Copart reports first quarter fiscal 2021 financial results
Dallas--(business wire)--copart, inc. (nasdaq: cprt) today reported financial results for the quarter ended october 31, 2020. for the three months ended october 31, 2020, revenue, gross profit, and net income were $592.9 million, $296.8 million, and $200.3 million, respectively. these represent an increase in revenue of $38.5 million, or 6.9%; an increase in gross profit of $41.9 million, or 16.4%; and a decrease in net income of $17.9 million, or 8.2%, respectively, from the same period last year. fully diluted earnings per share for the three months were $0.83 compared to $0.91 last year, a decrease of 8.8%. excluding the impact of discrete income tax items, foreign currency-related gains, 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 ended october 31, 2020 and 2019, were $0.79 and $0.65, respectively, an increase of 21.5%. 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, november 19, 2020, 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 https://78449.themediaframe.com/dataconf/productusers/copart/mediaframe/41926/indexl.html or via hyperlink at www.copart.com/investorrelation. a replay of the call will be available through january 21, 2021 by calling (877) 660-6853. use confirmation code: 13713059. 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 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, foreign currency-related gains, 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, foreign currency-related gains, 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 october 31, 2020 2019 service revenues and vehicle sales: service revenues $ 515,372 $ 487,856 vehicle sales 77,568 66,568 total service revenues and vehicle sales 592,940 554,424 operating expenses: yard operations 206,986 222,879 cost of vehicle sales 64,360 58,764 yard depreciation and amortization 23,294 16,820 yard stock-based compensation 1,531 1,092 gross profit 296,769 254,869 general and administrative 35,138 38,843 general and administrative depreciation and amortization 5,655 6,194 general and administrative stock-based compensation 7,382 4,441 total operating expenses 344,346 349,033 operating income 248,594 205,391 other expense: interest expense, net (5,032 ) (4,026 ) other income, net 3,253 717 total other expense (1,779 ) (3,309 ) income before income taxes 246,815 202,082 income tax expense (benefit) 46,530 (16,098 ) net income $ 200,285 $ 218,180 basic net income per common share $ 0.85 $ 0.94 weighted average common shares outstanding 235,791 231,169 diluted net income per common share $ 0.83 $ 0.91 diluted weighted average common shares outstanding 239,968 238,662 copart, inc. consolidated balance sheets (in thousands) (unaudited) october 31, 2020 july 31, 2020 assets current assets: cash, cash equivalents, and restricted cash $ 605,732 $ 477,718 accounts receivable, net 407,897 350,207 vehicle pooling costs 84,128 73,684 inventories 28,244 20,080 income taxes receivable 915 26,740 prepaid expenses and other assets 11,260 15,330 total current assets 1,138,176 963,759 property and equipment, net 2,072,059 1,941,719 operating lease right-of-use assets 112,275 118,455 intangibles, net 45,864 47,772 goodwill 342,576 343,622 deferred income taxes 212 213 other assets 30,026 39,721 total assets $ 3,741,188 $ 3,455,261 liabilities and stockholders’ equity current liabilities: accounts payable and accrued liabilities $ 359,816 $ 318,530 deferred revenue 9,476 8,233 income taxes payable 12,640 3,709 current portion of operating lease liabilities 24,011 24,821 current portion of finance lease liabilities 1,593 751 total current liabilities 407,536 356,044 deferred income taxes 77,826 71,686 income taxes payable 44,347 44,965 operating lease liabilities, net of current portion 88,490 95,584 long-term debt and finance lease liabilities, net of discount 411,845 397,036 other liabilities 311 430 total liabilities 1,030,355 965,745 commitments and contingencies stockholders' equity: preferred stock — — common stock 24 24 additional paid-in capital 701,654 672,727 accumulated other comprehensive loss (128,494 ) (121,088 ) retained earnings 2,137,649 1,937,853 total stockholders' equity 2,710,833 2,489,516 total liabilities and stockholders' equity $ 3,741,188 $ 3,455,261 copart, inc. consolidated statements of cash flows (in thousands) (unaudited) three months ended october 31, 2020 2019 cash flows from operating activities: net income $ 200,285 $ 218,180 adjustments to reconcile net income to net cash provided by operating activities: depreciation and amortization, including debt cost 29,227 23,704 allowance for credit loss (157 ) 382 equity in (earnings) losses of unconsolidated affiliates (1,741 ) 855 stock-based compensation 8,913 5,533 gain on sale of property and equipment (1,230 ) (272 ) deferred income taxes 6,239 4,839 changes in operating assets and liabilities: accounts receivable (57,860 ) (25,408 ) vehicle pooling costs (10,600 ) (9,358 ) inventories (8,259 ) 1,710 prepaid expenses and other current and non-current assets 15,236 4,079 operating lease right-of-use assets and lease liabilities 153 256 accounts payable and accrued liabilities 42,880 16,587 deferred revenue 1,251 (1,437 ) income taxes receivable 25,825 (28,740 ) income taxes payable 8,371 1,700 other liabilities — (152 ) net cash provided by operating activities 258,533 212,458 cash flows from investing activities: purchases of property and equipment, including acquisitions (147,093 ) (131,793 ) proceeds from sale of property and equipment 271 283 net cash used in investing activities (146,822 ) (131,510 ) cash flows from financing activities: proceeds from the exercise of stock options 20,014 12,620 payments for employee stock-based tax withholdings (489 ) (101,354 ) payments of finance lease obligations (327 ) — net cash provided by (used in) financing activities 19,198 (88,734 ) effect of foreign currency translation (2,895 ) 2,569 net increase (decrease) in cash, cash equivalents, and restricted cash 128,014 (5,217 ) cash, cash equivalents, and restricted cash at beginning of period 477,718 186,319 cash, cash equivalents, and restricted cash at end of period $ 605,732 $ 181,102 supplemental disclosure of cash flow information: interest paid $ 4,762 $ 4,506 income taxes paid, net of refunds $ 6,157 $ 7,465 copart, inc. additional financial information reconciliation of gaap to non-gaap financial measures (in thousands, except per share amounts) (unaudited) three months ended october 31, 2020 2019 gaap net income $ 200,285 $ 218,180 effect of discrete income tax items — (3,008 ) effect of foreign currency-related gains, net of tax (190 ) (263 ) effect of recognizing tax benefit on exercise of employee stock options (11,773 ) (62,365 ) effect of payroll taxes on certain executive stock compensation, net of tax — 2,867 non-gaap net income $ 188,322 $ 155,411 gaap net income per diluted common share $ 0.83 $ 0.91 non-gaap net income per diluted common share $ 0.79 $ 0.65 gaap diluted weighted average common shares outstanding 239,968 238,662 effect on common equivalent shares from asu 2016-09 (709 ) (1,306 ) non-gaap diluted weighted average common shares outstanding 239,259 237,356
