Copart Reports Fourth Quarter Fiscal 2023 Financial Results

Rhea-AI Summary

Copart, Inc. reports strong financial results for Q3 and FY 2023, with revenue, gross profit, and net income showing significant increases compared to last year.

Positive

• Revenue increased by 12.9% ($114.2 million) for Q3 and 10.5% ($368.6 million) for FY 2023.
• Gross profit increased by 19.9% ($76.0 million) for Q3 and 8.1% ($130.8 million) for FY 2023.
• Net income increased by 31.9% ($84.1 million) for Q3 and 13.5% ($147.6 million) for FY 2023.
• Fully diluted earnings per share increased by 33.3% ($0.09) for Q3 and 13.3% ($0.15) for FY 2023.

Negative

• None.

DALLAS--(BUSINESS WIRE)-- 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	)%
Income before income taxes			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
Goodwill			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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230914691291/en/

Brooke Boston, Executive Assistant, Office of the Chief Financial Officer

brooke.boston@copart.com

Source: Copart, Inc.