BusinessWire

Copart Reports Fourth Quarter Fiscal 2020 Financial Results

DALLAS--(BUSINESS WIRE)--#CopartEarnings--Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2020.

For the three months ended July 31, 2020, revenue, gross profit, and net income were $525.7 million, $250.4 million, and $165.5 million, respectively. These represent a decrease in revenue of $16.9 million, or 3.1%; an increase in gross profit of $7.8 million, or 3.2%; and an increase in net income of $12.0 million, or 7.8%, respectively, from the same period last year. Fully diluted earnings per share for the three months ended July 31, 2020 were $0.69 compared to $0.64 last year, an increase of 7.8%.

For the year ended July 31, 2020, revenue, gross profit, and net income were $2.2 billion, $1.0 billion, and $699.9 million, respectively. These represent an increase in revenue of $163.6 million, or 8.0%; an increase in gross profit of $109.5 million, or 12.2%; and an increase in net income of $108.2 million, or 18.3%, respectively, from the same period last year. Fully diluted earnings per share for the year ended July 31, 2020 were $2.93 compared to $2.46 last year, an increase of 19.1%.

Excluding the impact of discrete income tax items, disposal of non-operating assets, reserve for legacy sales tax liabilities, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises, and the effect on common equivalent shares from ASU 2016-09, non-GAAP fully diluted earnings per share for the three months and year ended July 31, 2020 and 2019, were $0.69, $0.60, $2.57 and $2.25, respectively. 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 3, 2020, 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 http://stream.conferenceamerica.com/copart090320. A replay of the call will be available through November 2, 2020 by calling (877) 919-4059. Use confirmation code: 38708517.

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 salvage and clean title vehicles to dealers, dismantlers, rebuilders, exporters, and in some cases, to end users. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers and also sells vehicles sourced from individual owners. With operations at over 200 locations in 11 countries, Copart has more than 150,000 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 discrete income tax items, disposal of non-operating assets, reserve for legacy sales tax liabilities, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises, and the effect on common equivalent shares from ASU 2016-09. 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. From a financial planning and analysis perspective, Copart management analyzes its operating results with and without the impact of discrete income tax items, disposal of non-operating assets, reserve for legacy sales tax liabilities, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises, and the effect on common equivalent shares from ASU 2016-09.

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,

 

 

2020

 

2019

 

2020

 

2019

Service revenues and vehicle sales:

 

 

 

 

 

 

 

 

Service revenues

 

$

457,668

 

 

$

470,399

 

 

$

1,947,140

 

 

$

1,755,694

 

Vehicle sales

 

67,991

 

 

72,176

 

 

258,443

 

 

286,263

 

Total service revenues and vehicle sales

 

525,659

 

 

542,575

 

 

2,205,583

 

 

2,041,957

 

Operating expenses:

 

 

 

 

 

 

 

 

Yard operations

 

197,186

 

 

217,089

 

 

889,733

 

 

819,753

 

Cost of vehicle sales

 

54,643

 

 

65,552

 

 

225,294

 

 

255,504

 

Yard depreciation and amortization

 

21,615

 

 

15,745

 

 

76,999

 

 

63,167

 

Yard stock-based compensation

 

1,784

 

 

1,570

 

 

5,755

 

 

5,191

 

Gross profit

 

250,431

 

 

242,619

 

 

1,007,802

 

 

898,342

 

General and administrative

 

34,643

 

 

39,772

 

 

149,745

 

 

141,885

 

General and administrative depreciation and amortization

 

5,764

 

 

5,770

 

 

24,391

 

 

21,728

 

General and administrative stock-based compensation

 

4,309

 

 

4,275

 

 

17,567

 

 

18,254

 

Total operating expenses

 

319,944

 

 

349,773

 

 

1,389,484

 

 

1,325,482

 

Operating income

 

205,715

 

 

192,802

 

 

816,099

 

 

716,475

 

Other expense:

 

 

 

 

 

 

 

 

Interest expense, net

 

(4,803

)

 

(4,255

)

 

(18,871

)

 

(17,585

)

Other income (expense), net

 

971

 

 

(1,477

)

 

3,611

 

 

6,061

 

Total other expense

 

(3,832

)

 

(5,732

)

 

(15,260

)

 

(11,524

)

Income before income taxes

 

201,883

 

 

187,070

 

 

800,839

 

 

704,951

 

Income tax expense

 

36,350

 

 

33,574

 

 

100,932

 

 

113,258

 

Net income

 

$

165,533

 

 

$

153,496

 

 

$

699,907

 

 

$

591,693

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.70

 

 

$

0.67

 

 

$

3.00

 

 

$

2.57

 

Weighted average common shares outstanding

 

234,863

 

 

229,204

 

 

233,202

 

 

230,489

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

0.69

 

 

$

0.64

 

 

$

2.93

 

 

$

2.46

 

Diluted weighted average common shares outstanding

 

238,927

 

 

238,354

 

 

238,656

 

 

240,453

 

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

July 31, 2020

 

July 31, 2019

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents, and restricted cash

 

$

477,718

 

 

$

186,319

 

Accounts receivable, net

 

350,207

 

 

367,265

 

Vehicle pooling costs

 

73,684

 

 

76,548

 

Inventories

 

20,080

 

 

20,941

 

Income taxes receivable

 

26,740

 

 

19,526

 

Prepaid expenses and other assets

 

15,330

 

 

16,568

 

Total current assets

 

963,759

 

 

687,167

 

Property and equipment, net

 

1,941,719

 

 

1,427,726

 

Operating lease right-of-use assets

 

118,455

 

 

 

Intangibles, net

 

47,772

 

 

55,156

 

Goodwill

 

343,622

 

 

333,321

 

Deferred income taxes

 

213

 

 

411

 

Other assets

 

39,721

 

 

43,836

 

Total assets

 

$

3,455,261

 

 

$

2,547,617

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

318,530

 

 

$

270,918

 

Deferred revenue

 

8,233

 

 

6,466

 

Income taxes payable

 

3,709

 

 

3,482

 

Current portion of operating lease liabilities

 

24,821

 

 

 

Current portion of finance lease obligations

 

751

 

 

1,138

 

Total current liabilities

 

356,044

 

 

282,004

 

Deferred income taxes

 

71,686

 

 

48,683

 

Income taxes payable

 

44,965

 

 

35,116

 

Operating lease liabilities, net of current portion

 

95,584

 

 

 

Long-term debt and finance lease obligations, net of discount

 

397,036

 

 

400,091

 

Other liabilities

 

430

 

 

3,342

 

Total liabilities

 

965,745

 

 

769,236

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock

 

 

 

 

Common stock

 

24

 

 

23

 

Additional paid-in capital

 

672,727

 

 

572,559

 

Accumulated other comprehensive loss

 

(121,088

)

 

(132,529

)

Retained earnings

 

1,937,853

 

 

1,338,328

 

Total stockholders’ equity

 

2,489,516

 

 

1,778,381

 

Total liabilities and stockholders’ equity

 

$

3,455,261

 

 

$

2,547,617

 

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Year Ended July 31,

 

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

Net income

 

$

699,907

 

 

$

591,693

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization, including debt cost

 

104,257

 

 

85,334

 

Allowance for doubtful accounts

 

1,670

 

 

(429

)

Impairment of long-lived assets

 

 

 

 

Equity in losses of unconsolidated affiliates

 

1,401

 

 

419

 

Stock-based compensation

 

23,322

 

 

23,445

 

Gain on sale of property and equipment

 

(1,913

)

 

(3,073

)

Deferred income taxes

 

23,082

 

 

23,167

 

Changes in operating assets and liabilities, net of effects from acquisitions:

 

 

 

 

Accounts receivable

 

15,993

 

 

(60,808

)

Vehicle pooling costs

 

2,590

 

 

(16,418

)

Inventories

 

1,348

 

 

(4,719

)

Prepaid expenses and other current and non-current assets

 

141

 

 

(12,265

)

Operating lease right-of-use assets and lease liabilities

 

(572

)

 

 

Accounts payable and accrued liabilities

 

41,648

 

 

11,126

 

Deferred revenue

 

1,615

 

 

2,056

 

Income taxes receivable

 

(7,216

)

 

(4,215

)

Income taxes payable

 

10,114

 

 

10,669

 

Other liabilities

 

498

 

 

664

 

Net cash provided by operating activities

 

917,885

 

 

646,646

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment, including acquisitions

 

(603,674

)

 

(374,628

)

Proceeds from sale of property and equipment

 

2,466

 

 

18,361

 

Net cash used in investing activities

 

(601,208

)

 

(356,267

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from the exercise of stock options

 

71,640

 

 

34,398

 

Proceeds from the issuance of Employee Stock Purchase Plan shares

 

8,276

 

 

7,183

 

Repurchases of common stock

 

 

 

(364,997

)

Payments for employee stock-based tax withholdings

 

(103,451

)

 

(46,888

)

Debt offering costs

 

(2,814

)

 

 

Payments of finance lease obligations

 

(1,065

)

 

 

Net cash used in financing activities

 

(27,414

)

 

(370,304

)

Effect of foreign currency translation

 

2,136

 

 

(8,276

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

291,399

 

 

(88,201

)

Cash, cash equivalents, and restricted cash at beginning of period

 

186,319

 

 

274,520

 

Cash, cash equivalents, and restricted cash at end of period

 

$

477,718

 

 

$

186,319

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid

 

$

19,728

 

 

$

19,289

 

Income taxes paid, net of refunds

 

$

83,770

 

 

$

82,448

 

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,

 

 

2020

 

2019

 

2020

 

2019

GAAP net income

 

$

165,533

 

 

$

153,496

 

 

$

699,907

 

 

$

591,693

 

Effect of discrete income tax items

 

4,740

 

 

 

 

1,732

 

 

(10,170

)

Effect of disposal of non-operating assets, net of tax

 

 

 

 

 

 

 

(1,598

)

Effect of reserve for legacy sales tax liabilities, net of tax

 

 

 

978

 

 

 

 

978

 

Effect of foreign currency-related (gains) losses, net of tax

 

(268

)

 

48

 

 

(1,436

)

 

(256

)

Effect of recognizing tax benefit on exercise of employee stock options

 

(6,586

)

 

(12,007

)

 

(92,548

)

 

(46,103

)

Effect of payroll taxes on certain executive stock compensation, net of tax

 

 

 

 

 

2,867

 

 

1,295

 

Non-GAAP net income

 

$

163,419

 

 

$

142,515

 

 

$

610,522

 

 

$

535,839

 

 

 

 

 

 

 

 

 

 

GAAP net income per diluted common share

 

$

0.69

 

 

$

0.64

 

 

$

2.93

 

 

$

2.46

 

Non-GAAP net income per diluted common share

 

$

0.69

 

 

$

0.60

 

 

$

2.57

 

 

$

2.25

 

 

 

 

 

 

 

 

 

 

GAAP diluted weighted average common shares outstanding

 

238,927

 

 

238,354

 

 

238,656

 

 

240,453

 

Effect on common equivalent shares from ASU 2016-09

 

(656

)

 

(1,633

)

 

(911

)

 

(1,870

)

Non-GAAP diluted weighted average common shares outstanding

 

238,271

 

 

236,721

 

 

237,745

 

 

238,583

 

 


Contacts

Melissa Hunter, Executive Support Manager, Office of the Chief Financial Officer
972-391-5090 or melissa.hunter@copart.com