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NPA parent Copart reveals fiscal Q1 2021 earnings
Dallas-based Copart, parent company of National Powersport Auctions (NPA) today reported financial results for the quarter ended Oct. 31, 2020.
For the three months ended Oct. 31, revenue, gross profit and net income were $592.9 million, $296.8 million, and $200.3 million, respectively. These represent an increase in revenue of $38.5 million, or 6.9%; an increase in gross profit of $41.9 million, or 16.4%; and a decrease in net income of $17.9 million, or 8.2%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.83 compared to $0.91 last year, a decrease of 8.8%.
Excluding the impact of discrete income tax items, foreign currency-related gains, certain income tax benefits and payroll taxes related to accounting for stock option exercises, and the effect on common equivalent shares from ASU 2016-09, non-GAAP fully diluted earnings per share for the three months ended Oct. 31, 2020 and 2019, were $0.79 and $0.65, respectively, an increase of 21.5%.
| Copart, Inc.Consolidated Statements of Income(In thousands, except per share amounts)(Unaudited) | ||||||||
| Three Months Ended October 31, | ||||||||
| 2020 | 2019 | |||||||
| Service revenues and vehicle sales: | ||||||||
| Service revenues | $ | 515,372 | $ | 487,856 | ||||
| Vehicle sales | 77,568 | 66,568 | ||||||
| Total service revenues and vehicle sales | 592,940 | 554,424 | ||||||
| Operating expenses: | ||||||||
| Yard operations | 206,986 | 222,879 | ||||||
| Cost of vehicle sales | 64,360 | 58,764 | ||||||
| Yard depreciation and amortization | 23,294 | 16,820 | ||||||
| Yard stock-based compensation | 1,531 | 1,092 | ||||||
| Gross profit | 296,769 | 254,869 | ||||||
| General and administrative | 35,138 | 38,843 | ||||||
| General and administrative depreciation and amortization | 5,655 | 6,194 | ||||||
| General and administrative stock-based compensation | 7,382 | 4,441 | ||||||
| Total operating expenses | 344,346 | 349,033 | ||||||
| Operating income | 248,594 | 205,391 | ||||||
| Other expense: | ||||||||
| Interest expense, net | (5,032 | ) | (4,026 | ) | ||||
| Other income, net | 3,253 | 717 | ||||||
| Total other expense | (1,779 | ) | (3,309 | ) | ||||
| Income before income taxes | 246,815 | 202,082 | ||||||
| Income tax expense (benefit) | 46,530 | (16,098 | ) | |||||
| Net income | $ | 200,285 | $ | 218,180 | ||||
| Basic net income per common share | $ | 0.85 | $ | 0.94 | ||||
| Weighted average common shares outstanding | 235,791 | 231,169 | ||||||
| Diluted net income per common share | $ | 0.83 | $ | 0.91 | ||||
| Diluted weighted average common shares outstanding | 239,968 | 238,662 |
| Copart, Inc.Consolidated Balance Sheets(In thousands)(Unaudited) | ||||||||
| October 31, 2020 | July 31, 2020 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents, and restricted cash | $ | 605,732 | $ | 477,718 | ||||
| Accounts receivable, net | 407,897 | 350,207 | ||||||
| Vehicle pooling costs | 84,128 | 73,684 | ||||||
| Inventories | 28,244 | 20,080 | ||||||
| Income taxes receivable | 915 | 26,740 | ||||||
| Prepaid expenses and other assets | 11,260 | 15,330 | ||||||
| Total current assets | 1,138,176 | 963,759 | ||||||
| Property and equipment, net | 2,072,059 | 1,941,719 | ||||||
| Operating lease right-of-use assets | 112,275 | 118,455 | ||||||
| Intangibles, net | 45,864 | 47,772 | ||||||
| Goodwill | 342,576 | 343,622 | ||||||
| Deferred income taxes | 212 | 213 | ||||||
| Other assets | 30,026 | 39,721 | ||||||
| Total assets | $ | 3,741,188 | $ | 3,455,261 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 359,816 | $ | 318,530 | ||||
| Deferred revenue | 9,476 | 8,233 | ||||||
| Income taxes payable | 12,640 | 3,709 | ||||||
| Current portion of operating lease liabilities | 24,011 | 24,821 | ||||||
| Current portion of finance lease liabilities | 1,593 | 751 | ||||||
| Total current liabilities | 407,536 | 356,044 | ||||||
| Deferred income taxes | 77,826 | 71,686 | ||||||
| Income taxes payable | 44,347 | 44,965 | ||||||
| Operating lease liabilities, net of current portion | 88,490 | 95,584 | ||||||
| Long-term debt and finance lease liabilities, net of discount | 411,845 | 397,036 | ||||||
| Other liabilities | 311 | 430 | ||||||
| Total liabilities | 1,030,355 | 965,745 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock | — | — | ||||||
| Common stock | 24 | 24 | ||||||
| Additional paid-in capital | 701,654 | 672,727 | ||||||
| Accumulated other comprehensive loss | (128,494 | ) | (121,088 | ) | ||||
| Retained earnings | 2,137,649 | 1,937,853 | ||||||
| Total stockholders’ equity | 2,710,833 | 2,489,516 | ||||||
| Total liabilities and stockholders’ equity | $ | 3,741,188 | $ | 3,455,261 |
| Copart, Inc.Consolidated Statements of Cash Flows(In thousands)(Unaudited) | ||||||||
| Three Months Ended October 31, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 200,285 | $ | 218,180 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization, including debt cost | 29,227 | 23,704 | ||||||
| Allowance for credit loss | (157 | ) | 382 | |||||
| Equity in (earnings) losses of unconsolidated affiliates | (1,741 | ) | 855 | |||||
| Stock-based compensation | 8,913 | 5,533 | ||||||
| Gain on sale of property and equipment | (1,230 | ) | (272 | ) | ||||
| Deferred income taxes | 6,239 | 4,839 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (57,860 | ) | (25,408 | ) | ||||
| Vehicle pooling costs | (10,600 | ) | (9,358 | ) | ||||
| Inventories | (8,259 | ) | 1,710 | |||||
| Prepaid expenses and other current and non-current assets | 15,236 | 4,079 | ||||||
| Operating lease right-of-use assets and lease liabilities | 153 | 256 | ||||||
| Accounts payable and accrued liabilities | 42,880 | 16,587 | ||||||
| Deferred revenue | 1,251 | (1,437 | ) | |||||
| Income taxes receivable | 25,825 | (28,740 | ) | |||||
| Income taxes payable | 8,371 | 1,700 | ||||||
| Other liabilities | — | (152 | ) | |||||
| Net cash provided by operating activities | 258,533 | 212,458 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment, including acquisitions | (147,093 | ) | (131,793 | ) | ||||
| Proceeds from sale of property and equipment | 271 | 283 | ||||||
| Net cash used in investing activities | (146,822 | ) | (131,510 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from the exercise of stock options | 20,014 | 12,620 | ||||||
| Payments for employee stock-based tax withholdings | (489 | ) | (101,354 | ) | ||||
| Payments of finance lease obligations | (327 | ) | — | |||||
| Net cash provided by (used in) financing activities | 19,198 | (88,734 | ) | |||||
| Effect of foreign currency translation | (2,895 | ) | 2,569 | |||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 128,014 | (5,217 | ) | |||||
| Cash, cash equivalents, and restricted cash at beginning of period | 477,718 | 186,319 | ||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 605,732 | $ | 181,102 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid | $ | 4,762 | $ | 4,506 | ||||
| Income taxes paid, net of refunds | $ | 6,157 | $ | 7,465 |
| Copart, Inc.Additional Financial InformationReconciliation of GAAP to Non-GAAP Financial Measures(In thousands, except per share amounts)(Unaudited) | ||||||||
| Three Months Ended October 31, | ||||||||
| 2020 | 2019 | |||||||
| GAAP net income | $ | 200,285 | $ | 218,180 | ||||
| Effect of discrete income tax items | — | (3,008 | ) | |||||
| Effect of foreign currency-related gains, net of tax | (190 | ) | (263 | ) | ||||
| Effect of recognizing tax benefit on exercise of employee stock options | (11,773 | ) | (62,365 | ) | ||||
| Effect of payroll taxes on certain executive stock compensation, net of tax | — | 2,867 | ||||||
| Non-GAAP net income | $ | 188,322 | $ | 155,411 | ||||
| GAAP net income per diluted common share | $ | 0.83 | $ | 0.91 | ||||
| Non-GAAP net income per diluted common share | $ | 0.79 | $ | 0.65 | ||||
| GAAP diluted weighted average common shares outstanding | 239,968 | 238,662 | ||||||
| Effect on common equivalent shares from ASU 2016-09 | (709 | ) | (1,306 | ) | ||||
| Non-GAAP diluted weighted average common shares outstanding | 239,259 | 237,356 |
