Copart reports second quarter fiscal 2021 financial results
Dallas--(business wire)--copart, inc. (nasdaq: cprt) today reported financial results for the quarter ended january 31, 2021. for the three months ended january 31, 2021, revenue, gross profit, and net income were $617.0 million, $307.5 million, and $193.4 million, respectively. these represent an increase in revenue of $41.9 million, or 7.3%; an increase in gross profit of $47.6 million, or 18.3%; and an increase in net income of $24.7 million, or 14.7%, respectively, from the same period last year. fully diluted earnings per share for the three months were $0.81 compared to $0.71 last year, an increase of 14.1%. for the six months ended january 31, 2021, revenue, gross profit, and net income were $1.2 billion, $604.3 million, and $393.7 million, respectively. these represent an increase in revenue of $80.4 million, or 7.1%; an increase in gross profit of $89.5 million, or 17.4%; and an increase in net income of $6.8 million, or 1.8%, respectively, from the same period last year. fully diluted earnings per share for the six months were $1.64 compared to $1.62 last year, an increase of 1.2%. excluding the impact of discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises, non-gaap fully diluted earnings per share for the three months ended january 31, 2021 and 2020, were $0.80, and $0.64, respectively, which was an increase of 25.0%. excluding the impact of discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises, non-gaap fully diluted earnings per share for the six months ended january 31, 2021 and 2020, were $1.58, and $1.29, respectively, which was an increase of 22.5%. 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 friday, february 19, 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 at http://public.viavid.com/index.php?id=143555 or via hyperlink at www.copart.com/investorrelations. a replay of the call will be available through may 2021 by visiting www.copart.com/investorrelations or http://public.viavid.com/index.php?id=143555. 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. 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 discrete income tax items, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises. 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, foreign currency-related gains and losses, certain income tax benefits and payroll taxes related to accounting for stock option exercises. 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 january 31, six months ended january 31, 2021 2020 2021 2020 service revenues and vehicle sales: service revenues $ 532,601 $ 510,034 $ 1,047,973 $ 997,890 vehicle sales 84,430 65,106 161,998 131,674 total service revenues and vehicle sales 617,031 575,140 1,209,971 1,129,564 operating expenses: yard operations 208,910 237,683 415,896 460,562 cost of vehicle sales 73,629 57,900 137,989 116,664 yard depreciation and amortization 25,180 18,231 48,474 35,051 yard stock-based compensation 1,814 1,437 3,345 2,529 gross profit 307,498 259,889 604,267 514,758 general and administrative 36,014 39,242 71,152 78,085 general and administrative depreciation and amortization 6,212 6,051 11,867 12,245 general and administrative stock-based compensation 7,051 4,704 14,433 9,145 total operating expenses 358,810 365,248 703,156 714,281 operating income 258,221 209,892 506,815 415,283 other expense: interest expense, net (4,849) (4,464) (9,881) (8,490) other income, net (920) (354) 2,333 363 total other expense (5,769) (4,818) (7,548) (8,127) income before income taxes 252,452 205,074 499,267 407,156 income tax expense 59,012 36,367 105,542 20,269 net income $ 193,440 $ 168,707 $ 393,725 $ 386,887 basic net income per common share $ 0.82 $ 0.73 $ 1.67 $ 1.67 weighted average common shares outstanding 236,152 232,671 235,971 231,920 diluted net income per common share $ 0.81 $ 0.71 $ 1.64 $ 1.62 diluted weighted average common shares outstanding 240,280 238,470 240,124 238,566 copart, inc. consolidated balance sheets (in thousands) (unaudited) january 31, 2021 july 31, 2020 assets current assets: cash, cash equivalents, and restricted cash $ 616,403 $ 477,718 accounts receivable, net 462,405 350,207 vehicle pooling costs 92,928 73,684 inventories 30,203 20,080 income taxes receivable 6,498 26,740 prepaid expenses and other assets 17,030 15,330 total current assets 1,225,467 963,759 property and equipment, net 2,175,346 1,941,719 operating lease right-of-use assets 107,602 118,455 intangibles, net 44,270 47,772 goodwill 346,966 343,622 deferred income taxes 221 213 other assets 34,566 39,721 total assets $ 3,934,438 $ 3,455,261 liabilities and stockholders’ equity current liabilities: accounts payable and accrued liabilities $ 324,108 $ 318,530 deferred revenue 14,431 8,233 income taxes payable 8,672 3,709 current portion of operating lease liabilities 22,554 24,821 current portion of finance lease liabilities 1,250 751 total current liabilities 371,015 356,044 deferred income taxes 81,316 71,686 income taxes payable 51,177 44,965 operating lease liabilities, net of current portion 85,307 95,584 long-term debt and finance lease liabilities, net of discount 402,703 397,036 other liabilities 328 430 total liabilities 991,846 965,745 commitments and contingencies stockholders' equity: preferred stock — — common stock 24 24 additional paid-in capital 718,497 672,727 accumulated other comprehensive loss (106,720) (121,088) retained earnings 2,330,791 1,937,853 total stockholders' equity 2,942,592 2,489,516 total liabilities and stockholders' equity $ 3,934,438 $ 3,455,261 copart, inc. consolidated statements of cash flows (in thousands) (unaudited) six months ended january 31, 2021 2020 cash flows from operating activities: net income $ 393,725 $ 386,887 adjustments to reconcile net income to net cash provided by operating activities: depreciation and amortization, including debt cost 60,898 48,097 allowance for credit loss 213 1,301 equity in (earnings) losses of unconsolidated affiliates (1,343) 3,124 stock-based compensation 17,778 11,674 gain on sale of property and equipment (1,145) (1,315) deferred income taxes 9,442 6,719 changes in operating assets and liabilities: accounts receivable (111,148) (78,510) vehicle pooling costs (19,099) (13,921) inventories (9,772) 2,765 prepaid expenses and other current and non-current assets 5,802 7,184 operating lease right-of-use assets and lease liabilities 470 331 accounts payable and accrued liabilities 10,041 24,862 deferred revenue 6,098 1,021 income taxes receivable 20,243 (48,722) income taxes payable 10,838 5,794 other liabilities — (371) net cash provided by operating activities 393,041 356,920 cash flows from investing activities: purchases of property and equipment, including acquisitions (283,214) (400,352) proceeds from sale of property and equipment 129 1,639 net cash used in investing activities (283,085) (398,713) cash flows from financing activities: proceeds from the exercise of stock options 23,112 32,594 proceeds from the issuance of employee stock purchase plan shares 4,880 3,955 payments for employee stock-based tax withholdings (787) (101,422) net proceeds on revolving loan facility — 13,600 payments of finance lease obligations (622) — net cash provided by (used in) financing activities 26,583 (51,273) effect of foreign currency translation 2,146 258 net increase (decrease) in cash, cash equivalents, and restricted cash 138,685 (92,808) cash, cash equivalents, and restricted cash at beginning of period 477,718 186,319 cash, cash equivalents, and restricted cash at end of period $ 616,403 $ 93,511 supplemental disclosure of cash flow information: interest paid $ 7,614 $ 9,007 income taxes paid, net of refunds $ 64,860 $ 57,591 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, 2021 2020 2021 2020 gaap net income $ 193,440 $ 168,707 $ 393,725 $ 386,887 effect of discrete income tax items — — — (3,008) effect of foreign currency-related losses (gains), net of tax 238 (416) 48 (679) effect of recognizing tax benefit on exercise of employee stock options (2,167) (14,829) (13,939) (77,194) effect of payroll taxes on certain executive stock compensation, net of tax — — — 2,867 non-gaap net income $ 191,511 $ 153,462 $ 379,834 $ 308,873 gaap net income per diluted common share $ 0.81 $ 0.71 $ 1.64 $ 1.62 non-gaap net income per diluted common share $ 0.80 $ 0.64 $ 1.58 $ 1.29
