EX-99.1 2 cprt4302019ex99-1.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports Third Quarter Fiscal 2019 Financial Results
Dallas, Texas. (May 22, 2019) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended April 30, 2019.
For the three months ended April 30, 2019, revenue, gross profit, and net income were $553.1 million, $251.6 million, and $192.7 million, respectively. These represent an increase in revenue of $74.9 million, or 15.7%; an increase in gross profit of $32.5 million, or 14.8%; and an increase in net income of $65.4 million, or 51.3%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.81 compared to $0.52 last year, an increase of 55.8%.
For the nine months ended April 30, 2019, revenue, gross profit, and net income were $1.5 billion, $655.7 million, and $438.2 million, respectively. These represent an increase in revenue of $142.9 million, or 10.5%; an increase in gross profit of $81.8 million, or 14.2%; and an increase in net income of $130.1 million, or 42.2%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $1.82 compared to $1.28 last year, an increase of 42.2%.
The operating results for the three and nine months ended April 30, 2018 were adversely affected by abnormal costs of $7.4 million and $79.7 million, respectively, incurred as a result of Hurricane Harvey. These costs included temporary storage facilities; abnormally high costs for subhaulers; increased labor costs due to 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 $3.5 million and $66.9 million, respectively, generated pre-tax loss for the three months ended April 30, 2018 of $3.9 million and a pre-tax loss for the nine months ended April 30, 2018 of $12.8 million.
Excluding the impact of income taxes on the deemed repatriation of foreign earnings, net of deferred tax changes, discrete income tax items, disposals of non-operating assets, foreign currency-related gains and losses, 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 months ended April 30, 2019 and 2018, were $0.66 and $0.52, respectively. Non-GAAP fully diluted earnings per share for the nine months ended April 30, 2019 and 2018, were $1.64 and $1.31, 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 23, 2019, at 9 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/copart052319. A replay of the call will be available through July 22, 2019 by calling (877) 919-4059. Use confirmation code # 77347431.
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, discrete income tax items, disposals of non-operating assets, foreign currency-related gains and losses, 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 income taxes on the deemed repatriation of foreign earnings, net of deferred tax changes, discrete income tax items, disposals of non-operating assets, foreign currency-related gains and losses, 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
 April 30,
 
Nine Months Ended
 April 30,
 
 
2019
 
2018
 
2019
 
2018
Service revenues and vehicle sales:
 
 
 
 
 
 
 
 
Service revenues
 
$
473,682

 
$
410,762

 
$
1,285,295

 
$
1,186,841

Vehicle sales
 
79,434

 
67,436

 
214,087

 
169,631

Total service revenues and vehicle sales
 
553,116

 
478,198

 
1,499,382

 
1,356,472

Operating expenses:
 
 
 
 
 
   
 
 
Yard operations
 
213,804

 
189,346

 
602,664

 
599,854

Cost of vehicle sales
 
70,984

 
57,538

 
189,952

 
146,148

Yard depreciation and amortization
 
15,398

 
11,188

 
47,422

 
33,617

Yard stock-based compensation
 
1,351

 
1,058

 
3,621

 
2,912

Gross profit
 
251,579

 
219,068

 
655,723

 
573,941

General and administrative
 
34,072

 
34,181

 
102,113

 
93,377

General and administrative depreciation and amortization
 
5,714

 
5,385

 
15,958

 
16,729

General and administrative stock-based compensation
 
4,299

 
4,883

 
13,979

 
14,327

Total operating expenses
 
345,622

 
303,579

 
975,709

 
906,964

Operating income
 
207,494

 
174,619

 
523,673

 
449,508

Other (expense) income:
 
 
 
 
 
   
 
 
Interest expense, net
 
(5,084
)
 
(4,134
)
 
(13,330
)
 
(15,093
)
Other income (expense), net
 
1,719

 
731

 
7,538

 
(4,633
)
Total other expense
 
(3,365
)
 
(3,403
)
 
(5,792
)
 
(19,726
)
Income before income taxes
 
204,129

 
171,216

 
517,881

 
429,782

Income tax expense
 
11,388

 
43,811

 
79,684

 
121,516

Net income
 
192,741

 
127,405

 
438,197

 
308,266

Net income attributable to noncontrolling interest
 
—

 
57

 
—

 
147

Net income attributable to Copart, Inc.
 
$
192,741

 
$
127,348

 
$
438,197

 
$
308,119

 
 
 
 
 
 
 
 
 
Basic net income per common share
 
$
0.85

 
$
0.55

 
$
1.90

 
$
1.33

Weighted average common shares outstanding
 
227,984

 
232,010

 
230,922

 
231,387

 
 
 
 
 
 
 
 
 
Diluted net income per common share
 
$
0.81

 
$
0.52

 
$
1.82

 
$
1.28

Diluted weighted average common shares outstanding
 
237,892

 
242,960

 
241,158

 
241,030



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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)
 
 
April 30, 2019
 
July 31, 2018
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
102,826

 
$
274,520

Accounts receivable, net
 
376,564

 
351,601

Vehicle pooling costs
 
75,289

 
34,284

Inventories
 
22,309

 
16,734

Income taxes receivable
 
18,902

 
15,312

Prepaid expenses and other assets
 
17,695

 
16,665

Total current assets
 
613,585

 
709,116

Property and equipment, net
 
1,340,692

 
1,163,425

Intangibles, net
 
57,627

 
64,892

Goodwill
 
337,725

 
337,235

Deferred income taxes
 
333

 
470

Other assets
 
41,801

 
32,560

Total assets
 
$
2,391,763

 
$
2,307,698

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued liabilities
 
$
279,779

 
$
270,944

Deferred revenue
 
7,988

 
4,488

Income taxes payable
 
1,583

 
673

Current portion of revolving loan facility and capital lease obligations
 
7,556

 
1,151

Total current liabilities
 
296,906

 
277,256

Deferred income taxes
 
40,165

 
19,733

Income taxes payable
 
33,634

 
27,277

Long-term debt, revolving loan facility and capital lease obligations, net of discount
 
398,835

 
398,747

Other liabilities
 
3,371

 
3,586

Total liabilities
 
772,911

 
726,599

Commitments and contingencies
 
 
 
 
Stockholders' equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
23

 
23

Additional paid-in capital
 
545,895

 
526,858

Accumulated other comprehensive loss
 
(113,191
)
 
(107,928
)
Retained earnings
 
1,186,125

 
1,162,146

Total stockholders' equity
 
1,618,852

 
1,581,099

Total liabilities and stockholders' equity
 
$
2,391,763

 
$
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)
 
 
Nine Months Ended April 30,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net income
 
$
438,197

 
$
308,266

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization, including debt cost
 
63,709

 
50,678

Allowance for doubtful accounts
 
341

 
1,096

Equity in (earnings) losses of unconsolidated affiliates
 
(1,852
)
 
679

Stock-based compensation
 
17,600

 
17,239

(Gain) loss on sale of property and equipment
 
(3,753
)
 
4,044

Deferred income taxes
 
14,583

 
(17
)
Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable
 
(69,920
)
 
(43,361
)
Vehicle pooling costs
 
(15,026
)
 
(1,590
)
Inventories
 
(5,721
)
 
(6,700
)
Prepaid expenses and other current assets
 
(1,436
)
 
(371
)
Other assets
 
(7,169
)
 
(413
)
Accounts payable and accrued liabilities
 
17,747

 
27,981

Deferred revenue
 
3,512

 
849

Income taxes receivable
 
(3,578
)
 
5,043

Income taxes payable
 
7,304

 
14,025

Other liabilities
 
(1,042
)
 
(251
)
Net cash provided by operating activities
 
453,496

 
377,197

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment, including acquisitions
 
(260,081
)
 
(188,482
)
Proceeds from sale of property and equipment
 
17,928

 
3,368

Net cash used in investing activities
 
(242,153
)
 
(185,114
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Proceeds from the exercise of stock options
 
17,261

 
23,816

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
 
(45,594
)
 
(3
)
Net proceeds (repayments) on revolving loan facility
 
7,000

 
(231,000
)
Distributions to noncontrolling interest
 
—

 
(55
)
Net cash used in financing activities
 
(382,829
)
 
(204,519
)
Effect of foreign currency translation
 
(208
)
 
6,611

Net decrease in cash and cash equivalents
 
(171,694
)
 
(5,825
)
Cash and cash equivalents at beginning of period
 
274,520

 
210,100

Cash and cash equivalents at end of period
 
$
102,826

 
$
204,275

Supplemental disclosure of cash flow information:
 
 
 
 
Interest paid
 
$
14,700

 
$
15,406

Income taxes paid, net of refunds
 
$
60,926

 
$
102,762





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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
 April 30,
 
Nine Months Ended
 April 30,
 
 
2019
 
2018
 
2019
 
2018
GAAP net income attributable to Copart, Inc.
 
$
192,741

 
$
127,348

 
$
438,197

 
$
308,119

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

 
1,000

 
—

 
11,000

Effect of discrete income tax items
 
(10,170
)
 
—

 
(10,170
)
 
—

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

 
—

 
(1,598
)
 
2,994

Effect of foreign currency-related losses (gains), net of tax
 
94

 
(261
)
 
(304
)
 
777

Effect of recognizing tax benefit on exercise of employee stock options
 
(29,074
)
 
(3,085
)
 
(34,096
)
 
(9,448
)
Effect of payroll taxes on certain executive stock compensation, net of tax
 
1,295

 
—

 
1,295

 
—

Non-GAAP net income attributable to Copart, Inc.
 
$
154,886

 
$
125,002

 
$
393,324

 
$
313,442

 
 
 
 
 
 
 
 
 
GAAP net income per diluted common share
 
$
0.81

 
$
0.52

 
$
1.82

 
$
1.28

Non-GAAP net income per diluted common share
 
$
0.66

 
$
0.52

 
$
1.64

 
$
1.31

 
 
 
 
 
 
 
 
 
GAAP diluted weighted average common shares outstanding
 
237,892

 
242,960

 
241,158

 
241,030

Effect on common equivalent shares from ASU 2016-09
 
(1,731
)
 
(3,090
)
 
(1,949
)
 
(1,030
)
Non-GAAP diluted weighted average common shares outstanding
 
236,161

 
239,870

 
239,209

 
240,000




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