EX-99.1 2 cprt07312019ex99-1.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
Copart, Inc.
For Immediate Release
Copart Reports Fourth Quarter Fiscal 2019 Financial Results
Dallas, Texas (September 4, 2019) — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter and year ended July 31, 2019.
For the three months ended July 31, 2019, revenue, gross profit, and net income were $542.6 million, $242.6 million, and $153.5 million, respectively. These represent an increase in revenue of $93.4 million, or 20.8%; an increase in gross profit of $54.2 million, or 28.8%; and an increase in net income of $43.7 million, or 39.9%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.64 compared to $0.45 last year, an increase of 42.2%.
For the year ended July 31, 2019, revenue, gross profit, and net income were $2.0 billion, $898.3 million, and $591.7 million, respectively. These represent an increase in revenue of $236.3 million, or 13.1%; an increase in gross profit of $136.0 million, or 17.8%; and an increase in net income of $173.8 million, or 41.6%, respectively, from the same period last year. Fully diluted earnings per share for the year ended July 31, 2019 were $2.46 compared to $1.73 last year, an increase of 42.2%.
The operating results for the year ended July 31, 2018 were adversely affected by abnormal costs of $79.7 million 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 $66.9 million generated a pre-tax loss of $12.8 million for the year ended July 31, 2018.
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, impairment of long-lived assets, acquisition related fees and integration charges, reserve for legacy sales tax liabilities; 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 July 31, 2019 and 2018, were $0.60 and $0.42, respectively. Non-GAAP fully diluted earnings per share for the year ended July 31, 2019 and 2018, were $2.25 and $1.73, 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, September 5, 2019, at 11:00 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/copart090519. A replay of the call will be available through October 29, 2019 by calling (877) 919-4059. Use confirmation code: 52506215.
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.

- 1 -
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, impairment of long-lived assets, acquisition related fees and integration charges, reserve for legacy sales tax liabilities; 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, impairment of long-lived assets, acquisition related fees and integration charges, reserve for legacy sales tax liabilities; 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



- 2 -
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 
 July 31,
 
Twelve Months Ended 
 July 31,
 
 
2019
 
2018
 
2019
 
2018
Service revenues and vehicle sales:
 
 
 
 
 
 
 
 
Service revenues
 
$
470,399

 
$
391,661

 
$
1,755,694

 
$
1,578,502

Vehicle sales
 
72,176

 
57,562

 
286,263

 
227,193

Total service revenues and vehicle sales
 
542,575

 
449,223

 
2,041,957

 
1,805,695

Operating expenses:
 
 
 
 
 
   
 
 
Yard operations
 
217,089

 
185,914

 
819,753

 
785,768

Cost of vehicle sales
 
65,552

 
50,313

 
255,504

 
196,461

Yard depreciation and amortization
 
15,745

 
23,613

 
63,167

 
57,230

Yard stock-based compensation
 
1,570

 
958

 
5,191

 
3,870

Gross profit
 
242,619

 
188,425

 
898,342

 
762,366

General and administrative
 
39,772

 
42,794

 
141,885

 
136,171

General and administrative depreciation and amortization
 
5,770

 
4,639

 
21,728

 
21,368

General and administrative stock-based compensation
 
4,275

 
5,024

 
18,254

 
19,351

Impairment of long-lived assets
 
—

 
1,131

 
—

 
1,131

Total operating expenses
 
349,773

 
314,386

 
1,325,482

 
1,221,350

Operating income
 
192,802

 
134,837

 
716,475

 
584,345

Other (expense) income:
 
 
 
 
 
   
 
 
Interest expense, net
 
(4,255
)
 
(3,982
)
 
(17,585
)
 
(19,075
)
Other (expense) income, net
 
(1,477
)
 
1,874

 
6,061

 
(2,759
)
Total other expense
 
(5,732
)
 
(2,108
)
 
(11,524
)
 
(21,834
)
Income before income taxes
 
187,070

 
132,729

 
704,951

 
562,511

Income tax expense
 
33,574

 
22,988

 
113,258

 
144,504

Net income
 
153,496

 
109,741

 
591,693

 
418,007

Net (loss) income attributable to noncontrolling interest
 
—

 
(7
)
 
—

 
140

Net income attributable to Copart, Inc.
 
$
153,496

 
$
109,748

 
$
591,693

 
$
417,867

 
 
 
 
 
 
 
 
 
Basic net income per common share
 
$
0.67

 
$
0.47

 
$
2.57

 
$
1.80

Weighted average common shares outstanding
 
229,204

 
232,995

 
230,489

 
231,793

 
 
 
 
 
 
 
 
 
Diluted net income per common share
 
$
0.64

 
$
0.45

 
$
2.46

 
$
1.73

Diluted weighted average common shares outstanding
 
238,354

 
244,406

 
240,453

 
241,877



- 3 -
Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000


Copart, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
 
July 31, 2019
 
July 31, 2018
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
186,319

 
$
274,520

Accounts receivable, net
 
367,265

 
351,601

Vehicle pooling costs
 
76,548

 
34,284

Inventories
 
20,941

 
16,734

Income taxes receivable
 
19,526

 
15,312

Prepaid expenses and other assets
 
16,568

 
16,665

Total current assets
 
687,167

 
709,116

Property and equipment, net
 
1,427,726

 
1,163,425

Intangibles, net
 
55,156

 
64,892

Goodwill
 
333,321

 
337,235

Deferred income taxes
 
411

 
470

Other assets
 
43,836

 
32,560

Total assets
 
$
2,547,617

 
$
2,307,698

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued liabilities
 
$
270,918

 
$
270,944

Deferred revenue
 
6,466

 
4,488

Income taxes payable
 
3,482

 
673

Current portion of revolving loan facility and capital lease obligations
 
1,138

 
1,151

Total current liabilities
 
282,004

 
277,256

Deferred income taxes
 
48,683

 
19,733

Income taxes payable
 
35,116

 
27,277

Long-term debt, revolving loan facility, and capital lease obligations, net of discount
 
400,091

 
398,747

Other liabilities
 
3,342

 
3,586

Total liabilities
 
769,236

 
726,599

Commitments and contingencies
 
 
 
 
Stockholders’ equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
23

 
23

Additional paid-in capital
 
572,559

 
526,858

Accumulated other comprehensive loss
 
(132,529
)
 
(107,928
)
Retained earnings
 
1,338,328

 
1,162,146

Total stockholders’ equity
 
1,778,381

 
1,581,099

Total liabilities and stockholders’ equity
 
$
2,547,617

 
$
2,307,698




- 4 -
Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000


Copart, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
 
Year Ended July 31,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net income
 
$
591,693

 
$
418,007

Adjustments to reconcile net income to net cash provided by operating activities:
 
   
 
   
Depreciation and amortization, including debt cost
 
85,334

 
79,040

Allowance for doubtful accounts
 
(429
)
 
1,142

Impairment of long-lived assets
 
—

 
1,157

Equity in losses of unconsolidated affiliates
 
419

 
750

Stock-based compensation
 
23,445

 
23,221

(Gain) loss on sale of property and equipment
 
(3,073
)
 
3,240

Deferred income taxes
 
23,167

 
16,717

Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
 
 
Accounts receivable
 
(60,808
)
 
(40,335
)
Vehicle pooling costs
 
(16,418
)
 
(3,353
)
Inventories
 
(4,719
)
 
(3,959
)
Prepaid expenses and other current assets
 
(204
)
 
(776
)
Other assets
 
(12,061
)
 
70

Accounts payable and accrued liabilities
 
11,126

 
53,320

Deferred revenue
 
2,056

 
(520
)
Income taxes receivable
 
(4,215
)
 
(8,916
)
Income taxes payable
 
10,669

 
(3,149
)
Other liabilities
 
664

 
(587
)
Net cash provided by operating activities
 
646,646

 
535,069

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment, including acquisitions
 
(374,628
)
 
(296,697
)
Proceeds from sale of property and equipment
 
18,361

 
6,425

Proceeds from sale of majority-owned subsidiary
 
—

 
1,796

Net cash used in investing activities
 
(356,267
)
 
(288,476
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Proceeds from the exercise of stock options
 
34,398

 
44,459

Proceeds from the issuance of Employee Stock Purchase Plan shares
 
7,183

 
5,853

Repurchases of common stock
 
(364,997
)
 
—

Payments for employee stock-based tax withholdings
 
(46,888
)
 
(1,115
)
Net repayments on revolving loan facility
 
—

 
(231,000
)
Distributions to noncontrolling interest
 
—

 
(235
)
Net cash used in financing activities
 
(370,304
)
 
(182,038
)
Effect of foreign currency translation
 
(8,276
)
 
(135
)
Net (decrease) increase in cash and cash equivalents
 
(88,201
)
 
64,420

Cash and cash equivalents at beginning of period
 
274,520

 
210,100

Cash and cash equivalents at end of period
 
$
186,319

 
$
274,520

Supplemental disclosure of cash flow information:
 
 
 
 
Interest paid
 
$
19,289

 
$
20,343

Income taxes paid, net of refunds
 
$
82,448

 
$
142,161



- 5 -
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 
 July 31,
 
Twelve Months Ended 
 July 31,
 
 
2019
 
2018
 
2019
 
2018
GAAP net income attributable to Copart, Inc.
 
$
153,496

 
$
109,748

 
$
591,693

 
$
417,867

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

 
(2,870
)
 
—

 
8,131

Effect of discrete income tax items
 
—

 
—

 
(10,170
)
 
—

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

 
—

 
—

 
2,994

Effect of impairment of long-lived assets, net of tax
 
—

 
916

 
(1,598
)
 
916

Effect of acquisition related fees and integration charges, net of tax
 
—

 
1,521

 
—

 
1,521

Effect of reserve for legacy sales tax liabilities, net of tax
 
978

 
1,017

 
978

 
1,017

Effect of foreign currency-related losses (gains), net of tax
 
48

 
(415
)
 
(256
)
 
452

Effect of recognizing tax benefit on exercise of employee stock options
 
(12,007
)
 
(11,821
)
 
(46,103
)
 
(21,269
)
Effect of payroll taxes on certain executive stock compensation, net of tax
 
—

 
4,514

 
1,295

 
4,514

Non-GAAP net income attributable to Copart, Inc.
 
$
142,515

 
$
102,610

 
$
535,839

 
$
416,143

 
 
 
 
 
 
 
 
 
GAAP net income per diluted common share
 
$
0.64

 
$
0.45

 
$
2.46

 
$
1.73

Non-GAAP net income per diluted common share
 
$
0.60

 
$
0.42

 
$
2.25

 
$
1.73

 
 
 
 
 
 
 
 
 
GAAP diluted weighted average common shares outstanding
 
238,354

 
244,406

 
240,453

 
241,877

Effect on common equivalent shares from ASU 2016-09
 
(1,633
)
 
(2,586
)
 
(1,870
)
 
(646
)
Non-GAAP diluted weighted average common shares outstanding
 
236,721

 
241,820

 
238,583

 
241,231



- 6 -
Copart, Inc. ~ 14185 Dallas Parkway, Suite 300, Dallas TX 75254 ~ (972) 391-5000