EX-99.1 2 cprt01312020ex99-1.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports Second Quarter Fiscal 2020 Financial Results
Dallas, Texas. (February 19, 2020) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended January 31, 2020.
For the three months ended January 31, 2020, revenue, gross profit, and net income were $575.1 million, $259.9 million, and $168.7 million, respectively. These represent an increase in revenue of $90.2 million, or 18.6%; an increase in gross profit of $51.7 million, or 24.8%; and an increase in net income of $37.3 million, or 28.4%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.71 compared to $0.55 last year, an increase of 29.1%.
For the six months ended January 31, 2020, revenue, gross profit, and net income were $1.1 billion, $514.8 million, and $386.9 million, respectively. These represent an increase in revenue of $183.3 million, or 19.4%; an increase in gross profit of $110.6 million, or 27.4%; and an increase in net income of $141.4 million, or 57.6%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $1.62 compared to $1.01 last year, an increase of 60.4%.
Excluding the impact of discrete income tax items, disposal of non-operating assets, 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 and six months ended January 31, 2020 and 2019, were $0.65, $0.52, $1.30 and $0.99, 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 Thursday, February 20, 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 http://stream.conferenceamerica.com/copart022020. A replay of the call will be available through April 20, 2020 by calling (877) 919-4059. Use confirmation code: 44749280.
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 cases, to end users. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers and also sells vehicles sourced from individual owners. 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, disposal of non-operating assets, 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, disposal of non-operating assets, 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, 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.
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
 January 31,
 
Six Months Ended
 January 31,
 
 
2020
 
2019
 
2020
 
2019
Service revenues and vehicle sales:
 
 
 
 
 
 
 
 
Service revenues
 
$
510,034

 
$
416,807

 
$
997,890

 
$
811,613

Vehicle sales
 
65,106

 
68,091

 
131,674

 
134,653

Total service revenues and vehicle sales
 
575,140

 
484,898

 
1,129,564

 
946,266

Operating expenses:
 
 
 
 
 
   
 
 
Yard operations
 
237,683

 
199,383

 
460,562

 
388,860

Cost of vehicle sales
 
57,900

 
61,212

 
116,664

 
118,968

Yard depreciation and amortization
 
18,231

 
14,839

 
35,051

 
32,024

Yard stock-based compensation
 
1,437

 
1,238

 
2,529

 
2,270

Gross profit
 
259,889

 
208,226

 
514,758

 
404,144

General and administrative
 
39,242

 
33,236

 
78,085

 
68,041

General and administrative depreciation and amortization
 
6,051

 
5,560

 
12,245

 
10,244

General and administrative stock-based compensation
 
4,704

 
4,691

 
9,145

 
9,680

Total operating expenses
 
365,248

 
320,159

 
714,281

 
630,087

Operating income
 
209,892

 
164,739

 
415,283

 
316,179

Other (expense) income:
 
 
 
 
 
   
 
 
Interest expense, net
 
(4,464
)
 
(4,555
)
 
(8,490
)
 
(8,246
)
Other (expense) income, net
 
(354
)
 
4,782

 
363

 
5,819

Total other (expense) income
 
(4,818
)
 
227

 
(8,127
)
 
(2,427
)
Income before income taxes
 
205,074

 
164,966

 
407,156

 
313,752

Income tax expense
 
36,367

 
33,593

 
20,269

 
68,296

Net income
 
$
168,707

 
$
131,373

 
$
386,887

 
$
245,456

 
 
 
 
 
 
 
 
 
Basic net income per common share
 
$
0.73

 
$
0.57

 
$
1.67

 
$
1.06

Weighted average common shares outstanding
 
232,671

 
230,798

 
231,920

 
232,343

 
 
 
 
 
 
 
 
 
Diluted net income per common share
 
$
0.71

 
$
0.55

 
$
1.62

 
$
1.01

Diluted weighted average common shares outstanding
 
238,470

 
240,660

 
238,566

 
242,743



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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)
 
 
January 31, 2020
 
July 31, 2019
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
93,511

 
$
186,319

Accounts receivable, net
 
445,963

 
367,265

Vehicle pooling costs
 
90,595

 
76,548

Inventories
 
18,515

 
20,941

Income taxes receivable
 
68,415

 
19,526

Prepaid expenses and other assets
 
14,964

 
16,568

Total current assets
 
731,963

 
687,167

Property and equipment, net
 
1,789,326

 
1,427,726

Operating lease right-of-use assets
 
104,360

 
—

Intangibles, net
 
50,291

 
55,156

Goodwill
 
338,262

 
333,321

Deferred income taxes
 
348

 
411

Other assets
 
34,055

 
43,836

Total assets
 
$
3,048,605

 
$
2,547,617

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued liabilities
 
$
296,977

 
$
270,918

Deferred revenue
 
7,603

 
6,466

Income taxes payable
 
728

 
3,482

Current portion of operating lease liabilities
 
23,314

 
—

Current portion of revolving loan facility and finance lease liabilities
 
14,215

 
1,138

Total current liabilities
 
342,837

 
282,004

Deferred income taxes
 
55,499

 
48,683

Income taxes payable
 
43,650

 
35,116

Operating lease liabilities, net of current portion
 
81,906

 
—

Long-term debt, revolving loan facility and finance lease liabilities, net of discount
 
399,846

 
400,091

Other liabilities
 
138

 
3,342

Total liabilities
 
923,876

 
769,236

Commitments and contingencies
 
 
 
 
Stockholders' equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
23

 
23

Additional paid-in capital
 
617,714

 
572,559

Accumulated other comprehensive loss
 
(119,870
)
 
(132,529
)
Retained earnings
 
1,626,862

 
1,338,328

Total stockholders' equity
 
2,124,729

 
1,778,381

Total liabilities and stockholders' equity
 
$
3,048,605

 
$
2,547,617




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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)
 
 
Six Months Ended January 31,
 
 
2020
 
2019
Cash flows from operating activities:
 
 
 
 
Net income
 
$
386,887

 
$
245,456

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization, including debt cost
 
48,097

 
42,487

Allowance for doubtful accounts
 
1,301

 
96

Equity in losses (earnings) of unconsolidated affiliates
 
3,124

 
(514
)
Stock-based compensation
 
11,674

 
11,950

Gain on sale of property and equipment
 
(1,315
)
 
(3,890
)
Deferred income taxes
 
6,719

 
6,632

Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable
 
(78,510
)
 
(86,125
)
Vehicle pooling costs
 
(13,921
)
 
(20,218
)
Inventories
 
2,765

 
(11,640
)
Prepaid expenses and other current and non-current assets
 
7,184

 
(725
)
Operating lease right-of-use assets and lease liabilities
 
331

 
—

Accounts payable and accrued liabilities
 
24,862

 
7,338

Deferred revenue
 
1,021

 
2,843

Income taxes receivable
 
(48,722
)
 
15,286

Income taxes payable
 
5,794

 
6,890

Other liabilities
 
(371
)
 
(662
)
Net cash provided by operating activities
 
356,920

 
215,204

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment
 
(400,352
)
 
(136,727
)
Proceeds from sale of property and equipment
 
1,639

 
17,488

Net cash used in investing activities
 
(398,713
)
 
(119,239
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Proceeds from the exercise of stock options
 
32,594

 
5,220

Proceeds from the issuance of Employee Stock Purchase Plan shares
 
3,955

 
3,501

Repurchases of common stock
 
—

 
(364,997
)
Payments for employee stock-based tax withholdings
 
(101,422
)
 
(27
)
Net proceeds on revolving loan facility
 
13,600

 
93,300

Net cash used in financing activities
 
(51,273
)
 
(263,003
)
Effect of foreign currency translation
 
258

 
692

Net decrease in cash and cash equivalents
 
(92,808
)
 
(166,346
)
Cash and cash equivalents at beginning of period
 
186,319

 
274,520

Cash and cash equivalents at end of period
 
$
93,511

 
$
108,174

Supplemental disclosure of cash flow information:
 
 
 
 
Interest paid
 
$
9,007

 
$
9,018

Income taxes paid, net of refunds
 
$
57,591

 
$
39,327





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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
 January 31,
 
Six Months Ended
 January 31,
 
 
2020
 
2019
 
2020
 
2019
GAAP net income
 
$
168,707

 
$
131,373

 
$
386,887

 
$
245,456

Effect of discrete income tax items
 
—

 
—

 
(3,008
)
 
—

Effect of disposal of non-operating assets, net of tax
 
—

 
(1,598
)
 
—

 
(1,598
)
Effect of foreign currency-related gains, net of tax
 
(416
)
 
(56
)
 
(679
)
 
(399
)
Effect of recognizing tax benefit on exercise of employee stock options
 
(14,829
)
 
(4,847
)
 
(77,194
)
 
(5,022
)
Effect of payroll taxes on certain executive stock compensation, net of tax
 
—

 
—

 
2,867

 
—

Non-GAAP net income
 
$
153,462

 
$
124,872

 
$
308,873

 
$
238,437

 
 
 
 
 
 
 
 
 
GAAP net income per diluted common share
 
$
0.71

 
$
0.55

 
$
1.62

 
$
1.01

Non-GAAP net income per diluted common share
 
$
0.65

 
$
0.52

 
$
1.30

 
$
0.99

 
 
 
 
 
 
 
 
 
GAAP diluted weighted average common shares outstanding
 
238,470

 
240,660

 
238,566

 
242,743

Effect on common equivalent shares from ASU 2016-09
 
(969
)
 
(1,675
)
 
(1,137
)
 
(2,058
)
Non-GAAP diluted weighted average common shares outstanding
 
237,501

 
238,985

 
237,429

 
240,685




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