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Copart Reports Second Quarter Fiscal 2021 Financial Results

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Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended January 31, 2021.

For the three months ended January 31, 2021, revenue, gross profit, and net income were $617.0 million, $307.5 million, and $193.4 million, respectively. These represent an increase in revenue of $41.9 million, or 7.3%; an increase in gross profit of $47.6 million, or 18.3%; and an increase in net income of $24.7 million, or 14.7%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $0.81 compared to $0.71 last year, an increase of 14.1%.

For the six months ended January 31, 2021, revenue, gross profit, and net income were $1.2 billion, $604.3 million, and $393.7 million, respectively. These represent an increase in revenue of $80.4 million, or 7.1%; an increase in gross profit of $89.5 million, or 17.4%; and an increase in net income of $6.8 million, or 1.8%, respectively, from the same period last year. Fully diluted earnings per share for the six months were $1.64 compared to $1.62 last year, an increase of 1.2%.

Excluding the impact of discrete income tax items, 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, 2021 and 2020, were $0.80, and $0.64, respectively, which was an increase of 25.0%. Excluding the impact of discrete income tax items, 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 six months ended January 31, 2021 and 2020, were $1.58, and $1.29, respectively, which was an increase of 22.5%. 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 Friday, February 19, 2021, 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://public.viavid.com/index.php?id=143555 or via hyperlink at www.copart.com/investorrelations. A replay of the call will be available through May 2021 by visiting www.copart.com/investorrelations or http://public.viavid.com/index.php?id=143555.

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 jurisdictions, to the general public. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers and individuals. With operations at over 200 locations in 11 countries, Copart has more than 175,000 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 (Copart.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.

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 discrete income tax items, 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 discrete income tax items, 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, including statements concerning the potential impact of the COVID-19 pandemic on our business, operations, and operating results. 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.

Copart, Inc.

Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020

2021

2020

Service revenues and vehicle sales:

Service revenues

$

532,601

$

510,034

$

1,047,973

$

997,890

Vehicle sales

84,430

65,106

161,998

131,674

Total service revenues and vehicle sales

617,031

575,140

1,209,971

1,129,564

Operating expenses:

Yard operations

208,910

237,683

415,896

460,562

Cost of vehicle sales

73,629

57,900

137,989

116,664

Yard depreciation and amortization

25,180

18,231

48,474

35,051

Yard stock-based compensation

1,814

1,437

3,345

2,529

Gross profit

307,498

259,889

604,267

514,758

General and administrative

36,014

39,242

71,152

78,085

General and administrative depreciation and amortization

6,212

6,051

11,867

12,245

General and administrative stock-based compensation

7,051

4,704

14,433

9,145

Total operating expenses

358,810

365,248

703,156

714,281

Operating income

258,221

209,892

506,815

415,283

Other expense:

Interest expense, net

(4,849)

(4,464)

(9,881)

(8,490)

Other income, net

(920)

(354)

2,333

363

Total other expense

(5,769)

(4,818)

(7,548)

(8,127)

Income before income taxes

252,452

205,074

499,267

407,156

Income tax expense

59,012

36,367

105,542

20,269

Net income

$

193,440

$

168,707

$

393,725

$

386,887

Basic net income per common share

$

0.82

$

0.73

$

1.67

$

1.67

Weighted average common shares outstanding

236,152

232,671

235,971

231,920

Diluted net income per common share

$

0.81

$

0.71

$

1.64

$

1.62

Diluted weighted average common shares outstanding

240,280

238,470

240,124

238,566

Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

January 31, 2021

July 31, 2020

ASSETS

Current assets:

Cash, cash equivalents, and restricted cash

$

616,403

$

477,718

Accounts receivable, net

462,405

350,207

Vehicle pooling costs

92,928

73,684

Inventories

30,203

20,080

Income taxes receivable

6,498

26,740

Prepaid expenses and other assets

17,030

15,330

Total current assets

1,225,467

963,759

Property and equipment, net

2,175,346

1,941,719

Operating lease right-of-use assets

107,602

118,455

Intangibles, net

44,270

47,772

Goodwill

346,966

343,622

Deferred income taxes

221

213

Other assets

34,566

39,721

Total assets

$

3,934,438

$

3,455,261

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

324,108

$

318,530

Deferred revenue

14,431

8,233

Income taxes payable

8,672

3,709

Current portion of operating lease liabilities

22,554

24,821

Current portion of finance lease liabilities

1,250

751

Total current liabilities

371,015

356,044

Deferred income taxes

81,316

71,686

Income taxes payable

51,177

44,965

Operating lease liabilities, net of current portion

85,307

95,584

Long-term debt and finance lease liabilities, net of discount

402,703

397,036

Other liabilities

328

430

Total liabilities

991,846

965,745

Commitments and contingencies

Stockholders' equity:

Preferred stock

Common stock

24

24

Additional paid-in capital

718,497

672,727

Accumulated other comprehensive loss

(106,720)

(121,088)

Retained earnings

2,330,791

1,937,853

Total stockholders' equity

2,942,592

2,489,516

Total liabilities and stockholders' equity

$

3,934,438

$

3,455,261

Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Six Months Ended January 31,

2021

2020

Cash flows from operating activities:

Net income

$

393,725

$

386,887

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization, including debt cost

60,898

48,097

Allowance for credit loss

213

1,301

Equity in (earnings) losses of unconsolidated affiliates

(1,343)

3,124

Stock-based compensation

17,778

11,674

Gain on sale of property and equipment

(1,145)

(1,315)

Deferred income taxes

9,442

6,719

Changes in operating assets and liabilities:

Accounts receivable

(111,148)

(78,510)

Vehicle pooling costs

(19,099)

(13,921)

Inventories

(9,772)

2,765

Prepaid expenses and other current and non-current assets

5,802

7,184

Operating lease right-of-use assets and lease liabilities

470

331

Accounts payable and accrued liabilities

10,041

24,862

Deferred revenue

6,098

1,021

Income taxes receivable

20,243

(48,722)

Income taxes payable

10,838

5,794

Other liabilities

(371)

Net cash provided by operating activities

393,041

356,920

Cash flows from investing activities:

Purchases of property and equipment, including acquisitions

(283,214)

(400,352)

Proceeds from sale of property and equipment

129

1,639

Net cash used in investing activities

(283,085)

(398,713)

Cash flows from financing activities:

Proceeds from the exercise of stock options

23,112

32,594

Proceeds from the issuance of Employee Stock Purchase Plan shares

4,880

3,955

Payments for employee stock-based tax withholdings

(787)

(101,422)

Net proceeds on revolving loan facility

13,600

Payments of finance lease obligations

(622)

Net cash provided by (used in) financing activities

26,583

(51,273)

Effect of foreign currency translation

2,146

258

Net increase (decrease) in cash, cash equivalents, and restricted cash

138,685

(92,808)

Cash, cash equivalents, and restricted cash at beginning of period

477,718

186,319

Cash, cash equivalents, and restricted cash at end of period

$

616,403

$

93,511

Supplemental disclosure of cash flow information:

Interest paid

$

7,614

$

9,007

Income taxes paid, net of refunds

$

64,860

$

57,591

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,

2021

2020

2021

2020

GAAP net income

$

193,440

$

168,707

$

393,725

$

386,887

Effect of discrete income tax items

(3,008)

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

238

(416)

48

(679)

Effect of recognizing tax benefit on exercise of employee stock options

(2,167)

(14,829)

(13,939)

(77,194)

Effect of payroll taxes on certain executive stock compensation, net of tax

2,867

Non-GAAP net income

$

191,511

$

153,462

$

379,834

$

308,873

GAAP net income per diluted common share

$

0.81

$

0.71

$

1.64

$

1.62

Non-GAAP net income per diluted common share

$

0.80

$

0.64

$

1.58

$

1.29

View source version on businesswire.com: https://www.businesswire.com/news/home/20210218005089/en/

Contacts

Melissa Hunter, Executive Support Manager, Office of the Chief Financial Officer
972-391-5090 or melissa.hunter@copart.com