Copart Reports Fourth Quarter Fiscal 2023 Financial Results

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

 

 

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