Copart reports third quarter fiscal 2023 financial results
Dallas--(business wire)--copart, inc. (nasdaq: cprt) today reported financial results for the quarter ended april 30, 2023. for the three months ended april 30, 2023, revenue, gross profit, and net income were $1,021.8 million, $483.4 million, and $350.4 million, respectively. these represent an increase in revenue of $81.9 million, or 8.7%; an increase in gross profit of $47.2 million, or 10.8%; and an increase in net income of $71.8 million, or 25.8%, respectively, from the same period last year. fully diluted earnings per share for the three months were $0.72 compared to $0.58 last year, an increase of 24.1%. for the nine months ended april 30, 2023, revenue, gross profit, and net income were $2,871.9 million, $1,279.4 million, and $890.0 million, respectively. these represent an increase in revenue of $254.4 million, or 9.7%; an increase in gross profit of $54.8 million, or 4.5%; and an increase in net income of $63.6 million, or 7.7%, respectively, from the same period last year. fully diluted earnings per share for the nine months were $1.84 compared to $1.71 last year, an increase of 7.6%. excluding the impact of certain income tax benefits related to stock-based compensation, non-gaap fully diluted earnings per share for the three months ended april 30, 2023 and 2022 were $0.72, and $0.58, respectively, which was an increase of 24.1%. excluding the impact of certain income tax benefits related to stock-based compensation, non-gaap fully diluted earnings per share for the nine months ended april 30, 2023 and 2022, were $1.83, and $1.67, respectively, which was an increase of 9.6%. 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 wednesday, may 17, 2023, at 5 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 via hyperlink at www.copart.com/investorrelations. a replay of the call will be available through august 2023 by visiting www.copart.com/investorrelations. about copart copart, inc., founded in 1982, is a global leader in online vehicle auctions and vehicle remarketing services. copart’s innovative technology and online auction platform links sellers to more than 750,000 members in over 190 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, fleet operators, dealers, vehicle rental companies, charities, 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. 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 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 april 30, nine months ended april 30, 2023 2022 % change 2023 2022 % change service revenues and vehicle sales: service revenues $ 847,249 $ 766,316 10.6 % 2,363,886 $ 2,145,224 10.2 % vehicle sales 174,582 173,625 0.6 % 508,041 472,309 7.6 % total service revenues and vehicle sales 1,021,831 939,941 8.7 % 2,871,927 2,617,533 9.7 % operating expenses: yard operations 343,617 313,365 9.7 % 1,020,674 878,740 16.2 % cost of vehicle sales 159,443 157,236 1.4 % 465,282 423,948 9.7 % yard depreciation and amortization 33,090 31,646 4.6 % 101,520 86,383 17.5 % yard stock-based compensation 2,251 1,417 58.9 % 5,038 3,813 32.1 % gross profit 483,430 436,277 10.8 % 1,279,413 1,224,649 4.5 % general and administrative 52,395 50,188 4.4 % 144,772 134,057 8.0 % general and administrative depreciation and amortization 4,281 4,933 (13.2 ) % 13,323 15,269 (12.7 ) % general and administrative stock-based compensation 7,830 8,401 (6.8 ) % 25,366 25,119 1.0 % total operating expenses 602,907 567,186 6.3 % 1,775,975 1,567,329 13.3 % operating income 418,924 372,755 12.4 % 1,095,952 1,050,204 4.4 % other expense: interest income (expense), net 17,878 (4,492 ) (498.0 ) % 36,780 (14,032 ) (362.1 ) % other income (expense), net 3,628 1,342 170.3 % (2,096 ) 1,314 (259.5 ) % total other income (expense) 21,506 (3,150 ) (782.7 ) % 34,684 (12,718 ) (372.7 ) % income before income taxes 440,430 369,605 19.2 % 1,130,636 1,037,486 9.0 % income tax expense 89,999 90,985 (1.1 ) % 240,680 211,091 14.0 % net income $ 350,431 $ 278,620 25.8 % $ 889,956 $ 826,395 7.7 % basic net income per common share $ 0.73 $ 0.59 23.7 % $ 1.87 $ 1.74 7.5 % weighted average common shares outstanding 476,787 475,010 0.4 % 476,417 474,554 0.4 % diluted net income per common share $ 0.72 $ 0.58 24.1 % $ 1.84 $ 1.71 7.6 % diluted weighted average common shares outstanding 483,690 481,448 0.5 % 482,718 482,576 — % copart, inc. consolidated balance sheets (in thousands) (unaudited) april 30, 2023 july 31, 2022 assets current assets: cash, cash equivalents, and restricted cash $ 2,114,183 $ 1,384,236 accounts receivable, net 693,834 578,573 vehicle pooling costs 119,724 112,242 inventories 44,999 58,791 income taxes receivable 428 49,882 prepaid expenses and other assets 27,862 18,731 total current assets 3,001,030 2,202,455 property and equipment, net 2,710,933 2,485,764 operating lease right-of-use assets 105,260 116,303 intangibles, net 49,676 54,680 goodwill 406,640 401,954 other assets 76,266 47,708 total assets $ 6,349,805 $ 5,308,864 liabilities and stockholders’ equity current liabilities: accounts payable and accrued liabilities $ 441,466 $ 399,034 deferred revenue 25,664 20,061 income taxes payable 18,534 — current portion of operating and finance lease liabilities 20,900 21,794 total current liabilities 506,564 440,889 deferred income taxes 76,690 80,060 income taxes payable 65,745 64,637 operating and finance lease liabilities, net of current portion 86,016 95,683 long-term debt and other liabilities 22,368 1,996 total liabilities 757,383 683,265 commitments and contingencies stockholders' equity: preferred stock — — common stock 48 48 additional paid-in capital 901,495 838,508 accumulated other comprehensive loss (152,459 ) (169,365 ) retained earnings 4,843,338 3,956,408 total stockholders' equity 5,592,422 4,625,599 total liabilities and stockholders' equity $ 6,349,805 $ 5,308,864 copart, inc. consolidated statements of cash flows (in thousands) (unaudited) nine months ended april 30, 2023 2022 cash flows from operating activities: net income $ 889,956 $ 826,395 adjustments to reconcile net income to net cash provided by operating activities: depreciation and amortization, including debt cost 115,320 102,333 allowance for credit loss 1,480 1,456 equity in losses of unconsolidated affiliates 5,446 794 stock-based compensation 30,404 28,932 gain on sale of property and equipment (965 ) (1,280 ) deferred income taxes (3,236 ) 14,582 changes in operating assets and liabilities: accounts receivable (115,098 ) (109,636 ) vehicle pooling costs (7,300 ) (20,029 ) inventories 14,870 (13,367 ) prepaid expenses, other current and non-current assets (33,830 ) (37,842 ) operating lease right-of-use assets and lease liabilities 595 436 accounts payable, accrued liabilities and other liabilities 30,314 45,745 deferred revenue 5,516 388 income taxes receivable 49,430 18,416 income taxes payable 22,731 6,531 net cash provided by operating activities 1,005,633 863,854 cash flows from investing activities: purchases of property and equipment (346,524 ) (234,810 ) purchase of assets in connection with acquisitions — (493 ) proceeds from sale of property and equipment 20,509 2,622 purchase of held to maturity securities — (374,866 ) proceeds from the sale of held to maturity securities — 149,977 investment in unconsolidated affiliate (2,744 ) — net cash used in investing activities (328,759 ) (457,570 ) cash flows from financing activities: proceeds from the exercise of stock options 27,220 16,108 proceeds from the issuance of employee stock purchase plan shares 5,363 5,026 payments for employee stock-based tax withholdings (3,026 ) (872 ) drawdown on revolving loan facility 21,481 — debt offering costs — (1,212 ) payments of finance lease obligations (18 ) (472 ) net cash provided by financing activities 51,020 18,578 effect of foreign currency translation 2,053 (18,304 ) net increase in cash, cash equivalents, and restricted cash 729,947 406,558 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 $ 2,114,183 $ 1,454,818 supplemental disclosure of cash flow information: interest paid $ 1,586 $ 14,485 income taxes paid, net of refunds $ 171,438 $ 195,521 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, 2023 2022 2023 2022 gaap net income $ 350,431 $ 278,620 $ 889,956 $ 826,395 effect of certain discrete income tax items — — — (17,490 ) effect of certain legal matters, net of tax — 5,092 — 5,092 effect of recognizing tax benefit on exercise of stock-based compensation (4,370 ) (2,244 ) (5,110 ) (9,197 ) non-gaap net income $ 346,061 $ 281,468 $ 884,846 $ 804,800 gaap net income per diluted common share $ 0.72 $ 0.58 $ 1.84 $ 1.71 non-gaap net income per diluted common share $ 0.72 $ 0.58 $ 1.83 $ 1.67
