Business
Copart Reports Fourth Quarter Fiscal 2023 Financial Results
DALLAS--(BUSINESS WIRE)-- Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2023. For the three months
About this update from Copart, Inc.
DALLAS --(BUSINESS WIRE)-- Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2023 . For the three months ended July 31, 2023 , revenue, gross profit, and net income were $997.6 million , $457.6 million , and $347.8 million , respectively. These represent an increase in revenue of $114.2 million , or 12.9%; an increase in gross profit of $76.0 million , or 19.9%; and an increase in net income of $84.1 million , or 31.9%, respectively, from the same period last year. Fully diluted earnings per share for the three months ended July 31, 2023 were $0.36 compared to $0.27 last year, an increase of 33.3%. For the year ended July 31, 2023 , revenue, gross profit, and net income were $3.9 billion , $1.7 billion , and $1.2 billion , respectively. These represent an increase in revenue of $368.6 million , or 10.5%; an increase in gross profit of $130.8 million , or 8.1%; and an increase in net income of $147.6 million , or 13.5%, respectively, from the same period last year. Fully diluted earnings per share for the year ended July 31, 2023 were $1.28 compared to $1.13 last year, an increase of 13.3%. Excluding the impact of certain discrete income tax items, the effect of extinguishment of debt, and certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the three months ended July 31, 2023 and 2022, were $0.34 and $0.28 , respectively, which was an increase of 21.4%. Excluding the impact of certain discrete income tax items, income, certain legal matters, the effect of extinguishment of debt, and certain income tax benefits related to stock-based compensation, non-GAAP fully diluted earnings per share for the year ended July 31, 2023 and 2022, were $1.26 and $1.12 , respectively, which was an increase of 12.5%. 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, September 14, 2023 , at 5:30 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 at www.copart.com/investorrelations . A replay of the call will be available through November 2023 by visiting www.copart.com/investorrelations . 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 vehicles to dealers, dismantlers, rebuilders, exporters, and to the general public. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers, vehicle rental companies, 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 . 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 discrete income tax items, income, certain legal matters, the effect of extinguishment of debt, and 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 July 31 , Twelve Months Ended July 31 , 2023 2022 % Change 2023 2022 % Change Service revenues and vehicle sales: Service revenues $ 834,242 $ 707,816 17.9 % $ 3,198,128 $ 2,853,040 12.1 % Vehicle sales 163,349 175,572 (7.0 )% 671,390 647,881 3.6 % Total service revenues and vehicle sales 997,591 883,388 12.9 % 3,869,518 3,500,921 10.5 % Operating expenses: Yard operations 348,332 307,717 13.2 % 1,369,006 1,186,457 15.4 % Cost of vehicle sales 149,216 161,255 (7.5 )% 614,498 585,203 5.0 % Yard depreciation and amortization 40,577 31,530 28.7 % 142,097 117,913 20.5 % Yard stock-based compensation 1,888 1,314 43.7 % 6,926 5,127 35.1 % Gross profit 457,578 381,572 19.9 % 1,736,991 1,606,221 8.1 % General and administrative 55,522 43,257 28.4 % 200,294 177,314 13.0 % General and administrative depreciation and amortization 4,058 4,803 (15.5 )% 17,381 20,072 (13.4 )% General and administrative stock-based compensation 7,381 8,719 (15.3 )% 32,747 33,838 (3.2 )% Total operating expenses 606,974 558,595 8.7 % 2,382,949 2,125,924 12.1 % Operating income 390,617 324,793 20.3 % 1,486,569 1,374,997 8.1 % Other income (expense): Interest income (expense), net 29,148 (2,656 ) (1197.4 )% 65,928 (16,688 ) (495.1 )% Loss on extinguishment of debt — (16,759 ) 100.0 % — (16,759 ) 100.0 % Other income (expense), net 3,927 (1,910 ) (305.6 )% 1,831 (596 ) (407.2 )% Total other income (expense) 33,075 (21,325 ) (255.1 )% 67,759 (34,043 ) (299.0 )% Income before income taxes 423,692 303,468 39.6 % 1,554,328 1,340,954 15.9 % Income tax expense 75,907 39,733 91.0 % 316,587 250,824 26.2 % Net income $ 347,785 $ 263,735 31.9 % $ 1,237,741 $ 1,090,130 13.5 % Basic net income per common share $ 0.36 $ 0.28 28.6 % $ 1.30 $ 1.15 13.0 % Weighted average common shares outstanding 955,773 951,364 0.5 % 953,574 949,676 0.4 % Diluted net income per common share $ 0.36 $ 0.27 33.3 % $ 1.28 $ 1.13 13.3 % Diluted weighted average common shares outstanding 970,255 962,944 0.8 % 966,647 964,604 0.2 % Copart, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) July 31, 2023 July 31, 2022 ASSETS Current assets: Cash, cash equivalents, and restricted cash $ 957,395 $ 1,384,236 Investment in held to maturity securities 1,406,589 — Accounts receivable, net 702,038 578,573 Vehicle pooling costs 123,725 112,242 Inventories 39,973 58,791 Income taxes receivable 6,574 49,882 Prepaid expenses and other assets 26,310 18,731 Total current assets 3,262,604 2,202,455 Property and equipment, net 2,844,339 2,485,764 Operating lease right-of-use assets 108,139 116,303 Intangibles, net 62,702 54,680 Goodwill 394,289 401,954 Other assets 65,806 47,708 Total assets $ 6,737,879 $ 5,308,864 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 440,810 $ 399,034 Deferred revenue 26,117 20,061 Income taxes payable 4,374 — Current portion of operating and finance lease liabilities 21,468 21,794 Total current liabilities 492,769 440,889 Deferred income taxes 89,492 80,060 Income taxes payable 69,193 64,637 Operating and finance lease liabilities, net of current portion 88,082 95,683 Long-term debt and other liabilities, net of discount 10,903 1,996 Total liabilities 750,439 683,265 Commitments and contingencies Stockholders’ equity: Preferred stock — — Common stock 96 96 Additional paid-in capital 938,910 838,460 Accumulated other comprehensive loss (141,006 ) (169,365 ) Retained earnings 5,189,440 3,956,408 Total stockholders’ equity 5,987,440 4,625,599 Total liabilities and stockholders’ equity $ 6,737,879 $ 5,308,864 Copart, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Year Ended July 31 , 2023 2022 Cash flows from operating activities: Net income $ 1,237,741 $ 1,090,130 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization, including debt cost 159,684 138,605 Allowance for credit losses (gains) 1,946 1,349 Equity in losses (earnings) of unconsolidated affiliates 5,347 284 Stock-based compensation 39,673 38,965 Gain on sale of property and equipment (1,846 ) (939 ) Loss on extinguishment of debt — 16,759 Deferred income taxes 9,946 17,017 Changes in operating assets and liabilities, net of effects from acquisitions: Accounts receivable (123,207 ) (97,750 ) Vehicle pooling costs (10,989 ) (18,342 ) Inventories 26,549 (10,851 ) Prepaid expenses and other current and non-current assets (59,949 ) (5,156 ) Operating lease right-of-use assets and lease liabilities 350 715 Accounts payable and accrued liabilities 18,010 36,306 Deferred revenue 5,896 (574 ) Income taxes receivable 33,193 (29,884 ) Income taxes payable 21,866 49 Net cash provided by operating activities 1,364,210 1,176,683 Cash flows from investing activities: Purchase of short-term investments (1,406,588 ) (374,866 ) Purchases of property and equipment (516,636 ) (337,448 ) Purchases of assets and liabilities in connection with acquisitions — (106,604 ) Proceeds from sale of property and equipment 33,919 4,333 Proceeds from the sale of held to maturity securities — 374,866 Investment in unconsolidated affiliate (2,744 ) (2,591 ) Net cash used in investing activities (1,892,049 ) (442,310 ) Cash flows from financing activities: Proceeds from the exercise of stock options 49,679 28,108 Proceeds from the issuance of Employee Stock Purchase Plan shares 11,098 9,625 Payments for employee stock-based tax withholdings (4,709 ) (1,925 ) Issuance of principal on revolver facility 44,494 — Principal payments on revolver facility (33,924 ) — Debt offering costs — (1,212 ) Principal payments on long-term debt — (416,759 ) Payments of finance lease obligations (23 ) (530 ) Net cash provided by (used in) financing activities 66,615 (382,693 ) Effect of foreign currency translation 34,383 (15,704 ) Net (decrease) increase in cash, cash equivalents, and restricted cash (426,841 ) 335,976 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 $ 957,395 $ 1,384,236 Supplemental disclosure of cash flow information: Interest paid $ 2,614 $ 18,539 Income taxes paid, net of refunds $ 257,514 $ 263,226 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 , 2023 2022 2023 2022 GAAP net income $ 347,785 $ 263,735 $ 1,237,741 $ 1,090,130 Effect of certain discrete income tax items (1,448 ) — (1,448 ) (17,490 ) Effect of certain legal matters, net of tax — — — 5,092 Effect of extinguishment of debt, net of tax — 12,929 — 12,929 Effect of recognizing tax benefit on exercise of stock-based compensation (15,911 ) (5,077 ) (21,021 ) (14,274 ) Non-GAAP net income $ 330,426 $ 271,587 $ 1,215,272 $ 1,076,387 GAAP net income per diluted common share $ 0.36 $ 0.27 $ 1.28 $ 1.13 Non-GAAP net income per diluted common share $ 0.34 $ 0.28 $ 1.26 $ 1.12 View source version on businesswire.com : https://www.businesswire.com/news/home/20230914691291/en/ Brooke Boston , Executive Assistant, Office of the Chief Financial Officer [email protected] Source: Copart, Inc.