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Copart Reports First Quarter Fiscal 2023 Financial Results

DALLAS, November 16, 2022--(BUSINESS WIRE)--Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended October 31, 2022.

For the three months ended October 31, 2022, revenue, gross profit, and net income were $893.4 million, $369.5 million, and $245.8 million, respectively. These represent an increase in revenue of $83.2 million, or 10.3%; a decrease in gross profit of $15.5 million, or 4.0%; and a decrease in net income of $14.5 million, or 5.6%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.51 compared to $0.54 last year, a decrease of 5.6%.

On September 28th, 2022, Hurricane Ian, a Category 4 hurricane, came ashore in Florida, with sustained winds of 150mph, the first such Category 4 storm to impact Southwest Florida since Hurricane Charley in 2004. Hurricane Ian adversely impacted the operating results for the three months ended October 31, 2022 resulting in additional costs of approximately $25 million. These costs included premiums for subhaulers, labor costs incurred from overtime, and travel and lodging due to the reassignment of employees to the affected region.

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 October 31, 2022 and 2021 were $0.51, and $0.53, respectively, which was a decrease of 3.8%. 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, November 17, 2022, 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 via hyperlink at www.copart.com/investorrelations. A replay of the call will be available through February 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 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, 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 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, 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

October 31,

2022

2021

% Change

Service revenues and vehicle sales:

Service revenues

$

726,840

$

667,818

8.8

%

Vehicle sales

166,532

142,314

17.0

%

Total service revenues and vehicle sales

893,372

810,132

10.3

%

Operating expenses:

Yard operations

336,972

271,276

24.2

%

Cost of vehicle sales

151,112

126,408

19.5

%

Yard depreciation and amortization

34,360

26,437

30.0

%

Yard stock-based compensation

1,445

981

47.3

%

Gross profit

369,483

385,030

(4.0

) %

General and administrative

44,535

41,115

8.3

%

General and administrative depreciation and amortization

4,698

5,323

(11.7

) %

General and administrative stock-based compensation

8,747

8,471

3.3

%

Total operating expenses

581,869

480,011

21.2

%

Operating income

311,503

330,121

(5.6

) %

Other expense:

Interest income (expense), net

4,422

(5,107

)

186.6

%

Other (expense) income, net

(2,822

)

812

(447.5

) %

Total other income (expense)

1,600

(4,295

)

137.3

%

Income before income taxes

313,103

325,826

(3.9

) %

Income tax expense

67,255

65,463

2.7

%

Net income

$

245,848

$

260,363

(5.6

) %

Basic net income per common share

$

0.52

$

0.55

(5.5

) %

Weighted average common shares outstanding

476,099

474,136

0.4

%

Diluted net income per common share

$

0.51

$

0.54

(5.6

) %

Diluted weighted average common shares outstanding

482,168

482,442

(0.1

) %

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

October 31, 2022

July 31, 2022

ASSETS

Current assets:

Cash, cash equivalents, and restricted cash

$

1,539,391

$

1,384,236

Accounts receivable, net

628,964

578,573

Vehicle pooling costs

116,526

112,242

Inventories

53,866

58,791

Income taxes receivable

5,261

49,882

Prepaid expenses and other assets

20,597

18,731

Total current assets

2,364,605

2,202,455

Property and equipment, net

2,582,481

2,485,764

Operating lease right-of-use assets

112,530

116,303

Intangibles, net

51,847

54,680

Goodwill

394,844

401,954

Other assets

87,370

47,708

Total assets

$

5,593,677

$

5,308,864

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

446,974

$

399,034

Deferred revenue

19,319

20,061

Income taxes payable

16,101

Current portion of operating and finance lease liabilities

22,083

21,794

Total current liabilities

504,477

440,889

Deferred income taxes

77,452

80,060

Income taxes payable

65,275

64,637

Operating and finance lease liabilities, net of current portion

91,670

95,683

Long-term debt and other liabilities, net of discount

1,969

1,996

Total liabilities

740,843

683,265

Commitments and contingencies

Stockholders' equity:

Preferred stock

Common stock

48

48

Additional paid-in capital

849,761

838,508

Accumulated other comprehensive loss

(198,936

)

(169,365

)

Retained earnings

4,201,961

3,956,408

Total stockholders' equity

4,852,834

4,625,599

Total liabilities and stockholders' equity

$

5,593,677

$

5,308,864

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three Months Ended October 31,

2022

2021

Cash flows from operating activities:

Net income

$

245,848

$

260,363

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization, including debt cost

39,327

32,049

Allowance for credit loss

1,396

295

Equity in losses of unconsolidated affiliates

2,122

168

Stock-based compensation

10,192

9,452

Gain on sale of property and equipment

(113

)

(440

)

Deferred income taxes

(1,780

)

8,319

Changes in operating assets and liabilities:

Accounts receivable

(53,837

)

(82,676

)

Vehicle pooling costs

(4,643

)

(21,697

)

Inventories

4,020

(3,463

)

Prepaid expenses, other current and non-current assets

(35,303

)

3,071

Operating lease right-of-use assets and lease liabilities

52

382

Accounts payable, accrued liabilities and other liabilities

40,372

62,013

Deferred revenue

(588

)

(979

)

Income taxes receivable

44,595

19,479

Income taxes payable

19,899

26,204

Net cash provided by operating activities

311,559

312,540

Cash flows from investing activities:

Purchases of property and equipment

(152,655

)

(64,696

)

Proceeds from sale of property and equipment

185

813

Net cash used in investing activities

(152,470

)

(63,883

)

Cash flows from financing activities:

Proceeds from the exercise of stock options

1,061

5,572

Payments for employee stock-based tax withholdings

(295

)

(249

)

Payments of finance lease obligations

(7

)

(157

)

Net cash provided by financing activities

759

5,166

Effect of foreign currency translation

(4,693

)

(3,710

)

Net increase in cash, cash equivalents, and restricted cash

155,155

250,113

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

$

1,539,391

$

1,298,373

Supplemental disclosure of cash flow information:

Interest paid

$

64

$

5,080

Income taxes paid, net of refunds

$

5,700

$

10,089

Copart, Inc.

Additional Financial Information

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

October 31,

2022

2021

GAAP net income

$

245,848

$

260,363

Effect of recognizing tax benefit on exercise of stock-based compensation

(625

)

(2,987

)

Non-GAAP net income

$

245,223

$

257,376

GAAP net income per diluted common share

$

0.51

$

0.54

Non-GAAP net income per diluted common share

$

0.51

$

0.53

View source version on businesswire.com: https://www.businesswire.com/news/home/20221116006057/en/

Contacts

Brooke Boston, Executive Assistant, Office of the Co-Chief Executive Officer
brooke.boston@copart.com