Copart Reports Second Quarter Fiscal 2023 Financial Results
Dallas, Texas February 20, 2023 — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended January 31, 2023.
For the three months ended January 31, 2023, revenue, gross profit, and net income were $956.7 million, $426.5 million, and $293.7 million, respectively. These represent an increase in revenue of $89.3 million, or 10.3%; an increase in gross profit of $23.2 million, or 5.7%; and an increase in net income of $6.3 million, or 2.2%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.61 compared to $0.60 last year, an increase of 1.7%.
For the six months ended January 31, 2023, revenue, gross profit, and net income were $1,850.1 million, $796.0 million, and $539.5 million, respectively. These represent an increase in revenue of $172.5 million, or 10.3%; an increase in gross profit of $7.6 million, or 1.0%; and a decrease in net income of $8.3 million, or (1.5)%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $1.12 compared to $1.14 last year, a decrease of (1.8)%.
Excluding the impact of certain 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, 2023 and 2022 were $0.61, and $0.55, respectively, which was an increase of 10.9%. Excluding the impact of certain 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, 2023 and 2022, were $1.12, and $1.08, respectively, which was an increase of 3.7%. 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 Tuesday, February 21, 2023, 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 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 190 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.
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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000
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 certain 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. 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.
Contact:
Brooke Boston, Executive Assistant, Office of the Chief Financial Officer
brooke.boston@copart.com
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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000
Copart, Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended January 31,
Six Months Ended January 31,
2023
2022
% Change
2023
2022
% Change
Service revenues and vehicle sales:
Service revenues
$
789,797
$
711,090
11.1
%
$
1,516,637
$
1,378,908
10.0
%
Vehicle sales
166,927
156,370
6.8
%
333,459
298,684
11.6
%
Total service revenues and vehicle sales
956,724
867,460
10.3
%
1,850,096
1,677,592
10.3
%
Operating expenses:
Yard operations
340,085
294,098
15.6
%
677,057
565,374
19.8
%
Cost of vehicle sales
154,727
140,304
10.3
%
305,839
266,712
14.7
%
Yard depreciation and amortization
34,070
28,301
20.4
%
68,430
54,738
25.0
%
Yard stock-based compensation
1,342
1,415
(5.2)
%
2,787
2,396
16.3
%
Gross profit
426,500
403,342
5.7
%
795,983
788,372
1.0
%
General and administrative
47,842
42,754
11.9
%
92,377
83,869
10.1
%
General and administrative depreciation and amortization
4,344
5,013
(13.3)
%
9,042
10,336
(12.5)
%
General and administrative stock-based compensation
8,789
8,247
6.6
%
17,536
16,718
4.9
%
Total operating expenses
591,199
520,132
13.7
%
1,173,068
1,000,143
17.3
%
Operating income
365,525
347,328
5.2
%
677,028
677,449
(0.1)
%
Other expense:
Interest income (expense), net
14,480
(4,433)
(426.6)
%
18,902
(9,540)
(298.1)
%
Other expense, net
(2,902)
(840)
245.5
%
(5,724)
(28)
20342.9
%
Total other income (expense)
11,578
(5,273)
(319.6)
%
13,178
(9,568)
237.7
%
Income before income taxes
377,103
342,055
10.2
%
690,206
667,881
3.3
%
Income tax expense
83,426
54,643
52.7
%
150,681
120,106
25.5
%
Net income
$
293,677
$
287,412
2.2
%
$
539,525
$
547,775
(1.5)
%
Basic net income per common share
$
0.62
$
0.61
1.6
%
$
1.13
$
1.15
(1.7)
%
Weighted average common shares outstanding
476,376
474,372
0.4
%
476,237
474,334
0.4
%
Diluted net income per common share
$
0.61
$
0.60
1.7
%
$
1.12
$
1.14
(1.8)
%
Diluted weighted average common shares outstanding
482,536
482,374
—
%
482,238
482,488
(0.1)
%
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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000
Copart, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
January 31, 2023
July 31, 2022
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash
$
1,660,952
$
1,384,236
Accounts receivable, net
765,192
578,573
Vehicle pooling costs
133,598
112,242
Inventories
52,071
58,791
Income taxes receivable
436
49,882
Prepaid expenses and other assets
26,532
18,731
Total current assets
2,638,781
2,202,455
Property and equipment, net
2,656,273
2,485,764
Operating lease right-of-use assets
106,656
116,303
Intangibles, net
51,186
54,680
Goodwill
404,046
401,954
Other assets
75,466
47,708
Total assets
$
5,932,408
$
5,308,864
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
439,271
$
399,034
Deferred revenue
23,796
20,061
Income taxes payable
3,820
—
Current portion of operating and finance lease liabilities
20,736
21,794
Total current liabilities
487,623
440,889
Deferred income taxes
76,471
80,060
Income taxes payable
65,322
64,637
Operating and finance lease liabilities, net of current portion
87,394
95,683
Long-term debt and other liabilities
1,946
1,996
Total liabilities
718,756
683,265
Commitments and contingencies
Stockholders' equity:
Preferred stock
—
—
Common stock
48
48
Additional paid-in capital
875,009
838,508
Accumulated other comprehensive loss
(156,507)
(169,365)
Retained earnings
4,495,102
3,956,408
Total stockholders' equity
5,213,652
4,625,599
Total liabilities and stockholders' equity
$
5,932,408
$
5,308,864
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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000
Copart, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended January 31,
2023
2022
Cash flows from operating activities:
Net income
$
539,525
$
547,775
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including debt cost
78,094
65,627
Allowance for credit loss
2,133
1,695
Equity in losses of unconsolidated affiliates
4,030
685
Stock-based compensation
20,323
19,114
Gain on sale of property and equipment
(748)
(755)
Deferred income taxes
(3,309)
6,003
Changes in operating assets and liabilities:
Accounts receivable
(186,559)
(152,763)
Vehicle pooling costs
(21,268)
(29,623)
Inventories
8,001
(8,589)
Prepaid expenses, other current and non-current assets
(29,176)
(19,889)
Operating lease right-of-use assets and lease liabilities
414
657
Accounts payable, accrued liabilities and other liabilities
27,619
10,741
Deferred revenue
3,709
(309)
Income taxes receivable
49,430
4,577
Income taxes payable
7,615
1,655
Other liabilities
—
(53)
Net cash provided by operating activities
499,833
446,548
Cash flows from investing activities:
Purchases of property and equipment
(256,719)
(156,200)
Purchase of assets in connection with acquisitions
—
(469)
Proceeds from sale of property and equipment
16,343
1,252
Purchase of held to maturity securities
—
(374,866)
Investment in unconsolidated affiliate
(1,993)
—
Net cash used in investing activities
(242,369)
(530,283)
Cash flows from financing activities:
Proceeds from the exercise of stock options
10,815
11,985
Proceeds from the issuance of Employee Stock Purchase Plan shares
5,363
5,022
Payments for employee stock-based tax withholdings
(831)
(599)
Payments of finance lease obligations
(13)
(314)
Net cash provided by financing activities
15,334
16,094
Effect of foreign currency translation
3,918
(8,968)
Net increase (decrease) in cash, cash equivalents, and restricted cash
276,716
(76,609)
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
$
1,660,952
$
971,651
Supplemental disclosure of cash flow information:
Interest paid
$
706
$
9,311
Income taxes paid, net of refunds
$
98,324
$
128,972
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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000
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,
2023
2022
2023
2022
GAAP net income
$
293,677
$
287,412
$
539,525
$
547,775
Effect of certain discrete income tax items
—
(17,490)
—
(17,490)
Effect of recognizing tax benefit on exercise of stock-based compensation
(115)
(3,965)
(740)
(6,952)
Non-GAAP net income
$
293,562
$
265,957
$
538,785
$
523,333
GAAP net income per diluted common share
$
0.61
$
0.60
$
1.12
$
1.14
Non-GAAP net income per diluted common share
$
0.61
$
0.55
$
1.12
$
1.08
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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000
