Summary
Copart, Inc. reported strong performance for the third quarter of fiscal year 2018, ending October 31, 2017. The company experienced significant revenue growth, driven by a substantial increase in service revenues, particularly in the United States, which saw a 22.6% rise. This growth was attributed to higher average auction selling prices due to a favorable vehicle mix and increased commodity prices, coupled with higher sales volumes. The latter was bolstered by new and expanded contracts with insurance companies, increased volume from existing suppliers, and a significant surge in vehicles processed due to Hurricane Harvey. Operationally, while total operating expenses remained stable as a percentage of total revenue at 70%, yard operations expenses saw an increase, partly due to abnormal costs associated with Hurricane Harvey. The company also reported a decrease in general and administrative expenses, primarily in the U.S., due to factors like reduced payroll taxes from stock option exercises. Despite increased other expenses driven by currency fluctuations and asset disposals, the company's financial position appears robust, with increasing cash and cash equivalents and working capital.
Financial Highlights
51 data points| Revenue | $419.17M |
| Cost of Revenue | $38.30M |
| Gross Profit | $163.26M |
| Operating Income | $123.94M |
| Interest Expense | $5.59M |
| Net Income | $77.52M |
| EPS (Basic) | $0.09 |
| EPS (Diluted) | $0.08 |
| Shares Outstanding (Basic) | 922.78M |
| Shares Outstanding (Diluted) | 955.16M |
Key Highlights
- 1Total service revenues increased by 21.8% year-over-year to $374.1 million, driven by strong performance in the U.S. (+22.6%) and international markets (+16.1%).
- 2U.S. service revenue growth was fueled by higher average auction selling prices and increased volume, with Hurricane Harvey contributing an extraordinary number of vehicles.
- 3Vehicle sales revenue saw a 15.8% increase, primarily in the U.S. (+33.3%), also benefiting from higher average selling prices and volume.
- 4Yard operations expenses increased by 29.8% year-over-year, significantly impacted by abnormal costs of $35.8 million related to temporary storage facilities and operational adjustments for Hurricane Harvey.
- 5General and administrative expenses decreased by 2.8% overall, driven by a 5.6% reduction in the U.S., largely due to lower payroll taxes from stock option exercises.
- 6Cash and cash equivalents increased by 6.7% to $224.2 million, and working capital grew by 28.1% to $365.2 million, indicating improved liquidity.
- 7The company's credit facility was significantly increased to $850.0 million, providing substantial borrowing capacity, with $182.0 million outstanding at the end of the quarter.