Copart, Inc. (NASDAQ: CPRT) today reported financial results for
the quarter ended January 31, 2017.
For the three months ended January 31, 2017, revenue, gross
margin, and net income were $349.5 million, $146.8 million, and
$66.1 million, respectively. These represent an increase in revenue
of $49.8 million, or 16.6%; an increase in gross margin of $22.2
million, or 17.8%; and an increase in net income of $7.1 million,
or 12.0%, respectively, from the same quarter last year. Fully
diluted earnings per share for the three months were $0.56 compared
to $0.47 last year, an increase of 19.1%.
For the six months ended January 31, 2017, revenue, gross
margin, and net income were $695.5 million, $292.1 million, and
$233.3 million, respectively. These represent an increase in
revenue of $107.0 million, or 18.2%; an increase in gross margin of
$46.6 million, or 19.0%; and an increase in net income of $121.7
million, or 109.1%, respectively, from the same period last year.
Fully diluted earnings per share for the six months were $1.97
compared to $0.89 last year, an increase of 121.3%.
Excluding the impact of foreign currency-related gains and
losses, 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 January 31, 2017
and 2016, were $0.58 and $0.45, respectively. Non-GAAP fully
diluted earnings per share for the six months ended
January 31, 2017 and 2016, were $1.14 and $0.86, 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 Wednesday, February 22, 2017, at 3 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
http://stream.conferenceamerica.com/copart022217. A replay of the
call will be available through April 22, 2017 by calling (877)
919-4059. Use confirmation code # 27485045.
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 and losses,
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 and losses, 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 January 31, Six Months
Ended January 31, 2017 2016
2017 2016 Service revenues and vehicle sales:
Service revenues $ 310,033 $ 260,417 $ 617,111 $ 511,384 Vehicle
sales 39,499 39,289 78,412 77,160 Total
service revenues and vehicle sales 349,532 299,706 695,523 588,544
Operating expenses: Yard operations 158,556 132,041 315,918 258,919
Cost of vehicle sales 33,686 34,127 66,773 66,195 Yard depreciation
and amortization 9,717 8,248 19,165 16,593 Yard stock-based payment
compensation 808 676 1,609 1,362 Gross
margin 146,765 124,614 292,058 245,475 General and administrative
27,675 24,376 58,599 51,087 General and administrative depreciation
and amortization 5,498 3,443 10,759 6,619 General and
administrative stock-based payment compensation 4,712 4,710
8,996 9,438 Total operating expenses 240,652
207,621 481,819 410,213 Operating
income 108,880 92,085 213,704 178,331 Other (expense) income:
Interest expense, net (5,760 ) (4,968 ) (11,382 ) (10,481 ) Other
(expense) income, net (3,021 ) 4,435 311 5,462
Total other expenses (8,781 ) (533 ) (11,071 ) (5,019 ) Income
before income taxes 100,099 91,552 202,633 173,312 Income tax
expense (benefit) 34,033 32,548 (30,713 ) 61,698
Net income $ 66,066 $ 59,004 $ 233,346
$ 111,614 Basic net income per common share $ 0.58
$ 0.50 $ 2.05 $ 0.94 Weighted average
common shares outstanding 114,571 117,306 113,644
118,731 Diluted net income per common share $
0.56 $ 0.47 $ 1.97 $ 0.89 Diluted
weighted average common shares outstanding 117,794 124,612
118,336 125,878
Copart, Inc.
Condensed Consolidated Balance
Sheets
(In thousands)
(Unaudited)
January 31, 2017 July 31, 2016 ASSETS
Current assets: Cash and cash equivalents $ 174,952 $ 155,849
Accounts receivable, net 340,438 266,270 Vehicle pooling costs and
inventories 43,579 38,987 Income taxes receivable 83,524 18,751
Deferred income taxes — 1,444 Prepaid expenses and other assets
16,759 18,005 Total current assets 659,252 499,306
Property and equipment, net 882,256 816,791 Intangibles, net 8,938
11,761 Goodwill 256,867 260,198 Deferred income taxes 1,236 23,506
Other assets 32,692 38,258 Total assets $ 1,841,241
$ 1,649,820
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities: Accounts payable and accrued
liabilities $ 184,968 $ 192,379 Deferred revenue 5,938 4,628 Income
taxes payable 7,624 5,625 Deferred income taxes 1,266 — Current
portion of revolving credit facility, and capital lease obligations
146,151 76,151 Total current liabilities 345,947
278,783 Deferred income taxes 3,446 3,816 Income taxes payable
27,470 25,641 Long-term debt and capital lease obligations, net of
discount 565,926 564,341 Other liabilities 2,749 2,783
Total liabilities 945,538 875,364 Commitments and
contingencies Stockholders' equity: Preferred stock — — Common
stock 11 11 Additional paid-in capital 429,957 392,445 Accumulated
other comprehensive loss (119,549 ) (109,194 ) Retained earnings
585,284 491,194 Total stockholders' equity 895,703
774,456 Total liabilities and stockholders' equity $
1,841,241 $ 1,649,820
Copart, Inc.
Condensed Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Six Months Ended January 31, 2017
2016 Cash flows from operating activities: Net income
$ 233,346 $ 111,614 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization,
including debt cost 30,146 23,294 Allowance for doubtful accounts
26 1,270 Equity in losses of unconsolidated affiliates 408 483
Stock-based payment compensation 10,605 10,800 Gain on sale of
property and equipment (79 ) (106 ) Deferred income taxes 23,466
(106 ) Changes in operating assets and liabilities: Accounts
receivable (74,789 ) (68,683 ) Vehicle pooling costs and
inventories (4,944 ) (6,449 ) Prepaid expenses and other current
assets 894 (216 ) Other assets (801 ) 448 Accounts payable and
accrued liabilities (4,599 ) 3,702 Deferred revenue 1,350 1,810
Income taxes receivable (64,757 ) (1,648 ) Income taxes payable
5,934 7,897 Other liabilities (678 ) (789 ) Net cash provided by
operating activities 155,528 83,321
Cash flows from
investing activities: Purchases of property and equipment
(92,412 ) (77,763 ) Investment in unconsolidated affiliate (1,050 )
— Proceeds from sale of property and equipment 386 396 Purchases of
marketable securities — (21,119 ) Net cash used in investing
activities (93,076 ) (98,486 )
Cash flows from financing
activities: Proceeds from the exercise of stock options 20,381
944 Proceeds from the issuance of Employee Stock Purchase Plan
shares 1,908 1,640 Repurchases of common stock — (325,000 )
Payments for employee stock-based tax withholdings (134,638 ) —
Proceeds from the issuance of long-term debt, net of discount —
68,000 Proceeds from revolving loan facility, net of repayments
72,000 — Principal payments on long-term debt — (37,500 )
Net cash used in financing activities (40,349 ) (291,916 ) Effect
of foreign currency translation (3,000 ) (7,515 ) Net increase
(decrease) in cash and cash equivalents 19,103 (314,596 ) Cash and
cash equivalents at beginning of period 155,849 456,012
Cash and cash equivalents at end of period $ 174,952
$ 141,416
Supplemental disclosure of cash flow
information: Interest paid $ 11,810 $ 11,294
Income taxes paid, net of refunds $ 4,616 $ 55,413
Additional Financial
Information
Reconciliation of GAAP to Non-GAAP
Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months Ended January 31, Six Months
Ended January 31, 2017 2016
2017 2016 GAAP net income $ 66,066 $ 59,004 $
233,346 $ 111,614 Effect of foreign currency-related losses
(gains), net of tax 2,720 (3,491 ) (127 ) (4,051 ) Effect of income
tax benefit of ASU 2016-09 adoption, net of tax (1) (1,347 ) (41 )
(102,742 ) (238 ) Effect of payroll taxes on certain executive
stock compensation, net of tax — — 3,307 48
Non-GAAP net income $ 67,439 $ 55,472 $
133,784 $ 107,373 GAAP diluted net income per
common share $ 0.56 $ 0.47 $ 1.97 $ 0.89
Non-GAAP diluted net income per common share $ 0.58 $
0.45 $ 1.14 $ 0.86 GAAP diluted
weighted average common shares outstanding 117,794 124,612 118,336
125,878 Effect on common equivalent shares from ASU 2016-09
adoption(1) (702 ) (1,704 ) (1,125 ) (1,638 ) Non-GAAP diluted
weighted average commons shares outstanding 117,092 122,908
117,211 124,240
(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/20170221006784/en/
Copart, Inc.Melissa Perry, 972-391-5090Executive Support
Manager, Office of the Chief Financial
Officermelissa.perry@copart.com
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