cprt-20211031

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-23255

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) (zip code)

(972) 391-5000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)


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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 18, 2021, 237,188,461 shares of the registrant’s common stock were outstanding.

Copart, Inc.

Index to the Quarterly Report

October 31, 2021


Table of Contents						Page Number
PART I - Financial Information
Item 1 - Financial Statements (Unaudited)
Consolidated Balance Sheets						3
Consolidated Statements of Income						4
Consolidated Statements of Comprehensive Income						5
Consolidated Statements of Stockholders’ Equity						6
Consolidated Statements of Cash Flows						7
Notes to Consolidated Financial Statements						8

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview						18
Acquisitions and New Operations						20
Results of Operations						21
Liquidity and Capital Resources						25
Critical Accounting Policies and Estimates						26
Recently Issued Accounting Standards						27
Contractual Obligations and Commitments						27
Off-Balance Sheet Arrangements						27

Item 3 - Quantitative and Qualitative Disclosures About Market Risk						27

Item 4 - Controls and Procedures
Evaluation of Disclosure Controls and Procedures						28
Changes in Internal Controls						28

PART II - Other Information
Item 1 - Legal Proceedings						29
Item 1A - Risk Factors						29
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds						42
Item 3 - Defaults Upon Senior Securities						42
Item 4 - Mine Safety Disclosures						42
Item 5 - Other Information						42
Item 6 - Exhibits						43
Signatures						44

Table of Contents

Copart, Inc.

Consolidated Balance Sheets

(Unaudited)


(In thousands, except share amounts)	October 31, 2021		July 31, 2021
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash	$	1,298,373	$	1,048,260

Accounts receivable, net	562,637		480,628
Vehicle pooling costs	115,994		94,449
Inventories	48,194		44,968
Income taxes receivable	537		20,012
Prepaid expenses and other assets	14,045		14,294
Total current assets	2,039,780		1,702,611
Property and equipment, net	2,318,701		2,296,624
Operating lease right-of-use assets	123,254		119,487
Intangibles, net	43,914		45,873
Goodwill	354,062		355,717
Other assets	39,141		41,831
Total assets	$	4,918,852	$	4,562,143
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	411,249	$	369,826
Deferred revenue	19,951		20,973
Income taxes payable	37,175		7,760
Current portion of operating and finance lease liabilities	23,536		22,472
Total current liabilities	491,911		421,031
Deferred income taxes	72,166		63,969
Income taxes payable	51,094		52,345
Operating and finance lease liabilities, net of current portion	100,920		97,961
Long-term debt and other liabilities, net of discount	408,940		397,636

Total liabilities	1,125,031		1,032,942
Commitments and contingencies
Stockholders’ equity:
Preferred stock: $0.0001 par value - 5,000,000 shares authorized; none issued	—		—
Common stock: $0.0001 par value - 400,000,000 shares authorized; 237,181,350 and 237,014,273 shares issued and outstanding, respectively.	24		24
Additional paid-in capital	776,858		761,834
Accumulated other comprehensive loss	(111,378)		(100,860)
Retained earnings	3,128,317		2,868,203
Total stockholders’ equity	3,793,821		3,529,201
Total liabilities and stockholders’ equity	$	4,918,852	$	4,562,143

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

Copart, Inc.

Consolidated Statements of Income

(Unaudited)


	Three Months Ended October 31,
(In thousands, except per share amounts)		2021		2020
Service revenues and vehicle sales:
Service revenues		$	667,818	$	515,372
Vehicle sales		142,314		77,568
Total service revenues and vehicle sales		810,132		592,940
Operating expenses:
Yard operations		298,694		231,811
Cost of vehicle sales		126,408		64,360
General and administrative		54,909		48,175

Total operating expenses		480,011		344,346
Operating income		330,121		248,594
Other expense:
Interest expense, net		(5,107)		(5,032)
Other income, net		812		3,253
Total other expense		(4,295)		(1,779)
Income before income taxes		325,826		246,815
Income tax expense		65,463		46,530
Net income		$	260,363	$	200,285

Basic net income per common share		$	1.10	$	0.85
Weighted average common shares outstanding		237,068		235,791

Diluted net income per common share		$	1.08	$	0.83
Diluted weighted average common shares outstanding		241,221		239,968

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

Copart, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended October 31,
(In thousands)		2021		2020
Comprehensive income, net of tax:
Net income		$	260,363	$	200,285
Other comprehensive income:
Foreign currency translation adjustments		(10,518)		(7,406)
Comprehensive income		$	249,845	$	192,879

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

Copart, Inc.

Consolidated Statements of Stockholders’ Equity

(Unaudited)


	Common Stock					Accumulated Other Comprehensive Income (Loss)
				Additional Paid-in Capital
(In thousands, except share amounts)	Outstanding Shares	Amount						Retained Earnings		Stockholders’ Equity
Balances at July 31, 2021	237,014,273	$	24	$	761,834	$	(100,860)	$	2,868,203	$	3,529,201
Net income	—	—		—		—		260,363		260,363
Currency translation adjustment	—	—		—		(10,518)		—		(10,518)
Exercise of stock options, net of repurchased shares	145,986	—		5,572		—		(249)		5,323
Stock-based compensation	21,091	—		9,452		—		—		9,452

Balances at October 31, 2021	237,181,350	24		776,858		(111,378)

SEC Form 10-Q filed by Copart, Inc.