAP EPS for the year rose by 44.5% to $3.70.

Negative

• None.

DALLAS--(BUSINESS WIRE)-- 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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210908006091/en/

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

972-391-5090 or melissa.hunter@copart.com

Source: Copart, Inc.

FAQ

What were Copart's quarterly revenue results for July 31, 2021?

Copart reported quarterly revenue of $748.6 million for the period ending July 31, 2021.

How did Copart's net income change in the latest quarter?

Net income for the quarter increased by $90.4 million, or 54.6%, reaching $256.0 million.

What is Copart's fully diluted EPS for the fiscal year ended July 31, 2021?

For the fiscal year ended July 31, 2021, Copart's fully diluted EPS was $3.90, up 33.1% from $2.93 last year.

Did Copart experience growth in gross profit in the recent quarter?

Yes, Copart's gross profit for the quarter increased by $107.1 million, or 42.7%.

When is Copart's earnings conference call scheduled?

Copart's earnings conference call is scheduled for September 9, 2021, at 11:00 a.m. Eastern Time.