TechDogs-"Copart Reports Fourth Quarter Fiscal 2023 Financial Results"

E-Commerce

Copart Reports Fourth Quarter Fiscal 2023 Financial Results

By Business Wire

Business Wire
Overall Rating

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


Contacts

Brooke Boston, Executive Assistant, Office of the Chief Financial Officer
brooke.boston@copart.com

First published on Fri, Sep 15, 2023

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