Copart reports third quarter fiscal 2022 financial results
Dallas--(business wire)--copart, inc. (nasdaq: cprt) today reported financial results for the quarter ended april 30, 2022. for the three months ended april 30, 2022, revenue, gross profit, and net income were $939.9 million, $436.3 million, and $278.6 million, respectively. these represent an increase in revenue of $206.0 million, or 28.1%; an increase in gross profit of $54.9 million, or 14.4%; and a decrease in net income of $(8.2) million, or (2.9)%, respectively, from the same period last year. fully diluted earnings per share for the three months were $1.16 compared to $1.19 last year, a decrease of (2.5)%. for the nine months ended april 30, 2022, revenue, gross profit, and net income were $2,617.5 million, $1,224.6 million, and $826.4 million, respectively. these represent an increase in revenue of $673.7 million, or 34.7%; an increase in gross profit of $239.0 million, or 24.3%; and an increase in net income of $145.9 million, or 21.4%, respectively, from the same period last year. fully diluted earnings per share for the nine months were $3.42 compared to $2.83 last year, an increase of 20.8%. excluding the impact of certain income tax benefits related to stock-based compensation and certain legal matters, non-gaap fully diluted earnings per share for the three months ended april 30, 2022 and 2021 were $1.17, and $1.09, respectively, which was an increase of 7.3%. excluding the impact of certain income tax benefits related to stock-based compensation, certain legal matters and discrete income tax items, non-gaap fully diluted earnings per share for the nine months ended april 30, 2022 and 2021, were $3.34, and $2.68, respectively, which was an increase of 24.6%. 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, may 19, 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 august 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. 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 income tax benefits related to stock-based compensation, certain legal matters and discrete income tax items. 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 april 30, nine months ended april 30, 2022 2021 % change 2022 2021 % change service revenues and vehicle sales: service revenues $ 766,316 $ 623,846 22.8 % $ 2,145,224 $ 1,671,819 28.3 % vehicle sales 173,625 110,064 57.7 % 472,309 272,062 73.6 % total service revenues and vehicle sales 939,941 733,910 28.1 % 2,617,533 1,943,881 34.7 % operating expenses: yard operations 313,365 230,794 35.8 % 878,740 646,690 35.9 % cost of vehicle sales 157,236 94,498 66.4 % 423,948 232,487 82.4 % yard depreciation and amortization 31,646 25,876 22.3 % 86,383 74,350 16.2 % yard stock-based compensation 1,417 1,401 1.1 % 3,813 4,746 (19.7 )% gross profit 436,277 381,341 14.4 % 1,224,649 985,608 24.3 % general and administrative 50,188 39,174 28.1 % 134,057 110,326 21.5 % general and administrative depreciation and amortization 4,933 6,090 (19.0 )% 15,269 17,957 (15.0 )% general and administrative stock-based compensation 8,401 7,966 5.5 % 25,119 22,399 12.1 % total operating expenses 567,186 405,799 39.8 % 1,567,329 1,108,955 41.3 % operating income 372,755 328,111 13.6 % 1,050,204 834,926 25.8 % other expense: interest expense, net (4,492 ) (5,346 ) (16.0 )% (14,032 ) (15,227 ) (7.8 )% other income, net 1,342 770 74.3 % 1,314 3,103 (57.7 )% total other expense (3,150 ) (4,576 ) (31.2 )% (12,718 ) (12,124 ) 4.9 % income before income taxes 369,605 323,535 14.2 % 1,037,486 822,802 26.1 % income tax expense 90,985 36,739 147.7 % 211,091 142,281 48.4 % net income $ 278,620 $ 286,796 (2.9 )% $ 826,395 $ 680,521 21.4 % basic net income per common share $ 1.17 $ 1.21 (3.3 )% $ 3.48 $ 2.88 20.8 % weighted average common shares outstanding 237,505 236,396 0.5 % 237,277 236,110 0.5 % diluted net income per common share $ 1.16 $ 1.19 (2.5 )% $ 3.42 $ 2.83 20.8 % diluted weighted average common shares outstanding 240,724 240,208 0.2 % 241,288 240,149 0.5 % copart, inc. consolidated balance sheets (in thousands) (unaudited) april 30, 2022 july 31, 2021 assets current assets: cash, cash equivalents, and restricted cash $ 1,454,818 $ 1,048,260 investment in held to maturity securities 224,889 — accounts receivable, net 585,914 480,628 vehicle pooling costs 114,028 94,449 inventories 56,988 44,968 income taxes receivable 1,581 20,012 prepaid expenses and other assets 19,208 14,294 total current assets 2,457,426 1,702,611 property and equipment, net 2,402,809 2,296,624 operating lease right-of-use assets 121,006 119,487 intangibles, net 40,854 45,873 goodwill 348,000 355,717 other assets 73,779 41,831 total assets $ 5,443,874 $ 4,562,143 liabilities and stockholders’ equity current liabilities: accounts payable and accrued liabilities $ 398,414 $ 369,826 deferred revenue 21,087 20,973 income taxes payable 6,907 7,760 current portion of operating and finance lease liabilities 22,687 22,472 total current liabilities 449,095 421,031 deferred income taxes 78,023 63,969 income taxes payable 61,359 52,345 operating and finance lease liabilities, net of current portion 99,610 97,961 long-term debt and other liabilities, net of discount 402,733 397,636 total liabilities 1,090,820 1,032,942 commitments and contingencies stockholders' equity: preferred stock — — common stock 24 24 additional paid-in capital 811,900 761,834 accumulated other comprehensive loss (152,596 ) (100,860 ) retained earnings 3,693,726 2,868,203 total stockholders' equity 4,353,054 3,529,201 total liabilities and stockholders' equity $ 5,443,874 $ 4,562,143 copart, inc. consolidated statements of cash flows (in thousands) (unaudited) nine months ended april 30, 2022 2021 cash flows from operating activities: net income $ 826,395 $ 680,521 adjustments to reconcile net income to net cash provided by operating activities: depreciation and amortization, including debt cost 102,333 93,141 allowance for credit loss 1,456 (1,429 ) equity in losses (earnings) of unconsolidated affiliates 794 (2,121 ) stock-based compensation 28,932 27,145 gain on sale of property and equipment (1,280 ) (1,257 ) deferred income taxes 14,582 (14,130 ) changes in operating assets and liabilities: accounts receivable (109,636 ) (81,593 ) vehicle pooling costs (20,029 ) (12,777 ) inventories (13,367 ) (18,788 ) prepaid expenses, other current and non-current assets (37,842 ) 6,879 operating lease right-of-use assets and lease liabilities 436 389 accounts payable, accrued liabilities and other liabilities 45,745 47,914 deferred revenue 388 8,467 income taxes receivable 18,416 16,152 income taxes payable 6,531 13,692 net cash provided by operating activities 863,854 762,205 cash flows from investing activities: purchases of property and equipment (234,810 ) (364,395 ) purchase of assets in connection with acquisitions (493 ) — proceeds from sale of property and equipment 2,622 599 purchase of held to maturity securities (374,866 ) — proceeds from the sale of held to maturity securities 149,977 — net cash used in investing activities (457,570 ) (363,796 ) cash flows from financing activities: proceeds from the exercise of stock options 16,108 28,829 proceeds from the issuance of employee stock purchase plan shares 5,026 4,880 payments for employee stock-based tax withholdings (872 ) (938 ) debt offering costs (1,212 ) — payments of finance lease obligations (472 ) (962 ) net cash provided by financing activities 18,578 31,809 effect of foreign currency translation (18,304 ) 3,954 net increase in cash, cash equivalents, and restricted cash 406,558 434,172 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 $ 1,454,818 $ 911,890 supplemental disclosure of cash flow information: interest paid $ 14,485 $ 14,736 income taxes paid, net of refunds $ 195,521 $ 126,303 copart, inc. additional financial information reconciliation of gaap to non-gaap financial measures (in thousands, except per share amounts) (unaudited) three months ended april 30, nine months ended april 30, 2022 2021 2022 2021 gaap net income $ 278,620 $ 286,796 $ 826,395 $ 680,521 effect of certain discrete income tax items — (19,764 ) (17,490 ) (19,764 ) effect of certain legal matters, net of tax 5,092 — 5,092 — effect of recognizing tax benefit on exercise of stock-based compensation (2,244 ) (4,910 ) (9,197 ) (18,850 ) non-gaap net income $ 281,468 $ 262,122 $ 804,800 $ 641,907 gaap net income per diluted common share $ 1.16 $ 1.19 $ 3.42 $ 2.83 non-gaap net income per diluted common share $ 1.17 $ 1.09 $ 3.34 $ 2.68
