Copart, Inc. (NASDAQ: CPRT) today reported financial results for
the quarter ended October 31, 2016.
For the three months ended October 31, 2016, revenue, gross
margin, and net income were $346.0 million, $145.3 million, and
$167.3 million, respectively. These represent an increase in
revenue of $57.2 million, or 19.8%; an increase in gross margin of
$24.4 million, or 20.2%; and an increase in net income of $114.7
million, or 218.0%, respectively, from the same quarter last year.
Fully diluted earnings per share for the three months were $1.41
compared to $0.41 last year, an increase of 243.9%.
Excluding the impact of foreign currency-related gains, certain
income tax benefits and payroll taxes related to accounting for
stock option exercises, non-GAAP fully diluted earnings per share
for the three months ended October 31, 2016 and 2015, were $0.57
and $0.41, 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 Tuesday, November 22, 2016, 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/copart112216. A replay of the
call will be available through January 20, 2017 by calling (877)
919-4059. Use confirmation code # 16477400.
About Copart
Copart, founded in 1982, provides vehicle sellers with a full
range of remarketing services to process and sell salvage and clean
title vehicles to dealers, dismantlers, rebuilders, exporters, and
in some states, to end users. Copart remarkets the vehicles through
Internet sales using its VB3 technology. Copart sells vehicles on
behalf of insurance companies, banks, financial institutions,
charities, car dealerships, fleet operators, vehicle rental
companies, as well as vehicles sourced from the general public. The
company currently operates in the United States (www.copart.com),
Canada (www.copart.ca), the United Kingdom (www.copart.co.uk),
Brazil (www.copart.com.br), Germany (www.copart.de), the United
Arab Emirates, Oman and Bahrain (www.copartmea.com), Spain
(www.copart.es), Ireland (www.copart.ie), and India
(www.copart.in). Copart links sellers to more than 750,000 Members
in more than 150 countries worldwide through its multi-channel
platform. In 2015, Copart was ranked at the top of Deloitte’s “The
Exceptional 100” list of companies, which reviewed U.S. publicly
traded companies based upon a multidimensional approach to
measuring financial performance. For more information, or to become
a Member, visit www.copart.com.
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
reflect the impact of foreign currency-related gains, certain
income tax benefits and payroll taxes related to accounting for
stock option exercises. 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
foreign currency-related gains, certain income tax benefits and
payroll taxes related to accounting for stock option exercises.
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.
Condensed Consolidated Statements of
Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended October 31, 2016
2015 Service revenues and vehicle sales:
Service revenues $ 307,078 $ 250,967 Vehicle sales 38,913
37,871 Total service revenues and vehicle sales 345,991
288,838 Operating expenses: Yard operations 157,362 126,878 Cost of
vehicle sales 33,087 32,068 Yard depreciation and amortization
9,448 8,345 Yard stock-based payment compensation 801 686
Gross margin 145,293 120,861 General and administrative
30,924 26,711 General and administrative depreciation and
amortization 5,261 3,176 General and administrative stock-based
payment compensation 4,284 4,728 Total operating
expenses 241,167 202,592 Operating income 104,824
86,246 Other (expense) income: Interest expense, net (5,622 )
(5,513 ) Other income, net 3,332 1,027 Total other
expenses (2,290 ) (4,486 ) Income before income taxes 102,534
81,760 Income tax (benefit) expense (64,746 ) 29,150 Net
income $ 167,280 $ 52,610 Basic net income per
common share $ 1.48 $ 0.44 Weighted average common
shares outstanding 112,718 120,155 Diluted net
income per common share $ 1.41 $ 0.41 Diluted
weighted average common shares outstanding 118,879 127,144
Copart, Inc.
Condensed Consolidated Balance
Sheets
(In thousands)
(Unaudited)
October 31, 2016 July 31, 2016 ASSETS
Current assets: Cash and cash equivalents $ 168,421 $ 155,849
Accounts receivable, net 294,358 266,270 Vehicle pooling costs and
inventories 40,202 38,987 Income taxes receivable 110,923 18,751
Deferred income taxes 711 1,444 Prepaid expenses and other assets
16,096 18,005 Total current assets 630,711 499,306
Property and equipment, net 840,587 816,791 Intangibles, net 10,241
11,761 Goodwill 255,093 260,198 Deferred income taxes 1,912 23,506
Other assets 31,852 38,258 Total assets $ 1,770,396
$ 1,649,820
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities: Accounts payable and accrued
liabilities $ 175,969 $ 192,379 Deferred revenue 3,975 4,628 Income
taxes payable 6,583 5,625 Current portion of long-term debt,
revolving credit facility, and capital lease obligations 171,151
76,151 Total current liabilities 357,678 278,783
Deferred income taxes 3,380 3,816 Income taxes payable 26,867
25,641 Long-term debt and capital lease obligations, net of
discount 573,030 564,341 Other liabilities 2,034 2,783
Total liabilities 962,989 875,364 Commitments and
contingencies Stockholders' equity: Preferred stock — — Common
stock 11 11 Additional paid-in capital 416,125 392,445 Accumulated
other comprehensive loss (127,969 ) (109,194 ) Retained earnings
519,240 491,194 Total stockholders' equity 807,407
774,456 Total liabilities and stockholders' equity $
1,770,396 $ 1,649,820
Copart, Inc.
Condensed Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Three Months Ended October 31, 2016
2015 Cash flows from operating activities: Net income
$ 167,280 $ 52,610 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization,
including debt cost 14,820 11,562 Allowance for doubtful accounts
22 1,032 Equity in losses of unconsolidated affiliates 349 158
Stock-based payment compensation 5,085 5,414 Loss (gain) on sale of
property and equipment 38 (60 ) Deferred income taxes 22,088 (870 )
Changes in operating assets and liabilities: Accounts receivable
(29,472 ) (16,910 ) Vehicle pooling costs and inventories (1,783 )
(2,252 ) Prepaid expenses and other current assets 1,392 (1,115 )
Other assets (202 ) (1,036 ) Accounts payable and accrued
liabilities (14,828 ) 77 Deferred revenue (602 ) (5 ) Income taxes
receivable (92,172 ) 5,136 Income taxes payable 2,615 23,483 Other
liabilities (337 ) (433 ) Net cash provided by operating activities
74,293 76,791
Cash flows from investing activities:
Purchases of property and equipment (38,209 ) (20,167 ) Investment
in unconsolidated affiliate (1,050 ) — Proceeds from sale of
property and equipment 190 443 Purchases of marketable securities —
(21,119 ) Net cash used in investing activities (39,069 )
(40,843 )
Cash flows from financing activities:
Proceeds from the exercise of stock options 13,977 368 Payments for
employee stock-based tax withholdings (134,615 ) — Proceeds from
revolving loan facility, net of repayments 103,900 — Principal
payments on long-term debt — (18,750 ) Net cash used in
financing activities (16,738 ) (18,382 ) Effect of foreign currency
translation (5,914 ) (662 ) Net increase in cash and cash
equivalents 12,572 16,904 Cash and cash equivalents at beginning of
period 155,849 456,012 Cash and cash equivalents at
end of period $ 168,421 $ 472,916
Supplemental
disclosure of cash flow information: Interest paid $ 4,333
$ 5,723 Income taxes paid, net of refunds $ 2,677
$ 1,292
Additional Financial
Information
Reconciliation of GAAP to Non-GAAP
Financial Measures
(In thousands)
(Unaudited)
Three Months Ended October 31,
2016 2015 GAAP net income $ 167,280 $
52,610 Effect of foreign currency-related gains, net of tax (2,847
) (560 ) Effect of income tax benefit of ASU 2016-09 adoption, net
of tax (1) (101,395 ) (197 ) Effect of payroll taxes on executive
stock compensation, net of tax 3,307 48 Non-GAAP net
income $ 66,345 $ 51,901 GAAP diluted net
income per common share $ 1.41 $ 0.41 Non-GAAP
diluted net income per common share $ 0.57 $ 0.41
GAAP diluted weighted average common shares outstanding
118,879 127,144 Effect on common equivalent shares from ASU 2016-09
adoption(1) (1,549 ) (1,572 ) Non-GAAP diluted weighted average
commons shares outstanding 117,330 125,572
(1) In March 2016, the FASB issued ASU No. 2016-09, Improvements
to Employee Share-Based Payment Accounting. Under this standard,
all excess tax benefits and tax deficiencies related to exercises
of stock options are recognized as income tax expense or benefit in
the income statement as discrete items in the reporting period in
which they occur. Additionally, excess tax benefits are classified
as an operating activity on the consolidated statements of cash
flows. The Company early adopted ASU 2016-09 during the fourth
quarter of fiscal 2016 on a modified retrospective basis. For a
more complete discussion, please review the Company's Annual Report
on Form 10-K, filed with the Securities and Exchange Commission on
September 28, 2016.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161121006252/en/
Copart, Inc.Melissa Perry, 972-391-5090Executive Support
Manager, Office of the Chief Financial
Officermelissa.perry@copart.com
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