Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jan. 31, 2019 | Feb. 27, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Jan. 31, 2019 | |
Entity Registrant Name | COPART INC | |
Entity Central Index Key | 900,075 | |
Current Fiscal Year End Date | --07-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus (i.e. Q1,Q2,Q3,FY) | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 228,205,906 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jan. 31, 2019 | Jul. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 108,174 | $ 274,520 |
Accounts receivable, net | 393,561 | 351,601 |
Vehicle pooling costs | 80,610 | 34,284 |
Inventories | 28,315 | 16,734 |
Income taxes receivable | 25 | 15,312 |
Prepaid expenses and other assets | 17,781 | 16,665 |
Total current assets | 628,466 | 709,116 |
Property and equipment, net | 1,237,117 | 1,163,425 |
Intangibles, net | 60,265 | 64,892 |
Goodwill | 338,045 | 337,235 |
Deferred income taxes | 348 | 470 |
Other assets | 32,664 | 32,560 |
Total assets | 2,296,905 | 2,307,698 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 266,126 | 270,944 |
Deferred revenue | 7,344 | 4,488 |
Income taxes payable | 4,441 | 673 |
Current portion of revolving loan facility and capital lease obligations | 94,122 | 1,151 |
Total current liabilities | 372,033 | 277,256 |
Deferred income taxes | 32,314 | 19,733 |
Income taxes payable | 30,390 | 27,277 |
Long-term debt, revolving loan facility and capital lease obligations, net of discount | 398,740 | 398,747 |
Other liabilities | 3,475 | 3,586 |
Total liabilities | 836,952 | 726,599 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock: $0.0001 par value - 5,000,000 shares authorized; none issued | 0 | 0 |
Common stock: $0.0001 par value - 400,000,000 shares authorized; 226,700,670 and 233,898,841 shares issued and outstanding, respectively. | 23 | 23 |
Additional paid-in capital | 530,102 | 526,858 |
Accumulated other comprehensive loss | (107,223) | (107,928) |
Retained earnings | 1,037,051 | 1,162,146 |
Total stockholders’ equity | 1,459,953 | 1,581,099 |
Total liabilities and stockholders’ equity | $ 2,296,905 | $ 2,307,698 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jan. 31, 2019 | Jul. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 226,700,670 | 233,898,841 |
Common stock, shares outstanding | 226,700,670 | 233,898,841 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Service revenues and vehicle sales: | $ 484,898 | $ 459,106 | $ 946,266 | $ 878,274 |
Operating expenses: | ||||
Yard operations | 215,460 | 217,184 | 423,154 | 434,791 |
Cost of vehicle sales | 61,212 | 50,313 | 118,968 | 88,610 |
General and administrative | 43,487 | 40,662 | 87,965 | 79,984 |
Total operating expenses | 320,159 | 308,159 | 630,087 | 603,385 |
Other (expense) income: | ||||
Interest expense | (5,233) | (5,758) | (9,884) | (11,353) |
Interest income | 678 | 197 | 1,638 | 394 |
Other income (expense), net | 4,782 | (948) | 5,819 | (5,364) |
Total other income (expense) | 227 | (6,509) | (2,427) | (16,323) |
Operating income | 164,739 | 150,947 | 316,179 | 274,889 |
Income before income taxes | 164,966 | 144,438 | 313,752 | 258,566 |
Income tax expense | (33,593) | (41,137) | (68,296) | (77,705) |
Net income | 131,373 | 103,301 | 245,456 | 180,861 |
Net income attributable to noncontrolling interest | 0 | 45 | 0 | 90 |
Net income attributable to Copart, Inc. | $ 131,373 | $ 103,256 | $ 245,456 | $ 180,771 |
Basic net income per common share | $ 0.57 | $ 0.45 | $ 1.06 | $ 0.78 |
Weighted average common shares outstanding | 230,798 | 231,478 | 232,343 | 231,086 |
Diluted net income per common share | $ 0.55 | $ 0.43 | $ 1.01 | $ 0.75 |
Diluted weighted average common shares outstanding | 240,660 | 241,360 | 242,743 | 240,076 |
Service revenues | ||||
Service revenues and vehicle sales: | $ 416,807 | $ 401,954 | $ 811,613 | $ 776,079 |
Vehicle sales | ||||
Service revenues and vehicle sales: | $ 68,091 | $ 57,152 | $ 134,653 | $ 102,195 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 131,373 | $ 103,301 | $ 245,456 | $ 180,861 |
Other comprehensive income: | ||||
Foreign currency translation adjustments | 8,423 | 23,243 | 705 | 21,763 |
Comprehensive income, net of tax: | ||||
Comprehensive income | 139,796 | 126,544 | 246,161 | 202,624 |
Comprehensive income attributable to noncontrolling interest | 0 | 45 | 0 | 90 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | $ 139,796 | $ 126,499 | $ 246,161 | $ 202,534 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interest |
Balances (in shares) | 230,488,296 | |||||
Stockholders' Equity Attributable to Parent | $ 23 | $ 453,349 | $ (100,676) | $ 745,370 | ||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 534 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 1,098,600 | |||||
Net Income | 0 | 0 | 0 | 77,515 | ||
Net income attributable to noncontrolling interest | 45 | |||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 77,560 | |||||
Currency Translation Adjustment | (1,480) | $ 0 | 0 | (1,480) | 0 | 0 |
Options Exercised | 730,323 | |||||
Exercise of stock options, net of repurchased shares | 9,250 | $ 0 | 9,253 | 0 | (3) | 0 |
Stock-based compensation | 5,307 | $ 0 | 5,307 | 0 | 0 | 0 |
Net Income | 180,771 | |||||
Net income attributable to noncontrolling interest | 90 | |||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 180,861 | |||||
Balances (in shares) | 231,218,619 | |||||
Stockholders' Equity Attributable to Parent | $ 23 | 467,909 | (102,156) | 822,882 | ||
Stockholders' Equity Attributable to Noncontrolling Interest | 579 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,189,237 | |||||
Net Income | 103,256 | 0 | 0 | 0 | 103,256 | |
Net income attributable to noncontrolling interest | 45 | 45 | ||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 103,301 | |||||
Currency Translation Adjustment | 23,243 | 0 | 0 | 23,243 | 0 | 0 |
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | (55) | $ 0 | 0 | 0 | 0 | 55 |
Options Exercised | 508,285 | |||||
Exercise of stock options, net of repurchased shares | 7,349 | $ 0 | 7,349 | 0 | 0 | 0 |
Stock-based compensation | 5,992 | $ 0 | 5,968 | 0 | 24 | 0 |
Shares issued for Employee Stock Purchase Plan (in shares) | 100,708 | |||||
Shares issued for Employee Stock Purchase Plan | 2,723 | $ 0 | 2,723 | 0 | 0 | 0 |
Balances (in shares) | 231,827,612 | |||||
Stockholders' Equity Attributable to Parent | $ 23 | 483,949 | (78,913) | 926,162 | ||
Stockholders' Equity Attributable to Noncontrolling Interest | 569 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,331,790 | |||||
Balances (in shares) | 233,898,841 | |||||
Stockholders' Equity Attributable to Parent | 1,581,099 | $ 23 | 526,858 | (107,928) | 1,162,146 | |
Stockholders' Equity Attributable to Noncontrolling Interest | 0 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,581,099 | |||||
Net Income | 0 | 0 | 0 | 114,083 | ||
Net income attributable to noncontrolling interest | 0 | |||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 114,083 | |||||
Currency Translation Adjustment | (7,718) | $ 0 | 0 | (7,718) | 0 | 0 |
Options Exercised | 109,321 | |||||
Exercise of stock options, net of repurchased shares | 1,227 | $ 0 | 1,229 | 0 | (2) | 0 |
Stock-based compensation | 6,021 | $ 0 | 6,021 | 0 | 0 | 0 |
Net Income | 245,456 | |||||
Net income attributable to noncontrolling interest | 0 | |||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 245,456 | |||||
Options Exercised | 294,000 | |||||
Balances (in shares) | 234,008,162 | |||||
Stockholders' Equity Attributable to Parent | $ 23 | 534,108 | (115,646) | 1,253,273 | ||
Stockholders' Equity Attributable to Noncontrolling Interest | 0 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 1,671,758 | |||||
Net Income | 131,373 | 0 | 0 | 0 | 131,373 | |
Net income attributable to noncontrolling interest | 0 | 0 | ||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 131,373 | |||||
Currency Translation Adjustment | 8,423 | $ 0 | 0 | 8,423 | 0 | 0 |
Options Exercised | 241,896 | |||||
Exercise of stock options, net of repurchased shares | 3,966 | $ 0 | 3,991 | 0 | (25) | 0 |
Stock-based compensation | 5,929 | $ 0 | 5,929 | 0 | 0 | 0 |
Shares issued for Employee Stock Purchase Plan (in shares) | 86,208 | |||||
Shares issued for Employee Stock Purchase Plan | 3,501 | $ 0 | 3,501 | 0 | 0 | 0 |
Stock Repurchased During Period, Shares | (7,635,596) | |||||
Stock Repurchased During Period, Value | (364,997) | $ 0 | (17,427) | 0 | (347,570) | 0 |
Balances (in shares) | 226,700,670 | |||||
Stockholders' Equity Attributable to Parent | 1,459,953 | $ 23 | $ 530,102 | $ (107,223) | $ 1,037,051 | |
Stockholders' Equity Attributable to Noncontrolling Interest | $ 0 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 1,459,953 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Statement of Cash Flows [Abstract] | ||
Net income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 245,456 | $ 180,861 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization, including debt cost | 42,487 | 33,994 |
Allowance for doubtful accounts | 96 | 1,013 |
Equity in (earnings) losses of unconsolidated affiliates | (514) | 251 |
Stock-based compensation | 11,950 | 11,298 |
(Gain) loss on sale of property and equipment | (3,890) | 4,639 |
Deferred income taxes | 6,632 | 2,666 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (86,125) | (86,147) |
Vehicle pooling costs | (20,218) | (6,548) |
Inventories | (11,640) | (2,525) |
Prepaid expenses and other current assets | (1,220) | (1,437) |
Other assets | 495 | (4,320) |
Accounts payable and accrued liabilities | 7,338 | 38,919 |
Deferred revenue | 2,843 | 1,705 |
Income taxes receivable | 15,286 | 2,575 |
Income taxes payable | 6,890 | 9,365 |
Other liabilities | (662) | 84 |
Net cash provided by operating activities | 215,204 | 186,393 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (136,727) | (110,905) |
Proceeds from sale of property and equipment | 17,488 | 2,812 |
Purchase of assets in connection with acquisitions | 0 | 123 |
Net cash used in investing activities | (119,239) | (107,970) |
Cash flows from financing activities: | ||
Proceeds from the exercise of stock options | 5,220 | 16,603 |
Proceeds from the issuance of Employee Stock Purchase Plan shares | 3,501 | 2,723 |
Repurchases of common stock | (364,997) | 0 |
Payments for employee stock-based tax withholdings | 27 | 3 |
Net proceeds (repayments) on revolving loan facility | 93,300 | (120,300) |
Payments to Noncontrolling Interests | 0 | (55) |
Net cash used in financing activities | (263,003) | (101,032) |
Effect of foreign currency translation | 692 | 7,809 |
Net decrease in cash and cash equivalents | (166,346) | (14,800) |
Cash and cash equivalents at beginning of period | 274,520 | 210,100 |
Cash and cash equivalents at end of period | 108,174 | 195,300 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 9,018 | 11,010 |
Income taxes paid, net of refunds | $ 39,327 | $ 64,104 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | NOTE 1 – Summary of Significant Accounting Policies Basis of Presentation and Description of Business Copart, Inc. (the Company) provides vehicle sellers with a full range of services to process and sell vehicles over the internet through the Company’s Virtual Bidding Third Generation (VB3) internet auction-style sales technology. Sellers are primarily insurance companies but also include banks, finance companies, charities, fleet operators, dealers and vehicles sourced directly from individual owners. The Company sells principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, and exporters; however, at certain locations, the Company sells directly to the general public. The majority of vehicles sold on behalf of insurance companies are either damaged vehicles deemed a total loss or not economically repairable by the insurance companies or are recovered stolen vehicles for which an insurance settlement with the vehicle owner has already been made. The Company offers vehicle sellers a full range of services that expedite each stage of the vehicle sales process, minimize administrative and processing costs and maximize the ultimate sales price through the online auction process. In the United States (U.S.), Canada, Brazil, the Republic of Ireland, Finland, the United Arab Emirates (U.A.E.), Oman, Bahrain, and Spain, the Company sells vehicles primarily as an agent and derives revenue primarily from auction and auction related sales transaction fees charged for vehicle remarketing services as well as fees for services subsequent to the auction, such as delivery and storage. In the United Kingdom (U.K.) and Germany, the Company operates both as an agent and on a principal basis, in some cases purchasing the salvage vehicles outright and reselling the vehicles for its own account. In Germany and Spain, the Company also derives revenue from listing vehicles on behalf of insurance companies and insurance experts to determine the vehicle’s residual value and/or to facilitate a sale for the insured. Principles of Consolidation In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments of a normal recurring nature considered necessary for fair presentation of its financial position as of January 31, 2019 and July 31, 2018 , its consolidated statements of income and comprehensive income for the three and six months ended January 31, 2019 and 2018 , and its cash flows for the six months ended January 31, 2019 and 2018 . Interim results for the three and six months ended January 31, 2019 are not necessarily indicative of the results that may be expected for any future period, or for the entire year ending July 31, 2019 . These consolidated financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. The interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2018 . Certain prior year amounts have been reclassified to conform to current year presentation. The consolidated financial statements of the Company include the accounts of the parent company and its wholly-owned subsidiaries, including its foreign wholly-owned subsidiaries. The Company also had a 59.5% voting interest in a company, which was acquired as part of the Cycle Express, LLC acquisition (“majority-owned subsidiary”), which provided various repossession services for the powersports auction industry. The noncontrolling interest consisted of a 40.5% outside voting interest in the majority-owned subsidiary. Net income or loss of the majority-owned subsidiary was allocated to the members’ interests in accordance with the operating agreement. During the year ended July 31, 2018, the Company sold the majority-owned subsidiary. Significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates include, but are not limited to, vehicle pooling costs; income taxes; stock-based compensation; purchase price allocations; and contingencies . Actual results could differ from these estimates. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), which superseded the revenue recognition requirements in ASC 605, Revenue Recognition (“ASC 605”). ASC 606 revised the timing of revenue recognition based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. On August 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all contracts. Results for reporting periods beginning August 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605. Under the new standard, the Company concluded its primary performance obligation is the auctioning of consigned vehicles through an online auction process. Upon adoption of ASC 606, service revenue and vehicle sales revenue are recognized at the date the vehicles are sold at auction, excluding annual registration fees. This timing of revenue recognition under ASC 606 represents a change in the timing of revenue recognition for certain service revenues, such as inbound transportation and titling fees, which were recognized under ASC 605 prior to auction, when the services were performed. Under ASC 606, costs to prepare the vehicles for auction, including inbound transportation costs and titling fees, are deferred and recognized at the time of revenue recognition at auction. The Company calculated the impact of the adoption on the consolidated financial statements, which resulted in a decrease to opening retained earnings, net of tax, as of August 1, 2018, of $23.0 million as a result of the initial application of the standard and did not have a material impact to earnings for the three and six months ended January 31, 2019 . This retained earnings impact related to adjustments to accounts receivable, vehicle pooling costs and deferred taxes upon adoption of the standard. There were no contract liabilities on the consolidated balance sheets at January 31, 2019 . The Company’s disaggregation between service revenues and vehicle sales at the segment level reflects how the nature, timing, amount and uncertainty of its revenues and cash flows are impacted by economic factors. The Company reports sales taxes on relevant transactions on a net basis in the Company’s consolidated results of operations, and therefore does not include sales taxes in revenues or costs. Service revenues The Company’s service revenue consists of auction and auction related sales transaction fees charged for vehicle remarketing services. Within this revenue category, the Company’s primary performance obligation is the auctioning of consigned vehicles through an online auction process. These auction and auction related services may include a combination of vehicle purchasing fees, vehicle listing fees, and vehicle selling fees that can be based on a predetermined percentage of the vehicle sales price, tiered vehicle sales price driven fees, or at a fixed fee based on the sale of each vehicle regardless of the selling price of the vehicle; transportation fees for the cost of transporting the vehicle to or from the Company’s facility; title processing and preparation fees; vehicle storage fees; bidding fees; and vehicle loading fees. These services are not distinct within the context of the contract. Accordingly, revenue for these services is recognized when the single performance obligation is satisfied at the completion of the auction process. The Company does not take ownership of these consigned vehicles, which are stored at the Company’s facilities located throughout the U.S. and at its international locations. These fees are recognized as net revenue (not gross vehicle selling price) at the time of auction in the amount of such fees charged. The Company identified a separate performance obligation related to providing access to its online auction platform. The Company charges members an annual registration fee for the right to participate in its online auctions and access the Company’s bidding platform. Under the new standard, this fee will continue to be recognized ratably over the term of the arrangement, generally one year, as each day of access to the online auction platform represents the best depiction of the transfer of the service. No provision for returns has been established, as all sales are final with no right of return or warranty, although the Company provides for bad debt expense in the case of non-performance by its buyers or sellers. Three Months Ended January 31, 2019 Three Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Service revenues $ 362,023 $ 54,784 $ 416,807 $ 355,542 $ 46,412 $ 401,954 Six Months Ended January 31, 2019 Six Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Service revenues $ 705,596 $ 106,017 $ 811,613 $ 686,933 $ 89,146 $ 776,079 Vehicle sales Certain vehicles are purchased and remarketed on the Company’s own behalf. The Company identified a single performance obligation related to the sale of these vehicles, which is the completion of the online auction process. Under the new standard, vehicle sales revenue will continue to be recognized on the auction date. As the Company acts as a principal in vehicle sales transactions, the gross sales price at auction is recorded as revenue. Three Months Ended January 31, 2019 Three Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Vehicle sales $ 28,049 $ 40,042 $ 68,091 $ 29,593 $ 27,559 $ 57,152 Six Months Ended January 31, 2019 Six Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Vehicle sales $ 55,685 $ 78,968 $ 134,653 $ 49,307 $ 52,888 $ 102,195 Contract assets The Company capitalizes certain contract assets related to obtaining a contract, where the amortization period for the related asset is greater than one year. These assets are amortized over the expected life of the customer relationship. Contract assets are classified as current or long-term other assets, based on the timing of when the Company expects to recognize the related revenues and are amortized as an offset to the associated revenues on a straight-line basis. The Company assesses these costs for impairment at least quarterly and as “triggering” events occur that indicate it is more likely than not that an impairment exists. The contract asset costs where the amortization period for the related asset is one year or less are expensed as incurred and recorded within general and administrative expenses in the accompanying statements of income. The change in the carrying amount of contract assets was as follows (in thousands): Balance as of July 31, 2018 $ 11,840 Costs amortized during the period (3,322 ) Effect of foreign currency exchange rates (46 ) Balance as of January 31, 2019 $ 8,472 Vehicle Pooling Costs The Company defers costs that relate directly to the fulfillment of its contracts associated with vehicles consigned to and received by the Company, but not sold as of the end of the period. The Company quantifies the deferred costs using a calculation that includes the number of vehicles at its facilities at the beginning and end of the period, the number of vehicles sold during the period and an allocation of certain yard operation costs of the period. The primary expenses allocated and deferred are inbound transportation costs, titling fees, certain facility costs, labor, and vehicle processing. Upon the adoption of ASC 606, the Company began deferring the inbound transportation costs and titling fees directly associated with the vehicles within its vehicle pooling costs. If the allocation factors change, then yard operation expenses could increase or decrease correspondingly in the future. These costs are expensed as vehicles are sold in subsequent periods on an average cost basis. Given the fixed cost nature of the Company’s business, there are no direct correlations for increases in expenses or units processed on vehicle pooling costs. Foreign Currency Translation The Company records foreign currency translation adjustments from the process of translating the functional currency of the financial statements of its foreign subsidiaries into the U.S. dollar reporting currency. The Canadian dollar, British pound, Brazilian real, European Union euro, U.A.E. dirham, Omani rial, Bahraini dinar, and Indian rupee are the functional currencies of the Company’s foreign subsidiaries as they are the primary currencies within the economic environment in which each subsidiary operates. The original equity investment in the respective subsidiaries is translated at historical rates. Assets and liabilities of the respective subsidiary’s operations are translated into U.S. dollars at period-end exchange rates, and revenues and expenses are translated into U.S. dollars at average exchange rates in effect during each reporting period. Adjustments resulting from the translation of each subsidiary’s financial statements are reported in other comprehensive income. The cumulative effects of foreign currency exchange rate fluctuations were as follows (in thousands): Cumulative loss on foreign currency translation as of July 31, 2017 $ (100,676 ) Loss on foreign currency translation (7,252 ) Cumulative loss on foreign currency translation as of July 31, 2018 $ (107,928 ) Gain on foreign currency translation 705 Cumulative loss on foreign currency translation as of January 31, 2019 $ (107,223 ) Income Taxes and Deferred Tax Assets Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax basis, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Excess tax benefits and deficiencies related to exercises of stock options are recognized as expense or benefit in the income statement as discrete items in the reporting period in which they occur. In accordance with the provisions of ASC 740, Income Taxes , a two-step approach is applied to the recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax position as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties related to uncertain tax positions in the provision for income taxes on its consolidated statements of income. The Company accounted for the tax effects of the Tax Cuts and Jobs Act, enacted on December 22, 2017, on a provisional basis in the six months ended January 31, 2018 consolidated financial statements. The Company completed its accounting as of January 31, 2019, within the one year measurement period from the enactment date. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents include cash held in checking, domestic certificates of deposit, and money market accounts. The Company periodically invests its excess cash in money market funds and U.S. Treasury Bills. The Company’s cash and cash equivalents are placed with high credit quality financial institutions. Other Assets Other assets consist of long-term deposits, contracted prepayments, notes receivable, and investments in unconsolidated affiliates. In accordance with ASC 323, Investments-Equity Method and Joint Ventures, the Company uses the equity method to account for investments in joint ventures and other unconsolidated entities if the Company has the ability to exercise significant influence over the financial and operating policies of those investees. Under the equity method, the Company records the initial investment in an entity at cost and subsequently adjusts the investment for the Company’s share of the affiliate’s undistributed earnings (losses) and distributions recorded in other income. The Company reviews the carrying amount of the investments in unconsolidated affiliates annually, or whenever circumstances indicate that the value of these investments may have declined. If the Company determines an investment is impaired on an other-than-temporary basis, a loss equal to the difference between the fair value of the investment and its carrying amount is recorded. Fair Value of Financial Instruments The Company records its financial assets and liabilities at fair value in accordance with the framework for measuring fair value in U.S. GAAP. In accordance with ASC 820, Fair Value Measurements and Disclosures , as amended by Accounting Standards Update 2011-04, the Company considers fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants under current market conditions. This framework establishes a fair value hierarchy that prioritizes the inputs used to measure fair value: Level I Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level II Inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly or indirectly. Level III Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate. The amounts recorded for financial instruments in the Company’s consolidated financial statements, which included cash, accounts receivable, accounts payable, accrued liabilities and Revolving Loan Facility approximated their fair values as of January 31, 2019 and July 31, 2018 , due to the short-term nature of those instruments, and are classified within Level II of the fair value hierarchy. Cash equivalents are classified within Level II of the fair value hierarchy because they are valued using quoted market prices of the underlying investments. See Note 3 – Long-Term Debt , and Note 5 – Fair Value Measures . Capitalized Software Costs The Company capitalizes system development costs and website development costs related to enterprise computing services during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, generally three years. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that impact the recoverability of these assets. Total gross capitalized software as of January 31, 2019 and July 31, 2018 was $34.3 million and $30.7 million , respectively. Accumulated amortization expense related to software as of January 31, 2019 and July 31, 2018 totaled $19.3 million and $16.0 million , respectively. Acquisitions The Company recognizes and measures identifiable assets acquired and liabilities assumed in acquired entities in accordance with ASC 805, Business Combinations . The allocation of the purchase consideration for acquisitions can require extensive use of accounting estimates and judgments to allocate the purchase consideration to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. The excess of the fair value of purchase consideration over the values of the identifiable assets and liabilities is recorded as goodwill. Critical estimates in valuing certain identifiable assets include but are not limited to expected long-term revenues; future expected operating expenses; cost of capital; appropriate attrition; and discount rates. Segments and Other Geographic Reporting The Company’s U.S. and International regions are considered two separate operating segments and are disclosed as two |
Accounts Receivable Accounts Re
Accounts Receivable Accounts Receivable | 6 Months Ended |
Jan. 31, 2019 | |
Accounts Receivable [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 2 — Accounts Receivable, Net Accounts receivable, net consisted of: (In thousands) January 31, 2019 July 31, 2018 Advance charges receivable $ 312,165 $ 230,092 Trade accounts receivable 84,290 125,255 Other receivables 2,646 1,698 399,101 357,045 Less: Allowance for doubtful accounts (5,540 ) (5,444 ) Accounts receivable, net $ 393,561 $ 351,601 Advance charges receivable represents amounts paid to third parties on behalf of insurance companies for which the Company will be reimbursed when the vehicle is sold. As advance charges are recovered within one year, the Company has not adjusted the amount of consideration received from the customer for a significant financing component. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jan. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | NOTE 3 – Long-Term Debt Credit Agreement On December 3, 2014 , the Company entered into a Credit Agreement (as amended from time to time, the “Credit Amendment”) with Wells Fargo Bank, National Association, as administrative agent, and Bank of America, N.A., as syndication agent. The Credit Agreement provided for (a) a secured revolving loan facility in an aggregate principal amount of up to $300.0 million (the “Revolving Loan Facility”), and (b) a secured term loan facility in an aggregate principal amount of $300.0 million (the “Term Loan”), which was fully drawn at closing. The Term Loan amortized $18.8 million per quarter. On March 15, 2016 , the Company entered into a First Amendment to Credit Agreement (the “Amendment to Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent and Bank of America, N.A. The Amendment to Credit Agreement amended certain terms of the Credit Agreement, dated as of December 3, 2014 . The Amendment to Credit Agreement provided for (a) an increase in the secured revolving credit commitments by $50.0 million , bringing the aggregate principal amount of the revolving credit commitments under the Credit Agreement to $350.0 million , (b) a new secured term loan (the “Incremental Term Loan”) in the aggregate principal amount of $93.8 million having a maturity date of March 15, 2021 , and (c) an extension of the termination date of the Revolving Loan Facility and the maturity date of the Term Loan from December 3, 2019 to March 15, 2021 . The Amendment to Credit Agreement extended the amortization period for the Term Loan and decreased the quarterly amortization payments for that loan to $7.5 million per quarter. The Amendment to Credit Agreement additionally reduced the pricing levels under the Credit Agreement to a range of 0.15% to 0.30% in the case of the commitment fee, 1.125% to 2.0% in the case of the applicable margin for LIBOR loans, and 0.125% to 1.0% in the case of the applicable margin for base rate loans, based on the Company’s consolidated total net leverage ratio during the preceding fiscal quarter. The Company borrowed the entire $93.8 million principal amount of the Incremental Term Loan concurrent with the closing of the Amendment to Credit Agreement. On July 21, 2016 , the Company entered into a Second Amendment to Credit Agreement (the “Second Amendment to Credit Agreement”) with Wells Fargo Bank, National Association, SunTrust Bank, and Bank of America, N.A., as administrative agent (as successor in interest to Wells Fargo Bank). The Second Amendment to Credit Agreement amends certain terms of the Credit Agreement, dated as of December 3, 2014 as amended by the Amendment to Credit Agreement, dated as of March 15, 2016 . The Second Amendment to Credit Agreement provides for, among other things, (a) an increase in the secured revolving credit commitments by $500.0 million , bringing the aggregate principal amount of the revolving credit commitments under the Credit Agreement to $850.0 million , (b) the repayment of existing term loans outstanding under the Credit Agreement, (c) an extension of the termination date of the revolving credit facility under the Credit Agreement from March 15, 2021 to July 21, 2021 , and (d) increased covenant flexibility. Concurrent with the closing of the Second Amendment to Credit Agreement, the Company prepaid in full the outstanding $242.5 million principal amount of the Term Loan and Incremental Term Loan under the Credit Agreement without premium or penalty. The Second Amendment to Credit Agreement reduced the pricing levels under the Credit Agreement to a range of 0.125% to 0.20% in the case of the commitment fee, 1.00% to 1.75% in the case of the applicable margin for LIBOR loans, and 0.0% to 0.75% in the case of the applicable margin for base rate loans, in each case depending on the Company’s consolidated total net leverage ratio. The principal purposes of these financing transactions were to increase the size and availability under the Company’s Revolving Loan Facility and to provide additional long-term financing. The proceeds are being used for general corporate purposes, including working capital and capital expenditures, potential share repurchases, acquisitions, or other investments relating to the Company’s expansion strategies in domestic and international markets. The Revolving Loan Facility under the Credit Agreement bears interest, at the election of the Company, at either (a) the Base Rate, which is defined as a fluctuating rate per annum equal to the greatest of (i) the Prime Rate in effect on such day; (ii) the Federal Funds Rate in effect on such date plus 0.50% ; or (iii) an adjusted LIBOR rate determined on the basis of a one-month interest period plus 1.0% , in each case plus an applicable margin ranging from 0.0% to 0.75% based on the Company’s consolidated total net leverage ratio during the preceding fiscal quarter; or (b) an adjusted LIBOR rate plus an applicable margin ranging from 1.00% to 1.75% depending on the Company’s consolidated total net leverage ratio during the preceding fiscal quarter. Interest is due and payable quarterly, in arrears, for loans bearing interest at the Base Rate, and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) in the case of loans bearing interest at the adjusted LIBOR rate. The interest rate as of January 31, 2019 on the Company’s Revolving Loan Facility was the one month LIBOR rate of 2.50% plus an applicable margin of 1.00%. The carrying amount of the Credit Agreement is comprised of borrowings under which interest accrues under a fluctuating interest rate structure. Accordingly, the carrying value approximates fair value at January 31, 2019 , and was classified within Level II of the fair value hierarchy. Amounts borrowed under the Revolving Loan Facility may be repaid and reborrowed until the maturity date of July 21, 2021 . The Company is obligated to pay a commitment fee on the unused portion of the Revolving Loan Facility. The commitment fee rate ranges from 0.125% to 0.20% , depending on the Company’s consolidated total net leverage ratio during the preceding fiscal quarter, on the average daily unused portion of the revolving credit commitment under the Credit Agreement. The Company had $93.3 million of outstanding borrowings under the Revolving Loan Facility as of January 31, 2019 and no outstanding borrowings under the Revolving Loan Facility at July 31, 2018 . The Company’s obligations under the Credit Agreement are guaranteed by certain of the Company’s domestic subsidiaries meeting materiality thresholds set forth in the Credit Agreement. Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the assets of the subsidiary guarantors pursuant to a Security Agreement, dated December 3, 2014, among the Company, the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent. The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends, or make distributions on and repurchase stock, in each case subject to certain exceptions. The Company is also required to maintain compliance, measured at the end of each fiscal quarter, with a consolidated total net leverage ratio and a consolidated interest coverage ratio. The Credit Agreement contains no restrictions on the payment of dividends and other restricted payments, as defined, as long as (1) the consolidated total net leverage ratio, as defined, both before and after giving effect to any such dividend or restricted payment on a pro forma basis, is less than 3.25 :1, in an unlimited amount, (2) if clause (1) is not available, so long as the consolidated total net leverage ratio both before and after giving effect to any such dividend on a pro forma basis is less than 3.50 :1, in an aggregate amount not to exceed the available amount, as defined, and (3) if clauses (1) and (2) are not available, in an aggregate amount not to exceed $50.0 million ; provided, that, minimum liquidity, as defined, shall be not less than $75.0 million both before and after giving effect to any such dividend or restricted payment. As of January 31, 2019 , the consolidated total net leverage ratio was 0.53 :1. Minimum liquidity as of January 31, 2019 was $0.8 billion . Accordingly, the Company does not believe that the provisions of the Credit Agreement represent a significant restriction to its ability to pay dividends or to the successful future operations of the business. The Company has not paid a cash dividend since becoming a public company in 1994. The Company was in compliance with all covenants related to the Credit Agreement as of January 31, 2019 . Note Purchase Agreement On December 3, 2014 , the Company entered into a Note Purchase Agreement and sold to certain purchasers (collectively, the “Purchasers”) $400.0 million in aggregate principal amount of senior secured notes (the “Senior Notes”) consisting of (i) $100.0 million aggregate principal amount of 4.07% Senior Notes, Series A, due December 3, 2024 ; (ii) $100.0 million aggregate principal amount of 4.19% Senior Notes, Series B, due December 3, 2026 ; (iii) $100.0 million aggregate principal amount of 4.25% Senior Notes, Series C, due December 3, 2027 ; and (iv) $100.0 million aggregate principal amount of 4.35% Senior Notes, Series D, due December 3, 2029 . Interest is due and payable quarterly, in arrears, on each of the Senior Notes. Proceeds from the Note Purchase Agreement are being used for general corporate purposes. On July 21, 2016 , the Company entered into Amendment No. 1 to Note Purchase Agreement (the “First Amendment to Note Purchase Agreement”) which amended certain terms of the Note Purchase Agreement, including providing for increased flexibility substantially consistent with the changes included in the Second Amendment to Credit Agreement, including among other things increased covenant flexibility. The Company may prepay the Senior Notes, in whole or in part, at any time, subject to certain conditions, including minimum amounts and payment of a make-whole amount equal to the discounted value of the remaining scheduled interest payments under the Senior Notes. The Company’s obligations under the Note Purchase Agreement are guaranteed by certain of the Company’s domestic subsidiaries meeting materiality thresholds set forth in the Note Purchase Agreement. Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and assets of the subsidiary guarantors. The obligations of the Company and its subsidiary guarantors under the Note Purchase Agreement will be treated on a pari passu basis with the obligations of those entities under the Credit Agreement as well as any additional debt the Company may obtain. The Note Purchase Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends, or make distributions and repurchase stock, in each case subject to certain exceptions. The Company is also required to maintain compliance, measured at the end of each fiscal quarter, with a consolidated total net leverage ratio and a consolidated interest coverage ratio. The Note Purchase Agreement contains no restrictions on the payment of dividends and other restricted payments, as defined, as long as (1) the consolidated total net leverage ratio, as defined, both before and after giving effect to any such dividend or restricted payment on a pro forma basis, is less than 3.25 :1, in an unlimited amount, (2) if clause (1) is not available, so long as the consolidated total net leverage ratio both before and after giving effect to any such dividend on a pro forma basis is less than 3.50 :1, in an aggregate amount not to exceed the available amount, as defined, and (3) if clauses (1) and (2) are not available, in an aggregate amount not to exceed $50.0 million ; provided, that, minimum liquidity, as defined, shall be not less than $75.0 million both before and after giving effect to any such dividend or restricted payment. As of January 31, 2019 , the consolidated total net leverage ratio was 0.53 :1. Minimum liquidity as of January 31, 2019 was $0.8 billion . Accordingly, the Company does not believe that the provisions of the Note Purchase Agreement represent a significant restriction to its ability to pay dividends or to the successful future operations of the business. The Company has not paid a cash dividend since becoming a public company in 1994. The Company was in compliance with all covenants related to the Note Purchase Agreement as of January 31, 2019 . Related to the execution of the Credit Agreement, First Amendment to Credit Agreement, Second Amendment to Credit Agreement, and the Note Purchase Agreement, the Company incurred $3.4 million in costs, of which $2.0 million was capitalized as debt issuance fees and $1.4 million |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jan. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 4 – Goodwill and Intangible Assets The following table sets forth amortizable intangible assets by major asset class: (In thousands) January 31, 2019 July 31, 2018 Amortized intangibles: Supply contracts & customer relationships $ 49,206 $ 71,787 Trade name 23,573 24,173 Licenses and databases 7,706 9,291 Covenants not to compete — 1,666 Accumulated amortization (20,220 ) (42,025 ) Net intangibles $ 60,265 $ 64,892 Aggregate amortization expense on amortizable intangible assets was $2.6 million and $3.5 million for the three months ended January 31, 2019 and 2018 , respectively, and $5.5 million and $7.4 million for the six months ended January 31, 2019 and 2018 , respectively. During the six months ended January 31, 2019 , the Company retired fully amortized intangible assets of $28.0 million , which were no longer being utilized. The change in the carrying amount of goodwill was as follows (in thousands): Balance as of July 31, 2018 $ 337,235 Effect of foreign currency exchange rates 810 Balance as of January 31, 2019 $ 338,045 |
Fair Value Measures
Fair Value Measures | 6 Months Ended |
Jan. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measures | NOTE 5 – Fair Value Measures The following table summarizes the fair value of the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis based on inputs used to derive their fair values: January 31, 2019 July 31, 2018 (In thousands) Fair Value Total Significant Observable Inputs (Level II) Fair Value Total Significant Observable Inputs (Level II) Assets Cash equivalents $ 12,840 $ 12,840 $ 130,769 $ 130,769 Total Assets $ 12,840 $ 12,840 $ 130,769 $ 130,769 Liabilities Long-term fixed rate debt, including current portion $ 391,961 $ 391,961 $ 381,230 $ 381,320 Revolving loan facility 93,300 93,300 — — Total Liabilities $ 485,261 $ 485,261 $ 381,230 $ 381,320 During the six months ended January 31, 2019 , no transfers were made between any levels within the fair value hierarchy. See Note 1 – Summary of Significant Accounting Policies , and Note 3 – Long-Term Debt |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jan. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | NOTE 6 – Net Income Per Share The table below reconciles basic weighted average shares outstanding to diluted weighted average shares outstanding: Three Months Ended January 31, Six Months Ended January 31, (In thousands) 2019 2018 2019 2018 Weighted average common shares outstanding 230,798 231,478 232,343 231,086 Effect of dilutive securities - stock options 9,862 9,882 10,400 8,990 Weighted average common and dilutive potential common shares outstanding 240,660 241,360 242,743 240,076 There were no material adjustments to net income required in calculating diluted net income per share. Excluded from the dilutive earnings per share calculation were 425,000 and 2,287,500 options to purchase the Company’s common stock for the three months ended January 31, 2019 and 2018 , respectively, and 460,000 and 4,478,004 options to purchase the Company’s common stock for the six months ended January 31, 2019 and 2018 |
Stock-based Payment Compensatio
Stock-based Payment Compensation | 6 Months Ended |
Jan. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Payment Compensation | NOTE 7 – Stock-based Compensation The Company recognizes compensation expense for stock option awards on a straight-line basis over the requisite service period of the award. The following is a summary of activity for the Company’s stock options for the six months ended January 31, 2019 : (In thousands, except per share and term data) Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In years) Aggregate Intrinsic Value Outstanding as of July 31, 2018 17,797 $ 20.29 6.19 $ 660,268 Grants of options 150 47.19 Exercises (294 ) 17.74 Forfeitures or expirations (98 ) 26.33 Outstanding as of January 31, 2019 17,555 $ 20.53 5.02 $ 528,435 Exercisable as of January 31, 2019 14,077 $ 18.51 4.40 $ 452,199 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock. The number of options that were in-the-money was 17,555,424 at January 31, 2019 . The table below sets forth the stock-based compensation recognized by the Company: Three Months Ended January 31, Six Months Ended January 31, (In thousands) 2019 2018 2019 2018 General and administrative $ 4,691 $ 4,990 $ 9,680 $ 9,444 Yard operations 1,238 1,002 2,270 1,854 Total stock-based compensation $ 5,929 $ 5,992 $ 11,950 $ 11,298 In accordance with ASC 718 , Compensation – Stock Compensation , the Company made an estimate of expected forfeitures and recognized compensation cost only for those equity awards expected to vest. In October 2013, the Compensation Committee of the Company’s Board of Directors, subject to stockholder approval (which was subsequently obtained at the December 16, 2013 annual meeting of stockholders), approved the grant to each of A. Jayson Adair, the Company’s Chief Executive Officer, and Vincent W. Mitz, the Company’s former President, of nonqualified stock options to purchase 4,000,000 and 3,000,000 shares of the Company’s common stock, respectively, at an exercise price of $17.81 per share, which equaled the closing price of the Company’s common stock on December 16, 2013, the effective date of grant. Such grants were made in lieu of any cash salary or bonus compensation in excess of $1.00 per year or the grant of any additional equity incentives for a five year period. Each option will become exercisable over five year s, subject to continued service by Mr. Adair and Mr. Mitz, with 20% vesting on April 15, 2015 and December 16, 2014, respectively, and the balance vesting monthly over the subsequent four years . On December 16, 2018, the option held by Mr. Mitz became fully vested and the option held my Mr. Adair will become fully vested, assuming continued service by Mr. Adair on April 15, 2019. If, prior to a change in control, either executive’s employment is terminated without cause, then 100% of the shares subject to that executive’s stock option will immediately vest. If, upon or following a change in control, either the Company or a successor entity terminates the executive’s service without cause, or the executive resigns for good reason (as defined in the option agreement), then 100% of the shares subject to his stock option will immediately vest. On June 2, 2015, the Compensation Committee of the Company’s Board of Directors approved the amendment of each of the stand-alone stock option agreements, by and between the Company and A. Jayson Adair and Vincent W. Mitz, respectively, to remove the provision providing at times prior to a “change in control” for the immediate vesting in full of the underlying option upon an involuntary termination of Mr. Adair or Mr. Mitz, as applicable, without “cause.” The fair value of each option at the date of grant using the Black-Scholes Merton option-pricing model was $5.72 . The total estimated compensation expense to be recognized by the Company over the five year estimated service period for these options is $40.0 million . The Company recognized $3.5 million and $3.6 million in compensation expenses for these grants in the six months ended January 31, 2019 and 2018 |
Stock Repurchases
Stock Repurchases | 6 Months Ended |
Jan. 31, 2019 | |
Equity [Abstract] | |
Common Stock Repurchases | NOTE 8 – Stock Repurchases On September 22, 2011 , the Company’s Board of Directors approved an 80 million share increase in the stock repurchase program, bringing the total current authorization to 196 million shares. The repurchases may be effected through solicited or unsolicited transactions in the open market or in privately negotiated transactions. No time limit has been placed on the duration of the stock repurchase program. Subject to applicable securities laws, such repurchases will be made at such times and in such amounts as the Company deems appropriate and may be discontinued at any time. The Company repurchased 7,635,596 shares of its common stock under the program during the six months ended January 31, 2019 at a weighted average price of $47.81 per share totaling $365.0 million . The Company did not repurchase any shares of its common stock under the program during the six months ended January 31, 2018. As of January 31, 2019 , the total number of shares repurchased under the program was 114,549,198 , and 81,450,802 shares were available for repurchase under the program. In fiscal 2018, certain members of the Company’s Board of Directors exercised stock options through cashless exercises. A portion of the options exercised were net settled in satisfaction of the exercise price. The Company remitted no amounts for the six months ended January 31, 2019 and 2018, respectively, to the proper taxing authorities in satisfaction of the employees’ statutory withholding requirements. The exercised stock options, utilizing a cashless exercise, are summarized in the following table: Period Options Exercised Weighted Average Exercise Price Shares Net Settled for Exercise Shares Withheld for Taxes (1) Net Shares to Individuals Weighted Average Share Price for Withholding Employee Stock Based Tax Withholding (in 000s) FY 2018—Q2 80,000 $ 6.54 11,996 — 68,004 $ 43.60 $ — (1) |
Income Taxes
Income Taxes | 6 Months Ended |
Jan. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 – Income Taxes The Company applies the provisions of the accounting standard for uncertain tax positions to its income taxes. For benefits to be realized, a tax position must be more likely than not to be sustained upon examination. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. On December 22, 2017 legislation, commonly referred to as the Tax Cuts and Jobs Act (the “Act”), was enacted. The Act included a one-time tax on accumulated unremitted earnings of our foreign subsidiaries (“Transition Tax”). SEC Staff Accounting Bulletin No. 118 allows the use of provisional amounts (reasonable estimates) if accounting for the income tax effects of the Act has not been completed. Provisional amounts must be adjusted within one year from the enactment date of the Act. As of July 31 2018, the Company recorded a $12.4 million provisional Transition Tax charge. No adjustment to the provisional Transition Tax charge was made in the first quarter of fiscal year 2019. The Company completed its accounting for the tax effects of the enactment of the Tax Act during the three months ended January 31, 2019, and recorded a discrete decrease in tax expense of $1.1 million , whose effect on the Company’s effective tax rate was immaterial for the three months ended January 31, 2019. The Act reduced the U.S. federal statutory tax rate from 35.0% to 21.0% , effective January 1, 2018, which resulted in a fiscal year 2018 U.S. federal statutory tax rate of 26.9% . The Company’s U.S. federal statutory tax rate for fiscal year 2019 is 21.0% . The Act contains Global Intangible Low-Taxed Income (“GILTI”) provisions, which first impact the Company in fiscal year 2019. The GILTI provisions effectively subject income earned by the Company’s foreign subsidiaries to current U.S. tax at a rate of 10.5% , less foreign tax credits. Under U.S. GAAP the Company can make an accounting policy election to either recognize deferred taxes for temporary differences expected to impact GILTI in future years or provide for tax expense related to GILTI in the year the tax is incurred as a period expense. The Company has elected to treat tax generated by GILTI provisions as a period expense. The Act also includes a favorable tax treatment for certain Foreign Derived Intangible Income (“FDII”), effective for the Company starting August 1, 2018. The Company’s provisional estimate for both GILTI and FDII did not materially impact the effective income tax rate or income tax expense for the three or six months ended January 31, 2019 . As of January 31, 2019 , the gross amounts of the Company’s liabilities for unrecognized tax benefits of $30.4 million , including interest and penalties, were classified as long-term income taxes payable in the accompanying consolidated balance sheets. Over the next twelve months, the Company’s existing positions will continue to generate an increase in liabilities for unrecognized tax benefits, as well as a likely decrease in liabilities as a result of the lapse of the applicable statute of limitations and the conclusion of income tax audits. The expected decrease in liabilities relating to unrecognized tax benefits will have a positive effect on the Company’s consolidated results of operations and financial position when realized. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company is currently under examination by certain taxing authorities in the U.S. for fiscal years between 2014 and 2017. At this time, the Company does not believe that the outcome of any examination will have a material impact on the Company’s consolidated results of operations and financial position. The Company’s effective income tax rates were 20.4% and 28.5% for the three months ended January 31, 2019 and 2018 , respectively, and 21.8% and 30.1% for the six months ended January 31, 2019 and 2018 , respectively. The effective tax rate for the three months ended January 31, 2019 was calculated based on the 21.0% U.S. federal statutory rate. For the three months ended January 31, 2018, a fiscal year 2018 federal statutory rate of 26.9% was used. The effective tax rates in the current and prior year were also impacted from the result of recognizing excess tax benefits from the exercise of employee stock options of $4.8 million and $2.6 million for the three months ended January 31, 2019 and 2018 , respectively, and $5.0 million and $6.4 million for the six months ended January 31, 2019 and 2018 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jan. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | NOTE 10 – Recent Accounting Pronouncements Pending In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The current standard, ASC Topic 740 - Income Taxes , requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. This includes the tax effects of items in accumulated other comprehensive income ("AOCI") that were originally recognized in other comprehensive income, subsequently creating stranded tax effects. ASU 2018-02 allows a reclassification from AOCI to retained earnings for stranded tax effects specifically resulting from the U.S. federal government's recently enacted tax bill, the Tax Cuts and Jobs Act. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those periods. Early adoption is permitted. The adoption of ASU 2018-02 will result in a reclassification from AOCI to retained earnings and will have no impact on the Company’s consolidated results of operations, financial position or cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350). ASU 2017-04 amends the requirement that entities compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, entities should perform their annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment if the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual periods beginning after December 15, 2019. The Company’s adoption of ASU 2017-04 will not have a material impact on the Company’s consolidated results of operations and financial position. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), that supersedes all existing guidance on accounting for leases in ASC Topic 840. ASU 2016-02 is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. ASU 2016-02 is effective for annual and interim periods within those annual reporting periods beginning after December 15, 2018 and adoption is to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients; however early adoption is permitted. Based on a preliminary assessment, the Company expects that most of its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a significant increase in the assets and liabilities on the Company’s consolidated balance sheets. The Company is continuing its assessment, which may identify additional impacts ASU 2016-02 may have on the Company’s consolidated results of operations, financial position, and related disclosures. Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASC 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for annual and interim periods within those annual reporting periods beginning after December 15, 2017 and was effective for the Company beginning with the first quarter of fiscal year 2019. ASU 2014-09 allows adoption with either retrospective application to each period presented, or modified retrospective application, with the cumulative effect recognized as of the date of initial application. The Company used the modified retrospective application with the cumulative effect as its transition method. Upon adoption, service revenue and vehicle sales revenue are recognized at the date the vehicles are sold at auction. This timing of revenue recognition under ASU 2014-09 is consistent with the Company’s previous policy under ASC 605 for most service and vehicle sales revenue. However, the adoption represents a change in the timing of revenue recognition for certain service revenues, such as inbound transportation and titling fees, which were previously recognized under ASC 605 when the services were performed, which generally occurred prior to auction. Related costs to prepare the vehicles for auction, including inbound transportation and titling, are deferred and recognized at the time of revenue recognition. This change resulted in a decrease to beginning retained earnings as of August 1, 2018, of $23.0 million as a result of the initial application of the standard and did not have a material impact to earnings. On August 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all contracts. Results for reporting periods beginning August 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition . In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs and eliminates the exception for an intra-entity transfer of an asset, other than inventory. This ASU is effective for annual and interim periods within those annual periods beginning after December 15, 2017, and is required to be adopted using a modified retrospective approach; however early adoption is permitted. The Company’s adoption of ASU 2016-16 did not have a material impact on the Company’s consolidated results of operations and financial position. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jan. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | NOTE 11 – Legal Proceedings The Company is subject to threats of litigation and is involved in actual litigation and damage claims arising in the ordinary course of business, such as actions related to injuries, property damage, contract disputes, and handling or disposal of vehicles. The material pending legal proceedings to which the Company is a party, or of which any of the Company’s property is subject, include the following matters. On November 1, 2013, the Company filed suit against Sparta Consulting, Inc. (now known as KPIT) in the 44th Judicial District Court of Dallas County, Texas, alleging fraud, fraudulent inducement, and/or promissory fraud, negligent misrepresentation, unfair business practices pursuant to California Business and Professions Code § 17200, breach of contract, declaratory judgment, and attorney’s fees. The Company sought compensatory and exemplary damages, disgorgement of amounts paid, attorney’s fees, pre- and post-judgment interest, costs of suit, and a judicial declaration of the parties’ rights, duties, and obligations under the Implementation Services Agreement dated October 6, 2011. The suit arose out of the Company’s September 17, 2013 decision to terminate the Implementation Services Agreement, under which KPIT was to design, implement, and deliver a customized replacement enterprise resource planning system for the Company. On January 2, 2014, KPIT removed this suit to the United States District Court for the Northern District of Texas. On August 11, 2014, the Northern District of Texas transferred the suit to the United States District Court for the Eastern District of California for convenience. On January 8, 2014, KPIT filed suit against the Company in the United States District Court for the Eastern District of California, alleging breach of contract, promissory estoppel, breach of the implied covenant of good faith and fair dealing, account stated, quantum meruit, unjust enrichment, and declaratory relief. KPIT sought compensatory and exemplary damages, prejudgment interest, costs of suit, and a judicial declaration of the parties’ rights, duties, and obligations under the Implementation Services Agreement. On June 8, 2016, the Company amended its complaint to include claims that KPIT stole certain intellectual property owned by the Company and acted negligently in its provision of services. The case was tried in April and May 2018. On May 22, 2018 , the jury returned a verdict for the Company on its fraud claim against KPIT for $4.7 million , and on its professional negligence claim against KPIT for $16.3 million , and the jury found for KPIT on its implied covenant counterclaim against the Company for $4.9 million . In a September 10, 2018 , post-trial order, the Court reduced the Company’s professional negligence award to $9.1 million , found KPIT liable under California’s Unfair Competition Law (UCL) for fraudulent and unfair conduct and held that the Company could recover restitution of $6.3 million if the Company chooses to forego its fraud and professional negligence damages, found that the Company was not entitled to restitution on its unjust enrichment claim, and awarded KPIT prejudgment interest on its implied covenant counterclaim starting from December 26, 2016. On January 24, 2019, the Court heard argument on the Company’s motion for prejudgment interest, and on KPIT’s motion for judgment notwithstanding the jury verdict, and for new trial. The Court is expected to issue a written opinion on these motions later this year. The Company provides for costs relating to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on the Company’s future consolidated results of operations and cash flows cannot be predicted because any such effect depends on future results of operations and the amount and timing of the resolution of such matters. The Company believes that any ultimate liability will not have a material effect on its consolidated results of operations, financial position or cash flows. However, the amount of the liabilities associated with these claims, if any, cannot be determined with certainty. The Company maintains insurance which may or may not provide coverage for claims made against the Company. There is no assurance that there will be insurance coverage available when and if needed. Additionally, the insurance that the Company carries requires that the Company pay for costs and/or claims exposure up to the amount of the insurance deductibles negotiated when the insurance is purchased. Governmental Proceedings The Georgia Department of Revenue, or DOR, conducted a sales and use tax audit of the Company’s operations in Georgia for the period from January 1, 2007 through June 30, 2011. As a result of their initial audit, the DOR issued a notice of proposed assessment for uncollected sales taxes in which it asserted that the Company failed to collect and remit sales taxes totaling $73.8 million , including penalties and interest. The Company subsequently engaged a Georgia law firm and outside tax advisors to review the conduct of its business operations in Georgia, the notice of proposed assessment, and the DOR’s policy position. In particular, the Company’s outside legal counsel provided the Company an opinion that the sales for resale to non-U.S. registered resellers should not be subject to Georgia sales and use tax. It was determined that grounds exist for a substantial reduction in the Official Assessment, on the basis that (i) the transactions and resulting tax at issue were erroneously double-counted by the DOR in the audit sales transaction work papers on which the Assessment was based; and (ii) the Company was ultimately able to provide documentation showing that most of the remaining transactions were sales at wholesale, therefore qualifying for the sale for resale exemption from Georgia Sales and Use Tax. After these reductions, the remaining amount of principal Georgia Sales and Use Tax still in dispute between the parties was $2.6 million , plus applicable interest. A Consent Order to this effect was entered by the Georgia Tax Tribunal on May 22, 2017 . The DOR subsequently filed a Motion for Summary Judgment related to the remaining $2.6 million in dispute. On November 16, 2018, the Georgia Tax Tribunal denied the DOR’s motion for summary judgment with regard to substantially all of the amount at issue. |
Segments and Other Geographic R
Segments and Other Geographic Reporting Segment Reporting | 6 Months Ended |
Jan. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure | NOTE 12 – Segments and Other Geographic Reporting The Company’s U.S. and International regions are considered two separate operating segments and are disclosed as two reportable segments. The segments represent geographic areas and reflect how the chief operating decision maker allocates resources and measures results, including total revenues, operating income and income before income taxes. Intercompany income (expense) is primarily related to charges for services provided by the U.S. segment. The following table presents financial information by segment: Three Months Ended January 31, 2019 Three Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Service revenues $ 362,023 $ 54,784 $ 416,807 $ 355,542 $ 46,412 $ 401,954 Vehicle sales 28,049 40,042 68,091 29,593 27,559 57,152 Total service revenues and vehicle sales 390,072 94,826 484,898 385,135 73,971 459,106 Yard operations 181,335 34,125 215,460 189,378 27,806 217,184 Cost of vehicle sales 26,883 34,329 61,212 28,794 21,519 50,313 General and administrative 36,452 7,035 43,487 33,953 6,709 40,662 Operating income 145,402 19,337 164,739 133,010 17,937 150,947 Interest (expense) income, net (4,674 ) 119 (4,555 ) (5,628 ) 67 (5,561 ) Other income (expense), net 4,674 108 4,782 (490 ) (458 ) (948 ) Intercompany income (expense) 1,931 (1,931 ) — 1,182 (1,182 ) — Income before income taxes 147,333 17,633 164,966 128,074 16,364 144,438 Income tax expense 32,799 794 33,593 37,677 3,460 41,137 Net income $ 114,534 $ 16,839 $ 131,373 $ 90,397 $ 12,904 $ 103,301 Depreciation and amortization $ 17,877 $ 2,522 $ 20,399 $ 14,054 $ 3,817 $ 17,871 Capital expenditures 66,901 7,490 74,391 56,804 12,617 69,421 Six Months Ended January 31, 2019 Six Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Service revenues $ 705,596 $ 106,017 $ 811,613 $ 686,933 $ 89,146 $ 776,079 Vehicle sales 55,685 78,968 134,653 49,307 52,888 102,195 Total service revenues and vehicle sales 761,281 184,985 946,266 736,240 142,034 878,274 Yard operations 358,977 64,177 423,154 382,211 52,580 434,791 Cost of vehicle sales 52,826 66,142 118,968 47,554 41,056 88,610 General and administrative 73,784 14,181 87,965 67,446 12,538 79,984 Operating income 275,694 40,485 316,179 239,029 35,860 274,889 Interest (expense) income, net (8,488 ) 242 (8,246 ) (11,116 ) 157 (10,959 ) Other income (expense), net 5,299 520 5,819 (4,601 ) (763 ) (5,364 ) Intercompany income (expense) 3,342 (3,342 ) — 3,486 (3,486 ) — Income before income taxes 275,847 37,905 313,752 226,798 31,768 258,566 Income tax expense 63,265 5,031 68,296 71,262 6,443 77,705 Net income $ 212,582 $ 32,874 $ 245,456 $ 155,536 $ 25,325 $ 180,861 Depreciation and amortization $ 37,269 $ 4,999 $ 42,268 $ 27,583 $ 6,190 $ 33,773 Capital expenditures 102,154 34,573 136,727 95,709 15,073 110,782 January 31, 2019 July 31, 2018 (In thousands) United States International Total United States International Total Total assets $ 1,848,216 $ 448,689 $ 2,296,905 $ 1,856,058 $ 451,640 $ 2,307,698 Goodwill 256,434 81,611 338,045 256,434 80,801 337,235 |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments of a normal recurring nature considered necessary for fair presentation of its financial position as of January 31, 2019 and July 31, 2018 , its consolidated statements of income and comprehensive income for the three and six months ended January 31, 2019 and 2018 , and its cash flows for the six months ended January 31, 2019 and 2018 . Interim results for the three and six months ended January 31, 2019 are not necessarily indicative of the results that may be expected for any future period, or for the entire year ending July 31, 2019 . These consolidated financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. The interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2018 . Certain prior year amounts have been reclassified to conform to current year presentation. The consolidated financial statements of the Company include the accounts of the parent company and its wholly-owned subsidiaries, including its foreign wholly-owned subsidiaries. The Company also had a 59.5% voting interest in a company, which was acquired as part of the Cycle Express, LLC acquisition (“majority-owned subsidiary”), which provided various repossession services for the powersports auction industry. The noncontrolling interest consisted of a 40.5% |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates include, but are not limited to, vehicle pooling costs; income taxes; stock-based compensation; purchase price allocations; and contingencies |
Revenue Recognition | Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), which superseded the revenue recognition requirements in ASC 605, Revenue Recognition (“ASC 605”). ASC 606 revised the timing of revenue recognition based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. On August 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all contracts. Results for reporting periods beginning August 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605. Under the new standard, the Company concluded its primary performance obligation is the auctioning of consigned vehicles through an online auction process. Upon adoption of ASC 606, service revenue and vehicle sales revenue are recognized at the date the vehicles are sold at auction, excluding annual registration fees. This timing of revenue recognition under ASC 606 represents a change in the timing of revenue recognition for certain service revenues, such as inbound transportation and titling fees, which were recognized under ASC 605 prior to auction, when the services were performed. Under ASC 606, costs to prepare the vehicles for auction, including inbound transportation costs and titling fees, are deferred and recognized at the time of revenue recognition at auction. The Company calculated the impact of the adoption on the consolidated financial statements, which resulted in a decrease to opening retained earnings, net of tax, as of August 1, 2018, of $23.0 million as a result of the initial application of the standard and did not have a material impact to earnings for the three and six months ended January 31, 2019 . This retained earnings impact related to adjustments to accounts receivable, vehicle pooling costs and deferred taxes upon adoption of the standard. There were no contract liabilities on the consolidated balance sheets at January 31, 2019 . The Company’s disaggregation between service revenues and vehicle sales at the segment level reflects how the nature, timing, amount and uncertainty of its revenues and cash flows are impacted by economic factors. The Company reports sales taxes on relevant transactions on a net basis in the Company’s consolidated results of operations, and therefore does not include sales taxes in revenues or costs. Service revenues The Company’s service revenue consists of auction and auction related sales transaction fees charged for vehicle remarketing services. Within this revenue category, the Company’s primary performance obligation is the auctioning of consigned vehicles through an online auction process. These auction and auction related services may include a combination of vehicle purchasing fees, vehicle listing fees, and vehicle selling fees that can be based on a predetermined percentage of the vehicle sales price, tiered vehicle sales price driven fees, or at a fixed fee based on the sale of each vehicle regardless of the selling price of the vehicle; transportation fees for the cost of transporting the vehicle to or from the Company’s facility; title processing and preparation fees; vehicle storage fees; bidding fees; and vehicle loading fees. These services are not distinct within the context of the contract. Accordingly, revenue for these services is recognized when the single performance obligation is satisfied at the completion of the auction process. The Company does not take ownership of these consigned vehicles, which are stored at the Company’s facilities located throughout the U.S. and at its international locations. These fees are recognized as net revenue (not gross vehicle selling price) at the time of auction in the amount of such fees charged. The Company identified a separate performance obligation related to providing access to its online auction platform. The Company charges members an annual registration fee for the right to participate in its online auctions and access the Company’s bidding platform. Under the new standard, this fee will continue to be recognized ratably over the term of the arrangement, generally one year, as each day of access to the online auction platform represents the best depiction of the transfer of the service. No provision for returns has been established, as all sales are final with no right of return or warranty, although the Company provides for bad debt expense in the case of non-performance by its buyers or sellers. Three Months Ended January 31, 2019 Three Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Service revenues $ 362,023 $ 54,784 $ 416,807 $ 355,542 $ 46,412 $ 401,954 Six Months Ended January 31, 2019 Six Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Service revenues $ 705,596 $ 106,017 $ 811,613 $ 686,933 $ 89,146 $ 776,079 Vehicle sales Certain vehicles are purchased and remarketed on the Company’s own behalf. The Company identified a single performance obligation related to the sale of these vehicles, which is the completion of the online auction process. Under the new standard, vehicle sales revenue will continue to be recognized on the auction date. As the Company acts as a principal in vehicle sales transactions, the gross sales price at auction is recorded as revenue. Three Months Ended January 31, 2019 Three Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Vehicle sales $ 28,049 $ 40,042 $ 68,091 $ 29,593 $ 27,559 $ 57,152 Six Months Ended January 31, 2019 Six Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Vehicle sales $ 55,685 $ 78,968 $ 134,653 $ 49,307 $ 52,888 $ 102,195 Contract assets |
Contract with Customer, Asset and Liability [Table Text Block] | The change in the carrying amount of contract assets was as follows (in thousands): Balance as of July 31, 2018 $ 11,840 Costs amortized during the period (3,322 ) Effect of foreign currency exchange rates (46 ) Balance as of January 31, 2019 $ 8,472 |
Vehicle Pooling Costs | Vehicle Pooling Costs The Company defers costs that relate directly to the fulfillment of its contracts associated with vehicles consigned to and received by the Company, but not sold as of the end of the period. The Company quantifies the deferred costs using a calculation that includes the number of vehicles at its facilities at the beginning and end of the period, the number of vehicles sold during the period and an allocation of certain yard operation costs of the period. The primary expenses allocated and deferred are inbound transportation costs, titling fees, certain facility costs, labor, and vehicle processing. Upon the adoption of ASC 606, the Company began deferring the inbound transportation costs and titling fees directly associated with the vehicles within its vehicle pooling costs. If the allocation factors change, then yard operation expenses could increase or decrease correspondingly in the future. These costs are expensed as vehicles are sold in subsequent periods on an average cost basis. Given the fixed cost nature of the Company’s business, there are no direct correlations for increases in expenses or units processed on vehicle pooling costs. |
Foreign Currency Translation | Foreign Currency Translation The Company records foreign currency translation adjustments from the process of translating the functional currency of the financial statements of its foreign subsidiaries into the U.S. dollar reporting currency. The Canadian dollar, British pound, Brazilian real, European Union euro, U.A.E. dirham, Omani rial, Bahraini dinar, and Indian rupee are the functional currencies of the Company’s foreign subsidiaries as they are the primary currencies within the economic environment in which each subsidiary operates. The original equity investment in the respective subsidiaries is translated at historical rates. Assets and liabilities of the respective subsidiary’s operations are translated into U.S. dollars at period-end exchange rates, and revenues and expenses are translated into U.S. dollars at average exchange rates in effect during each reporting period. Adjustments resulting from the translation of each subsidiary’s financial statements are reported in other comprehensive income. |
Income Taxes and Deferred Tax Assets | Income Taxes and Deferred Tax Assets Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax basis, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Excess tax benefits and deficiencies related to exercises of stock options are recognized as expense or benefit in the income statement as discrete items in the reporting period in which they occur. In accordance with the provisions of ASC 740, Income Taxes , a two-step approach is applied to the recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax position as the largest amount that is more than 50% likely to be realized upon ultimate settlement. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid investments purchased with original maturities of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents include cash held in checking, domestic certificates of deposit, and money market accounts. The Company periodically invests its excess cash in money market funds and U.S. Treasury Bills. The Company’s cash and cash equivalents are placed with high credit quality financial institutions. |
Other Assets | Other Assets Other assets consist of long-term deposits, contracted prepayments, notes receivable, and investments in unconsolidated affiliates. In accordance with ASC 323, Investments-Equity Method and Joint Ventures, |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company records its financial assets and liabilities at fair value in accordance with the framework for measuring fair value in U.S. GAAP. In accordance with ASC 820, Fair Value Measurements and Disclosures , as amended by Accounting Standards Update 2011-04, the Company considers fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants under current market conditions. This framework establishes a fair value hierarchy that prioritizes the inputs used to measure fair value: Level I Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level II Inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly or indirectly. Level III Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate. The amounts recorded for financial instruments in the Company’s consolidated financial statements, which included cash, accounts receivable, accounts payable, accrued liabilities and Revolving Loan Facility approximated their fair values as of January 31, 2019 and July 31, 2018 , due to the short-term nature of those instruments, and are classified within Level II of the fair value hierarchy. Cash equivalents are classified within Level II of the fair value hierarchy because they are valued using quoted market prices of the underlying investments. See Note 3 – Long-Term Debt , and Note 5 – Fair Value Measures |
Capitalized Software Costs | Capitalized Software CostsThe Company capitalizes system development costs and website development costs related to enterprise computing services during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, generally three years. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that impact the recoverability of these assets. |
Acquisitions | Acquisitions The Company recognizes and measures identifiable assets acquired and liabilities assumed in acquired entities in accordance with ASC 805, Business Combinations |
Segments and Other Geographic Reporting | Segments and Other Geographic Reporting The Company’s U.S. and International regions are considered two separate operating segments and are disclosed as two |
Recent Accounting Pronouncements | Pending In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The current standard, ASC Topic 740 - Income Taxes , requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. This includes the tax effects of items in accumulated other comprehensive income ("AOCI") that were originally recognized in other comprehensive income, subsequently creating stranded tax effects. ASU 2018-02 allows a reclassification from AOCI to retained earnings for stranded tax effects specifically resulting from the U.S. federal government's recently enacted tax bill, the Tax Cuts and Jobs Act. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those periods. Early adoption is permitted. The adoption of ASU 2018-02 will result in a reclassification from AOCI to retained earnings and will have no impact on the Company’s consolidated results of operations, financial position or cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350). ASU 2017-04 amends the requirement that entities compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, entities should perform their annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment if the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual periods beginning after December 15, 2019. The Company’s adoption of ASU 2017-04 will not have a material impact on the Company’s consolidated results of operations and financial position. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), that supersedes all existing guidance on accounting for leases in ASC Topic 840. ASU 2016-02 is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. ASU 2016-02 is effective for annual and interim periods within those annual reporting periods beginning after December 15, 2018 and adoption is to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients; however early adoption is permitted. Based on a preliminary assessment, the Company expects that most of its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a significant increase in the assets and liabilities on the Company’s consolidated balance sheets. The Company is continuing its assessment, which may identify additional impacts ASU 2016-02 may have on the Company’s consolidated results of operations, financial position, and related disclosures. Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASC 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for annual and interim periods within those annual reporting periods beginning after December 15, 2017 and was effective for the Company beginning with the first quarter of fiscal year 2019. ASU 2014-09 allows adoption with either retrospective application to each period presented, or modified retrospective application, with the cumulative effect recognized as of the date of initial application. The Company used the modified retrospective application with the cumulative effect as its transition method. Upon adoption, service revenue and vehicle sales revenue are recognized at the date the vehicles are sold at auction. This timing of revenue recognition under ASU 2014-09 is consistent with the Company’s previous policy under ASC 605 for most service and vehicle sales revenue. However, the adoption represents a change in the timing of revenue recognition for certain service revenues, such as inbound transportation and titling fees, which were previously recognized under ASC 605 when the services were performed, which generally occurred prior to auction. Related costs to prepare the vehicles for auction, including inbound transportation and titling, are deferred and recognized at the time of revenue recognition. This change resulted in a decrease to beginning retained earnings as of August 1, 2018, of $23.0 million as a result of the initial application of the standard and did not have a material impact to earnings. On August 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all contracts. Results for reporting periods beginning August 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition . In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs and eliminates the exception for an intra-entity transfer of an asset, other than inventory. This ASU is effective for annual and interim periods within those annual periods beginning after December 15, 2017, and is required to be adopted using a modified retrospective approach; however early adoption is permitted. The Company’s adoption of ASU 2016-16 did not have a material impact on the Company’s consolidated results of operations and financial position. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Contract with Customer, Asset and Liability [Table Text Block] | The change in the carrying amount of contract assets was as follows (in thousands): Balance as of July 31, 2018 $ 11,840 Costs amortized during the period (3,322 ) Effect of foreign currency exchange rates (46 ) Balance as of January 31, 2019 $ 8,472 |
Schedule of foreign currency translation | The cumulative effects of foreign currency exchange rate fluctuations were as follows (in thousands): Cumulative loss on foreign currency translation as of July 31, 2017 $ (100,676 ) Loss on foreign currency translation (7,252 ) Cumulative loss on foreign currency translation as of July 31, 2018 $ (107,928 ) Gain on foreign currency translation 705 Cumulative loss on foreign currency translation as of January 31, 2019 $ (107,223 ) |
Accounts Receivable Accounts _2
Accounts Receivable Accounts Receivable (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Accounts receivable, net consisted of: (In thousands) January 31, 2019 July 31, 2018 Advance charges receivable $ 312,165 $ 230,092 Trade accounts receivable 84,290 125,255 Other receivables 2,646 1,698 399,101 357,045 Less: Allowance for doubtful accounts (5,540 ) (5,444 ) Accounts receivable, net $ 393,561 $ 351,601 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of aggregate amortization expense on intangible assets | The following table sets forth amortizable intangible assets by major asset class: (In thousands) January 31, 2019 July 31, 2018 Amortized intangibles: Supply contracts & customer relationships $ 49,206 $ 71,787 Trade name 23,573 24,173 Licenses and databases 7,706 9,291 Covenants not to compete — 1,666 Accumulated amortization (20,220 ) (42,025 ) Net intangibles $ 60,265 $ 64,892 |
Schedule of change in carrying amount of goodwill (in thousands) | The change in the carrying amount of goodwill was as follows (in thousands): Balance as of July 31, 2018 $ 337,235 Effect of foreign currency exchange rates 810 Balance as of January 31, 2019 $ 338,045 |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Financial Assets and Liabilities | The following table summarizes the fair value of the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis based on inputs used to derive their fair values: January 31, 2019 July 31, 2018 (In thousands) Fair Value Total Significant Observable Inputs (Level II) Fair Value Total Significant Observable Inputs (Level II) Assets Cash equivalents $ 12,840 $ 12,840 $ 130,769 $ 130,769 Total Assets $ 12,840 $ 12,840 $ 130,769 $ 130,769 Liabilities Long-term fixed rate debt, including current portion $ 391,961 $ 391,961 $ 381,230 $ 381,320 Revolving loan facility 93,300 93,300 — — Total Liabilities $ 485,261 $ 485,261 $ 381,230 $ 381,320 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of basic weighted shares outstanding to diluted weighted average shares outstanding | The table below reconciles basic weighted average shares outstanding to diluted weighted average shares outstanding: Three Months Ended January 31, Six Months Ended January 31, (In thousands) 2019 2018 2019 2018 Weighted average common shares outstanding 230,798 231,478 232,343 231,086 Effect of dilutive securities - stock options 9,862 9,882 10,400 8,990 Weighted average common and dilutive potential common shares outstanding 240,660 241,360 242,743 240,076 |
Stock-based Payment Compensat_2
Stock-based Payment Compensation (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of option activity for stock options | The following is a summary of activity for the Company’s stock options for the six months ended January 31, 2019 : (In thousands, except per share and term data) Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In years) Aggregate Intrinsic Value Outstanding as of July 31, 2018 17,797 $ 20.29 6.19 $ 660,268 Grants of options 150 47.19 Exercises (294 ) 17.74 Forfeitures or expirations (98 ) 26.33 Outstanding as of January 31, 2019 17,555 $ 20.53 5.02 $ 528,435 Exercisable as of January 31, 2019 14,077 $ 18.51 4.40 $ 452,199 |
Recognized stock-based compensation expense | The table below sets forth the stock-based compensation recognized by the Company: Three Months Ended January 31, Six Months Ended January 31, (In thousands) 2019 2018 2019 2018 General and administrative $ 4,691 $ 4,990 $ 9,680 $ 9,444 Yard operations 1,238 1,002 2,270 1,854 Total stock-based compensation $ 5,929 $ 5,992 $ 11,950 $ 11,298 |
Stock Repurchases (Tables)
Stock Repurchases (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Equity [Abstract] | |
Summary of stock options exercised | The exercised stock options, utilizing a cashless exercise, are summarized in the following table: Period Options Exercised Weighted Average Exercise Price Shares Net Settled for Exercise Shares Withheld for Taxes (1) Net Shares to Individuals Weighted Average Share Price for Withholding Employee Stock Based Tax Withholding (in 000s) FY 2018—Q2 80,000 $ 6.54 11,996 — 68,004 $ 43.60 $ — (1) |
Segments and Other Geographic_2
Segments and Other Geographic Reporting Segment Reporting (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following table presents financial information by segment: Three Months Ended January 31, 2019 Three Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Service revenues $ 362,023 $ 54,784 $ 416,807 $ 355,542 $ 46,412 $ 401,954 Vehicle sales 28,049 40,042 68,091 29,593 27,559 57,152 Total service revenues and vehicle sales 390,072 94,826 484,898 385,135 73,971 459,106 Yard operations 181,335 34,125 215,460 189,378 27,806 217,184 Cost of vehicle sales 26,883 34,329 61,212 28,794 21,519 50,313 General and administrative 36,452 7,035 43,487 33,953 6,709 40,662 Operating income 145,402 19,337 164,739 133,010 17,937 150,947 Interest (expense) income, net (4,674 ) 119 (4,555 ) (5,628 ) 67 (5,561 ) Other income (expense), net 4,674 108 4,782 (490 ) (458 ) (948 ) Intercompany income (expense) 1,931 (1,931 ) — 1,182 (1,182 ) — Income before income taxes 147,333 17,633 164,966 128,074 16,364 144,438 Income tax expense 32,799 794 33,593 37,677 3,460 41,137 Net income $ 114,534 $ 16,839 $ 131,373 $ 90,397 $ 12,904 $ 103,301 Depreciation and amortization $ 17,877 $ 2,522 $ 20,399 $ 14,054 $ 3,817 $ 17,871 Capital expenditures 66,901 7,490 74,391 56,804 12,617 69,421 Six Months Ended January 31, 2019 Six Months Ended January 31, 2018 (In thousands) United States International Total United States International Total Service revenues $ 705,596 $ 106,017 $ 811,613 $ 686,933 $ 89,146 $ 776,079 Vehicle sales 55,685 78,968 134,653 49,307 52,888 102,195 Total service revenues and vehicle sales 761,281 184,985 946,266 736,240 142,034 878,274 Yard operations 358,977 64,177 423,154 382,211 52,580 434,791 Cost of vehicle sales 52,826 66,142 118,968 47,554 41,056 88,610 General and administrative 73,784 14,181 87,965 67,446 12,538 79,984 Operating income 275,694 40,485 316,179 239,029 35,860 274,889 Interest (expense) income, net (8,488 ) 242 (8,246 ) (11,116 ) 157 (10,959 ) Other income (expense), net 5,299 520 5,819 (4,601 ) (763 ) (5,364 ) Intercompany income (expense) 3,342 (3,342 ) — 3,486 (3,486 ) — Income before income taxes 275,847 37,905 313,752 226,798 31,768 258,566 Income tax expense 63,265 5,031 68,296 71,262 6,443 77,705 Net income $ 212,582 $ 32,874 $ 245,456 $ 155,536 $ 25,325 $ 180,861 Depreciation and amortization $ 37,269 $ 4,999 $ 42,268 $ 27,583 $ 6,190 $ 33,773 Capital expenditures 102,154 34,573 136,727 95,709 15,073 110,782 January 31, 2019 July 31, 2018 (In thousands) United States International Total United States International Total Total assets $ 1,848,216 $ 448,689 $ 2,296,905 $ 1,856,058 $ 451,640 $ 2,307,698 Goodwill 256,434 81,611 338,045 256,434 80,801 337,235 |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | Jul. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||
Service revenues and vehicle sales: | $ 484,898 | $ 459,106 | $ 946,266 | $ 878,274 | |
Cumulative Translation Adjustment Summary [Roll Forward] | |||||
Cumulative loss on foreign currency translation, beginning balance | (107,928) | (100,676) | $ (100,676) | ||
(Loss) Gain on foreign currency translation | 705 | (7,252) | |||
Cumulative loss on foreign currency translation, ending balance | (107,223) | (107,223) | $ (107,928) | ||
Service revenues | |||||
Disaggregation of Revenue [Line Items] | |||||
Service revenues and vehicle sales: | 416,807 | 401,954 | 811,613 | 776,079 | |
Vehicle sales | |||||
Disaggregation of Revenue [Line Items] | |||||
Service revenues and vehicle sales: | $ 68,091 | $ 57,152 | $ 134,653 | $ 102,195 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies (Details Textual) | Aug. 01, 2018USD ($) | Jan. 31, 2019USD ($) | Jul. 31, 2018USD ($) |
Description Of Business and Summary Of Significant Accounting Policies [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Parent | 59.50% | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 40.50% | ||
Cumulative Effect on Retained Earnings, Net of Tax | $ 23,000,000 | ||
Contract with Customer, Asset, Net | $ 8,472,000 | $ 11,840,000 | |
Capitalized Contract Cost, Amortization | (3,322,000) | ||
Contract with Customer, Liability | 0 | ||
Indefinite-lived Intangible Assets, Foreign Currency Translation Gain (Loss) | $ (46,000) | ||
Tax benefits realized upon ultimate settlement, Description | The second step is to measure the tax position as the largest amount that is more than 50% likely to be realized upon ultimate settlement. | ||
Capitalized software costs | $ 34,300,000 | 30,700,000 | |
Accumulated amortization expense | $ 19,300,000 | $ 16,000,000 | |
Number of operating segments | 2 | ||
Number of reportable segment | 2 |
Accounts Receivable Accounts _3
Accounts Receivable Accounts Receivable (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jan. 31, 2019 | Jul. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenue, Practical Expedient, Financing Component [true false] | false | |
Accounts Receivable, Gross, Current | $ 399,101 | $ 357,045 |
Less: Allowance for doubtful accounts | 5,540 | 5,444 |
Accounts receivable, net | 393,561 | 351,601 |
Advance charges receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | 312,165 | 230,092 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | 84,290 | 125,255 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | $ 2,646 | $ 1,698 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | Jul. 21, 2016 | Dec. 03, 2014 | Jul. 21, 2016 | Jan. 31, 2019 | Mar. 14, 2016 | Jul. 21, 2016 | Jul. 31, 2018 | Jan. 31, 2017 | Mar. 15, 2016 |
Line of Credit Facility [Line Items] | |||||||||
Maturity date | Mar. 15, 2021 | ||||||||
Minimum Liquidity | $ 800 | ||||||||
Scenario 1 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of Credit Facility, Covenant Terms 1 | 325.00% | ||||||||
Note Agreement, Covenant Terms | 325.00% | ||||||||
Scenario 2 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of Credit Facility, Covenant Terms 1 | 350.00% | ||||||||
Note Agreement, Covenant Terms | 350.00% | ||||||||
Scenario 3 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term Debt | not to exceed $50.0 million | ||||||||
Scenario 4 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term Debt | not less than $75.0 million | ||||||||
Credit Agreement | Term Loan Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maturity date | Dec. 3, 2019 | ||||||||
Note Purchase Agreement | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt issuance cost | $ 3.4 | ||||||||
Debt issuance fees | $ 2 | $ 2 | 2 | ||||||
Reduction of long term debt | 1.4 | $ 1.4 | 1.4 | ||||||
Note Purchase Agreement | Senior Notes | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument principal amount | $ 400 | ||||||||
Note Purchase Agreement | Senior Notes, Series A | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maturity date | Dec. 3, 2024 | ||||||||
Debt instrument principal amount | $ 100 | ||||||||
Debt instrument, interest rate | 4.07% | ||||||||
Note Purchase Agreement | Senior Notes, Series B | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maturity date | Dec. 3, 2026 | ||||||||
Debt instrument principal amount | $ 100 | ||||||||
Debt instrument, interest rate | 4.19% | ||||||||
Note Purchase Agreement | Senior Notes, Series C | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maturity date | Dec. 3, 2027 | ||||||||
Debt instrument principal amount | $ 100 | ||||||||
Debt instrument, interest rate | 4.25% | ||||||||
Note Purchase Agreement | Senior Notes, Series D | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maturity date | Dec. 3, 2029 | ||||||||
Debt instrument principal amount | $ 100 | ||||||||
Debt instrument, interest rate | 4.35% | ||||||||
Wells Fargo and Bank of America, N.A. | Line of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Repayments of Lines of Credit | 242.5 | ||||||||
Wells Fargo and Bank of America, N.A. | Revolving Credit Facility | Line of Credit | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.15% | ||||||||
Wells Fargo and Bank of America, N.A. | Revolving Credit Facility | Line of Credit | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.30% | ||||||||
Wells Fargo and Bank of America, N.A. | Term Loan Facility | Line of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Quarterly amortization for term loan | $ 7.5 | ||||||||
Wells Fargo and Bank of America, N.A. | Credit Agreement | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 300 | ||||||||
Wells Fargo and Bank of America, N.A. | Credit Agreement | Term Loan Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 300 | ||||||||
Wells Fargo and Bank of America, N.A. | Credit Agreement | Term Loan Facility | Line of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Quarterly amortization for term loan | $ 18.8 | ||||||||
Wells Fargo and Bank of America, N.A. | First Amendment To Credit Agreement | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 350 | ||||||||
Line of Credit, Maximum Borrowing Capacity, Increase | 50 | ||||||||
Wells Fargo and Bank of America, N.A. | First Amendment To Credit Agreement | Term Loan Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | 93.8 | ||||||||
Outstanding borrowings | $ 93.8 | ||||||||
Wells Fargo and Bank of America, N.A. | London Interbank Offered Rate (LIBOR), Adjusted LIBOR One | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 0.125% | ||||||||
Wells Fargo and Bank of America, N.A. | London Interbank Offered Rate (LIBOR), Adjusted LIBOR One | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 1.00% | ||||||||
Wells Fargo and Bank of America, N.A. | London Interbank Offered Rate (LIBOR), Adjusted LIBOR Two | Revolving Credit Facility | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 1.125% | ||||||||
Wells Fargo and Bank of America, N.A. | London Interbank Offered Rate (LIBOR), Adjusted LIBOR Two | Revolving Credit Facility | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 2.00% | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maturity date | Jul. 21, 2021 | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | Revolving Credit Facility | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.125% | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | Revolving Credit Facility | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.20% | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | Revolving Credit Facility | Line of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Outstanding borrowings | $ 93.3 | $ 0 | |||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | Scenario 3 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of Credit Facility, Covenant Terms | not to exceed $50.0 million | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | Scenario 4 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of Credit Facility, Covenant Terms | not less than $75.0 million | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | Credit Agreement | Term Loan Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
LIBOR variable interest rate | LIBOR rate of 2.50% plus an applicable margin of 1.00%. | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | Second Amendment To Credit Agreement | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 500 | $ 500 | $ 500 | $ 850 | |||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | Federal Funds Effective Swap Rate | Credit Agreement | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 0.50% | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | London Interbank Offered Rate (LIBOR) | Credit Agreement | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 1.00% | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | London Interbank Offered Rate (LIBOR), Adjusted LIBOR One | Revolving Credit Facility | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 0.00% | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | London Interbank Offered Rate (LIBOR), Adjusted LIBOR One | Revolving Credit Facility | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 0.75% | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | London Interbank Offered Rate (LIBOR), Adjusted LIBOR Two | Revolving Credit Facility | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 1.00% | ||||||||
WellsFargo,NationalAssociation,SunTrustBankandBankofAmerica,N.A. | London Interbank Offered Rate (LIBOR), Adjusted LIBOR Two | Revolving Credit Facility | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 1.75% |
Long-Term Debt Leverage Ratios
Long-Term Debt Leverage Ratios (Details) | 6 Months Ended |
Jan. 31, 2019 | |
Leverage Ratios [Abstract] | |
Total Consolidated Net Leverage Ratio | 53.00% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | Jul. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of Intangible Assets | $ 2,600 | $ 3,500 | $ 5,500 | $ 7,400 | |
Amortized intangibles: | |||||
Accumulated amortization | (20,220) | (20,220) | $ (42,025) | ||
Net intangibles | 60,265 | 60,265 | 64,892 | ||
Intangible Assets, Explanation of Significant Deletions | 28,000 | ||||
Supply contracts & customer relationships | |||||
Amortized intangibles: | |||||
Gross carrying amount | 49,206 | 49,206 | 71,787 | ||
Trade name | |||||
Amortized intangibles: | |||||
Gross carrying amount | 23,573 | 23,573 | 24,173 | ||
Licenses and databases | |||||
Amortized intangibles: | |||||
Gross carrying amount | 7,706 | 7,706 | 9,291 | ||
Covenants not to compete | |||||
Amortized intangibles: | |||||
Gross carrying amount | $ 0 | $ 0 | $ 1,666 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) $ in Thousands | Jan. 31, 2019USD ($) |
Goodwill [Roll Forward] | |
Balance as of July 31, 2018 | $ 337,235 |
Balance as of January 31, 2019 | $ 338,045 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Aggregate amortization expense | $ 2,600 | $ 3,500 | $ 5,500 | $ 7,400 |
Effect of foreign currency exchange rates | $ 810 |
Fair Value Measures (Details)
Fair Value Measures (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jan. 31, 2019 | Jul. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 12,840 | $ 130,769 |
Assets, Fair Value Disclosure | 12,840 | 130,769 |
Total Liabilities | 485,261 | 381,230 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 12,840 | 130,769 |
Total Liabilities | 485,261 | 381,320 |
Fixed Rate Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term variable rate debt, including current portion | 391,961 | 381,230 |
Long-term fixed rate debt, including current portion | 391,961 | 381,230 |
Fixed Rate Debt | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term variable rate debt, including current portion | 391,961 | 381,320 |
Long-term fixed rate debt, including current portion | 391,961 | 381,320 |
Variable Rate Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving loan facility | $ 93,300 | $ 0 |
Net Income Per Share (Details)
Net Income Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Earnings Per Share [Abstract] | ||||
Weighted average common shares outstanding | 230,798 | 231,478 | 232,343 | 231,086 |
Effect of dilutive securities - stock options | 9,862 | 9,882 | 10,400 | 8,990 |
Weighted average common and dilutive potential common shares outstanding | 240,660 | 241,360 | 242,743 | 240,076 |
Net Income Per Share (Details T
Net Income Per Share (Details Textual) - shares | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Employee Stock Option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options excluded from the calculation of dilutive earnings per share | 425,000 | 2,287,500 | 460,000 | 4,478,004 |
Stock-based Payment Compensat_3
Stock-based Payment Compensation (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jan. 31, 2019USD ($)$ / sharesshares | Jul. 31, 2018USD ($)$ / sharesshares | |
Shares | ||
Outstanding as of July 31, 2018 | shares | 17,797,000 | |
Grants of options (in shares) | shares | 150,000 | |
Exercises (in shares) | shares | (294,000) | |
Forfeitures or expirations (in shares) | shares | (98,000) | |
Outstanding as of January 31, 2019 | shares | 17,555,000 | 17,797,000 |
Exercisable as of January 31, 2019 | shares | 14,077,000 | |
Weighted Average Exercise Price | ||
Outstanding as of July 31, 2018 | $ / shares | $ 20.29 | |
Grants of options (in dollars per share) | $ / shares | 47.19 | |
Exercises (in dollars per share) | $ / shares | 17.74 | |
Forfeitures or expirations (in dollars per share) | $ / shares | 26.33 | |
Outstanding as of January 31, 2019 | $ / shares | 20.53 | $ 20.29 |
Exercisable as of January 31, 2019 | $ / shares | $ 18.51 | |
Weighted Average Remaining Contractual Term (In years) | ||
Outstanding as of July 31, 2018 | 6 years 2 months 8 days | |
Outstanding as of January 31, 2019 | 5 years 7 days | |
Exercisable as of January 31, 2019 | 4 years 4 months 24 days | |
Aggregate Intrinsic Value | ||
Outstanding as of July 31, 2018 | $ | $ 660,268 | |
Outstanding as of January 31, 2019 | $ | 528,435 | $ 660,268 |
Exercisable as of January 31, 2019 | $ | $ 452,199 |
Stock-based Payment Compensat_4
Stock-based Payment Compensation (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 5,929 | $ 5,992 | $ 11,950 | $ 11,298 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 4,691 | 4,990 | 9,680 | 9,444 |
Yard Operations | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 1,238 | $ 1,002 | $ 2,270 | $ 1,854 |
Stock-based Payment Compensat_5
Stock-based Payment Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Millions | Apr. 15, 2015 | Dec. 16, 2014 | Oct. 31, 2013 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2014 |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Number of stock options exercised | 294,000 | |||||
Stock Based Compensation (Textual) | ||||||
Shares available for calculating intrinsic value (in shares) | 17,555,424 | |||||
Nonqualified stock options to purchase of shares, exercise price | $ 17.81 | |||||
Term for not granting cash salary or bonus compensation in excess of $ 1.00 per year | 5 years | |||||
Deferred compensation arrangement with individual - requisite service period | 5 years | |||||
Deferred compensation arrangement with individual, description | Each option will become fully vested, assuming continued service by Mr. Adair and Mr. Mitz on?April?15, 2019 and December 16, 2018. | |||||
Fair value of option at grant date (in dollars per share) | $ 5.72 | |||||
Total compensation expense to be recognized per grant | $ 40 | |||||
Compensation expense | $ 3.5 | $ 3.6 | ||||
Vincent W. Mitz, the President | ||||||
Stock Based Compensation (Textual) | ||||||
Nonqualified stock options to purchase of shares | 3,000,000 | |||||
Chief Executive Officer [Member] | ||||||
Stock Based Compensation (Textual) | ||||||
Nonqualified stock options to purchase of shares | 4,000,000 | |||||
Tranche One on December 16, 2014 | Vincent W. Mitz, the President | ||||||
Stock Based Compensation (Textual) | ||||||
Percentage of total aggregate options vested | 20.00% | |||||
Tranche Two on April 15, 2015 | Chief Executive Officer [Member] | ||||||
Stock Based Compensation (Textual) | ||||||
Percentage of total aggregate options vested | 20.00% | |||||
Tranche Three Vesting Monthly | Chief Executive Officer [Member] | ||||||
Stock Based Compensation (Textual) | ||||||
Award vesting period | 4 years | |||||
October Grants [Member] | ||||||
Stock Based Compensation (Textual) | ||||||
Percentage Of Stock Options Immediately Vested On Termination Of Executive | 100.00% | |||||
Percentage of stock options which would get immediately vested on change of control | 100.00% |
Stock Repurchases (Details)
Stock Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jan. 31, 2018 | Jan. 31, 2019 | |
Share-Based Compensation Arrangement By Share-Based Payment Award, Options Exercisable [Abstract] | ||
Options Exercised | 294,000 | |
Weighted Average Exercise Price | $ 17.74 | |
Common Stock | ||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options Exercisable [Abstract] | ||
Options Exercised | 80,000 | |
Weighted Average Exercise Price | $ 6.54 | |
Shares Net Settled for Exercise | 11,996 | |
Shares Withheld for Taxes(1) | 0 | |
Net Shares to Individuals | 68,004 | |
Weighted Average Share Price for Withholding | $ 43.60 | |
Employee Stock Based Tax Withholding (in 000s) | $ 0 |
Stock Repurchases (Details Text
Stock Repurchases (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 88 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2019 | Sep. 22, 2011 | |
Stock Repurchased and Retired During Period, Shares | 7,635,596 | ||
Stock Repurchased and Retired During Period, Value | $ 365 | ||
Stock Repurchased and Retired During Period Cost Per Share | $ 47.81 | $ 47.81 | |
Remittance to taxing authorities under statutory withholding | $ 0 | ||
Number of stock options exercised | 294,000 | ||
Stock Repurchase Program 2011 | |||
Stock Repurchase Program Additional Number Of Shares Authorized Approved | 80,000,000 | ||
Stock Repurchased and Retired During Period, Shares | 114,549,198 | ||
Number of shares available for repurchase under stock repurchase program | 81,450,802 | 81,450,802 | |
Common Stock | Stock Repurchase Program 2011 | |||
Common stock authorized for repurchase (in shares) | 196,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2019 | Jul. 31, 2018 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | Jul. 31, 2018 | |
Tax benefits recognized provided percentage of likelihood of realization is more than | 50.00% | |||||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 4.8 | $ 2.6 | $ 5 | $ 6.4 | ||
Gross unrecognized tax benefit | 30.4 | $ 30.4 | ||||
Other Tax Expense Benefit Transition Tax Net of Foreign Tax Credit | $ 1.1 | $ 12.4 | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 20.40% | 28.50% | 21.80% | 30.10% | 26.90% | |
Domestic Tax Authority [Member] | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | 10.50% |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) $ in Millions | May 22, 2017 | Jun. 30, 2011 | May 22, 2018 |
Liability for Uncollected Sales Taxes, with Interest and Penalties | Georgia Department of Revenue | |||
Loss Contingencies [Line Items] | |||
Assessed sales tax liability | $ 2.6 | $ 73.8 | |
Sparta Implied Covenant Counterclaim Loss Contingency [Member] | |||
Loss Contingencies [Line Items] | |||
Loss Contingency, Estimate of Possible Loss | $ 4.9 |
Legal Proceedings Gain Continge
Legal Proceedings Gain Contingencies (Details) - Positive Outcome of Litigation - USD ($) $ in Millions | Sep. 10, 2018 | May 22, 2018 |
Gain Contingencies [Line Items] | ||
Gain Contingency, Unrecorded Amount | $ 16.3 | |
Sparta Fraud Claim Gain Contingency | ||
Gain Contingencies [Line Items] | ||
Gain Contingency, Unrecorded Amount | $ 6.3 | $ 4.7 |
Sparta Professional Negligence Claim Gain Contingency | ||
Gain Contingencies [Line Items] | ||
Gain Contingency, Unrecorded Amount | $ 9.1 |
Segments and Other Geographic_3
Segments and Other Geographic Reporting Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jan. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Jan. 31, 2018USD ($) | Oct. 31, 2017USD ($) | Jan. 31, 2019USD ($) | Jan. 31, 2018USD ($) | Jul. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||||||
Number of Operating Segments | 2 | ||||||
Number of Reportable Segments | 2 | ||||||
Service revenues and vehicle sales: | $ 484,898 | $ 459,106 | $ 946,266 | $ 878,274 | |||
Yard operations | 215,460 | 217,184 | 423,154 | 434,791 | |||
Cost of vehicle sales | 61,212 | 50,313 | 118,968 | 88,610 | |||
General and administrative | 43,487 | 40,662 | 87,965 | 79,984 | |||
Operating income | 164,739 | 150,947 | 316,179 | 274,889 | |||
Interest (expense) income, net | (4,555) | (5,561) | (8,246) | (10,959) | |||
Other (expense) income, net | 4,782 | (948) | 5,819 | (5,364) | |||
Intercompany income (expense) | 0 | 0 | 0 | 0 | |||
Income before income taxes | 164,966 | 144,438 | 313,752 | 258,566 | |||
Income taxes | 33,593 | 41,137 | 68,296 | 77,705 | |||
Net income (Loss), Including Portion Attributable to Noncontrolling Interest | 131,373 | $ 114,083 | 103,301 | $ 77,560 | 245,456 | 180,861 | |
Depreciation and amortization | 20,399 | 17,871 | 42,268 | 33,773 | |||
Capital expenditures, including acquisitions | 74,391 | 69,421 | 136,727 | 110,782 | |||
Total assets | 2,296,905 | 2,296,905 | $ 2,307,698 | ||||
Goodwill | 338,045 | 338,045 | 337,235 | ||||
Net Income (Loss) Attributable to Parent | 131,373 | 103,256 | 245,456 | 180,771 | |||
Operating Segments | United States | |||||||
Segment Reporting Information [Line Items] | |||||||
Cost of vehicle sales | 26,883 | 28,794 | 52,826 | 47,554 | |||
Operating Segments | International | |||||||
Segment Reporting Information [Line Items] | |||||||
Cost of vehicle sales | 34,329 | 21,519 | 66,142 | 41,056 | |||
Operating Segments | United States | United States | |||||||
Segment Reporting Information [Line Items] | |||||||
Service revenues and vehicle sales: | 390,072 | 385,135 | 761,281 | 736,240 | |||
Yard operations | 181,335 | 189,378 | 358,977 | 382,211 | |||
General and administrative | 36,452 | 33,953 | 73,784 | 67,446 | |||
Operating income | 145,402 | 133,010 | 275,694 | 239,029 | |||
Interest (expense) income, net | (4,674) | (5,628) | (8,488) | (11,116) | |||
Other (expense) income, net | 4,674 | (490) | 5,299 | (4,601) | |||
Intercompany income (expense) | 1,931 | 1,182 | 3,342 | 3,486 | |||
Income before income taxes | 147,333 | 128,074 | 275,847 | 226,798 | |||
Income taxes | 32,799 | 37,677 | 63,265 | 71,262 | |||
Net income (Loss), Including Portion Attributable to Noncontrolling Interest | 114,534 | 90,397 | 212,582 | 155,536 | |||
Depreciation and amortization | 17,877 | 14,054 | 37,269 | 27,583 | |||
Capital expenditures, including acquisitions | 66,901 | 56,804 | 102,154 | 95,709 | |||
Total assets | 1,848,216 | 1,848,216 | 1,856,058 | ||||
Goodwill | 256,434 | 256,434 | 256,434 | ||||
Operating Segments | International | International | |||||||
Segment Reporting Information [Line Items] | |||||||
Service revenues and vehicle sales: | 94,826 | 73,971 | 184,985 | 142,034 | |||
Yard operations | 34,125 | 27,806 | 64,177 | 52,580 | |||
General and administrative | 7,035 | 6,709 | 14,181 | 12,538 | |||
Operating income | 19,337 | 17,937 | 40,485 | 35,860 | |||
Interest (expense) income, net | 119 | 67 | 242 | 157 | |||
Other (expense) income, net | 108 | (458) | 520 | (763) | |||
Intercompany income (expense) | (1,931) | (1,182) | (3,342) | (3,486) | |||
Income before income taxes | 17,633 | 16,364 | 37,905 | 31,768 | |||
Income taxes | 794 | 3,460 | 5,031 | 6,443 | |||
Net income (Loss), Including Portion Attributable to Noncontrolling Interest | 16,839 | 12,904 | 32,874 | 25,325 | |||
Depreciation and amortization | 2,522 | 3,817 | 4,999 | 6,190 | |||
Capital expenditures, including acquisitions | 7,490 | 12,617 | 34,573 | 15,073 | |||
Total assets | 448,689 | 448,689 | 451,640 | ||||
Goodwill | 81,611 | 81,611 | $ 80,801 | ||||
Service revenues | |||||||
Segment Reporting Information [Line Items] | |||||||
Service revenues and vehicle sales: | 416,807 | 401,954 | 811,613 | 776,079 | |||
Service revenues | Operating Segments | United States | United States | |||||||
Segment Reporting Information [Line Items] | |||||||
Service revenues and vehicle sales: | 362,023 | 355,542 | 705,596 | 686,933 | |||
Service revenues | Operating Segments | International | International | |||||||
Segment Reporting Information [Line Items] | |||||||
Service revenues and vehicle sales: | 54,784 | 46,412 | 106,017 | 89,146 | |||
Vehicle sales | |||||||
Segment Reporting Information [Line Items] | |||||||
Service revenues and vehicle sales: | 68,091 | 57,152 | 134,653 | 102,195 | |||
Vehicle sales | Operating Segments | United States | United States | |||||||
Segment Reporting Information [Line Items] | |||||||
Service revenues and vehicle sales: | 28,049 | 29,593 | 55,685 | 49,307 | |||
Vehicle sales | Operating Segments | International | International | |||||||
Segment Reporting Information [Line Items] | |||||||
Service revenues and vehicle sales: | $ 40,042 | $ 27,559 | $ 78,968 | $ 52,888 |
Uncategorized Items - cprt13120
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (22,954,000) |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Common Stock [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Noncontrolling Interest [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (22,954,000) |