8-KFinancial Events

COPART INC 8-K Report, Financial Obligation (Mar 20, 2020)

Filed March 20, 2020For Securities:CPRT

Summary

Copart, Inc. (CPRT) announced on March 20, 2020, that it drew down a significant portion of its credit facility to bolster its cash reserves. As of March 19, 2020, the company had $825 million in outstanding borrowings under its $850 million secured revolving credit facility, in addition to $24 million in outstanding letters of credit. This strategic move was made to ensure ample financial flexibility amidst current global market uncertainties, particularly related to the COVID-19 pandemic. Importantly, Copart stated that it had sufficient liquidity prior to this action. The funds are available for various corporate uses, including investments, technology, acquisitions, working capital, share repurchases, or general corporate purposes, as permitted by the credit agreement. Combined with existing cash on hand, Copart's total cash position exceeded $1.0 billion as of March 19, 2020.

Key Highlights

  • 1Copart drew down $825 million under its $850 million secured revolving credit facility.
  • 2The company also had $24 million in outstanding letters of credit as of March 19, 2020.
  • 3The drawdown was a proactive measure to enhance financial flexibility amid global market uncertainty due to the pandemic.
  • 4Copart affirmed it had sufficient liquidity before this action.
  • 5Total cash on hand, including the new borrowings, exceeded $1.0 billion as of March 19, 2020.
  • 6Funds can be used for a range of purposes including investments, technology, acquisitions, working capital, and share repurchases.

Frequently Asked Questions

Copart drew down its credit facility to proactively ensure it maintains ample financial flexibility in response to current uncertainty in the global markets, largely attributed to the global pandemic.

No, Copart explicitly stated that it had sufficient liquidity prior to taking this action. The drawdown was a precautionary measure to enhance its financial position.

As of March 19, 2020, Copart had $825 million in outstanding borrowings under its credit facility. Combined with its existing cash on hand, the company's total cash balances exceeded $1.0 billion.

The borrowed funds may be used for investments in land, technology, acquisitions, working capital, share repurchases, or general corporate purposes, in accordance with the terms of its Credit Agreement.