EX-99.1 2 cprt04302017ex99-1.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports Third Quarter Fiscal 2017 Financial Results
Dallas, Texas. (May 24, 2017) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended April 30, 2017.
For the three months ended April 30, 2017, revenue, gross margin, and net income were $373.9 million, $172.5 million, and $90.5 million, respectively. These represent an increase in revenue of $26.6 million, or 7.7%; an increase in gross margin of $14.9 million, or 9.4%; and an increase in net income of $15.9 million, or 21.3%, respectively, from the same quarter last year. Fully diluted earnings per share for the three months were $0.38 compared to $0.32 last year, an increase of 18.8%.
For the nine months ended April 30, 2017, revenue, gross margin, and net income were $1.1 billion, $464.6 million, and $323.9 million, respectively. These represent an increase in revenue of $133.6 million, or 14.3%; an increase in gross margin of $61.4 million, or 15.2%; and an increase in net income of $137.7 million, or 73.9%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $1.37 compared to $0.75 last year, an increase of 82.7%.
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 April 30, 2017 and 2016, were $0.37 and $0.32, respectively. Non-GAAP fully diluted earnings per share for the nine months ended April 30, 2017 and 2016, were $0.94 and $0.74, 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, May 25, 2017, 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/copart052517. A replay of the call will be available through July 24, 2017 by calling (877) 919-4059. Use confirmation code # 76132729.
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 vehicles sourced from individual owners. With operations in over 200 locations in 11 countries, Copart has more than 125,000 vehicles available online every day. Copart currently operates in the United States (Copart.com), Canada (Copart.ca), the United Kingdom (Copart.co.uk), the Republic of Ireland (Copart.ie), Brazil (Copart.com.br), Germany (Copart.de), the United Arab Emirates, Oman and Bahrain (Copartmea.com), India (Copart.in), 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 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
 April 30,
 
Nine Months Ended
 April 30,
 
 
2017
 
2016
 
2017
 
2016
Service revenues and vehicle sales:
 
 
 
 
 
 
 
 
Service revenues
 
$
332,346

 
$
303,507

 
$
949,457

 
$
814,891

Vehicle sales
 
41,516

 
43,739

 
119,928

 
120,899

Total service revenues and vehicle sales
 
373,862

 
347,246

 
1,069,385

 
935,790

Operating expenses:
 
 
 
 
 
   
 
 
Yard operations
 
155,793

 
142,802

 
471,711

 
401,721

Cost of vehicle sales
 
34,785

 
37,744

 
101,558

 
103,939

Yard depreciation and amortization
 
9,951

 
8,339

 
29,116

 
24,932

Yard stock-based payment compensation
 
828

 
714

 
2,437

 
2,076

Gross margin
 
172,505

 
157,647

 
464,563

 
403,122

General and administrative
 
28,280

 
27,360

 
86,879

 
78,447

General and administrative depreciation and amortization
 
3,257

 
4,019

 
14,016

 
10,638

General and administrative stock-based payment compensation
 
4,180

 
4,320

 
13,176

 
13,758

Total operating expenses
 
237,074

 
225,298

 
718,893

 
635,511

Operating income
 
136,788

 
121,948

 
350,492

 
300,279

Other (expense) income:
 
 
 
 
 
   
 
 
Interest expense, net
 
(5,506
)
 
(5,419
)
 
(16,888
)
 
(15,900
)
Other (expense) income, net
 
(194
)
 
39

 
117

 
5,501

Total other expenses
 
(5,700
)
 
(5,380
)
 
(16,771
)
 
(10,399
)
Income before income taxes
 
131,088

 
116,568

 
333,721

 
289,880

Income tax expense
 
40,542

 
41,944

 
9,829

 
103,642

Net income
 
$
90,546

 
$
74,624

 
$
323,892

 
$
186,238

 
 
 
 
 
 
 
 
 
Basic net income per common share
 
$
0.39

 
$
0.34

 
$
1.42

 
$
0.80

Weighted average common shares outstanding
 
229,920

 
221,088

 
228,146

 
234,142

 
 
 
 
 
 
 
 
 
Diluted net income per common share
 
$
0.38

 
$
0.32

 
$
1.37

 
$
0.75

Diluted weighted average common shares outstanding
 
237,135

 
236,412

 
236,808

 
248,780



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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)
 
 
April 30, 2017
 
July 31, 2016
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
189,621

 
$
155,849

Accounts receivable, net
 
302,071

 
266,270

Vehicle pooling costs and inventories
 
41,061

 
38,987

Income taxes receivable
 
42,663

 
18,751

Deferred income taxes
 
191

 
1,444

Prepaid expenses and other assets
 
18,002

 
18,005

Total current assets
 
593,609

 
499,306

Property and equipment, net
 
913,303

 
816,791

Intangibles, net
 
7,624

 
11,761

Goodwill
 
258,634

 
260,198

Deferred income taxes
 
2,978

 
23,506

Other assets
 
35,538

 
38,258

Total assets
 
$
1,811,686

 
$
1,649,820

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued liabilities
 
$
192,769

 
$
192,379

Deferred revenue
 
6,147

 
4,628

Income taxes payable
 
6,421

 
5,625

Current portion of revolving credit facility and capital lease obligations
 
16,151

 
76,151

Total current liabilities
 
221,488

 
278,783

Deferred income taxes
 
3,773

 
3,816

Income taxes payable
 
26,772

 
25,641

Long-term debt, revolving loan facility and capital lease obligations, net of discount
 
550,755

 
564,341

Other liabilities
 
2,569

 
2,783

Total liabilities
 
805,357

 
875,364

Commitments and contingencies
 
 
 
 
Stockholders' equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
22

 
22

Additional paid-in capital
 
444,745

 
392,434

Accumulated other comprehensive loss
 
(114,268
)
 
(109,194
)
Retained earnings
 
675,830

 
491,194

Total stockholders' equity
 
1,006,329

 
774,456

Total liabilities and stockholders' equity
 
$
1,811,686

 
$
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)
 
 
Nine Months Ended April 30,
 
 
2017
 
2016
Cash flows from operating activities:
 
 
 
 
Net income
 
$
323,892

 
$
186,238

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization, including debt cost
 
43,951

 
35,900

Allowance for doubtful accounts
 
(542
)
 
1,227

Equity in losses of unconsolidated affiliates
 
584

 
768

Stock-based payment compensation
 
15,613

 
15,834

Gain on sale of property and equipment
 
(125
)
 
(188
)
Deferred income taxes
 
21,791

 
(325
)
Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
 
 
Accounts receivable
 
(35,668
)
 
(49,594
)
Vehicle pooling costs and inventories
 
(2,262
)
 
(8,121
)
Prepaid expenses and other current assets
 
1,440

 
293

Other assets
 
(1,185
)
 
3,206

Accounts payable and accrued liabilities
 
1,140

 
5,024

Deferred revenue
 
1,532

 
2,038

Income taxes receivable
 
(23,909
)
 
3,326

Income taxes payable
 
2,619

 
13,858

Other liabilities
 
(1,044
)
 
(1,138
)
Net cash provided by operating activities
 
347,827

 
208,346

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment, including acquisitions
 
(134,710
)
 
(143,833
)
Investment in unconsolidated affiliate
 
(3,566
)
 
—

Proceeds from sale of property and equipment
 
554

 
485

Purchases of marketable securities
 
—

 
(21,119
)
Proceeds from sale of marketable securities
 
—

 
21,498

Net cash used in investing activities
 
(137,722
)
 
(142,969
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Proceeds from the exercise of stock options
 
30,171

 
4,989

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

 
1,640

Repurchases of common stock
 
—

 
(442,855
)
Payments for employee stock-based tax withholdings
 
(134,638
)
 
—

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

 
93,468

Repayments on revolving loan facility, net of proceeds
 
(73,000
)
 
—

Debt offering costs
 
—

 
(165
)
Principal payments on long-term debt
 
—

 
(37,500
)
Net cash used in financing activities
 
(175,559
)
 
(380,423
)
Effect of foreign currency translation
 
(774
)
 
(3,313
)
Net increase (decrease) in cash and cash equivalents
 
33,772

 
(318,359
)
Cash and cash equivalents at beginning of period
 
155,849

 
456,012

Cash and cash equivalents at end of period
 
$
189,621

 
$
137,653

Supplemental disclosure of cash flow information:
 
 
 
 
Interest paid
 
$
17,681

 
$
16,996

Income taxes paid, net of refunds
 
$
9,452

 
$
86,243


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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
 April 30,
 
Nine Months Ended
 April 30,
 
 
2017
 
2016
 
2017
 
2016
GAAP net income
 
$
90,546

 
$
74,624

 
$
323,892

 
$
186,238

Effect of foreign currency-related (gains) losses, net of tax
 
(167
)
 
467

 
(295
)
 
(3,584
)
Effect of income tax benefit of ASU 2016-09 adoption, net of tax (1)
 
(4,007
)
 
(608
)
 
(106,749
)
 
(847
)
Effect of payroll taxes on certain executive stock compensation, net of tax
 
—

 
—

 
3,307

 
48

Non-GAAP net income
 
$
86,372

 
$
74,483

 
$
220,155

 
$
181,855

 
 
 
 
 
 
 
 
 
GAAP diluted net income per common share
 
$
0.38

 
$
0.32

 
$
1.37

 
$
0.75

Non-GAAP diluted net income per common share
 
$
0.37

 
$
0.32

 
$
0.94

 
$
0.74

 
 
 
 
 
 
 
 
 
GAAP diluted weighted average common shares outstanding
 
237,135

 
236,412

 
236,808

 
248,780

Effect on common equivalent shares from ASU 2016-09 adoption(1)
 
(1,692
)
 
(1,818
)
 
(2,065
)
 
(1,698
)
Non-GAAP diluted weighted average commons shares outstanding
 
235,443

 
234,594

 
234,743

 
247,082

(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