Copart Reports Second Quarter Fiscal 2022 Financial Results

Rhea-AI Summary

Copart, Inc. (NASDAQ: CPRT) reported robust financial results for the quarter ending January 31, 2022. Revenue reached $867.5 million, marking a 40.6% increase year-over-year. Gross profit improved to $403.3 million, up by 31.2%, while net income surged by 48.6% to $287.4 million. Fully diluted earnings per share (EPS) climbed to $1.19, a 46.9% increase from $0.81 the previous year. For the six-month period, revenue totaled $1,677.6 million, with net income rising 39.1% to $547.8 million. Non-GAAP EPS for the quarter was $1.10, up 37.5%, reflecting strong operational performance.

Positive

• Revenue increased by $250.4 million (40.6%) year-over-year for Q1.
• Gross profit rose by $95.8 million (31.2%) compared to last year.
• Net income grew by $94.0 million (48.6%) year-over-year for Q1.
• Earnings per share (EPS) reached $1.19, up 46.9% from the previous year.
• Revenue for the six-month period increased by $467.6 million (38.6%).
• Net income for the six months improved by $154.1 million (39.1%).

Negative

• None.

DALLAS--(BUSINESS WIRE)-- Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended January 31, 2022.

For the three months ended January 31, 2022, revenue, gross profit, and net income were $867.5 million, $403.3 million, and $287.4 million, respectively. These represent an increase in revenue of $250.4 million, or 40.6%; an increase in gross profit of $95.8 million, or 31.2%; and an increase in net income of $94.0 million, or 48.6%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $1.19 compared to $0.81 last year, an increase of 46.9%.

For the six months ended January 31, 2022, revenue, gross profit, and net income were $1,677.6 million, $788.4 million, and $547.8 million, respectively. These represent an increase in revenue of $467.6 million, or 38.6%; an increase in gross profit of $184.1 million, or 30.5%; and an increase in net income of $154.1 million, or 39.1%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $2.27 compared to $1.64 last year, an increase of 38.4%.

Excluding the impact of discrete income tax items, and certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the three months ended January 31, 2022 and 2021 were $1.10, and $0.80, respectively, which was an increase of 37.5%. Excluding the impact of discrete income tax items, and certain income tax benefits related to stock-based compensation, , non-GAAP fully diluted earnings per share for the six months ended January 31, 2022 and 2021, were $2.17, and $1.59, respectively, which was an increase of 36.5%. 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, February 17, 2022, at 11 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 via hyperlink at www.copart.com/investorrelations. A replay of the call will be available through May 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.

Copart, Inc.

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 discrete income tax items, 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 January 31,									Six Months Ended January 31,
		2022			2021			% Change			2022			2021			% Change
Service revenues and vehicle sales:
Service revenues		$ 711,090			$ 532,601			33.5	%		$ 1,378,908			$ 1,047,973			31.6	%
Vehicle sales		156,370			84,430			85.2	%		298,684			161,998			84.4	%
Total service revenues and vehicle sales		867,460			617,031			40.6	%		1,677,592			1,209,971			38.6	%
Operating expenses:
Yard operations		294,098			208,910			40.8	%		565,374			415,896			35.9	%
Cost of vehicle sales		140,304			73,629			90.6	%		266,712			137,989			93.3	%
Yard depreciation and amortization		28,301			25,180			12.4	%		54,738			48,474			12.9	%
Yard stock-based compensation		1,415			1,814			(22.0	) %		2,396			3,345			(28.4	) %
Gross profit		403,342			307,498			31.2	%		788,372			604,267			30.5	%
General and administrative		42,754			36,014			18.7	%		83,869			71,152			17.9	%
General and administrative depreciation and amortization		5,013			6,212			(19.3	) %		10,336			11,867			(12.9	) %
General and administrative stock-based compensation		8,247			7,051			17.0	%		16,718			14,433			15.8	%
Total operating expenses		520,132			358,810			45.0	%		1,000,143			703,156			42.2	%
Operating income		347,328			258,221			34.5	%		677,449			506,815			33.7	%
Other expense:
Interest expense, net		(4,433	)		(4,849	)		(8.6	) %		(9,540	)		(9,881	)		(3.5	) %
Other income, net		(840	)		(920	)		(8.7	) %		(28	)		2,333			(101.2	) %
Total other expense		(5,273	)		(5,769	)		(8.6	) %		(9,568	)		(7,548	)		26.8	%
Income before income taxes		342,055			252,452			35.5	%		667,881			499,267			33.8	%
Income tax expense		54,643			59,012			(7.4	) %		120,106			105,542			13.8	%
Net income		$ 287,412			$ 193,440			48.6	%		$ 547,775			$ 393,725			39.1	%
Basic net income per common share		$ 1.21			$ 0.82			47.6	%		$ 2.31			$ 1.67			38.3	%
Weighted average common shares outstanding		237,186			236,152			0.4	%		237,167			235,971			0.5	%
Diluted net income per common share		$ 1.19			$ 0.81			46.9	%		$ 2.27			$ 1.64			38.4	%
Diluted weighted average common shares outstanding		241,187			240,280			0.4	%		241,244			240,124			0.5	%

Copart, Inc. Consolidated Balance Sheets (In thousands) (Unaudited)
		January 31, 2022			July 31, 2021
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash		$ 1,346,517			$ 1,048,260
Accounts receivable, net		630,629			480,628
Vehicle pooling costs		123,896			94,449
Inventories		52,979			44,968
Income taxes receivable		15,426			20,012
Prepaid expenses and other assets		19,926			14,294
Total current assets		2,189,373			1,702,611
Property and equipment, net		2,376,013			2,296,624
Operating lease right-of-use assets		120,309			119,487
Intangibles, net		42,731			45,873
Goodwill		352,908			355,717
Other assets		55,622			41,831
Total assets		$ 5,136,956			$ 4,562,143
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$ 367,699			$ 369,826
Deferred revenue		20,577			20,973
Income taxes payable		6,458			7,760
Current portion of operating and finance lease liabilities		23,126			22,472
Total current liabilities		417,860			421,031
Deferred income taxes		69,759			63,969
Income taxes payable		57,193			52,345
Operating and finance lease liabilities, net of current portion		98,459			97,961
Long-term debt and other liabilities, net of discount		403,829			397,636
Total liabilities		1,047,100			1,032,942
Commitments and contingencies
Stockholders' equity:
Preferred stock		—			—
Common stock		24			24
Additional paid-in capital		797,955			761,834
Accumulated other comprehensive loss		(123,502	)		(100,860	)
Retained earnings		3,415,379			2,868,203
Total stockholders' equity		4,089,856			3,529,201
Total liabilities and stockholders' equity		$ 5,136,956			$ 4,562,143

Copart, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited)
		Six Months Ended January 31,
		2022			2021
Cash flows from operating activities:
Net income		$ 547,775			$ 393,725
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including debt cost		65,627			60,898
Allowance for credit loss		1,695			213
Equity in losses (earnings) of unconsolidated affiliates		685			(1,343	)
Stock-based compensation		19,114			17,778
Gain on sale of property and equipment		(755	)		(1,145	)
Deferred income taxes		6,003			9,442
Changes in operating assets and liabilities:
Accounts receivable		(152,763	)		(111,148	)
Vehicle pooling costs		(29,623	)		(19,099	)
Inventories		(8,589	)		(9,772	)
Prepaid expenses and other current and non-current assets		(19,889	)		5,802
Operating lease right-of-use assets and lease liabilities		657			470
Accounts payable and accrued liabilities		10,741			10,041
Deferred revenue		(309	)		6,098
Income taxes receivable		4,577			20,243
Income taxes payable		1,655			10,838
Other liabilities		(53	)		—
Net cash provided by operating activities		446,548			393,041
Cash flows from investing activities:
Purchases of property and equipment		(156,200	)		(283,214	)
Purchase of assets in connection with acquisitions		(469	)		—
Proceeds from sale of property and equipment		1,252			129
Net cash used in investing activities		(155,417	)		(283,085	)
Cash flows from financing activities:
Proceeds from the exercise of stock options		11,986			23,112
Proceeds from the issuance of Employee Stock Purchase Plan shares		5,022			4,880
Payments for employee stock-based tax withholdings		(599	)		(787	)
Payments of finance lease obligations		(314	)		(622	)
Net cash provided by financing activities		16,095			26,583
Effect of foreign currency translation		(8,969	)		2,146
Net increase in cash, cash equivalents, and restricted cash		298,257			138,685
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		$ 1,346,517			$ 616,403
Supplemental disclosure of cash flow information:
Interest paid		$ 9,311			$ 7,614
Income taxes paid, net of refunds		$ 128,972			$ 64,860

Copart, Inc. Additional Financial Information Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share amounts) (Unaudited)
		Three Months Ended January 31,						Six Months Ended January 31,
		2022			2021			2022			2021
GAAP net income		$ 287,412			$ 193,440			$ 547,775			$ 393,725
Effect of certain discrete income tax items		(17,490	)		—			(17,490	)		—
Effect of recognizing tax benefit on exercise of stock-based compensation		(3,965	)		(2,167	)		(6,952	)		(13,939	)
Non-GAAP net income		$ 265,957			$ 191,273			$ 523,333			$ 379,786
GAAP net income per diluted common share		$ 1.19			$ 0.81			$ 2.27			$ 1.64
Non-GAAP net income per diluted common share		$ 1.10			$ 0.80			$ 2.17			$ 1.59

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220216006176/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 financial results for Q1 2022?

For Q1 2022, Copart reported revenue of $867.5 million, gross profit of $403.3 million, and net income of $287.4 million.

How much did Copart's earnings per share increase in Q1 2022?

Earnings per share for Q1 2022 was $1.19, an increase of 46.9% from $0.81 in Q1 2021.

What is Copart's revenue growth for the six months ended January 31, 2022?

For the six months ended January 31, 2022, Copart's revenue grew by $467.6 million, representing a 38.6% increase year-over-year.

What is the non-GAAP EPS for Copart in Q1 2022?

The non-GAAP EPS for Q1 2022 was $1.10, which is a 37.5% increase from the $0.80 reported in Q1 2021.