COPART INC - FORM 8-K - EX-99.1 - November 18, 2020

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8-K - 8-K - COPART INCcprt-20201118.htm

Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports First Quarter Fiscal 2021 Financial Results
Dallas, Texas. (November 18, 2020) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended October 31, 2020.
For the three months ended October 31, 2020, 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 October 31, 2020 and 2019, were $0.79 and $0.65, respectively, an increase of 21.5%. 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 Thursday, November 19, 2020, 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 https://78449.themediaframe.com/dataconf/productusers/copart/mediaframe/41926/indexl.html or via hyperlink at www.copart.com/investorrelation. A replay of the call will be available through January 21, 2021 by calling (877) 660-6853. Use confirmation code: 13713059.
About Copart
Copart, Inc., founded in 1982, is a global leader in online vehicle auctions. Copart’s innovative technology and online auction platform links sellers to more than 750,000 Members in over 170 countries. Copart offers services to process and sell salvage and clean title vehicles to dealers, dismantlers, rebuilders, exporters, and in some jurisdictions, to the general public. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers and individuals. With operations at over 200 locations in 11 countries, Copart has more than 150,000 vehicles available online every day. Copart currently operates in the United States (Copart.com), Canada (Copart.ca), the United Kingdom (Copart.co.uk), Brazil (Copart.com.br), the Republic of Ireland (Copart.ie), Germany (Copart.de), Finland (Copart.fi), the United Arab Emirates, Oman and Bahrain (Copartmea.com), and Spain (Copart.es). For more information, or to become a Member, visit Copart.com/Register.
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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.
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 exclude 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. 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 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.
Cautionary Note About Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws, including statements concerning the potential impact of the COVID-19 pandemic on our business, operations, and operating results. 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.
Contact:Melissa Hunter, Executive Support Manager, Office of the Chief Financial Officer
972-391-5090 or melissa.hunter@copart.com


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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended October 31,
20202019
Service revenues and vehicle sales:
Service revenues$515,372 $487,856 
Vehicle sales77,568 66,568 
Total service revenues and vehicle sales
592,940 554,424 
Operating expenses:   
Yard operations206,986 222,879 
Cost of vehicle sales64,360 58,764 
Yard depreciation and amortization23,294 16,820 
Yard stock-based compensation1,531 1,092 
Gross profit
296,769 254,869 
General and administrative35,138 38,843 
General and administrative depreciation and amortization5,655 6,194 
General and administrative stock-based compensation7,382 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, net3,253 717 
Total other expense(1,779)(3,309)
Income before income taxes246,815 202,082 
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 outstanding235,791 231,169 
Diluted net income per common share$0.83 $0.91 
Diluted weighted average common shares outstanding239,968 238,662 

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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
October 31, 2020July 31, 2020
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash$605,732 $477,718 
Accounts receivable, net407,897 350,207 
Vehicle pooling costs84,128 73,684 
Inventories28,244 20,080 
Income taxes receivable915 26,740 
Prepaid expenses and other assets11,260 15,330 
Total current assets1,138,176 963,759 
Property and equipment, net2,072,059 1,941,719 
Operating lease right-of-use assets112,275 118,455 
Intangibles, net45,864 47,772 
Goodwill342,576 343,622 
Deferred income taxes212 213 
Other assets30,026 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 revenue9,476 8,233 
Income taxes payable12,640 3,709 
Current portion of operating lease liabilities24,011 24,821 
Current portion of finance lease liabilities1,593 751 
Total current liabilities407,536 356,044 
Deferred income taxes77,826 71,686 
Income taxes payable44,347 44,965 
Operating lease liabilities, net of current portion88,490 95,584 
Long-term debt and finance lease liabilities, net of discount411,845 397,036 
Other liabilities311 430 
Total liabilities1,030,355 965,745 
Commitments and contingencies
Stockholders' equity:
Preferred stock— — 
Common stock24 24 
Additional paid-in capital701,654 672,727 
Accumulated other comprehensive loss(128,494)(121,088)
Retained earnings2,137,649 1,937,853 
Total stockholders' equity2,710,833 2,489,516 
Total liabilities and stockholders' equity$3,741,188 $3,455,261 


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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended October 31,
20202019
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 cost29,227 23,704 
Allowance for credit loss(157)382 
Equity in (earnings) losses of unconsolidated affiliates(1,741)855 
Stock-based compensation8,913 5,533 
Gain on sale of property and equipment(1,230)(272)
Deferred income taxes6,239 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 assets15,236 4,079 
Operating lease right-of-use assets and lease liabilities153 256 
Accounts payable and accrued liabilities42,880 16,587 
Deferred revenue1,251 (1,437)
Income taxes receivable25,825 (28,740)
Income taxes payable8,371 1,700 
Other liabilities— (152)
Net cash provided by operating activities258,533 212,458 
Cash flows from investing activities:
Purchases of property and equipment, including acquisitions(147,093)(131,793)
Proceeds from sale of property and equipment271 283 
Net cash used in investing activities(146,822)(131,510)
Cash flows from financing activities:
Proceeds from the exercise of stock options20,014 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 activities19,198 (88,734)
Effect of foreign currency translation(2,895)2,569 
Net increase (decrease) in cash, cash equivalents, and restricted cash128,014 (5,217)
Cash, cash equivalents, and restricted cash at beginning of period477,718 186,319 
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 



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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

Copart, Inc.
Additional Financial Information
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended October 31,
20202019
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 outstanding239,968 238,662 
Effect on common equivalent shares from ASU 2016-09(709)(1,306)
Non-GAAP diluted weighted average common shares outstanding239,259 237,356 


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Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000

COPART INC Reports