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Feb. 19, 2020, 5:55 p.m. EST

Copart Reports Second Quarter Fiscal 2020 Financial Results

Copart, Inc. /zigman2/quotes/200378896/composite CPRT -0.30% today reported financial results for the quarter ended January 31, 2020.

For the three months ended January 31, 2020, revenue, gross profit, and net income were $575.1 million, $259.9 million, and $168.7 million, respectively. These represent an increase in revenue of $90.2 million, or 18.6%; an increase in gross profit of $51.7 million, or 24.8%; and an increase in net income of $37.3 million, or 28.4%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.71 compared to $0.55 last year, an increase of 29.1%.

For the six months ended January 31, 2020, revenue, gross profit, and net income were $1.1 billion, $514.8 million, and $386.9 million, respectively. These represent an increase in revenue of $183.3 million, or 19.4%; an increase in gross profit of $110.6 million, or 27.4%; and an increase in net income of $141.4 million, or 57.6%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $1.62 compared to $1.01 last year, an increase of 60.4%.

Excluding the impact of discrete income tax items, disposal of non-operating assets, 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 and six months ended January 31, 2020 and 2019, were $0.65, $0.52, $1.30 and $0.99, 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, February 20, 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 http://stream.conferenceamerica.com/copart022020 . A replay of the call will be available through April 20, 2020 by calling (877) 919-4059 . Use confirmation code: 44749280.

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, 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, disposal of non-operating assets, 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, and 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,
    2020   2019   2020   2019
Service revenues and vehicle sales:                
Service revenues   $ 510,034     $ 416,807     $ 997,890     $ 811,613  
Vehicle sales   65,106     68,091     131,674     134,653  
Total service revenues and vehicle sales   575,140     484,898     1,129,564     946,266  
Operating expenses:                
Yard operations   237,683     199,383     460,562     388,860  
Cost of vehicle sales   57,900     61,212     116,664     118,968  
Yard depreciation and amortization   18,231     14,839     35,051     32,024  
Yard stock-based compensation   1,437     1,238     2,529     2,270  
Gross profit   259,889     208,226     514,758     404,144  
General and administrative   39,242     33,236     78,085     68,041  
General and administrative depreciation and amortization   6,051     5,560     12,245     10,244  
General and administrative stock-based compensation   4,704     4,691     9,145     9,680  
Total operating expenses   365,248     320,159     714,281     630,087  
Operating income   209,892     164,739     415,283     316,179  
Other (expense) income:                
Interest expense, net   (4,464 )   (4,555 )   (8,490 )   (8,246 )
Other (expense) income, net   (354 )   4,782     363     5,819  
Total other (expense) income   (4,818 )   227     (8,127 )   (2,427 )
Income before income taxes   205,074     164,966     407,156     313,752  
Income tax expense   36,367     33,593     20,269     68,296  
Net income   $ 168,707     $ 131,373     $ 386,887     $ 245,456  
                 
Basic net income per common share   $ 0.73     $ 0.57     $ 1.67     $ 1.06  
Weighted average common shares outstanding   232,671     230,798     231,920     232,343  
                 
Diluted net income per common share   $ 0.71     $ 0.55     $ 1.62     $ 1.01  
Diluted weighted average common shares outstanding   238,470     240,660     238,566     242,743  
Copart, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
    January 31, 2020   July 31, 2019
ASSETS        
Current assets:        
Cash and cash equivalents   $ 93,511     $ 186,319  
Accounts receivable, net   445,963     367,265  
Vehicle pooling costs   90,595     76,548  
Inventories   18,515     20,941  
Income taxes receivable   68,415     19,526  
Prepaid expenses and other assets   14,964     16,568  
Total current assets   731,963     687,167  
Property and equipment, net   1,789,326     1,427,726  
Operating lease right-of-use assets   104,360      
Intangibles, net   50,291     55,156  
Goodwill   338,262     333,321  
Deferred income taxes   348     411  
Other assets   34,055     43,836  
Total assets   $ 3,048,605     $ 2,547,617  
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable and accrued liabilities   $ 296,977     $ 270,918  
Deferred revenue   7,603     6,466  
Income taxes payable   728     3,482  
Current portion of operating lease liabilities   23,314      
Current portion of revolving loan facility and finance lease liabilities   14,215     1,138  
Total current liabilities   342,837     282,004  
Deferred income taxes   55,499     48,683  
Income taxes payable   43,650     35,116  
Operating lease liabilities, net of current portion   81,906      
Long-term debt, revolving loan facility and finance lease liabilities, net of discount   399,846     400,091  
Other liabilities   138     3,342  
Total liabilities   923,876     769,236  
Commitments and contingencies        
Stockholders' equity:        
Preferred stock        
Common stock   23     23  
Additional paid-in capital   617,714     572,559  
Accumulated other comprehensive loss   (119,870 )   (132,529 )
Retained earnings   1,626,862     1,338,328  
Total stockholders' equity   2,124,729     1,778,381  
Total liabilities and stockholders' equity   $ 3,048,605     $ 2,547,617  
Copart, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Six Months Ended January 31,
  2020   2019
Cash flows from operating activities:        
Net income   $ 386,887     $ 245,456  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization, including debt cost   48,097     42,487  
Allowance for doubtful accounts   1,301     96  
Equity in losses (earnings) of unconsolidated affiliates   3,124     (514 )
Stock-based compensation   11,674     11,950  
Gain on sale of property and equipment   (1,315 )   (3,890 )
Deferred income taxes   6,719     6,632  
Changes in operating assets and liabilities:        
Accounts receivable   (78,510 )   (86,125 )
Vehicle pooling costs   (13,921 )   (20,218 )
Inventories   2,765     (11,640 )
Prepaid expenses and other current and non-current assets   7,184     (725 )
Operating lease right-of-use assets and lease liabilities   331      
Accounts payable and accrued liabilities   24,862     7,338  
Deferred revenue   1,021     2,843  
Income taxes receivable   (48,722 )   15,286  
Income taxes payable   5,794     6,890  
Other liabilities   (371 )   (662 )
Net cash provided by operating activities   356,920     215,204  
         
Cash flows from investing activities:        
Purchases of property and equipment   (400,352 )   (136,727 )
Proceeds from sale of property and equipment   1,639     17,488  
Net cash used in investing activities   (398,713 )   (119,239 )
         
Cash flows from financing activities:        
Proceeds from the exercise of stock options   32,594     5,220  
Proceeds from the issuance of Employee Stock Purchase Plan shares   3,955     3,501  
Repurchases of common stock       (364,997 )
Payments for employee stock-based tax withholdings   (101,422 )   (27 )
Net proceeds on revolving loan facility   13,600     93,300  
Net cash used in financing activities   (51,273 )   (263,003 )
Effect of foreign currency translation   258     692  
Net decrease in cash and cash equivalents   (92,808 )   (166,346 )
Cash and cash equivalents at beginning of period   186,319     274,520  
Cash and cash equivalents at end of period   $ 93,511     $ 108,174  
Supplemental disclosure of cash flow information:        
Interest paid   $ 9,007     $ 9,018  
Income taxes paid, net of refunds   $ 57,591     $ 39,327  
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,
    2020   2019   2020   2019
GAAP net income   $ 168,707     $ 131,373     $ 386,887     $ 245,456  
Effect of discrete income tax items           (3,008 )    
Effect of disposal of non-operating assets, net of tax       (1,598 )       (1,598 )
Effect of foreign currency-related gains, net of tax   (416 )   (56 )   (679 )   (399 )
Effect of recognizing tax benefit on exercise of employee stock options   (14,829 )   (4,847 )   (77,194 )   (5,022 )
Effect of payroll taxes on certain executive stock compensation, net of tax           2,867      
Non-GAAP net income   $ 153,462     $ 124,872     $ 308,873     $ 238,437  
                 
GAAP net income per diluted common share   $ 0.71     $ 0.55     $ 1.62     $ 1.01  
Non-GAAP net income per diluted common share   $ 0.65     $ 0.52     $ 1.30     $ 0.99  
                 
GAAP diluted weighted average common shares outstanding   238,470     240,660     238,566     242,743  
Effect on common equivalent shares from ASU 2016-09   (969 )   (1,675 )   (1,137 )   (2,058 )
Non-GAAP diluted weighted average common shares outstanding   237,501     238,985     237,429     240,685  

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200219006043/en/

SOURCE: Copart, Inc.

Melissa Hunter, Executive Support Manager, Office of the Chief Financial Officer
972-391-5090 or melissa.hunter@copart.com

Copyright Business Wire 2020

/zigman2/quotes/200378896/composite
US : U.S.: Nasdaq
$ 102.01
-0.31 -0.30%
Volume: 932,872
Sept. 24, 2020 4:00p
P/E Ratio
34.82
Dividend Yield
N/A
Market Cap
$24.02 billion
Rev. per Employee
$310,934
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