EX-99.1 2 cprt1312019ex99-1.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports Second Quarter Fiscal 2019 Financial Results
Dallas, Texas. (February 20, 2019) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended January 31, 2019.
For the three months ended January 31, 2019, revenue, gross profit, and net income were $484.9 million, $208.2 million, and $131.4 million, respectively. These represent an increase in revenue of $25.8 million, or 5.6%; an increase in gross profit of $16.6 million, or 8.7%; and an increase in net income of $28.1 million, or 27.2%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.55 compared to $0.43 last year, an increase of 27.9%.
For the six months ended January 31, 2019, revenue, gross profit, and net income were $946.3 million, $404.1 million, and $245.5 million, respectively. These represent an increase in revenue of $68.0 million, or 7.7%; an increase in gross profit of $49.3 million, or 13.9%; and an increase in net income of $64.7 million, or 35.8%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $1.01 compared to $0.75 last year, an increase of 34.7%.
The operating results for the three and six months ended January 31, 2018 were adversely affected by abnormal costs of $36.5 million and $72.3 million, respectively, incurred as a result of Hurricane Harvey. These costs included temporary storage facilities; premiums for subhaulers; labor costs incurred from overtime; travel and lodging due to the reassignment of employees to the affected region; and equipment lease expenses to handle the increased volume, as well as cost of vehicle sales. These costs, net of the associated revenues of $44.8 million and $63.4 million, respectively, generated pre-tax income for the three months ended January 31, 2018 of $8.3 million and a pre-tax loss for the six months ended January 31, 2018 of $8.9 million.
Excluding the impact of income taxes on the deemed repatriation of foreign earnings, net of deferred tax changes, disposals of non-operating assets, foreign currency-related gains and losses, and certain income tax benefits related to accounting for stock option exercises, non-GAAP fully diluted earnings per share for the three months ended January 31, 2019 and 2018, were $0.52 and $0.47, respectively. Non-GAAP fully diluted earnings per share for the six months ended January 31, 2019 and 2018, were $0.99 and $0.79, 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 21, 2019, 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/copart022119. A replay of the call will be available through April 22, 2019 by calling (877) 919-4059. Use confirmation code # 33529287.
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 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), Brazil (Copart.com.br), the Republic of Ireland (Copart.ie), Germany (Copart.de), Finland (avk.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 income taxes on the deemed repatriation of foreign earnings, net of deferred tax changes, disposals of non-operating assets, foreign currency-related gains and losses, and certain income tax benefits 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 income taxes on the deemed repatriation of foreign earnings, net of deferred tax changes, disposals of non-operating assets, foreign currency-related gains and losses, and certain income tax benefits 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 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,
 
 
2019
 
2018
 
2019
 
2018
Service revenues and vehicle sales:
 
 
 
 
 
 
 
 
Service revenues
 
$
416,807

 
$
401,954

 
$
811,613

 
$
776,079

Vehicle sales
 
68,091

 
57,152

 
134,653

 
102,195

Total service revenues and vehicle sales
 
484,898

 
459,106

 
946,266

 
878,274

Operating expenses:
 
 
 
 
 
   
 
 
Yard operations
 
199,383

 
204,289

 
388,860

 
410,508

Cost of vehicle sales
 
61,212

 
50,313

 
118,968

 
88,610

Yard depreciation and amortization
 
14,839

 
11,893

 
32,024

 
22,429

Yard stock-based compensation
 
1,238

 
1,002

 
2,270

 
1,854

Gross profit
 
208,226

 
191,609

 
404,144

 
354,873

General and administrative
 
33,236

 
29,694

 
68,041

 
59,196

General and administrative depreciation and amortization
 
5,560

 
5,978

 
10,244

 
11,344

General and administrative stock-based compensation
 
4,691

 
4,990

 
9,680

 
9,444

Total operating expenses
 
320,159

 
308,159

 
630,087

 
603,385

Operating income
 
164,739

 
150,947

 
316,179

 
274,889

Other (expense) income:
 
 
 
 
 
   
 
 
Interest expense, net
 
(4,555
)
 
(5,561
)
 
(8,246
)
 
(10,959
)
Other income (expense), net
 
4,782

 
(948
)
 
5,819

 
(5,364
)
Total other income (expense)
 
227

 
(6,509
)
 
(2,427
)
 
(16,323
)
Income before income taxes
 
164,966

 
144,438

 
313,752

 
258,566

Income tax expense
 
33,593

 
41,137

 
68,296

 
77,705

Net income
 
131,373

 
103,301

 
245,456

 
180,861

Net income attributable to noncontrolling interest
 
—

 
45

 
—

 
90

Net income attributable to Copart, Inc.
 
$
131,373

 
$
103,256

 
$
245,456

 
$
180,771

 
 
 
 
 
 
 
 
 
Basic net income per common share
 
$
0.57

 
$
0.45

 
$
1.06

 
$
0.78

Weighted average common shares outstanding
 
230,798

 
231,478

 
232,343

 
231,086

 
 
 
 
 
 
 
 
 
Diluted net income per common share
 
$
0.55

 
$
0.43

 
$
1.01

 
$
0.75

Diluted weighted average common shares outstanding
 
240,660

 
241,360

 
242,743

 
240,076



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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, 2019
 
July 31, 2018
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
108,174

 
$
274,520

Accounts receivable, net
 
393,561

 
351,601

Vehicle pooling costs and inventories
 
108,925

 
51,018

Income taxes receivable
 
25

 
15,312

Prepaid expenses and other assets
 
17,781

 
16,665

Total current assets
 
628,466

 
709,116

Property and equipment, net
 
1,237,117

 
1,163,425

Intangibles, net
 
60,265

 
64,892

Goodwill
 
338,045

 
337,235

Deferred income taxes
 
348

 
470

Other assets
 
32,664

 
32,560

Total assets
 
$
2,296,905

 
$
2,307,698

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued liabilities
 
$
266,126

 
$
270,944

Deferred revenue
 
7,344

 
4,488

Income taxes payable
 
4,441

 
673

Current portion of revolving loan facility and capital lease obligations
 
94,122

 
1,151

Total current liabilities
 
372,033

 
277,256

Deferred income taxes
 
32,314

 
19,733

Income taxes payable
 
30,390

 
27,277

Long-term debt, revolving loan facility and capital lease obligations, net of discount
 
398,740

 
398,747

Other liabilities
 
3,475

 
3,586

Total liabilities
 
836,952

 
726,599

Commitments and contingencies
 
 
 
 
Stockholders' equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
23

 
23

Additional paid-in capital
 
530,102

 
526,858

Accumulated other comprehensive loss
 
(107,223
)
 
(107,928
)
Retained earnings
 
1,037,051

 
1,162,146

Total stockholders' equity
 
1,459,953

 
1,581,099

Total liabilities and stockholders' equity
 
$
2,296,905

 
$
2,307,698




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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,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net income
 
$
245,456

 
$
180,861

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization, including debt cost
 
42,487

 
33,994

Allowance for doubtful accounts
 
96

 
1,013

Equity in (earnings) losses of unconsolidated affiliates
 
(514
)
 
251

Stock-based compensation
 
11,950

 
11,298

(Gain) loss on sale of property and equipment
 
(3,890
)
 
4,639

Deferred income taxes
 
6,632

 
2,666

Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable
 
(86,125
)
 
(86,147
)
Vehicle pooling costs and inventories
 
(31,858
)
 
(9,073
)
Prepaid expenses and other current assets
 
(1,220
)
 
(1,437
)
Other assets
 
495

 
(4,320
)
Accounts payable and accrued liabilities
 
7,338

 
38,919

Deferred revenue
 
2,843

 
1,705

Income taxes receivable
 
15,286

 
2,575

Income taxes payable
 
6,890

 
9,365

Other liabilities
 
(662
)
 
84

Net cash provided by operating activities
 
215,204

 
186,393

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment
 
(136,727
)
 
(110,782
)
Proceeds from sale of property and equipment
 
17,488

 
2,812

Net cash used in investing activities
 
(119,239
)
 
(107,970
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Proceeds from the exercise of stock options
 
5,220

 
16,603

Proceeds from the issuance of Employee Stock Purchase Plan shares
 
3,501

 
2,723

Repurchases of common stock
 
(364,997
)
 
—

Payments for employee stock-based tax withholdings
 
(27
)
 
(3
)
Net proceeds (repayments) on revolving loan facility
 
93,300

 
(120,300
)
Distributions to noncontrolling interest
 
—

 
(55
)
Net cash used in financing activities
 
(263,003
)
 
(101,032
)
Effect of foreign currency translation
 
692

 
7,809

Net decrease in cash and cash equivalents
 
(166,346
)
 
(14,800
)
Cash and cash equivalents at beginning of period
 
274,520

 
210,100

Cash and cash equivalents at end of period
 
$
108,174

 
$
195,300

Supplemental disclosure of cash flow information:
 
 
 
 
Interest paid
 
$
9,018

 
$
11,010

Income taxes paid, net of refunds
 
$
39,327

 
$
64,104





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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,
 
 
2019
 
2018
 
2019
 
2018
GAAP net income attributable to Copart, Inc.
 
$
131,373

 
$
103,256

 
$
245,456

 
$
180,771

Effect of deemed repatriation of foreign earnings, net of deferred tax changes
 
—

 
10,000

 
—

 
10,000

Effect of disposal of non-operating assets, net of tax
 
(1,598
)
 
—

 
(1,598
)
 
2,994

Effect of foreign currency-related (gains) losses, net of tax
 
(56
)
 
768

 
(399
)
 
1,076

Effect of recognizing tax benefit on exercise of employee stock options
 
(4,847
)
 
(2,596
)
 
(5,022
)
 
(6,363
)
Non-GAAP net income attributable to Copart, Inc.
 
$
124,872

 
$
111,428

 
$
238,437

 
$
188,478

 
 
 
 
 
 
 
 
 
GAAP diluted net income per common share
 
$
0.55

 
$
0.43

 
$
1.01

 
$
0.75

Non-GAAP diluted net income per common share
 
$
0.52

 
$
0.47

 
$
0.99

 
$
0.79

 
 
 
 
 
 
 
 
 
GAAP diluted weighted average common shares outstanding
 
240,660

 
241,360

 
242,743

 
240,076

Effect on common equivalent shares from ASU 2016-09
 
(1,675
)
 
(2,703
)
 
(2,058
)
 
(1,352
)
Non-GAAP diluted weighted average common shares outstanding
 
238,985

 
238,657

 
240,685

 
238,724




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