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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

May 18, 2022

Date of Report (date of earliest event reported)

COPART, INC.

(Exact name of registrant as specified in its charter)

Delaware

000-23255

94-2867490

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification No.)

14185 Dallas Parkway

Suite 300

Dallas

Texas

75254

(Address of principal executive offices, including zip code)

(972) 391-5000

(Registrant’s telephone number, including area code)

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, par value $0.0001			CPRT			The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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INFORMATION INCLUDED IN THIS REPORT

Section 2 — Financial Information

Item 2.02 Results of Operations and Financial Condition

The following information and the exhibit attached hereto as Exhibit 99.1 are intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information and the exhibit attached hereto as Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this report, regardless of any general incorporation language in the filing, except as shall be expressly set forth by specific reference in such filing.

On February 16, 2022, Copart, Inc. issued a press release announcing its financial results for the third quarter of fiscal year 2022, which ended April 30, 2022. The full text of the press release is furnished herewith as Exhibit 99.1.

Section 9 — Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibits are furnished herewith:

Exhibit Number						Description
99.1						Press release, dated February 16, 2022 of Copart, Inc. announcing its financial results for the second quarter of fiscal year 2022, which ended January 31, 2022.
104						Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:      February 16, 2022                 COPART, INC.

						By:			/s/ John North
									John North
									Chief Financial Officer

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INDEX TO EXHIBITS

Exhibit Number						Description
99.1						Press release, dated February 16, 2022 of Copart, Inc. announcing its financial results for the second quarter of fiscal year 2022, which ended January 31, 2022.
104						Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL).

Exhibit 99.1

Copart, Inc.

For Immediate Release

Copart Reports Third Quarter Fiscal 2022 Financial Results

Dallas, Texas May 18, 2022 — Copart, Inc. (NASDAQ: CPRT) today reported financial results for the quarter ended April 30, 2022.

For the three months ended April 30, 2022, revenue, gross profit, and net income were $939.9 million, $436.3 million, and $278.6 million, respectively. These represent an increase in revenue of $206.0 million, or 28.1%; an increase in gross profit of $54.9 million, or 14.4%; and a decrease in net income of $(8.2) million, or (2.9)%, respectively, from the same period last year. Fully diluted earnings per share for the three months were $1.16 compared to $1.19 last year, a decrease of (2.5)%.

For the nine months ended April 30, 2022, revenue, gross profit, and net income were $2,617.5 million, $1,224.6 million, and $826.4 million, respectively. These represent an increase in revenue of $673.7 million, or 34.7%; an increase in gross profit of $239.0 million, or 24.3%; and an increase in net income of $145.9 million, or 21.4%, respectively, from the same period last year. Fully diluted earnings per share for the nine months were $3.42 compared to $2.83 last year, an increase of 20.8%.

Excluding the impact of certain income tax benefits related to stock-based compensation and certain legal matters, non-GAAP fully diluted earnings per share for the three months ended April 30, 2022 and 2021 were $1.17, and $1.09, respectively, which was an increase of 7.3%. Excluding the impact of certain income tax benefits related to stock-based compensation, certain legal matters and discrete income tax items, non-GAAP fully diluted earnings per share for the nine months ended April 30, 2022 and 2021, were $3.34, and $2.68, respectively, which was an increase of 24.6%. 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 19, 2022, 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 via hyperlink at www.copart.com/investorrelations. A replay of the call will be available through August 2022 by visiting www.copart.com/investorrelations.

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 vehicles to dealers, dismantlers, rebuilders, exporters, and to the general public. Copart sells vehicles on behalf of insurance companies, banks, finance companies, charities, fleet operators, dealers, vehicle rental companies, and individuals. With operations at over 200 locations in 11 countries, Copart has more than 250,000 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.

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

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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 certain income tax benefits related to stock-based compensation, certain legal matters and discrete income tax items. 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.

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.

Contact:			Brooke Boston, Executive Assistant, Office of the Chief Financial Officer
			[email protected]

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

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Copart, Inc.

Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

						Three Months Ended  April 30,																		Nine Months Ended  April 30,
						2022						2021						% Change						2022						2021						% Change
Service revenues and vehicle sales:
Service revenues						$	766,316					$	623,846					22.8		%				$	2,145,224					$	1,671,819					28.3		%
Vehicle sales						173,625						110,064						57.7		%				472,309						272,062						73.6		%
Total service revenues and vehicle sales						939,941						733,910						28.1		%				2,617,533						1,943,881						34.7		%
Operating expenses:
Yard operations						313,365						230,794						35.8		%				878,740						646,690						35.9		%
Cost of vehicle sales						157,236						94,498						66.4		%				423,948						232,487						82.4		%
Yard depreciation and amortization						31,646						25,876						22.3		%				86,383						74,350						16.2		%
Yard stock-based compensation						1,417						1,401						1.1		%				3,813						4,746						(19.7)		%
Gross profit						436,277						381,341						14.4		%				1,224,649						985,608						24.3		%
General and administrative						50,188						39,174						28.1		%				134,057						110,326						21.5		%
General and administrative depreciation and amortization						4,933						6,090						(19.0)		%				15,269						17,957						(15.0)		%
General and administrative stock-based compensation						8,401						7,966						5.5		%				25,119						22,399						12.1		%
Total operating expenses						567,186						405,799						39.8		%				1,567,329						1,108,955						41.3		%
Operating income						372,755						328,111						13.6		%				1,050,204						834,926						25.8		%
Other expense:
Interest expense, net						(4,492)						(5,346)						(16.0)		%				(14,032)						(15,227)						(7.8)		%
Other income, net						1,342						770						74.3		%				1,314						3,103						(57.7)		%
Total other expense						(3,150)						(4,576)						(31.2)		%				(12,718)						(12,124)						4.9		%
Income before income taxes						369,605						323,535						14.2		%				1,037,486						822,802						26.1		%
Income tax expense						90,985						36,739						147.7		%				211,091						142,281						48.4		%
Net income						$	278,620					$	286,796					(2.9)		%				$	826,395					$	680,521					21.4		%
Basic net income per common share						$	1.17					$	1.21					(3.3)		%				$	3.48					$	2.88					20.8		%
Weighted average common shares outstanding						237,505						236,396						0.5		%				237,277						236,110						0.5		%
Diluted net income per common share						$	1.16					$	1.19					(2.5)		%				$	3.42					$	2.83					20.8		%
Diluted weighted average common shares outstanding						240,724						240,208						0.2		%				241,288						240,149						0.5		%

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

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Copart, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

						April 30, 2022						July 31, 2021
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash						$	1,454,818					$	1,048,260
Investment in held to maturity securities						224,889						—
Accounts receivable, net						585,914						480,628
Vehicle pooling costs						114,028						94,449
Inventories						56,988						44,968
Income taxes receivable						1,581						20,012
Prepaid expenses and other assets						19,208						14,294
Total current assets						2,457,426						1,702,611
Property and equipment, net						2,402,809						2,296,624
Operating lease right-of-use assets						121,006						119,487
Intangibles, net						40,854						45,873
Goodwill						348,000						355,717
Other assets						73,779						41,831
Total assets						$	5,443,874					$	4,562,143
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities						$	398,414					$	369,826
Deferred revenue						21,087						20,973
Income taxes payable						6,907						7,760
Current portion of operating and finance lease liabilities						22,687						22,472
Total current liabilities						449,095						421,031
Deferred income taxes						78,023						63,969
Income taxes payable						61,359						52,345
Operating and finance lease liabilities, net of current portion						99,610						97,961
Long-term debt and other liabilities, net of discount						402,733						397,636
Total liabilities						1,090,820						1,032,942
Commitments and contingencies
Stockholders' equity:
Preferred stock						—						—
Common stock						24						24
Additional paid-in capital						811,900						761,834
Accumulated other comprehensive loss						(152,596)						(100,860)
Retained earnings						3,693,726						2,868,203
Total stockholders' equity						4,353,054						3,529,201
Total liabilities and stockholders' equity						$	5,443,874					$	4,562,143

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

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Copart, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

						Nine Months Ended April 30,
						2022						2021
Cash flows from operating activities:
Net income						$	826,395					$	680,521
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including debt cost						102,333						93,141
Allowance for credit loss						1,456						(1,429)
Equity in losses (earnings) of unconsolidated affiliates						794						(2,121)
Stock-based compensation						28,932						27,145
Gain on sale of property and equipment						(1,280)						(1,257)
Deferred income taxes						14,582						(14,130)
Changes in operating assets and liabilities:
Accounts receivable						(109,636)						(81,593)
Vehicle pooling costs						(20,029)						(12,777)
Inventories						(13,367)						(18,788)
Prepaid expenses, other current and non-current assets						(37,842)						6,879
Operating lease right-of-use assets and lease liabilities						436						389
Accounts payable, accrued liabilities and other liabilities						45,745						47,914
Deferred revenue						388						8,467
Income taxes receivable						18,416						16,152
Income taxes payable						6,531						13,692
Net cash provided by operating activities						863,854						762,205
Cash flows from investing activities:
Purchases of property and equipment						(234,810)						(364,395)
Purchase of assets in connection with acquisitions						(493)						—
Proceeds from sale of property and equipment						2,622						599
Purchase of held to maturity securities						(374,866)						—
Proceeds from the sale of held to maturity securities						149,977						—
Net cash used in investing activities						(457,570)						(363,796)
Cash flows from financing activities:
Proceeds from the exercise of stock options						16,108						28,829
Proceeds from the issuance of Employee Stock Purchase Plan shares						5,026						4,880
Payments for employee stock-based tax withholdings						(872)						(938)
Debt offering costs						(1,212)						—
Payments of finance lease obligations						(472)						(962)
Net cash provided by financing activities						18,578						31,809
Effect of foreign currency translation						(18,304)						3,954
Net increase in cash, cash equivalents, and restricted cash						406,558						434,172
Cash, cash equivalents, and restricted cash at beginning of period						1,048,260						477,718
Cash, cash equivalents, and restricted cash at end of period						$	1,454,818					$	911,890
Supplemental disclosure of cash flow information:
Interest paid						$	14,485					$	14,736
Income taxes paid, net of refunds						$	195,521					$	126,303

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

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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,
						2022						2021						2022						2021
GAAP net income						$	278,620					$	286,796					$	826,395					$	680,521
Effect of certain discrete income tax items						—						(19,764)						(17,490)						(19,764)
Effect of certain legal matters, net of tax						5,092						—						5,092						—
Effect of recognizing tax benefit on exercise of stock-based compensation						(2,244)						(4,910)						(9,197)						(18,850)
Non-GAAP net income						$	281,468					$	262,122					$	804,800					$	641,907
GAAP net income per diluted common share						$	1.16					$	1.19					$	3.42					$	2.83
Non-GAAP net income per diluted common share						$	1.17					$	1.09					$	3.34					$	2.68

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