10-QPeriod: Q1 FY2023

COPART INC Quarterly Report for Q1 Ended Oct 31, 2022

Filed November 18, 2022For Securities:CPRT

Summary

Copart, Inc. (CPRT) reported solid performance for the three months ended October 31, 2022, with total service revenues and vehicle sales showing an increase of 8.8% and 17.0% respectively compared to the prior year period. This growth was primarily driven by a strong performance in the U.S., attributed to higher revenue per car due to increased auction selling prices and improved volume. International revenue saw a slight dip in service revenue but a notable increase in vehicle sales, benefiting from higher average selling prices amidst global supply chain constraints. The company continues to expand its operational footprint, with several new facilities opened in the U.S. and internationally between August 2021 and October 2022, alongside strategic acquisitions. Despite an increase in yard operations expenses (up 24.8%) driven by higher processing costs and a significant impact from Hurricane Ian, Copart managed its overall operating expenses effectively, though operating income as a percentage of revenue decreased slightly from 40% to 35%. The company maintains a strong liquidity position with over $1.5 billion in cash, cash equivalents, and restricted cash.

Financial Highlights

46 data points
Beta

Revenue

$893.37M

Net Income

$245.85M

27.5% Net Margin

EPS (Diluted)

$0.25

Total Assets

$5.59B

Cash & Equivalents

$1.54B

Free Cash Flow

$158.90M

Financial Statements
Beta
Revenue$893.37M
Operating Expenses$581.87M
Operating Income$311.50M
Net Income$245.85M
EPS (Basic)$0.26
EPS (Diluted)$0.25
Shares Outstanding (Basic)952.20M
Shares Outstanding (Diluted)964.34M

Key Highlights

  • 1Total service revenues increased by 8.8% to $726.8 million, driven by an 8.1% rise in U.S. service revenues.
  • 2Total vehicle sales grew by 17.0% to $166.5 million, with both U.S. and International segments showing significant increases.
  • 3Yard operations expenses increased by 24.8%, significantly impacted by $25 million in costs related to Hurricane Ian.
  • 4Despite increased operating expenses, the company maintained a healthy operating income margin, though it slightly decreased year-over-year.
  • 5Copart continues its expansion strategy, opening multiple new facilities in the U.S. and internationally and completing strategic acquisitions.
  • 6The company maintained a strong liquidity position with $1.54 billion in cash, cash equivalents, and restricted cash as of October 31, 2022.
  • 7The company has a $1.25 billion revolving credit facility, with no outstanding borrowings as of the reporting date.

Frequently Asked Questions

Revenue growth was primarily driven by an increase in the U.S. service revenues, which rose by 10.3%. This was attributed to higher revenue per car due to increased auction selling prices, influenced by a change in the mix of vehicles sold and reduced supply, as well as an increase in overall volume.

Hurricane Ian had a notable impact on yard operations expenses, contributing approximately $25 million to the increased costs in the U.S. during the quarter. This was due to increased subhaul costs, labor costs, and expenses related to overtime, travel, and equipment leases.

Copart is pursuing a global expansion strategy by acquiring and developing facilities in new and existing regions. As of October 31, 2022, the company operates in the U.S., Canada, the U.K., Brazil, the Republic of Ireland, Germany, Finland, the U.A.E., Oman, Bahrain, and Spain, with plans to provide global coverage for its sellers.

Copart maintains a strong liquidity position, with cash, cash equivalents, and restricted cash totaling $1.54 billion as of October 31, 2022. This is an increase of $155.2 million from the previous quarter, primarily due to cash generated from operations and stock option exercises.