8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

November 21, 2016

Date of Report (date of earliest event reported)              

COPART, INC.

(Exact name of Registrant as specified in its charter)

Delaware	000-23255	94-2867490
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

14185 Dallas Parkway, Suite 300

Dallas, Texas 75254

(Address of principal executive offices, including zip code)

(972) 391-5000

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION INCLUDED IN THIS REPORT

Section 2 — Financial Information

Item 2.02 Results of Operations and Financial Condition

The following information and the exhibit attached hereto as Exhibit 99.1 are intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information and the exhibit attached hereto as Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this report, regardless of any general incorporation language in the filing, except as shall be expressly set forth by specific reference in such a filing.

On November 21, 2016, Copart, Inc. issued a press release announcing its financial results for the first quarter of fiscal year 2017, which ended October 31, 2016. The full text of the press release is furnished herewith as Exhibit 99.1.

Section 9 — Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibit is furnished herewith:

Exhibit Number	Description
99.1	Press release, dated November 21, 2016 of Copart, Inc. announcing its financial results for the first quarter of fiscal year 2017, which ended October 31, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:     November 21, 2016COPART, INC.

By:	/s/ Jeffrey Liaw
	Jeffrey Liaw
	Chief Financial Officer

INDEX TO EXHIBITS

Exhibit Number	Description
99.1	Press release, dated November 21, 2016 of Copart, Inc. announcing its financial results for the first quarter of fiscal year 2017, which ended October 31, 2016.

EX-99.1

Exhibit 99.1

Copart, Inc.

For Immediate Release

Copart Reports First Quarter Fiscal 2017 Financial Results

Dallas, Texas. (November 21, 2016) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended October 31, 2016.

For the three months ended October 31, 2016, revenue, gross margin, and net income were $346.0 million, $145.3 million, and $167.3 million, respectively. These represent an increase in revenue of $57.2 million, or 19.8%; an increase in gross margin of $24.4 million, or 20.2%; and an increase in net income of $114.7 million, or 218.0%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $1.41 compared to $0.41 last year, an increase of 243.9%.

Excluding the impact of foreign currency-related gains, certain income tax benefits and payroll taxes related to accounting for stock option exercises, non-GAAP fully diluted earnings per share for the three months ended October 31, 2016 and 2015, were $0.57 and $0.41, 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 Tuesday, November 22, 2016, 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/copart112216. A replay of the call will be available through January 20, 2017 by calling (877) 919-4059. Use confirmation code # 16477400.

About Copart

Copart, founded in 1982, provides vehicle sellers with a full range of remarketing services to process and sell salvage and clean title vehicles to dealers, dismantlers, rebuilders, exporters, and in some states, to end users. Copart remarkets the vehicles through Internet sales using its VB3 technology. Copart sells vehicles on behalf of insurance companies, banks, financial institutions, charities, car dealerships, fleet operators, vehicle rental companies, as well as vehicles sourced from the general public. The company currently operates in the United States (www.copart.com), Canada (www.copart.ca), the United Kingdom (www.copart.co.uk), Brazil (www.copart.com.br), Germany (www.copart.de), the United Arab Emirates, Oman and Bahrain (www.copartmea.com), Spain (www.copart.es), Ireland (www.copart.ie), and India (www.copart.in). Copart links sellers to more than 750,000 Members in more than 150 countries worldwide through its multi-channel platform. In 2015, Copart was ranked at the top of Deloitte’s “The Exceptional 100” list of companies, which reviewed U.S. publicly traded companies based upon a multidimensional approach to measuring financial performance. For more information, or to become a Member, visit www.copart.com.

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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 reflect the impact of foreign currency-related gains, certain income tax benefits and payroll taxes related to accounting for stock option exercises. 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 foreign currency-related gains, certain income tax benefits and payroll taxes related to accounting for stock option exercises.

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 Perry, Executive Support Manager, Office of the Chief Financial Officer
	972-391-5090 or melissa.perry@copart.com

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

Copart, Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

	Three Months Ended   October 31,
	2016			2015
Service revenues and vehicle sales:
Service revenues	$	307,078		$	250,967
Vehicle sales	38,913			37,871
Total service revenues and vehicle sales	345,991			288,838
Operating expenses:
Yard operations	157,362			126,878
Cost of vehicle sales	33,087			32,068
Yard depreciation and amortization	9,448			8,345
Yard stock-based payment compensation	801			686
Gross margin	145,293			120,861
General and administrative	30,924			26,711
General and administrative depreciation and amortization	5,261			3,176
General and administrative stock-based payment compensation	4,284			4,728
Total operating expenses	241,167			202,592
Operating income	104,824			86,246
Other (expense) income:
Interest expense, net	(5,622		)	(5,513		)
Other income, net	3,332			1,027
Total other expenses	(2,290		)	(4,486		)
Income before income taxes	102,534			81,760
Income tax (benefit) expense	(64,746		)	29,150
Net income	$	167,280		$	52,610
Basic net income per common share	$	1.48		$	0.44
Weighted average common shares outstanding	112,718			120,155
Diluted net income per common share	$	1.41		$	0.41
Diluted weighted average common shares outstanding	118,879			127,144

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

Copart, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

	October 31, 2016			July 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	168,421		$	155,849
Accounts receivable, net	294,358			266,270
Vehicle pooling costs and inventories	40,202			38,987
Income taxes receivable	110,923			18,751
Deferred income taxes	711			1,444
Prepaid expenses and other assets	16,096			18,005
Total current assets	630,711			499,306
Property and equipment, net	840,587			816,791
Intangibles, net	10,241			11,761
Goodwill	255,093			260,198
Deferred income taxes	1,912			23,506
Other assets	31,852			38,258
Total assets	$	1,770,396		$	1,649,820
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	175,969		$	192,379
Deferred revenue	3,975			4,628
Income taxes payable	6,583			5,625
Current portion of long-term debt, revolving credit facility, and capital lease obligations	171,151			76,151
Total current liabilities	357,678			278,783
Deferred income taxes	3,380			3,816
Income taxes payable	26,867			25,641
Long-term debt and capital lease obligations, net of discount	573,030			564,341
Other liabilities	2,034			2,783
Total liabilities	962,989			875,364
Commitments and contingencies
Stockholders' equity:
Preferred stock	—			—
Common stock	11			11
Additional paid-in capital	416,125			392,445
Accumulated other comprehensive loss	(127,969		)	(109,194		)
Retained earnings	519,240			491,194
Total stockholders' equity	807,407			774,456
Total liabilities and stockholders' equity	$	1,770,396		$	1,649,820

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

Copart, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended October 31,
	2016			2015
Cash flows from operating activities:
Net income	$	167,280		$	52,610
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including debt cost	14,820			11,562
Allowance for doubtful accounts	22			1,032
Equity in losses of unconsolidated affiliates	349			158
Stock-based payment compensation	5,085			5,414
Loss (gain) on sale of property and equipment	38			(60		)
Deferred income taxes	22,088			(870		)
Changes in operating assets and liabilities:
Accounts receivable	(29,472		)	(16,910		)
Vehicle pooling costs and inventories	(1,783		)	(2,252		)
Prepaid expenses and other current assets	1,392			(1,115		)
Other assets	(202		)	(1,036		)
Accounts payable and accrued liabilities	(14,828		)	77
Deferred revenue	(602		)	(5		)
Income taxes receivable	(92,172		)	5,136
Income taxes payable	2,615			23,483
Other liabilities	(337		)	(433		)
Net cash provided by operating activities	74,293			76,791
Cash flows from investing activities:
Purchases of property and equipment	(38,209		)	(20,167		)
Investment in unconsolidated affiliate	(1,050		)	—
Proceeds from sale of property and equipment	190			443
Purchases of marketable securities	—			(21,119		)
Net cash used in investing activities	(39,069		)	(40,843		)
Cash flows from financing activities:
Proceeds from the exercise of stock options	13,977			368
Payments for employee stock-based tax withholdings	(134,615		)	—
Proceeds from revolving loan facility, net of repayments	103,900			—
Principal payments on long-term debt	—			(18,750		)
Net cash used in financing activities	(16,738		)	(18,382		)
Effect of foreign currency translation	(5,914		)	(662		)
Net increase in cash and cash equivalents	12,572			16,904
Cash and cash equivalents at beginning of period	155,849			456,012
Cash and cash equivalents at end of period	$	168,421		$	472,916
Supplemental disclosure of cash flow information:
Interest paid	$	4,333		$	5,723
Income taxes paid, net of refunds	$	2,677		$	1,292

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

Additional Financial Information

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands)

(Unaudited)

	Three Months Ended   October 31,
	2016			2015
GAAP net income	$	167,280		$	52,610
Effect of foreign currency-related gains, net of tax	(2,847		)	(560		)
Effect of income tax benefit of ASU 2016-09 adoption, net of tax (1)	(101,395		)	(197		)
Effect of payroll taxes on executive stock compensation, net of tax	3,307			48
Non-GAAP net income	$	66,345		$	51,901
GAAP diluted net income per common share	$	1.41		$	0.41
Non-GAAP diluted net income per common share	$	0.57		$	0.41
GAAP diluted weighted average common shares outstanding	118,879			127,144
Effect on common equivalent shares from ASU 2016-09 adoption(1)	(1,549		)	(1,572		)
Non-GAAP diluted weighted average commons shares outstanding	117,330			125,572

(1) In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. Under this standard, all excess tax benefits and tax deficiencies related to exercises of stock options are recognized as income tax expense or benefit in the income statement as discrete items in the reporting period in which they occur. Additionally, excess tax benefits are classified as an operating activity on the consolidated statements of cash flows. The Company early adopted ASU 2016-09 during the fourth quarter of fiscal 2016 on a modified retrospective basis. For a more complete discussion, please review the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 28, 2016.

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