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May 20, 2020, 5:55 p.m. EDT

Copart Reports Third Quarter Fiscal 2020 Financial Results

Copart, Inc. /zigman2/quotes/200378896/composite CPRT +0.60% today reported financial results for the quarter ended April 30, 2020.

For the three months ended April 30, 2020, revenue, gross profit, and net income were $550.4 million, $242.6 million, and $147.5 million, respectively. These represent a decrease in revenue of $2.8 million, or 0.5%; a decrease in gross profit of $9.0 million, or 3.6%; and a decrease in net income of $45.3 million, or 23.5%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.62 compared to $0.81 last year, a decrease of 23.5%.

For the nine months ended April 30, 2020, revenue, gross profit, and net income were $1.7 billion, $757.4 million, and $534.4 million, respectively. These represent an increase in revenue of $180.5 million, or 12.0%; an increase in gross profit of $101.6 million, or 15.5%; and an increase in net income of $96.2 million, or 21.9%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $2.24 compared to $1.82 last year, an increase of 23.1%.

Excluding the impact of discrete income tax items, disposal of non-operating assets, 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 and nine months ended April 30, 2020 and 2019, were $0.58, $0.66, $1.88 and $1.64, 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, May 21, 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/copart052120 . A replay of the call will be available through July 20, 2020 by calling (877) 919-4059 . Use confirmation code: 48213700.

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 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, 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
April 30,
  Nine Months Ended
April 30,
    2020   2019   2020   2019
Service revenues and vehicle sales:                
Service revenues   $ 491,582     $ 473,682     $ 1,489,472     $ 1,285,295  
Vehicle sales   58,778     79,434     190,452     214,087  
Total service revenues and vehicle sales   550,360     553,116     1,679,924     1,499,382  
Operating expenses:                
Yard operations   231,985     213,804     692,547     602,664  
Cost of vehicle sales   53,987     70,984     170,651     189,952  
Yard depreciation and amortization   20,333     15,398     55,384     47,422  
Yard stock-based compensation   1,442     1,351     3,971     3,621  
Gross profit   242,613     251,579     757,371     655,723  
General and administrative   37,017     34,072     115,102     102,113  
General and administrative depreciation and amortization   6,382     5,714     18,627     15,958  
General and administrative stock-based compensation   4,113     4,299     13,258     13,979  
Total operating expenses   355,259     345,622     1,069,540     975,709  
Operating income   195,101     207,494     610,384     523,673  
Other expense:                
Interest expense, net   (5,578)     (5,084)     (14,068)     (13,330)  
Other income, net   2,277     1,719     2,640     7,538  
Total other expense   (3,301)     (3,365)     (11,428)     (5,792)  
Income before income taxes   191,800     204,129     598,956     517,881  
Income tax expense   44,313     11,388     64,582     79,684  
Net income   $ 147,487     $ 192,741     $ 534,374     $ 438,197  
                 
Basic net income per common share   $ 0.63     $ 0.85     $ 2.30     $ 1.90  
Weighted average common shares outstanding   234,133     227,984     232,647     230,922  
                 
Diluted net income per common share   $ 0.62     $ 0.81     $ 2.24     $ 1.82  
Diluted weighted average common shares outstanding   238,591     237,892     238,564     241,158  
Copart, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
    April 30, 2020   July 31, 2019
ASSETS        
Current assets:        
Cash and cash equivalents   $ 306,387     $ 186,319  
Accounts receivable, net   346,244     367,265  
Vehicle pooling costs   75,357     76,548  
Inventories   19,809     20,941  
Income taxes receivable   31,578     19,526  
Prepaid expenses and other assets   14,777     16,568  
Total current assets   794,152     687,167  
Property and equipment, net   1,838,297     1,427,726  
Operating lease right-of-use assets   106,634      
Intangibles, net   48,671     55,156  
Goodwill   338,039     333,321  
Deferred income taxes   310     411  
Other assets   35,480     43,836  
Total assets   $ 3,161,583     $ 2,547,617  
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable and accrued liabilities   $ 250,841     $ 270,918  
Deferred revenue   7,884     6,466  
Income taxes payable   905     3,482  
Current portion of operating lease liabilities   23,395      
Current portion of finance lease liabilities   3,543     1,138  
Total current liabilities   286,568     282,004  
Deferred income taxes   57,724     48,683  
Income taxes payable   46,795     35,116  
Operating lease liabilities, net of current portion   85,698      
Long-term debt and finance lease liabilities, net of discount   403,653     400,091  
Other liabilities   134     3,342  
Total liabilities   880,572     769,236  
Commitments and contingencies        
Stockholders' equity:        
Preferred stock        
Common stock   23     23  
Additional paid-in capital   646,331     572,559  
Accumulated other comprehensive loss   (138,923)     (132,529)  
Retained earnings   1,773,580     1,338,328  
Total stockholders' equity   2,281,011     1,778,381  
Total liabilities and stockholders' equity   $ 3,161,583     $ 2,547,617  
Copart, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
    Nine Months Ended April 30,
    2020   2019
Cash flows from operating activities:        
Net income   $ 534,374     $ 438,197  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization, including debt cost   76,756     63,709  
Allowance for doubtful accounts   1,332     341  
Equity in losses (earnings) of unconsolidated affiliates   1,918     (1,852)  
Stock-based compensation   17,229     17,600  
Gain on sale of property and equipment   (1,745)     (3,753)  
Deferred income taxes   9,265     14,583  
Changes in operating assets and liabilities:        
Accounts receivable   19,102     (69,920)  
Vehicle pooling costs   661     (15,026)  
Inventories   1,209     (5,721)  
Prepaid expenses and other current and non-current assets   6,268     (8,605)  
Operating lease right-of-use assets and lease liabilities   (221)      
Accounts payable and accrued liabilities   (15,636)     17,747  
Deferred revenue   1,365     3,512  
Income taxes receivable   (12,076)     (3,578)  
Income taxes payable   9,168     7,304  
Other liabilities   1,999     (1,042)  
Net cash provided by operating activities   650,968     453,496  
         
Cash flows from investing activities:        
Purchases of property and equipment, including acquisitions   (490,998)     (260,081)  
Proceeds from sale of property and equipment   2,153     17,928  
Net cash used in investing activities   (488,845)     (242,153)  
         
Cash flows from financing activities:        
Proceeds from the exercise of stock options   55,656     17,261  
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   (102,191)     (45,594)  
Net proceeds on revolving loan facility       7,000  
Net cash used in financing activities   (42,580)     (382,829)  
Effect of foreign currency translation   525     (208)  
Net increase (decrease) in cash and cash equivalents   120,068     (171,694)  
Cash and cash equivalents at beginning of period   186,319     274,520  
Cash and cash equivalents at end of period   $ 306,387     $ 102,826  
Supplemental disclosure of cash flow information:        
Interest paid   $ 14,514     $ 14,700  
Income taxes paid, net of refunds   $ 59,302     $ 60,926  
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,
    2020   2019   2020   2019
GAAP net income   $ 147,487     $ 192,741     $ 534,374     $ 438,197  
Effect of discrete income tax items       (10,170)     (3,008)     (10,170)  
Effect of disposal of non-operating assets, net of tax               (1,598)  
Effect of foreign currency-related (gains) losses, net of tax   (490)     94     (1,169)     (304)  
Effect of recognizing tax benefit on exercise of employee stock options   (8,768)     (29,074)     (85,962)     (34,096)  
Effect of payroll taxes on certain executive stock compensation, net of tax       1,295     2,867     1,295  
Non-GAAP net income   $ 138,229     $ 154,886     $ 447,102     $ 393,324  
                 
GAAP net income per diluted common share   $ 0.62     $ 0.81     $ 2.24     $ 1.82  
Non-GAAP net income per diluted common share   $ 0.58     $ 0.66     $ 1.88     $ 1.64  
                 
GAAP diluted weighted average common shares outstanding   238,591     237,892     238,564     241,158  
Effect on common equivalent shares from ASU 2016-09   (710)     (1,731)     (995)     (1,949)  
Non-GAAP diluted weighted average common shares outstanding   237,881     236,161     237,569     239,209  

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200520005826/en/

SOURCE: Copart, Inc.

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

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/zigman2/quotes/200378896/composite
US : U.S.: Nasdaq
$ 102.62
+0.61 +0.60%
Volume: 116,847
Sept. 25, 2020 10:38a
P/E Ratio
35.05
Dividend Yield
N/A
Market Cap
$23.95 billion
Rev. per Employee
$310,934
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