Copart Inc (CPRT) 8-K Material Event Thu May 19 2022

For the three months ended April 30, 2022, revenue, gross profit, and net income were $939.9 million, $436.3 million, and $278.6 million, respectively. These represent an increase in revenue of $206.0 million, or 28.1%; an increase in gross profit of $54.9 million, or 14.4%; and a decrease in net income of $(8.2) million, or (2.9)%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $1.16 compared to $1.19 last year, a decrease of (2.5)%.

For the nine months ended April 30, 2022, revenue, gross profit, and net income were $2,617.5 million, $1,224.6 million, and $826.4 million, respectively. These represent an increase in revenue of $673.7 million, or 34.7%; an increase in gross profit of $239.0 million, or 24.3%; and an increase in net income of $145.9 million, or 21.4%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $3.42 compared to $2.83 last year, an increase of 20.8%.

Excluding the impact of certain income tax benefits related to stock-based compensation and certain legal matters, non-GAAP fully diluted earnings per share for the three months ended April 30, 2022 and 2021 were $1.17, and $1.09, respectively, which was an increase of 7.3%. Excluding the impact of certain income tax benefits related to stock-based compensation, certain legal matters and discrete income tax items, non-GAAP fully diluted earnings per share for the nine months ended April 30, 2022 and 2021, were $3.34, and $2.68, respectively, which was an increase of 24.6%. 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 19, 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 August 2022 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.

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

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, certain legal matters and discrete income tax items. 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.


Contact:			Brooke Boston, Executive Assistant, Office of the Chief Financial Officer
			brooke.boston@copart.com

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended April 30,						Nine Months Ended April 30,
	2022		2021		% Change		2022		2021		% Change
Service revenues and vehicle sales:
Service revenues	$	766,316	$	623,846	22.8	%	$	2,145,224	$	1,671,819	28.3	%
Vehicle sales	173,625		110,064		57.7	%	472,309		272,062		73.6	%
Total service revenues and vehicle sales	939,941		733,910		28.1	%	2,617,533		1,943,881		34.7	%
Operating expenses:
Yard operations	313,365		230,794		35.8	%	878,740		646,690		35.9	%
Cost of vehicle sales	157,236		94,498		66.4	%	423,948		232,487		82.4	%
Yard depreciation and amortization	31,646		25,876		22.3	%	86,383		74,350		16.2	%
Yard stock-based compensation	1,417		1,401		1.1	%	3,813		4,746		(19.7)	%
Gross profit	436,277		381,341		14.4	%	1,224,649		985,608		24.3	%
General and administrative	50,188		39,174		28.1	%	134,057		110,326		21.5	%
General and administrative depreciation and amortization	4,933		6,090		(19.0)	%	15,269		17,957		(15.0)	%
General and administrative stock-based compensation	8,401		7,966		5.5	%	25,119		22,399		12.1	%

Total operating expenses	567,186		405,799		39.8	%	1,567,329		1,108,955		41.3	%
Operating income	372,755		328,111		13.6	%	1,050,204		834,926		25.8	%
Other expense:
Interest expense, net	(4,492)		(5,346)		(16.0)	%	(14,032)		(15,227)		(7.8)	%
Other income, net	1,342		770		74.3	%	1,314		3,103		(57.7)	%
Total other expense	(3,150)		(4,576)		(31.2)	%	(12,718)		(12,124)		4.9	%
Income before income taxes	369,605		323,535		14.2	%	1,037,486		822,802		26.1	%
Income tax expense	90,985		36,739		147.7	%	211,091		142,281		48.4	%
Net income	$	278,620	$	286,796	(2.9)	%	$	826,395	$	680,521	21.4	%

Basic net income per common share	$	1.17	$	1.21	(3.3)	%	$	3.48	$	2.88	20.8	%
Weighted average common shares outstanding	237,505		236,396		0.5	%	237,277		236,110		0.5	%

Diluted net income per common share	$	1.16	$	1.19	(2.5)	%	$	3.42	$	2.83	20.8	%
Diluted weighted average common shares outstanding	240,724		240,208		0.2	%	241,288		240,149		0.5	%

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)


	April 30, 2022		July 31, 2021
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash	$	1,454,818	$	1,048,260
Investment in held to maturity securities	224,889		—
Accounts receivable, net	585,914		480,628
Vehicle pooling costs	114,028		94,449
Inventories	56,988		44,968
Income taxes receivable	1,581		20,012
Prepaid expenses and other assets	19,208		14,294
Total current assets	2,457,426		1,702,611
Property and equipment, net	2,402,809		2,296,624
Operating lease right-of-use assets	121,006		119,487
Intangibles, net	40,854		45,873
Goodwill	348,000		355,717
Other assets	73,779		41,831
Total assets	$	5,443,874	$	4,562,143

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	398,414	$	369,826
Deferred revenue	21,087		20,973
Income taxes payable	6,907		7,760
Current portion of operating and finance lease liabilities	22,687		22,472
Total current liabilities	449,095		421,031
Deferred income taxes	78,023		63,969
Income taxes payable	61,359		52,345
Operating and finance lease liabilities, net of current portion	99,610		97,961
Long-term debt and other liabilities, net of discount	402,733		397,636

Total liabilities	1,090,820		1,032,942
Commitments and contingencies
Stockholders' equity:
Preferred stock	—		—
Common stock	24		24
Additional paid-in capital	811,900		761,834
Accumulated other comprehensive loss	(152,596)		(100,860)
Retained earnings	3,693,726		2,868,203
Total stockholders' equity	4,353,054		3,529,201
Total liabilities and stockholders' equity	$	5,443,874	$	4,562,143

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended April 30,
	2022		2021
Cash flows from operating activities:
Net income	$	826,395	$	680,521
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including debt cost	102,333		93,141
Allowance for credit loss	1,456		(1,429)
Equity in losses (earnings) of unconsolidated affiliates	794		(2,121)

Stock-based compensation	28,932		27,145
Gain on sale of property and equipment	(1,280)		(1,257)
Deferred income taxes	14,582		(14,130)
Changes in operating assets and liabilities:
Accounts receivable	(109,636)		(81,593)
Vehicle pooling costs	(20,029)		(12,777)
Inventories	(13,367)		(18,788)
Prepaid expenses, other current and non-current assets	(37,842)		6,879
Operating lease right-of-use assets and lease liabilities	436		389
Accounts payable, accrued liabilities and other liabilities	45,745		47,914
Deferred revenue	388		8,467
Income taxes receivable	18,416		16,152
Income taxes payable	6,531		13,692

Net cash provided by operating activities	863,854		762,205

Cash flows from investing activities:
Purchases of property and equipment	(234,810)		(364,395)
Purchase of assets in connection with acquisitions	(493)		—
Proceeds from sale of property and equipment	2,622		599
Purchase of held to maturity securities	(374,866)		—
Proceeds from the sale of held to maturity securities	149,977		—

Net cash used in investing activities	(457,570)		(363,796)

Cash flows from financing activities:
Proceeds from the exercise of stock options	16,108		28,829
Proceeds from the issuance of Employee Stock Purchase Plan shares	5,026		4,880

Payments for employee stock-based tax withholdings	(872)		(938)



Debt offering costs	(1,212)		—
Payments of finance lease obligations	(472)		(962)


Net cash provided by financing activities	18,578		31,809
Effect of foreign currency translation	(18,304)		3,954
Net increase in cash, cash equivalents, and restricted cash	406,558		434,172
Cash, cash equivalents, and restricted cash at beginning of period	1,048,260		477,718
Cash, cash equivalents, and restricted cash at end of period	$	1,454,818	$	911,890
Supplemental disclosure of cash flow information:
Interest paid	$	14,485	$	14,736
Income taxes paid, net of refunds	$	195,521	$	126,303

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

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,
	2022		2021		2022		2021
GAAP net income	$	278,620	$	286,796	$	826,395	$	680,521

Effect of certain discrete income tax items	—		(19,764)		(17,490)		(19,764)
Effect of certain legal matters, net of tax	5,092		—		5,092		—




Effect of recognizing tax benefit on exercise of stock-based compensation	(2,244)		(4,910)		(9,197)		(18,850)

Non-GAAP net income	$	281,468	$	262,122	$	804,800	$	641,907

GAAP net income per diluted common share	$	1.16	$	1.19	$	3.42	$	2.83
Non-GAAP net income per diluted common share	$	1.17	$	1.09	$	3.34	$	2.68

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

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Exhibit 99.1: Additional Exhibits

Ticker: CPRT
CIK: 900075
Form Type: 8-K Corporate News
Accession Number: 0000900075-22-000026
Submitted to the SEC: Wed May 18 2022 6:18:47 PM EST
Accepted by the SEC: Thu May 19 2022
Period: Wednesday, May 18, 2022
Industry: Retail Auto Dealers And Gasoline Stations