Copart reports fourth quarter fiscal 2020 financial results
Dallas--(business wire)--copart, inc. (nasdaq: cprt) today reported financial results for the quarter and year ended july 31, 2020. for the three months ended july 31, 2020, revenue, gross profit, and net income were $525.7 million, $250.4 million, and $165.5 million, respectively. these represent a decrease in revenue of $16.9 million, or 3.1%; an increase in gross profit of $7.8 million, or 3.2%; and an increase in net income of $12.0 million, or 7.8%, respectively, from the same period last year. fully diluted earnings per share for the three months ended july 31, 2020 were $0.69 compared to $0.64 last year, an increase of 7.8%. for the year ended july 31, 2020, revenue, gross profit, and net income were $2.2 billion, $1.0 billion, and $699.9 million, respectively. these represent an increase in revenue of $163.6 million, or 8.0%; an increase in gross profit of $109.5 million, or 12.2%; and an increase in net income of $108.2 million, or 18.3%, respectively, from the same period last year. fully diluted earnings per share for the year ended july 31, 2020 were $2.93 compared to $2.46 last year, an increase of 19.1%. excluding the impact of discrete income tax items, disposal of non-operating assets, reserve for legacy sales tax liabilities, foreign currency-related gains and losses, 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 and year ended july 31, 2020 and 2019, were $0.69, $0.60, $2.57 and $2.25, respectively. 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, september 3, 2020, at 11:00 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://stream.conferenceamerica.com/copart090320. a replay of the call will be available through november 2, 2020 by calling (877) 919-4059. use confirmation code: 38708517. 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 cases, to end users. copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers and also sells vehicles sourced from individual owners. 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, disposal of non-operating assets, reserve for legacy sales tax liabilities, foreign currency-related gains and losses, 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, disposal of non-operating assets, reserve for legacy sales tax liabilities, foreign currency-related gains and losses, 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 july 31, twelve months ended july 31, 2020 2019 2020 2019 service revenues and vehicle sales: service revenues $ 457,668 $ 470,399 $ 1,947,140 $ 1,755,694 vehicle sales 67,991 72,176 258,443 286,263 total service revenues and vehicle sales 525,659 542,575 2,205,583 2,041,957 operating expenses: yard operations 197,186 217,089 889,733 819,753 cost of vehicle sales 54,643 65,552 225,294 255,504 yard depreciation and amortization 21,615 15,745 76,999 63,167 yard stock-based compensation 1,784 1,570 5,755 5,191 gross profit 250,431 242,619 1,007,802 898,342 general and administrative 34,643 39,772 149,745 141,885 general and administrative depreciation and amortization 5,764 5,770 24,391 21,728 general and administrative stock-based compensation 4,309 4,275 17,567 18,254 total operating expenses 319,944 349,773 1,389,484 1,325,482 operating income 205,715 192,802 816,099 716,475 other expense: interest expense, net (4,803 ) (4,255 ) (18,871 ) (17,585 ) other income (expense), net 971 (1,477 ) 3,611 6,061 total other expense (3,832 ) (5,732 ) (15,260 ) (11,524 ) income before income taxes 201,883 187,070 800,839 704,951 income tax expense 36,350 33,574 100,932 113,258 net income $ 165,533 $ 153,496 $ 699,907 $ 591,693 basic net income per common share $ 0.70 $ 0.67 $ 3.00 $ 2.57 weighted average common shares outstanding 234,863 229,204 233,202 230,489 diluted net income per common share $ 0.69 $ 0.64 $ 2.93 $ 2.46 diluted weighted average common shares outstanding 238,927 238,354 238,656 240,453 copart, inc. consolidated balance sheets (in thousands) (unaudited) july 31, 2020 july 31, 2019 assets current assets: cash, cash equivalents, and restricted cash $ 477,718 $ 186,319 accounts receivable, net 350,207 367,265 vehicle pooling costs 73,684 76,548 inventories 20,080 20,941 income taxes receivable 26,740 19,526 prepaid expenses and other assets 15,330 16,568 total current assets 963,759 687,167 property and equipment, net 1,941,719 1,427,726 operating lease right-of-use assets 118,455 — intangibles, net 47,772 55,156 goodwill 343,622 333,321 deferred income taxes 213 411 other assets 39,721 43,836 total assets $ 3,455,261 $ 2,547,617 liabilities and stockholders’ equity current liabilities: accounts payable and accrued liabilities $ 318,530 $ 270,918 deferred revenue 8,233 6,466 income taxes payable 3,709 3,482 current portion of operating lease liabilities 24,821 — current portion of finance lease obligations 751 1,138 total current liabilities 356,044 282,004 deferred income taxes 71,686 48,683 income taxes payable 44,965 35,116 operating lease liabilities, net of current portion 95,584 — long-term debt and finance lease obligations, net of discount 397,036 400,091 other liabilities 430 3,342 total liabilities 965,745 769,236 commitments and contingencies stockholders’ equity: preferred stock — — common stock 24 23 additional paid-in capital 672,727 572,559 accumulated other comprehensive loss (121,088 ) (132,529 ) retained earnings 1,937,853 1,338,328 total stockholders’ equity 2,489,516 1,778,381 total liabilities and stockholders’ equity $ 3,455,261 $ 2,547,617 copart, inc. consolidated statements of cash flows (in thousands) (unaudited) year ended july 31, 2020 2019 cash flows from operating activities: net income $ 699,907 $ 591,693 adjustments to reconcile net income to net cash provided by operating activities: depreciation and amortization, including debt cost 104,257 85,334 allowance for doubtful accounts 1,670 (429 ) impairment of long-lived assets — — equity in losses of unconsolidated affiliates 1,401 419 stock-based compensation 23,322 23,445 gain on sale of property and equipment (1,913 ) (3,073 ) deferred income taxes 23,082 23,167 changes in operating assets and liabilities, net of effects from acquisitions: accounts receivable 15,993 (60,808 ) vehicle pooling costs 2,590 (16,418 ) inventories 1,348 (4,719 ) prepaid expenses and other current and non-current assets 141 (12,265 ) operating lease right-of-use assets and lease liabilities (572 ) — accounts payable and accrued liabilities 41,648 11,126 deferred revenue 1,615 2,056 income taxes receivable (7,216 ) (4,215 ) income taxes payable 10,114 10,669 other liabilities 498 664 net cash provided by operating activities 917,885 646,646 cash flows from investing activities: purchases of property and equipment, including acquisitions (603,674 ) (374,628 ) proceeds from sale of property and equipment 2,466 18,361 net cash used in investing activities (601,208 ) (356,267 ) cash flows from financing activities: proceeds from the exercise of stock options 71,640 34,398 proceeds from the issuance of employee stock purchase plan shares 8,276 7,183 repurchases of common stock — (364,997 ) payments for employee stock-based tax withholdings (103,451 ) (46,888 ) debt offering costs (2,814 ) — payments of finance lease obligations (1,065 ) — net cash used in financing activities (27,414 ) (370,304 ) effect of foreign currency translation 2,136 (8,276 ) net increase (decrease) in cash, cash equivalents, and restricted cash 291,399 (88,201 ) cash, cash equivalents, and restricted cash at beginning of period 186,319 274,520 cash, cash equivalents, and restricted cash at end of period $ 477,718 $ 186,319 supplemental disclosure of cash flow information: interest paid $ 19,728 $ 19,289 income taxes paid, net of refunds $ 83,770 $ 82,448 copart, inc. additional financial information reconciliation of gaap to non-gaap financial measures (in thousands, except per share amounts) (unaudited) three months ended july 31, twelve months ended july 31, 2020 2019 2020 2019 gaap net income $ 165,533 $ 153,496 $ 699,907 $ 591,693 effect of discrete income tax items 4,740 — 1,732 (10,170 ) effect of disposal of non-operating assets, net of tax — — — (1,598 ) effect of reserve for legacy sales tax liabilities, net of tax — 978 — 978 effect of foreign currency-related (gains) losses, net of tax (268 ) 48 (1,436 ) (256 ) effect of recognizing tax benefit on exercise of employee stock options (6,586 ) (12,007 ) (92,548 ) (46,103 ) effect of payroll taxes on certain executive stock compensation, net of tax — — 2,867 1,295 non-gaap net income $ 163,419 $ 142,515 $ 610,522 $ 535,839 gaap net income per diluted common share $ 0.69 $ 0.64 $ 2.93 $ 2.46 non-gaap net income per diluted common share $ 0.69 $ 0.60 $ 2.57 $ 2.25 gaap diluted weighted average common shares outstanding 238,927 238,354 238,656 240,453 effect on common equivalent shares from asu 2016-09 (656 ) (1,633 ) (911 ) (1,870 ) non-gaap diluted weighted average common shares outstanding 238,271 236,721 237,745 238,583
