Copart reports third quarter fiscal 2021 financial results
Dallas--(business wire)--copart, inc. (nasdaq: cprt) today reported financial results for the quarter ended april 30, 2021. for the three months ended april 30, 2021, revenue, gross profit, and net income were $733.9 million, $381.3 million, and $286.8 million, respectively. these represent an increase in revenue of $183.6 million, or 33.4%; an increase in gross profit of $138.7 million, or 57.2%; and an increase in net income of $139.3 million, or 94.5%, respectively, from the same period last year. fully diluted earnings per share for the three months were $1.19 compared to $0.62 last year, an increase of 91.9%. for the nine months ended april 30, 2021, revenue, gross profit, and net income were $1.9 billion, $985.6 million, and $680.5 million, respectively. these represent an increase in revenue of $264.0 million, or 15.7%; an increase in gross profit of $228.2 million, or 30.1%; and an increase in net income of $146.1 million, or 27.3%, respectively, from the same period last year. fully diluted earnings per share for the nine months were $2.83 compared to $2.24 last year, an increase of 26.3%. excluding the impact of certain discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to stock-based compensation, non-gaap fully diluted earnings per share for the three months ended april 30, 2021 and 2020, were $1.09, and $0.58, respectively, which was an increase of 87.9%. excluding the impact of certain discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to stock-based compensation, non-gaap fully diluted earnings per share for the nine months ended april 30, 2021 and 2020, were $2.67, and $1.87, respectively, which was an increase of 42.8%. 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 20, 2021, 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 2021 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 salvage and clean title vehicles to dealers, dismantlers, rebuilders, exporters, and in some jurisdictions, to the general public. copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers and individuals. with operations at over 200 locations in 11 countries, copart has more than 175,000 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, foreign currency-related gains and losses, certain income tax benefits and payroll taxes 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. from a financial planning and analysis perspective, copart management analyzes its operating results with and without the impact of certain discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to stock-based compensation. 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, 2021 2020 2021 2020 service revenues and vehicle sales: service revenues $ 623,846 $ 491,582 $ 1,671,819 $ 1,489,472 vehicle sales 110,064 58,778 272,062 190,452 total service revenues and vehicle sales 733,910 550,360 1,943,881 1,679,924 operating expenses: yard operations 230,794 231,985 646,690 692,547 cost of vehicle sales 94,498 53,987 232,487 170,651 yard depreciation and amortization 25,876 20,333 74,350 55,384 yard stock-based compensation 1,401 1,442 4,746 3,971 gross profit 381,341 242,613 985,608 757,371 general and administrative 39,174 37,017 110,326 115,102 general and administrative depreciation and amortization 6,090 6,382 17,957 18,627 general and administrative stock-based compensation 7,966 4,113 22,399 13,258 total operating expenses 405,799 355,259 1,108,955 1,069,540 operating income 328,111 195,101 834,926 610,384 other expense: interest expense, net (5,346 ) (5,578 ) (15,227 ) (14,068 ) other income, net 770 2,277 3,103 2,640 total other expense (4,576 ) (3,301 ) (12,124 ) (11,428 ) income before income taxes 323,535 191,800 822,802 598,956 income tax expense 36,739 44,313 142,281 64,582 net income $ 286,796 $ 147,487 $ 680,521 $ 534,374 basic net income per common share $ 1.21 $ 0.63 $ 2.88 $ 2.30 weighted average common shares outstanding 236,396 234,133 236,110 232,647 diluted net income per common share $ 1.19 $ 0.62 $ 2.83 $ 2.24 diluted weighted average common shares outstanding 240,208 238,591 240,149 238,564 copart, inc. consolidated balance sheets (in thousands) (unaudited) april 30, 2021 july 31, 2020 assets current assets: cash, cash equivalents, and restricted cash $ 911,890 $ 477,718 accounts receivable, net 434,873 350,207 vehicle pooling costs 86,685 73,684 inventories 39,229 20,080 income taxes receivable 10,588 26,740 prepaid expenses and other assets 16,106 15,330 total current assets 1,499,371 963,759 property and equipment, net 2,227,531 1,941,719 operating lease right-of-use assets 125,709 118,455 intangibles, net 42,535 47,772 goodwill 347,515 343,622 other assets 39,285 39,934 total assets $ 4,281,946 $ 3,455,261 liabilities and stockholders’ equity current liabilities: accounts payable and accrued liabilities $ 359,239 $ 318,530 deferred revenue 20,660 8,233 income taxes payable 9,140 3,709 current portion of operating and finance lease liabilities 24,006 25,572 total current liabilities 413,045 356,044 deferred income taxes 57,767 71,686 income taxes payable 55,637 44,965 operating and finance lease liabilities, net of current portion 108,487 96,150 long-term debt and other liabilities, net of discount 397,633 396,900 total liabilities 1,032,569 965,745 commitments and contingencies stockholders' equity: preferred stock — — common stock 24 24 additional paid-in capital 733,581 672,727 accumulated other comprehensive loss (101,664 ) (121,088 ) retained earnings 2,617,436 1,937,853 total stockholders' equity 3,249,377 2,489,516 total liabilities and stockholders' equity $ 4,281,946 $ 3,455,261 copart, inc. consolidated statements of cash flows (in thousands) (unaudited) nine months ended april 30, 2021 2020 cash flows from operating activities: net income $ 680,521 $ 534,374 adjustments to reconcile net income to net cash provided by operating activities: depreciation and amortization, including debt cost 93,141 76,756 allowance for credit loss (1,429 ) 1,332 equity in (earnings) losses of unconsolidated affiliates (2,121 ) 1,918 stock-based compensation 27,145 17,229 gain on sale of property and equipment (1,257 ) (1,745 ) deferred income taxes (14,130 ) 9,265 changes in operating assets and liabilities: accounts receivable (81,593 ) 19,102 vehicle pooling costs (12,777 ) 661 inventories (18,788 ) 1,209 prepaid expenses and other current and non-current assets 6,879 6,268 operating lease right-of-use assets and lease liabilities 389 (221 ) accounts payable and accrued liabilities 47,914 (15,636 ) deferred revenue 8,467 1,365 income taxes receivable 16,152 (12,076 ) income taxes payable 13,692 9,168 other liabilities — 1,999 net cash provided by operating activities 762,205 650,968 cash flows from investing activities: purchases of property and equipment, including acquisitions (364,395 ) (490,998 ) proceeds from sale of property and equipment 599 2,153 net cash used in investing activities (363,796 ) (488,845 ) cash flows from financing activities: proceeds from the exercise of stock options 28,829 55,656 proceeds from the issuance of employee stock purchase plan shares 4,880 3,955 payments for employee stock-based tax withholdings (938 ) (102,191 ) payments of finance lease obligations (962 ) — net cash provided by (used in) financing activities 31,809 (42,580 ) effect of foreign currency translation 3,954 525 net increase in cash, cash equivalents, and restricted cash 434,172 120,068 cash, cash equivalents, and restricted cash at beginning of period 477,718 186,319 cash, cash equivalents, and restricted cash at end of period $ 911,890 $ 306,387 supplemental disclosure of cash flow information: interest paid $ 14,736 $ 14,514 income taxes paid, net of refunds $ 126,303 $ 59,302 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, 2021 2020 2021 2020 gaap net income $ 286,796 $ 147,487 $ 680,521 $ 534,374 effect of certain discrete income tax items (19,764 ) — (19,764 ) (3,008 ) effect of foreign currency-related losses (gains), net of tax 303 (490 ) 351 (1,169 ) effect of recognizing tax benefit on exercise of stock-based compensation (4,910 ) (8,768 ) (18,850 ) (85,965 ) effect of payroll taxes on certain executive stock-based compensation, net of tax — — — 2,867 non-gaap net income $ 262,425 $ 138,229 $ 642,258 $ 447,099 gaap net income per diluted common share $ 1.19 $ 0.62 $ 2.83 $ 2.24 non-gaap net income per diluted common share $ 1.09 $ 0.58 $ 2.67 $ 1.87
