EX-99.1 2 cprt01312017ex99-1.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports Second Quarter Fiscal 2017 Financial Results
Dallas, Texas. (February 21, 2017) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended January 31, 2017.
For the three months ended January 31, 2017, revenue, gross margin, and net income were $349.5 million, $146.8 million, and $66.1 million, respectively. These represent an increase in revenue of $49.8 million, or 16.6%; an increase in gross margin of $22.2 million, or 17.8%; and an increase in net income of $7.1 million, or 12.0%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.56 compared to $0.47 last year, an increase of 19.1%.
For the six months ended January 31, 2017, revenue, gross margin, and net income were $695.5 million, $292.1 million, and $233.3 million, respectively. These represent an increase in revenue of $107.0 million, or 18.2%; an increase in gross margin of $46.6 million, or 19.0%; and an increase in net income of $121.7 million, or 109.1%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $1.97 compared to $0.89 last year, an increase of 121.3%.
Excluding the impact of foreign currency-related gains and losses, 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 January 31, 2017 and 2016, were $0.58 and $0.45, respectively. Non-GAAP fully diluted earnings per share for the six months ended January 31, 2017 and 2016, were $1.14 and $0.86, 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 Wednesday, February 22, 2017, at 3 p.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/copart022217. A replay of the call will be available through April 22, 2017 by calling (877) 919-4059. Use confirmation code # 27485045.
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 and losses, 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 and losses, 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 
 January 31,
 
Six Months Ended 
 January 31,
 
 
2017
 
2016
 
2017
 
2016
Service revenues and vehicle sales:
 
 
 
 
 
 
 
 
Service revenues
 
$
310,033

 
$
260,417

 
$
617,111

 
$
511,384

Vehicle sales
 
39,499

 
39,289

 
78,412

 
77,160

Total service revenues and vehicle sales
 
349,532

 
299,706

 
695,523

 
588,544

Operating expenses:
 
 
 
 
 
   
 
 
Yard operations
 
158,556

 
132,041

 
315,918

 
258,919

Cost of vehicle sales
 
33,686

 
34,127

 
66,773

 
66,195

Yard depreciation and amortization
 
9,717

 
8,248

 
19,165

 
16,593

Yard stock-based payment compensation
 
808

 
676

 
1,609

 
1,362

Gross margin
 
146,765

 
124,614

 
292,058

 
245,475

General and administrative
 
27,675

 
24,376

 
58,599

 
51,087

General and administrative depreciation and amortization
 
5,498

 
3,443

 
10,759

 
6,619

General and administrative stock-based payment compensation
 
4,712

 
4,710

 
8,996

 
9,438

Total operating expenses
 
240,652

 
207,621

 
481,819

 
410,213

Operating income
 
108,880

 
92,085

 
213,704

 
178,331

Other (expense) income:
 
 
 
 
 
   
 
 
Interest expense, net
 
(5,760
)
 
(4,968
)
 
(11,382
)
 
(10,481
)
Other (expense) income, net
 
(3,021
)
 
4,435

 
311

 
5,462

Total other expenses
 
(8,781
)
 
(533
)
 
(11,071
)
 
(5,019
)
Income before income taxes
 
100,099

 
91,552

 
202,633

 
173,312

Income tax expense (benefit)
 
34,033

 
32,548

 
(30,713
)
 
61,698

Net income
 
$
66,066

 
$
59,004

 
$
233,346

 
$
111,614

 
 
 
 
 
 
 
 
 
Basic net income per common share
 
$
0.58

 
$
0.50

 
$
2.05

 
$
0.94

Weighted average common shares outstanding
 
114,571

 
117,306

 
113,644

 
118,731

 
 
 
 
 
 
 
 
 
Diluted net income per common share
 
$
0.56

 
$
0.47

 
$
1.97

 
$
0.89

Diluted weighted average common shares outstanding
 
117,794

 
124,612

 
118,336

 
125,878



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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)
 
 
January 31, 2017
 
July 31, 2016
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
174,952

 
$
155,849

Accounts receivable, net
 
340,438

 
266,270

Vehicle pooling costs and inventories
 
43,579

 
38,987

Income taxes receivable
 
83,524

 
18,751

Deferred income taxes
 
—

 
1,444

Prepaid expenses and other assets
 
16,759

 
18,005

Total current assets
 
659,252

 
499,306

Property and equipment, net
 
882,256

 
816,791

Intangibles, net
 
8,938

 
11,761

Goodwill
 
256,867

 
260,198

Deferred income taxes
 
1,236

 
23,506

Other assets
 
32,692

 
38,258

Total assets
 
$
1,841,241

 
$
1,649,820

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued liabilities
 
$
184,968

 
$
192,379

Deferred revenue
 
5,938

 
4,628

Income taxes payable
 
7,624

 
5,625

Deferred income taxes
 
1,266

 
—

Current portion of revolving credit facility, and capital lease obligations
 
146,151

 
76,151

Total current liabilities
 
345,947

 
278,783

Deferred income taxes
 
3,446

 
3,816

Income taxes payable
 
27,470

 
25,641

Long-term debt and capital lease obligations, net of discount
 
565,926

 
564,341

Other liabilities
 
2,749

 
2,783

Total liabilities
 
945,538

 
875,364

Commitments and contingencies
 
 
 
 
Stockholders' equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
11

 
11

Additional paid-in capital
 
429,957

 
392,445

Accumulated other comprehensive loss
 
(119,549
)
 
(109,194
)
Retained earnings
 
585,284

 
491,194

Total stockholders' equity
 
895,703

 
774,456

Total liabilities and stockholders' equity
 
$
1,841,241

 
$
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)
 
 
Six Months Ended January 31,
 
 
2017
 
2016
Cash flows from operating activities:
 
 
 
 
Net income
 
$
233,346

 
$
111,614

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization, including debt cost
 
30,146

 
23,294

Allowance for doubtful accounts
 
26

 
1,270

Equity in losses of unconsolidated affiliates
 
408

 
483

Stock-based payment compensation
 
10,605

 
10,800

Gain on sale of property and equipment
 
(79
)
 
(106
)
Deferred income taxes
 
23,466

 
(106
)
Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable
 
(74,789
)
 
(68,683
)
Vehicle pooling costs and inventories
 
(4,944
)
 
(6,449
)
Prepaid expenses and other current assets
 
894

 
(216
)
Other assets
 
(801
)
 
448

Accounts payable and accrued liabilities
 
(4,599
)
 
3,702

Deferred revenue
 
1,350

 
1,810

Income taxes receivable
 
(64,757
)
 
(1,648
)
Income taxes payable
 
5,934

 
7,897

Other liabilities
 
(678
)
 
(789
)
Net cash provided by operating activities
 
155,528

 
83,321

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment
 
(92,412
)
 
(77,763
)
Investment in unconsolidated affiliate
 
(1,050
)
 
—

Proceeds from sale of property and equipment
 
386

 
396

Purchases of marketable securities
 
—

 
(21,119
)
Net cash used in investing activities
 
(93,076
)
 
(98,486
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Proceeds from the exercise of stock options
 
20,381

 
944

Proceeds from the issuance of Employee Stock Purchase Plan shares
 
1,908

 
1,640

Repurchases of common stock
 
—

 
(325,000
)
Payments for employee stock-based tax withholdings
 
(134,638
)
 
—

Proceeds from the issuance of long-term debt, net of discount
 
—

 
68,000

Proceeds from revolving loan facility, net of repayments
 
72,000

 
—

Principal payments on long-term debt
 
—

 
(37,500
)
Net cash used in financing activities
 
(40,349
)
 
(291,916
)
Effect of foreign currency translation
 
(3,000
)
 
(7,515
)
Net increase (decrease) in cash and cash equivalents
 
19,103

 
(314,596
)
Cash and cash equivalents at beginning of period
 
155,849

 
456,012

Cash and cash equivalents at end of period
 
$
174,952

 
$
141,416

Supplemental disclosure of cash flow information:
 
 
 
 
Interest paid
 
$
11,810

 
$
11,294

Income taxes paid, net of refunds
 
$
4,616

 
$
55,413


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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, except per share data)
(Unaudited)
 
 
Three Months Ended 
 January 31,
 
Six Months Ended 
 January 31,
 
 
2017
 
2016
 
2017
 
2016
GAAP net income
 
$
66,066

 
$
59,004

 
$
233,346

 
$
111,614

Effect of foreign currency-related losses (gains), net of tax
 
2,720

 
(3,491
)
 
(127
)
 
(4,051
)
Effect of income tax benefit of ASU 2016-09 adoption, net of tax (1)
 
(1,347
)
 
(41
)
 
(102,742
)
 
(238
)
Effect of payroll taxes on certain executive stock compensation, net of tax
 
—

 
—

 
3,307

 
48

Non-GAAP net income
 
$
67,439

 
$
55,472

 
$
133,784

 
$
107,373

 
 
 
 
 
 
 
 
 
GAAP diluted net income per common share
 
$
0.56

 
$
0.47

 
$
1.97

 
$
0.89

Non-GAAP diluted net income per common share
 
$
0.58

 
$
0.45

 
$
1.14

 
$
0.86

 
 
 
 
 
 
 
 
 
GAAP diluted weighted average common shares outstanding
 
117,794

 
124,612

 
118,336

 
125,878

Effect on common equivalent shares from ASU 2016-09 adoption(1)
 
(702
)
 
(1,704
)
 
(1,125
)
 
(1,638
)
Non-GAAP diluted weighted average commons shares outstanding
 
117,092

 
122,908

 
117,211

 
124,240

(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