Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2015 | Sep. 24, 2015 | Jan. 31, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | COPART INC | ||
Entity Central Index Key | 900,075 | ||
Current Fiscal Year End Date | --07-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Trading Symbol | cprt | ||
Entity Common Stock, Shares Outstanding | 120,186,984 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 3,646,539,300 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2015 | Jul. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 456,012 | $ 158,668 |
Accounts receivable, net | 215,696 | 196,985 |
Vehicle pooling costs | 24,949 | 24,438 |
Inventories | 8,613 | 7,259 |
Income taxes receivable | 6,092 | 2,288 |
Deferred income taxes | 3,396 | 1,803 |
Prepaid expenses and other assets | 19,824 | 20,850 |
Total current assets | 734,582 | 412,291 |
Property and equipment, net | 700,402 | 692,383 |
Intangibles, net | 17,857 | 25,242 |
Goodwill | 271,850 | 283,780 |
Deferred income taxes | 28,840 | 36,721 |
Other assets | 46,421 | 56,387 |
Total assets | 1,799,952 | 1,506,804 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 147,452 | 152,156 |
Deferred revenue | 3,724 | 4,170 |
Income taxes payable | 8,279 | 8,284 |
Current portion of long-term debt and capital lease obligations | 53,671 | 79,674 |
Total current liabilities | 213,126 | 244,284 |
Deferred income taxes | 5,322 | 7,372 |
Income taxes payable | 21,157 | 23,771 |
Long-term debt and capital lease obligations | 592,135 | 223,227 |
Other liabilities | 3,748 | 4,651 |
Total liabilities | $ 835,488 | $ 503,305 |
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—180,000,000 shares authorized; 120,156,340 and 126,143,366 shares issued and outstanding, respectively | 12 | 13 |
Additional paid-in capital | 407,808 | 404,542 |
Accumulated other comprehensive loss | (68,793) | (20,060) |
Retained earnings | 625,437 | 619,004 |
Total stockholders’ equity | 964,464 | 1,003,499 |
Total liabilities and stockholders’ equity | $ 1,799,952 | $ 1,506,804 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Jul. 31, 2015 | Jul. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 120,156,340 | 126,143,366 |
Common stock, shares outstanding | 120,156,340 | 126,143,366 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Service revenues and vehicle sales: | |||
Service revenues | $ 985,363 | $ 958,413 | $ 849,667 |
Vehicle sales | 160,716 | 205,076 | 196,719 |
Total service revenues and vehicle sales | 1,146,079 | 1,163,489 | 1,046,386 |
Operating expenses: | |||
Yard operations | 526,291 | 520,423 | 458,228 |
Cost of vehicle sales | 136,412 | 174,493 | 167,236 |
General and administrative | 138,975 | 164,535 | 137,930 |
Impairment of long-lived assets | 0 | 29,104 | 0 |
Total operating expenses | 801,678 | 888,555 | 763,394 |
Operating income | 344,401 | 274,934 | 282,992 |
Other (expense) income: | |||
Interest expense | (18,121) | (8,768) | (10,267) |
Interest income | 817 | 491 | 638 |
Other income, net | 4,972 | 3,378 | 3,509 |
Total other expense | (12,332) | (4,899) | (6,120) |
Income before income taxes | 332,069 | 270,035 | 276,872 |
Income taxes | 112,286 | 91,348 | 96,847 |
Net income | $ 219,783 | $ 178,687 | $ 180,025 |
Basic net income per common share (in dollars per share) | $ 1.75 | $ 1.42 | $ 1.44 |
Weighted average common shares outstanding | 125,914 | 125,693 | 124,912 |
Diluted net income per common share (in dollars per share) | $ 1.67 | $ 1.36 | $ 1.39 |
Diluted weighted average common shares outstanding | 131,425 | 131,230 | 129,781 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Comprehensive income, net of tax: | |||
Net income | $ 219,783 | $ 178,687 | $ 180,025 |
Other comprehensive income: | |||
Unrealized gain on interest rate swaps, net | 1,926 | 2,140 | 2,993 |
Reclassification adjustment of interest rate swaps, net | (1,141) | (1,467) | (1,624) |
Foreign currency translation adjustments | (49,518) | 26,428 | (10,487) |
Total comprehensive income | 171,050 | 205,788 | 170,907 |
Tax effects on unrealized gain (loss) on interest rate swaps | (1,026) | (1,125) | (1,647) |
Tax effects on reclassification adjustment of interest rate swaps | $ 582 | $ 744 | $ 874 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Balances at Jul. 31, 2012 | $ 561,117 | $ 12 | $ 326,187 | $ (38,043) | $ 272,961 |
Balances (in shares) at Jul. 31, 2012 | 124,393,700 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 180,025 | $ 0 | 0 | 0 | 180,025 |
Currency translation adjustment | (10,487) | 0 | 0 | (10,487) | 0 |
Interest rate swap, net of tax effects | 1,369 | 0 | 0 | 1,369 | 0 |
Exercise of stock options, net of repurchased shares | 20,428 | $ 1 | 21,370 | 0 | (943) |
Exercise of stock options, net of repurchased shares (in shares) | 1,516,534 | ||||
Employee stock-based compensation and related tax benefit | 21,886 | $ 0 | 21,886 | 0 | 0 |
Shares issued for Employee Stock Purchase Plan | 1,948 | $ 0 | 1,948 | 0 | 0 |
Shares issued for Employee Stock Purchase Plan (in shares) | 84,761 | ||||
Shares repurchased | (13,885) | $ 0 | (2,622) | 0 | (11,263) |
Shares repurchased (in shares) | (500,000) | ||||
Balances at Jul. 31, 2013 | 762,401 | $ 13 | 368,769 | (47,161) | 440,780 |
Balances (in shares) at Jul. 31, 2013 | 125,494,995 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 178,687 | $ 0 | 0 | 0 | 178,687 |
Currency translation adjustment | 26,428 | 0 | 0 | 26,428 | 0 |
Interest rate swap, net of tax effects | 673 | 0 | 0 | 673 | 0 |
Exercise of stock options, net of repurchased shares | 9,886 | $ 0 | 10,349 | 0 | (463) |
Exercise of stock options, net of repurchased shares (in shares) | 566,404 | ||||
Employee stock-based compensation and related tax benefit | 23,085 | $ 0 | 23,085 | 0 | 0 |
Shares issued for Employee Stock Purchase Plan | 2,339 | $ 0 | 2,339 | 0 | 0 |
Shares issued for Employee Stock Purchase Plan (in shares) | 81,967 | ||||
Balances at Jul. 31, 2014 | 1,003,499 | $ 13 | 404,542 | (20,060) | 619,004 |
Balances (in shares) at Jul. 31, 2014 | 126,143,366 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 219,783 | $ 0 | 0 | 0 | 219,783 |
Currency translation adjustment | (49,518) | 0 | 0 | (49,518) | 0 |
Interest rate swap, net of tax effects | 785 | 0 | 0 | 785 | 0 |
Exercise of stock options, net of repurchased shares | 684 | $ 0 | 2,193 | 0 | (1,509) |
Exercise of stock options, net of repurchased shares (in shares) | 397,520 | ||||
Employee stock-based compensation and related tax benefit | 19,636 | $ 0 | 19,636 | 0 | 0 |
Shares issued for Employee Stock Purchase Plan | 3,079 | $ 0 | 3,079 | 0 | 0 |
Shares issued for Employee Stock Purchase Plan (in shares) | 101,015 | ||||
Shares repurchased | (233,484) | $ (1) | (21,642) | 0 | (211,841) |
Shares repurchased (in shares) | (6,485,561) | ||||
Balances at Jul. 31, 2015 | $ 964,464 | $ 12 | $ 407,808 | $ (68,793) | $ 625,437 |
Balances (in shares) at Jul. 31, 2015 | 120,156,340 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flow - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 219,783 | $ 178,687 | $ 180,025 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 48,893 | 53,726 | 56,728 |
Allowance for doubtful accounts | (578) | 1,087 | (356) |
Impairment of long-lived assets | 0 | 29,104 | 0 |
Stock-based payment compensation | 18,154 | 22,099 | 19,557 |
Excess tax benefit from stock-based payment compensation | (2,971) | (2,289) | (6,097) |
Gain on sale of property and equipment | (918) | (1,461) | (962) |
Deferred income taxes | 4,365 | (10,838) | (3,605) |
Changes in operating assets and liabilities, net of effects from acquisitions: | |||
Accounts receivable | (20,417) | (12,870) | (31,171) |
Vehicle pooling costs | (891) | (3,613) | (3,626) |
Inventories | (1,731) | 4,012 | (1,777) |
Prepaid expenses and other current assets | 69 | (4,500) | (5,971) |
Other assets | 10,125 | (8,900) | (18,714) |
Accounts payable and accrued liabilities | (3,926) | 5,425 | 14,749 |
Deferred revenue | (438) | (661) | (871) |
Income taxes receivable | (806) | 9,267 | (752) |
Income taxes payable | (1,971) | 2,816 | 1,609 |
Other liabilities | (1,666) | 1,503 | 560 |
Net cash provided by operating activities | 265,076 | 262,594 | 199,326 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (79,153) | (81,510) | (130,265) |
Proceeds from sale of property and equipment | 1,521 | 2,849 | 3,077 |
Proceeds from sale of assets held for sale | 217 | 858 | 3,189 |
Investment in unconsolidated affiliate | (4,500) | 0 | 0 |
Purchases of assets and liabilities in connection with acquisition, net of cash acquired | 0 | (14,300) | (84,022) |
Net cash used in investing activities | (81,915) | (92,103) | (208,021) |
Cash flows from financing activities: | |||
Proceeds from the exercise of stock options | 3,634 | 10,412 | 21,442 |
Excess tax benefit from stock-based payment compensation | 2,971 | 2,289 | 6,097 |
Proceeds from the issuance of Employee Stock Purchase Plan shares | 3,079 | 2,339 | 1,948 |
Repurchases of common stock | (237,306) | (572) | (15,009) |
Change in bank overdraft | 0 | (16,291) | 16,291 |
Proceeds from the issuance of long-term debt, net of discount | 698,939 | 0 | 0 |
Debt offering costs | (955) | 0 | 0 |
Principal payments on long-term debt | (350,000) | (75,000) | (96,660) |
Net cash provided by (used in) financing activities | 120,362 | (76,823) | (65,891) |
Effect of foreign currency translation | (6,179) | 1,369 | (1,895) |
Net increase (decrease) in cash and cash equivalents | 297,344 | 95,037 | (76,481) |
Cash and cash equivalents at beginning of period | 158,668 | 63,631 | 140,112 |
Cash and cash equivalents at end of period | 456,012 | 158,668 | 63,631 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 18,121 | 8,768 | 10,267 |
Income taxes paid, net of refunds | $ 109,925 | $ 82,813 | $ 95,182 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1 — Summary of Significant Accounting Policies Basis of Presentation and Description of Business Copart, Inc. was incorporated under the laws of the State of California in 1982. In January 2012, the Company changed the state in which it is incorporated (the “Reincorporation”), and is now incorporated under the laws of the State of Delaware. All references to “we,” “us,” “our,” or “the Company” herein refer to the California corporation prior to the date of the Reincorporation, and to the Delaware corporation on and after the date of the Reincorporation. 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. Significant intercompany transactions and balances have been eliminated in consolidation. 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 and financial institutions, charities, car dealerships, fleet operators, and vehicle rental companies. 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. In the United States and Canada (North America), the United Arab Emirates (U.A.E.), Oman, Bahrain, and Brazil, the Company sells vehicles primarily as an agent and derives revenue primarily from fees paid by vehicle sellers and vehicle buyers as well as related fees for services, such as towing and storage. In the United Kingdom (U.K.), the Company operates both on a principal basis, purchasing the salvage vehicle outright from the insurance company and reselling the vehicle for its own account, and as an agent. In Germany and Spain, the Company derives revenue from sales listing fees for listing vehicles on behalf of insurance companies. 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; self-insured reserves; allowance for doubtful accounts; income taxes; revenue recognition; stock-based payment compensation; purchase price allocations; long-lived asset and goodwill impairment calculations and contingencies. Actual results could differ from these estimates. Revenue Recognition The Company provides a portfolio of services to its sellers and buyers that facilitate the sale and delivery of a vehicle from seller to buyer. These services include the ability to use the Company’s Internet sales technology and vehicle delivery, loading, title processing, preparation and storage. The Company evaluates multiple-element arrangements relative to its member and seller agreements. The services provided to the seller of a vehicle involve disposing of a vehicle on the seller’s behalf and, under most of the Company’s current North American contracts, collecting the proceeds from the member. The Company applies Accounting Standard Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (ASU 2009-13) for revenue recognition. Pre-sale services, including towing, title processing, preparation and storage, as well as sale fees and other enhancement services meet the criteria for separate units of accounting. Revenue associated with each service is recognized upon completion of the respective service, net of applicable rebates or allowances. For certain sellers who are charged a proportionate fee based on high bid of the vehicle, the revenue associated with the pre-sale services is recognized upon completion of the sale when the total arrangement is fixed and determinable. The estimated selling price of each service is determined based on management’s best estimate and allotted based on the relative selling price method. Vehicle sales, where vehicles are purchased and remarketed on the Company’s own behalf, are recognized on the sale date, which is typically the point of high bid acceptance. Upon high bid acceptance, a legal binding contract is formed with the member, and the gross sales price is recorded as revenue. The Company also provides a number of services to the buyer of the vehicle, charging a separate fee for each service. Each of these services has been assessed to determine whether the requirements have been met to separate them into units of accounting within a multiple-element arrangement. The Company has concluded that the sale and the post-sale services are separate units of accounting. The fees for sale services are recognized upon completion of the sale, and the fees for the post-sale services are recognized upon successful completion of those services using the relative selling price method. The Company also charges members an annual registration fee for the right to participate in its vehicle sales program, which is recognized ratably over the term of the arrangement, and relist and late-payment fees, which are recognized upon receipt of payment by the member. No provision for returns has been established, as all sales are final with no right of return, although the Company provides for bad debt expense in the case of non-performance by its members or sellers. The Company allocates arrangement consideration based upon management’s best estimate of the selling price of the separate units of accounting contained within arrangements including multiple deliverables. Significant inputs in the Company’s estimates of the selling price of separate units of accounting include market and pricing trends, pricing customization and practices, and profit objectives for the services. Vehicle Pooling Costs The Company defers in vehicle pooling costs certain yard operation expenses 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 certain facility costs, labor, transportation, and vehicle processing. 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. The Company applies the provisions of accounting guidance for subsequent measurement of inventory to our vehicle pooling costs. The provision requires that items such as idle facility expenses, double freight and rehandling costs be recognized as current period charges regardless of whether they meet the criteria of “abnormal” as provided in the guidance. In addition, the guidance requires that the allocation of fixed production overhead to the costs of conversion be based on the normal capacity of production facilities. In early November 2012, Hurricane Sandy hit the northeastern coast of the United States. As a result of the extensive flooding that it caused, the Company expended additional costs for (i) temporary storage facilities; (ii) premiums for subhaulers as they were reassigned from other regions; and (iii) labor costs incurred for overtime, travel and lodging due to the reassignment of employees to the affected region. These costs, which are characterized as “abnormal” under ASC 330, Inventory , were expensed as incurred and not included in inventory. At July 31, 2013, the incremental salvage vehicles received as a result of Hurricane Sandy were sold. 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, U.A.E. dirham, Bahraini dinar, Omani rial, Brazilian real, and Euro 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, 2013 $ (45,420 ) Gain on foreign currency translation 26,428 Cumulative loss on foreign currency translation as of July 31, 2014 $ (18,992 ) Loss on foreign currency translation (49,518 ) Cumulative loss on foreign currency translation as of July 31, 2015 $ (68,510 ) 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. Interest rate hedges are valued at exit prices obtained from the counter-party. 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 and accrued liabilities approximated their fair values as of July 31, 2015 and 2014 , 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 8 — Long-Term Debt for additional fair value disclosures. Derivatives and Hedging The Company has entered into two interest rate swaps to eliminate interest rate risk on the Company’s variable interest rate debt, and the swaps are designated as effective cash flow hedges under ASC 815, Derivatives and Hedging. See Note 9 — Derivatives and Hedging . Each quarter, the Company measures hedge effectiveness using the “hypothetical derivative method” and records in earnings any hedge ineffectiveness with the effective portion of the change in fair value recorded in other comprehensive income or loss. Cost of Vehicle Sales Cost of vehicle sales includes the purchase price of vehicles sold for the Company’s own account. Yard Operations Yard operations consists primarily of operating personnel (which includes yard management, clerical and yard employees), rent, contract vehicle towing, insurance, fuel and equipment maintenance and repair. The Company recognizes the costs of pre-sale services, including towing, title processing, and preparation and storage within yard operation expenses at the time the related services are provided. General and Administrative Expenses General and administrative expenses consist primarily of executive, accounting and data processing, sales personnel, professional services, system maintenance and enhancements and marketing expenses. Advertising All advertising costs are expensed as incurred and are included in general and administrative expenses on the consolidated statements of income. Advertising expenses were $4.9 million for the year ended July 31, 2015 , and $5.0 million for the years ended July 31, 2014 and 2013 , respectively. Other (Expense) Income Other (expense) income consists primarily of interest expense, interest income, gains and losses from the disposal of fixed assets, rental income, and earnings from unconsolidated affiliates. Net Income Per Share Basic net income per share amounts were computed by dividing consolidated net income by the weighted average number of common shares outstanding during the period. Diluted net income per share amounts were computed by dividing consolidated net income by the weighted average number of common shares outstanding plus dilutive potential common shares calculated for stock options outstanding during the period using the treasury stock method. 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. Bank Overdraft As a result of maintaining a consolidated cash management system, the Company utilizes controlled disbursement bank accounts. These accounts are funded as checks are presented for payment, not when checks are issued. The resulting bank overdraft position was included in current liabilities as of July 31, 2013. Inventory Inventories of purchased vehicles are stated at the lower of cost or estimated realizable value. Cost includes the Company’s cost of acquiring ownership of the vehicle. The cost of vehicles sold is charged to cost of vehicle sales as sold on a specific identification basis. Accounts Receivable Accounts receivable, which consist primarily of advance charges due from insurance companies and the gross sales price of the vehicle due from members, are recorded when billed, advanced or accrued and represent claims against third parties that will be settled in cash. Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts in order to provide for estimated losses resulting from disputed amounts billed to sellers or members and the inability of sellers or members to make required payments. If billing disputes exceed expectations and/or if the financial condition of sellers or members were to deteriorate, additional allowances may be required. The allowance is calculated by considering both seller and member accounts receivables written off during the previous twelve-month period as a percentage of the total accounts receivable balance. Concentration of Credit Risk Financial instruments, which subject the Company to potential credit risk, consist of its cash and cash equivalents, short-term investments and accounts receivable. The Company adheres to its investment policy when placing investments. The investment policy has established guidelines to limit the Company’s exposure to credit risk by placing investments with high credit quality financial institutions, diversifying its investment portfolio, limiting investments in any one issuer or pooled fund and placing investments with maturities that maintain safety and liquidity. The Company places its cash and cash equivalents with high credit quality financial institutions. Deposits with these financial institutions may exceed the amount of insurance provided; however, these deposits typically are redeemable upon demand and, therefore, the Company believes that the financial risks associated with these financial instruments are minimal. The Company performs ongoing credit evaluations of its customers, and generally does not require collateral on its accounts receivable. The Company estimates its allowances for doubtful accounts based on historical collection trends, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past-due account balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amounts due. The Company does not have off-balance sheet credit exposure related to its customers and to date, the Company has not experienced significant credit-related losses. No single customer accounted for more than 10 % of total revenues for the years ended July 31, 2015 , 2014 and 2013 . As of July 31, 2015 and 2014 , one customer accounted for more than 10 % of the Company’s accounts receivable. Property and Equipment Property and equipment is stated at cost, less accumulated depreciation and amortization. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful lives of the respective improvements, which is between five and ten years . Significant improvements which substantially extend the useful lives of assets are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives: three to five years for internally developed or purchased software; three to seven years for transportation and other equipment; three to ten years for office furniture and equipment; and 5 to 40 years or the lease term, whichever is shorter , for buildings and improvements. Amortization of equipment under capital leases is included in depreciation expense. Long-Lived Asset Valuation The Company evaluates long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In accordance with ASC 360, Property, Plant, and Equipment , a long-lived asset is initially measured at the lower of its carrying amount or fair value. An impairment loss is recognized when the estimated undiscounted future cash flows expected to be generated from the use of the asset are less than the carrying amount of the asset. The impairment loss is then calculated by comparing the carrying amount with its fair value, which is usually estimated using discounted cash flows expected to be generated from the use of the asset. Goodwill and Other Identifiable Intangible Assets In accordance with ASC 350-30-35, Intangibles—Goodwill and Other , goodwill is not amortized but is tested for potential impairment, at a minimum on an annual basis, or when indications of potential impairment exist. The Company performed its annual impairment test for goodwill during the fourth quarter of the year ended July 31, 2015 , utilizing a market value and discounted cash flow approach. The impairment test for identifiable intangible assets not subject to amortization is also performed annually or when impairment indicators exist. The impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount. Identifiable intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate other long-lived assets. Capitalized Software Costs The Company capitalizes system development costs and website development costs related to the 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 July 31, 2015 and 2014 was $65.1 million and $61.7 million , respectively. Accumulated amortization expense related to software as of July 31, 2015 and 2014 totaled $42.6 million and $38.6 million , respectively. The Company reassessed its strategy of utilizing a third-party enterprise operating system to address its international expansion needs based on the projected cost to complete, deployment risk and certain other factors. The Company decided to cease development of this software and address its international technology needs through an internally developed proprietary solution. For the year ended July 31, 2014, the Company recognized a charge of $29.1 million resulting primarily from the impairment of costs previously capitalized in connection with the development of the software. Retained Insurance Liabilities The Company is partially self-insured for certain losses related to medical, general liability, workers’ compensation and auto liability. The Company’s insurance policies are subject to a $250,000 deductible per claim, with the exception of its medical policy which has a $225,000 stop loss per claim and a stop loss limiting total exposure to 120% of expected claims. In addition, each of the Company’s policies contains an aggregate stop loss which limits its ultimate exposure. The Company’s liability represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. The estimated liability is not discounted and is established based upon analysis of historical data and actuarial estimates. The primary estimates used in the actuarial analysis include total payroll and revenue. The Company’s estimates have not materially fluctuated from actual results. While the Company believes these estimates are reasonable based on the information currently available, if actual trends, including the severity of claims and medical cost inflation, differ from the Company’s estimates, the Company’s consolidated results of operations, financial position or cash flows could be impacted. The process of determining the Company’s insurance reserves requires estimates with various assumptions, each of which can positively or negatively impact those balances. As of July 31, 2015 and 2014 , the total amount reserved for related self-insured claims is $5.8 million and $5.7 million , respectively. Stock-Based Payment Compensation The Company accounts for stock-based awards to employees and non-employees using the fair value method as required by ASC 718, Compensation—Stock Compensation (ASC 718), which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees, consultants and directors based on estimated fair value. ASC 718 requires companies to estimate the fair value of stock-based payment awards on the measurement date using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized in expense over the requisite service periods. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the input assumptions can materially affect their fair value estimate, it is the Company’s opinion that the existing models do not necessarily provide a reliable single measure of the fair value of the employee stock options. The fair value of each option was estimated on the measurement date using the Black-Scholes Merton (BSM) option-pricing model utilizing the following assumptions: July 31, 2015 2014 2013 Expected life (in years) 5.3 – 7.2 5.1 – 7.1 5.2 – 6.9 Risk-free interest rate 1.58 – 2.26 1.55 – 2.3 0.61 – 1.5 Estimated volatility 22 – 28 20 – 25 24 – 26 Expected dividends — % — % — % Weighted average fair value at measurement date $ 10.18 $ 11.10 $ 7.87 Expected life—The Company’s expected life represents the period that the Company’s stock-based payment awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based payment awards, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its stock-based payment awards. Estimated volatility—The Company uses the trading history of its common stock in determining an estimated volatility factor when using the BSM option-pricing model to determine the fair value of options granted. Expected dividend—The Company has not declared dividends. Therefore, the Company uses a zero value for the expected dividend value factor when using the BSM option-pricing model to determine the fair value of options granted. Risk-free interest rate—The Company bases the risk-free interest rate used in the BSM option-pricing model on the implied yield currently available on U.S. Treasury zero-coupon issues with the same or substantially equivalent expected life. Estimated forfeitures—When estimating forfeitures, the Company considers voluntary and involuntary termination behavior as well as analysis of actual option forfeitures. Net cash proceeds from the exercise of stock options were $3.6 million , $10.4 million and $21.4 million for the years ended July 31, 2015 , 2014 and 2013 , respectively. The Company realized an income tax benefit of $3.0 million , $2.3 million and $6.1 million from stock option exercises during the years ended July 31, 2015 , 2014 and 2013 , respectively. In accordance with ASC 718, the Company presents excess tax benefits from disqualifying dispositions of the exercise of incentive stock options, vested prior to August 1, 2005, if any, as financing cash flows rather than operating cash flows. Comprehensive Income Comprehensive income includes all changes in stockholders’ equity during a period from non-stockholder sources. For the years ended July 31, 2015 , 2014 and 2013 , accumulated other comprehensive income (loss) was the effect of foreign currency translation adjustments and the effective portion of the interest rate swaps’ change in fair value. Deferred taxes are not provided on cumulative translation adjustments where the Company expects earnings of a foreign subsidiary to be indefinitely reinvested. Reclassifications Certain reclassifications have been made to prior years' consolidated financial statements to conform to the classifications used in fiscal 2015. Recently Issued Accounting Standards In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments are effective for financial statements issued for annual and interim periods beginning after December 15, 2015. The amendments are to be applied on a retrospective basis, wherein the balance sheet of each individual period presented is adjusted to reflect the period-specific effects of applying the new guidance. The Company’s adoption of ASU 2015-03 will not have a material impact on the Company’s consolidated results of operations and financial position. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810), which is intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The ASU focuses on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. In addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards Codification and improves current U.S. GAAP by placing more emphasis on risk of loss when determining a controlling financial interest, reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity (“VIE”), and changing consolidation conclusions for companies in several industries that typically make use of limited partnerships or VIEs. The ASU will be effective for annual and interim periods beginning after December 15, 2015. The Company’s adoption of ASU 2015-02 will not have a material impact on the Company’s consolidated results of operations and financial position. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 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 beginning after December 15, 2016, . On July 9, 2015, the FASB issued a proposed ASU to defer the effective date for one year for annual and interim periods beginning after December 15, 2017. ASU 2014-09 allows adoption with either retrospective application to each period presented, or retrospective application with the cumulative effect recognized as of the date of initial application. The Company has not determined the potential effects of implementing ASU 2014-09 on the consolidated financial statements. Acquisitions The Company recognizes and measures identifiable assets acquired and liabilities assumed in acquired entities in accordance with ASC 805, Business Combinations . The accounting for acquisitions involves significant judgments and estimates, including the fair value of certain forms of consideration, the fair value of acquired intangible assets, which involve projections of future revenues, cash flows and terminal value, which are then either discounted at an estimated discount rate or measured at an estimated royalty rate, and the fair value of other acquired assets and assumed liabilities, including potential contingencies and the useful lives of the assets. The projections are developed using internal forecasts, available industry and market data and estimates of long-term growth rates of the Company. Historical experience is additionally utilized, in which historical or current costs have approximated fair value for certain assets acquired. Segments and Other Geographic Reporting The Company’s North American |
Acquisitions
Acquisitions | 12 Months Ended |
Jul. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | 2 — Acquisitions Fiscal 2015 Transactions The Company made no significant acquisitions during the year ended July 31, 2015 . Fiscal 2014 Transactions During the year ended July 31, 2014, the Company acquired one facility in Montreal, Canada; a salvage vehicle auction business in Brazil, which did not include any facilities; as well as the assets of an online marketing company, which included the rights to hundreds of web domains including www.cashforcars.com and www.cash4cars.com. The aggregate purchase price totaled $14.5 million . During the year ended July 31, 2015 , the purchase price allocations for the assets of the online marketing company and the salvage vehicle auction businesses in Montreal, Canada and Brazil were finalized. As a result, from the preliminary purchase price allocation as of July 31, 2014, goodwill decreased $0.8 million , primarily related to a $0.9 million increase in intangible assets, and changes to deferred taxes on acquired intangible assets. In accordance with ASC 805, any adjustments to the fair value of acquired assets and liabilities that occur subsequent to the measurement period will be reflected in the Company’s results of operations. The following table summarizes the purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed for these acquisitions (in thousands): Allocation of the acquisition: Accounts receivable and prepaid expenses $ 734 Property and equipment 71 Inventory 81 Intangible assets 6,071 Goodwill 7,682 Liabilities assumed (171 ) Fair value of net assets and liabilities acquired $ 14,468 These acquisitions were undertaken because of their strategic fit and have been accounted for using the purchase method in accordance with ASC 805, Business Combinations , which resulted in the recognition of goodwill in the Company’s consolidated financial statements. Goodwill arose because the purchase price of each acquisition reflected a number of factors, including their future earnings and cash flow potential; the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers; the competitive nature of the process by which the Company acquired these businesses; and the complementary strategic fit and resulting synergies brought to existing operations. Goodwill that arose from these acquisitions was within Level III of the fair value hierarchy as it was valued using unobservable inputs. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine the value of acquired assets at the reporting date based on the best information available in the circumstances. When a determination is made to classify items within Level III of the fair value hierarchy, the evaluation is based upon the significance of the unobservable inputs to the overall fair value measurement. Due to the limitation of goodwill asset market value or pricing information, the determination of fair value of the goodwill asset is inherently more difficult. Goodwill is not amortized for financial reporting purposes but could be amortizable for tax purposes. The intangible assets that arose from these acquisitions were also within Level III of the fair value hierarchy as it was valued using unobservable inputs, primarily from utilizing the Multi-Period Excess Earnings Method (MPEEM) model, which is an income-based approach that allocates to goodwill any acquisition costs not specifically assigned to intangibles, fixed assets or working capital. Intangible assets acquired include covenants not to compete, supply contracts, customer relationships, trade names, licenses and databases and software with a useful life ranging from three to eight years . These acquisitions did not result in a significant change in the Company’s consolidated results of operations individually or in the aggregate; therefore, pro forma financial information has not been presented. The operating results have been included in the Company’s consolidated results of operations and financial position since the acquisition dates. The acquisition-related expenses incurred during the year ended July 31, 2014, were not significant and were included in general and administrative expenses in the Company’s consolidated financial position and results of operations. Fiscal 2013 Transactions During the year ended July 31, 2013, the Company acquired 100% of the voting stock of Salvage Parent, Inc., which conducted business primarily as Quad City Salvage Auction, CrashedToys, and Desert View Auto Auctions. The Company also acquired salvage vehicle auction businesses in Brazil and the U.A.E.; two auction platforms in Germany and Spain; as well as the assets of Gainesville Salvage Disposal and Auto Salvage Auction, Inc., salvage vehicle auction companies with locations in Gainesville, GA, and Davison and Ionia, MI, for a total purchase price of $87.0 million . During the year ended July 31, 2014, the purchase price allocation for Salvage Parent, Inc. and the acquired auction platform in Spain was finalized. As a result, from the preliminary purchase price allocation as of July 31, 2013, goodwill decreased $0.8 million , primarily related to increases of $11.5 million in accrued liabilities, $9.3 million in intangible assets, and changes to deferred taxes on acquired intangible assets and working capital adjustments. Accrued liabilities were adjusted after obtaining new information on a pre-acquisition contingency related to a lack of documentation on the historical sales of Salvage Parent, Inc. The Company noted that the potential exposure from this contingency ranged from $7.0 million to $28.0 million . The Company recorded the fair value of this contingency of $14.0 million . In accordance with ASC 805, any adjustments to the fair value of acquired assets and liabilities that occur subsequent to the measurement period will be reflected in the Company’s results of operations. The following table summarizes the purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed for these acquisitions (in thousands): Total cash paid, net of cash acquired $ 83,866 Contingent consideration 3,092 Total acquisition price $ 86,958 Allocation of the acquisition: Accounts receivable and prepaid expenses $ 21,082 Deferred income taxes 2,845 Vehicle pooling costs 1,187 Property and equipment 21,158 Inventory 634 Intangible assets 24,186 Goodwill 72,666 Liabilities assumed (56,800 ) Fair value of net assets and liabilities acquired $ 86,958 The acquisitions do not result in a significant change in the Company’s consolidated results of operations individually nor in the aggregate; therefore pro forma financial information has not been presented. The operating results have been included in the Company’s consolidated financial position and results of operations since the acquisition dates. The acquisition-related expenses incurred during the year ended July 31, 2013, were not significant and were included in general and administrative expenses in the Company’s consolidated financial position and results of operations. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Jul. 31, 2015 | |
Accounts Receivable, Net [Abstract] | |
Accounts Receivable, Net | 3 — Accounts Receivable, Net Accounts receivable, net consisted of: July 31, (In thousands) 2015 2014 Advance charges receivable $ 143,724 $ 126,307 Trade accounts receivable 73,773 72,170 Other receivables 1,187 2,092 218,684 200,569 Less: allowance for doubtful accounts (2,988 ) (3,584 ) Accounts receivable, net $ 215,696 $ 196,985 Advance charges receivable represents unbilled amounts paid to third parties on behalf of insurance companies for which the Company will be reimbursed when the vehicle is sold. Trade accounts receivable includes fees and gross auction proceeds to be collected from insurance companies and members. The movements in the allowance for doubtful accounts were as follows: July 31, (In thousands) 2015 2014 2013 Balance at beginning of year $ 3,584 $ 2,683 $ 2,920 Charged to costs and expenses 2,221 3,376 1,424 Deductions to bad debt (2,817 ) (2,475 ) (1,661 ) Balance at end of year $ 2,988 $ 3,584 $ 2,683 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Jul. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4 — Property and Equipment, Net Property and equipment, net consisted of the following: July 31, (In thousands) 2015 2014 Transportation and other equipment $ 70,133 $ 68,956 Office furniture and equipment 44,837 41,504 Software 65,072 61,698 Land 481,748 475,564 Buildings and leasehold improvements 453,965 429,895 1,115,755 1,077,617 Less: accumulated depreciation and amortization (415,353 ) (385,234 ) Property and equipment, net $ 700,402 $ 692,383 Depreciation expense on property and equipment was $34.9 million , $37.0 million and $42.0 million for the years ended July 31, 2015 , 2014 and 2013 , respectively. Amortization expense of software was $5.0 million , $9.8 million and $9.5 million for the years ended July 31, 2015 , 2014 and 2013 , respectively. |
Goodwill
Goodwill | 12 Months Ended |
Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 5 — Goodwill The change in the carrying amount of goodwill was as follows: July 31, (In thousands) 2015 2014 Beginning balance $ 283,780 $ 267,463 Goodwill recorded during the period (790 ) 7,724 Effect of foreign currency exchange rates (11,140 ) 8,593 Ending balance $ 271,850 $ 283,780 In accordance with the guidance in ASC 350, goodwill is tested for impairment on an annual basis or upon the occurrence of circumstances that indicate that goodwill may be impaired. The Company’s annual impairment tests were performed in the fourth quarter of fiscal 2015 and 2014 and goodwill was not impaired. As of July 31, 2015 and 2014 , the cumulative amount of goodwill impairment losses recognized totaled $21.8 million . |
Intangibles, Net
Intangibles, Net | 12 Months Ended |
Jul. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangibles, Net | 6 — Intangibles, Net The following table sets forth amortizable intangible assets by major asset class: Gross Carrying Amount Accumulated Amortization Net Book Value Weighted Average Remaining Useful Life (in years) July 31, July 31, July 31, July 31, (In thousands, except remaining useful life) 2015 2014 2015 2014 2015 2014 2015 2014 Amortized intangibles: Covenants not to compete $ 1,691 $ 1,797 $ (900 ) $ (615 ) $ 791 $ 1,182 3 4 Supply contracts & customer relationships 27,506 29,128 (13,551 ) (9,747 ) 13,955 19,381 4 5 Trade name 5,129 5,791 (2,467 ) (1,479 ) 2,662 4,312 3 4 Licenses and databases 2,498 1,810 (2,049 ) (1,443 ) 449 367 2 3 Intangibles, net $ 36,824 $ 38,526 $ (18,967 ) $ (13,284 ) $ 17,857 $ 25,242 Aggregate amortization expense on intangible assets was $6.8 million , $6.9 million and $4.8 million for the years ended July 31, 2015 , 2014 and 2013 , respectively. Intangible amortization expense for the next five fiscal years based upon July 31, 2015 intangible assets is expected to be as follows: (In thousands) 2016 $ 5,811 2017 5,497 2018 4,414 2019 817 2020 574 Thereafter 744 Total future intangible amortization expense $ 17,857 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Jul. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | 7 — Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following: July 31, (In thousands) 2015 2014 Trade accounts payable $ 15,287 $ 22,108 Accounts payable to sellers 42,230 40,105 Buyer deposits and prepayments 33,871 28,117 Accrued compensation and benefits 25,647 25,721 Accrued insurance 5,796 5,703 Other accrued liabilities 24,621 30,402 Total accounts payable and accrued expenses $ 147,452 $ 152,156 The Company is partially self-insured for certain losses related to general liability, workers’ compensation and auto liability. Accrued insurance liability represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. The estimated liability is not discounted and is established based upon analysis of historical data, including the severity of the Company’s frequency of claims, actuarial estimates and is reviewed periodically by management to ensure that the liability is appropriate. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Jul. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 8 — Long-Term Debt Credit Facility On December 14, 2010, the Company entered into an Amended and Restated Credit Facility Agreement (Credit Facility), with Bank of America, N.A. The Credit Facility was an unsecured credit agreement providing for (i) a $100.0 million revolving credit facility, including a $100.0 million alternative currency borrowing sublimit and a $50.0 million letter of credit sublimit and (ii) a term loan facility of $400.0 million . On September, 29, 2011, the Company amended the Credit Facility increasing the amount of the term loan facility from $400.0 million to $500.0 million . Credit Agreement On December 3, 2014 , the Company entered into a Credit Agreement with Wells Fargo Bank, National Association, as administrative agent, and Bank of America, N.A., as syndication agent, which superseded the Credit Facility. The Credit Agreement provides for (a) a secured revolving loan facility in an aggregate principal amount of up to $300.0 million , none of which was drawn at closing, or at July 31, 2015 (Revolving Loan Facility), and (b) a secured term loan facility in an aggregate principal amount of $300.0 million (Term Loan), which was fully drawn at closing. Proceeds from the Credit Facility Agreement were used to repay all outstanding amounts under the Credit Facility totaling $275.0 million at December 3, 2014 . The remaining proceeds will be used for general corporate purposes. The Revolving Loan Facility and the Term Loan facility mature on December 3, 2019 . The Term Loan, which as of July 31, 2015 , had $243.8 million outstanding, amortizes $18.8 million each quarter beginning December 31, 2014 through December 31, 2015, then amortizes $ 7.5 million each quarter, with all outstanding borrowings due on December 3, 2019 . All amounts borrowed under the Term Loan may be prepaid without premium or penalty. The revolving and term loans under the Credit Agreement bear 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 0.25% to 1.0% 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 1.25% to 2.0% 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 July 31, 2015 on the Company's variable interest rate debt was the one month LIBOR rate of 0.19% plus an applicable margin of 1.25% . 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 July 31, 2015 , 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 December 3, 2019 . The Company is obligated to pay a commitment fee on the unused portion of the Revolving Loan Facility. The commitment fee rate ranges from 0.20% to 0.35% , 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 no outstanding borrowings under the Revolving Loan Facility as of July 31, 2015 . 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 Company was in compliance with all covenants related to the Credit Agreement as of July 31, 2015 . The Company’s Term Loan requires quarterly payments of $18.8 million each quarter beginning December 31, 2014 through December 31, 2015, then amortizes $ 7.5 million each quarter, with all outstanding borrowings due on December 3, 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 (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 will be used for general corporate purposes. 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 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 Company was in compliance with all covenants related to the Note Purchase Agreement as of July 31, 2015 . Related to the execution of the Credit Agreement and the Note Purchase Agreement, the Company incurred $2.1 million in costs, of which $1.0 million was capitalized as debt issuance fees and $1.1 million was recorded as a reduction of the long-term debt proceeds as a debt discount. Both the debt issuance fees and debt discount are amortized to interest expense over the term of the respective debt instruments. As of July 31, 2015 , future payments on the Term Loan and Note Purchase Agreement were as follows: (In thousands) July 31, 2016 $ 52,500 2017 30,000 2018 30,000 2019 30,000 2020 101,250 Thereafter 400,000 Total future payments $ 643,750 |
Derivatives and Hedging
Derivatives and Hedging | 12 Months Ended |
Jul. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | 9 — Derivatives and Hedging The Company has entered into two interest rate swaps to exchange its variable interest rate payments commitment for fixed interest rate payments through December 2015. The swaps are a designated effective cash flow hedge under ASC 815, Derivatives and Hedging . Each quarter, the Company measures hedge effectiveness using the “ hypothetical derivative method ” and records in earnings any hedge ineffectiveness with the effective portion of the change in fair value recorded in other comprehensive income or loss. The Company has reclassified $1.7 million , $2.2 million , and $2.5 million for the years ended July 31, 2015 , 2014 and 2013 respectively, out of other comprehensive income into interest expense. The hedge provided by the swaps could prove to be ineffective for a number of reasons, including early retirement of the variable interest rate debt, as is allowed under the variable interest rate debt, or in the event the counterparty to the interest rate swaps is determined in the future to not be creditworthy. The Company has no plans for early retirement of the Term Loan. The interest rate swaps are classified within Level II of the fair value hierarchy as the derivatives are valued using observable inputs. The Company determines fair value of the derivative utilizing observable market data of swap rates and basis rates. These inputs are placed into a pricing model using a discounted cash flow methodology in order to calculate the mark-to-market value of the interest rate swaps. As of July 31, 2015 and 2014 , the Company’s fair value of the interest rate swaps were $0.4 million and $1.7 million , respectively, and were classified as other liabilities in the consolidated balance sheets. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jul. 31, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | 10 — Stockholders’ Equity General The Company has authorized the issuance of 180 million shares of common stock, with a par value of $0.0001 , of which 120,156,340 shares were issued and outstanding at July 31, 2015 . As of July 31, 2015 and 2014 , the Company had reserved 22,682,820 and 23,472,855 shares of common stock, respectively, for the issuance of options granted under the Company’s stock option plans and 1,097,943 and 1,158,921 shares of common stock, respectively, for the issuance of shares under the Copart, Inc. Employee Stock Purchase Plan (ESPP). The Company has authorized the issuance of five million shares of preferred stock, with a par value of $0.0001 , none of which were issued or outstanding at July 31, 2015 or 2014 , which have the rights and preferences as the Company’s Board of Directors shall determine, from time to time. Stock Repurchases On September 22, 2011, the Company’s board of directors approved a 40 million share increase in the Company’s stock repurchase program, bringing the total current authorization to 98 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. During the twelve months ended July 31, 2015 , the Company repurchased 231,500 shares of our common stock at a weighted average price of $ 36.02 per share totaling $8.3 million . During the twelve months ended July 31, 2014, the Company did not repurchase any common stock. During the twelve months ended July 31, 2013, the Company repurchased 500,000 shares of its common stock at a weighted average price of $27.77 per share totaling $13.9 million . As of July 31, 2015 , the total number of shares repurchased under the program was 50,518,282 and 47,481,718 shares were available for repurchase under the program. Additionally, on July 9, 2015 , the Company completed a modified "Dutch Auction" tender offer, or tender offer, to purchase up to 13,888,888 shares of its common stock at a price not greater than $ 36.00 nor less than $34.75 per share. In connection with the tender offer, the Company accepted for payment an aggregate of 6,254,061 shares of its common stock at a purchase price of $36.00 per share for a total value of $225.1 million . The Company's directors and executive officers were expressly prohibited from participating in the tender offer by the board of directors under the Company's Insider Trading Policy. The shares purchased as a result of the tender offer were not part of the repurchase program. The purchases of the shares of common stock were funded by the proceeds from the issuance of long term debt. During fiscal 2015 , 2014 and 2013 , certain executive officers and employees exercised stock options through cashless exercises. A portion of the options exercised were net settled in satisfaction of the exercise price and federal and state minimum statutory tax withholding requirements. The Company remitted $3.8 million , $0.1 million and $0.6 million for the years ended July 31, 2015 , 2014 and 2013 , respectively, to the proper taxing authorities in satisfaction of the employees’ minimum statutory withholding requirements. The exercised stock options are summarized in the following table: Period Options Exercised Exercise Price Shares Net Settled for Exercise Shares Withheld for Taxes(1) Net Shares to Employee Share Price for Withholding Tax Withholding (in 000s) FY 2013—Q2 73,228 $ 8.89 18,127 17,461 37,640 $ 35.91 $ 627 FY 2014—Q1 14,000 16.43 7,241 2,519 4,240 31.77 80 FY 2015—Q1 201,333 19.59 124,621 35,416 41,296 31.65 1,121 FY 2015—Q3 139,690 20.27 76,021 20,656 43,013 37.27 770 FY 2015—Q4 200,000 12.02 66,602 52,158 81,240 36.08 1,882 (1) Shares withheld for taxes are treated as a repurchase of shares for accounting purposes but do not count against the Company’s stock repurchase program. Employee Stock Purchase Plan The ESPP provides for the purchase of up to an aggregate of 5 million shares of common stock of the Company by employees pursuant to the terms of the ESPP. The Company’s ESPP was adopted by the Board of Directors and approved by the stockholders in 1994. The ESPP was amended and restated in 2003 and again approved by the stockholders. In 2014, a new ESPP was approved by the Board of Directors and approved by the stockholders. Under the ESPP, employees of the Company who elect to participate have the right to purchase common stock at a 15% discount from the lower of the market value of the common stock at the beginning or the end of each six month offering period. The ESPP permits an enrolled employee to make contributions to purchase shares of common stock by having withheld from their salary an amount up to 10% of their compensation (which amount may be increased from time to time by the Company but may not exceed 15 % of compensation). No employee may purchase more than $25,000 worth of common stock (calculated at the time the purchase right is granted) in any calendar year. The Compensation Committee of the Board of Directors administers the ESPP. The number of shares of common stock issued pursuant to the ESPP during the years ended July 31, 2015 , 2014 and 2013 was 101,015 ; 81,967 ; and 84,761 , respectively. As of July 31, 2015 , there were 3,942,094 shares of common stock issued pursuant to the ESPP and 1,097,943 shares remain available for purchase under the ESPP. Stock Options In December 2007, the Company adopted the Copart, Inc. 2007 Equity Incentive Plan (Plan), presently covering an aggregate of 8.0 million shares of the Company’s common stock. The Plan provides for the grant of incentive stock options, restricted stock, restricted stock units and other equity-based awards to employees and non-qualified stock options, restricted stock, restricted stock units and other equity-based awards to employees, officers, directors and consultants at prices not less than 100% of the fair market value for incentive and non-qualified stock options, as determined by the Board of Directors at the grant date. Incentive and non-qualified stock options may have terms of up to ten years and vest over periods determined by the Board of Directors. Options generally vest ratably over a five -year period. The Plan replaced the Company’s 2001 Stock Option Plan. As of July 31, 2015 , 1,671,530 shares were available for grant under the Plan. In April 2009, the Compensation Committee of the Company’s Board of Directors, subject to stockholder approval (which was subsequently obtained at the April 14, 2009 special meeting of stockholders), approved the grant to each of Willis J. Johnson, the Company’s Chairman (and then Chief Executive Officer), and A. Jayson Adair, the Company’s Chief Executive Officer (and then President), of nonqualified stock options to purchase 4,000,000 shares of the Company’s common stock at an exercise price of $15.11 per share, which equaled the closing price of the Company’s common stock on April 14, 2009, 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 became exercisable over five years , due to continued service by the executive, with 20% vesting on April 14, 2010, and the balance vesting ratably over the subsequent four years. Each option became fully vested due to continued service on April 14, 2014, the fifth anniversary of the date of grant. The total compensation expense recognized by the Company over the five year service period was $26.1 million per grant. The Company recognized no compensation expense in the year ended July 31, 2015 , and $7.2 million and $10.2 million for the years ended July 31, 2014 and 2013 , respectively, relating to these grants. 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 President, of nonqualified stock options to purchase 2,000,000 and 1,500,000 shares of the Company’s common stock, respectively, at an exercise price of $35.62 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 years , 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. Each option will become fully vested, assuming continued service, on April 15, 2019 and December 16, 2018, respectively. 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 was $11.43 . 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 $7.5 million and $4.7 million in compensation expenses for these grants in the years ended July 31, 2015 and 2014 , respectively. The following table details stock-based payment compensation expense included in the company’s consolidated statements of income: Year Ended July 31, (In thousands) 2015 2014 2013 General and administrative $ 15,938 $ 19,489 $ 17,238 Yard operations 2,216 2,610 2,319 Total stock-based payment compensation $ 18,154 $ 22,099 $ 19,557 There were no material compensation costs capitalized as part of the cost of an asset as of July 31, 2015 and 2014 . A summary of the status of the Company’s non-vested shares and its activity during the year ended July 31, 2015 was as follows: (In thousands, except per share amounts) Number of Shares Weighted Average Grant- date Fair Value Non-vested shares at July 31, 2014 5,921 $ 10.39 Grants of non-vested shares 2,891 10.18 Vested (1,984 ) 9.83 Forfeitures or expirations (213 ) 10.37 Non-vested shares at July 31, 2015 6,615 $ 10.48 Stock option activity for the year ended July 31, 2015 was as follows: (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, 2014 19,082 $ 21.64 6.01 $ 235,734 Grants of options 2,891 35.95 Exercises (749 ) 17.11 Forfeitures or expirations (213 ) 33.40 Outstanding as of July 31, 2015 21,011 $ 23.65 5.78 $ 261,339 Exercisable as of July 31, 2015 14,396 $ 18.38 4.37 $ 254,158 Vested and expected to vest as of July 31, 2015 20,542 $ 23.39 5.72 $ 260,845 As required by 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. The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the year ended July 31, 2015 and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their options on July 31, 2015 . The aggregate intrinsic value of options exercised was $13.4 million , $10.5 million and $25.4 million in the years ended July 31, 2015 , 2014 and 2013 , respectively, and represents the difference between the exercise price of the option and the estimated fair value of the Company’s common stock on the dates exercised. As of July 31, 2015 , the total compensation cost related to non-vested stock-based payment awards granted to employees under the Company’s stock option plans but not yet recognized was $60.9 million , net of estimated forfeitures. This cost will be amortized on a straight-line basis over a weighted average remaining term of 3.78 years and will be adjusted for subsequent changes in estimated forfeitures. The fair value of options vested for the years ended July 31, 2015 , 2014 and 2013 was $19.5 million , $15.0 million and $22.9 million , respectively. The following table summarizes stock options outstanding and exercisable as of July 31, 2015 : (In thousands, except per share amount) Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Weighted Average Exercise Price $12.02–$17.20 10,484 3.61 $ 15.42 10,464 $ 15.42 $17.32–$21.05 2,122 4.90 19.83 1,942 19.76 $22.47–$35.45 2,503 8.95 32.29 594 25.21 $35.62–$37.22 5,902 8.61 35.99 1,396 35.71 21,011 5.78 23.65 14,396 18.38 |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11 — Income Taxes Income before taxes consisted of the following: Year ended July 31, (In thousands) 2015 2014 2013 U.S. $ 286,169 $ 218,450 $ 236,118 Non-U.S. 45,900 51,585 40,754 Total income before taxes $ 332,069 $ 270,035 $ 276,872 Income tax expense (benefit) from continuing operations consisted of the following: Year ended July 31, (In thousands) 2015 2014 2013 Federal: Current $ 95,468 $ 90,207 $ 87,484 Deferred 5,841 (9,589 ) (1,073 ) 101,309 80,618 86,411 State: Current 1,160 1,912 3,871 Deferred (86 ) (279 ) 66 1,074 1,633 3,937 Foreign: Current 11,062 10,077 9,090 Deferred (1,159 ) (980 ) (2,591 ) 9,903 9,097 6,499 Income tax expense $ 112,286 $ 91,348 $ 96,847 A reconciliation of the expected U.S. statutory tax rate to the actual effective income tax rate is as follows: Year ended July 31, (In thousands) 2015 2014 2013 Federal statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal income tax benefit 1.1 1.1 1.1 Foreign rate differential (1.9 ) (2.1 ) (1.8 ) Compensation and fringe benefits 0.1 0.1 0.1 Other differences (0.5 ) (0.3 ) 0.6 Effective tax rate 33.8 % 33.8 % 35.0 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) are presented below: July 31, (In thousands) 2015 2014 Deferred tax assets: Allowance for doubtful accounts $ 992 $ 1,209 Accrued compensation and benefits 40,391 36,780 State taxes 577 416 Accrued other 3,967 2,962 Deferred revenue 798 1,301 Property and equipment 16,957 18,627 Losses carried forward 4,362 4,312 Federal tax benefit 7,832 10,457 Total gross deferred tax assets 75,876 76,064 Less valuation allowance (2,650 ) (2,210 ) Net deferred tax assets 73,226 73,854 Deferred tax liabilities: Vehicle pooling costs (7,749 ) (7,420 ) Prepaid insurance (890 ) (1,950 ) Intangibles and goodwill (37,673 ) (33,332 ) Total gross deferred tax liabilities (46,312 ) (42,702 ) Net deferred tax assets $ 26,914 $ 31,152 The above net deferred tax assets and liabilities have been reflected in the accompanying consolidated balance sheets as follows: July 31, (In thousands) 2015 2014 North America current assets $ 3,396 $ 1,803 North America non-current assets 28,856 36,639 Foreign non-current liabilities (5,338 ) (7,290 ) Net deferred tax assets $ 26,914 $ 31,152 The Company’s ability to realize deferred tax assets is dependent on its ability to generate future taxable income. Accordingly, the Company has established a valuation allowance in taxable jurisdictions where the utilization of the tax assets is uncertain. Additional timing differences or future tax losses may occur which could warrant a need for establishing additional valuation allowances against certain deferred tax assets. The valuation allowance for the years ended July 31, 2015 and 2014 was $2.7 million and $2.2 million , respectively. As of July 31, 2015 and 2014 , if recognized, the portion of liabilities for unrecognized tax benefits that would favorably affect the Company’s effective tax rate was $17.4 million and $18.4 million , respectively. It is possible that the amount of unrecognized tax benefits will change in the next twelve months, due to tax legislation updates or future audit outcomes; however an estimate of the range of the possible change cannot be made at this time. The following table summarizes the activities related to the Company’s unrecognized tax benefits: July 31, (In thousands) 2015 2014 2013 Beginning balance $ 18,419 $ 17,178 $ 16,946 Increases related to current year tax position 3,441 1,805 1,844 Prior year tax positions: Prior year increase 599 2,997 1,474 Prior year decrease — (523 ) — Cash settlement (225 ) — — Lapse of statute of limitations (4,806 ) (3,038 ) (3,086 ) Ending balance $ 17,428 $ 18,419 $ 17,178 It is the Company’s continuing practice to recognize interest and penalties related to income tax matters in income tax expense. As of July 31, 2015 , 2014 and 2013 , the Company had accrued interest and penalties related to unrecognized tax benefits of $3.8 million , $5.4 million and $5.9 million , respectively. The Company is currently under audit by certain taxing authorities in the U.S. for fiscal years 2011 to 2014. The Company is no longer subject to U.S. federal and state income tax examination for fiscal years prior to 2012, except the jurisdictions currently under audit. 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. In the years ended July 31, 2015 , 2014 and 2013 , the Company recognized a tax benefit of $3.0 million , $2.3 million and $6.1 million , respectively, upon the exercise of certain stock options, which was reflected in stockholders’ equity. The Company has not provided for U.S. federal income and foreign withholding taxes on its $134.0 million foreign subsidiaries’ undistributed earnings as of July 31, 2015 , because the Company intends to reinvest such earnings indefinitely in its foreign operations. Specifically, the earnings will be dedicated to the following areas outside the U.S. (i) funding operating and capital spending needs in existing foreign markets; (ii) funding merger and acquisition deals both in existing and new foreign markets; and (iii) other investments to help expand the Company's footprint in foreign emerging markets. The Company does not anticipate the need for any foreign cash in the U.S. operations. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to U.S. income taxes (subject to an adjustment for foreign tax credits). It is not practical to determine the income tax liability that might be incurred if these earnings were to be distributed. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 12 — Net Income Per Share The table below reconciles basic weighted shares outstanding to diluted weighted average shares outstanding: July 31, (In thousands) 2015 2014 2013 Weighted average common shares outstanding 125,914 125,693 124,912 Effect of dilutive securities — stock options 5,511 5,537 4,869 Weighted average common and dilutive potential common shares outstanding 131,425 131,230 129,781 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 5,905,374 ; 3,684,735 ; and 298,408 options to purchase the Company’s common stock for the years ended July 31, 2015 , 2014 , and 2013 , respectively, because their inclusion would have been anti-dilutive. |
Segments and Other Geographic I
Segments and Other Geographic Information | 12 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
Segments and Other Geographic Information | 13 — Segments and Other Geographic Reporting The Company’s North American and U.K. regions are considered two separate operating segments, which have been aggregated into one reportable segment because they share similar economic characteristics. Total revenues by geographic location of the selling facility are summarized in the following table: Year ended July 31, (In thousands) 2015 2014 2013 North America $ 914,443 $ 904,000 $ 826,030 United Kingdom 209,823 235,245 209,186 Other 21,813 24,244 11,170 Total revenue $ 1,146,079 $ 1,163,489 $ 1,046,386 International total $ 243,199 $ 269,915 $ 228,945 Long-lived assets by geographic location are summarized in the following table: Year ended July 31, (In thousands) 2015 2014 2013 North America $ 580,691 $ 551,182 $ 565,590 United Kingdom 118,958 139,845 102,934 Other 47,174 57,743 44,219 Total long-lived assets $ 746,823 $ 748,770 $ 712,743 International total $ 171,396 $ 204,076 $ 151,179 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14 — Commitments and Contingencies Leases The Company leases certain facilities and certain equipment under non-cancelable capital and operating leases. In addition to the minimum future lease commitments presented below, the leases generally require the Company to pay property taxes, insurance, maintenance and repair cost which are not included in the table because the Company has determined these items are not material. Certain leases provide the Company with either a right of first refusal to acquire or an option to purchase a facility at fair value. Certain leases also contain escalation clauses and renewal option clauses calling for increased rents. Where a lease contains an escalation clause or a concession, such as a rent holiday or tenant improvement allowance, rent expense is recognized on a straight-line basis over the lease term in accordance with ASC 840, Operating Leases. The future minimum lease commitments for the next five fiscal years, under non-cancelable capital and operating leases with initial or remaining lease terms in excess of one year were as follows: Year ended July 31, (In thousands) 2016 2017 2018 2019 2020 Thereafter Subtotal Less Amount Representing Interest Total Operating leases $ 22,311 $ 19,734 $ 17,431 $ 14,113 $ 10,895 $ 71,885 $ 156,369 $ — $ 156,369 Capital leases 1,312 37 3 — — — 1,352 (28 ) 1,324 Facilities rental expense for the years ended July 31, 2015 , 2014 and 2013 were $21.7 million , $26.4 million and $20.6 million , respectively. Yard operations equipment rental expense for the years ended July 31, 2015 , 2014 and 2013 were $3.6 million , $3.0 million and $2.8 million , respectively. Commitments Letters of Credit The Company had outstanding letters of credit of $17.5 million at July 31, 2015 , which are primarily used to secure certain insurance obligations. Contingencies 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, and handling or disposal of vehicles. The material pending legal proceedings to which the Company is a party to, or of which any of the Company’s property is subject to 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 seeks 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 arises 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 seeks 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. The Company is pursuing its claim for damages, and defending KPIT’s claim for damages. 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, has 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. According to the DOR, the proposed assessment was based on its initial determination that the Company's sales did not constitute nontaxable sales for resale. 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. In rendering its opinion, the Company’s counsel noted that non-U.S. registered resellers are unable to comply strictly with technical requirements for a Georgia certificate of exemption but concluded that its sales for resale to non-U.S. registered resellers should not be subject to Georgia sales and use tax notwithstanding this technical inability to comply. Since the Company's receipt of the notice of proposed assessment, the Company and its counsel have engaged in active discussions with the DOR to resolve the matter. On June 5, 2015 , following the Company's most recent discussions and after additional review of documentation, the DOR provided the Company with revised audit work papers computing a sales tax liability of $2.7 million before interest and any penalties. On June 22, 2015 , representatives of the DOR and the Office of the Attorney General for the State of Georgia informed the Company's counsel that the DOR intended to issue a formal notice of assessment for an estimated $100.0 million , based on the DOR’s original proposed assessment of $73.8 million plus additional accumulated interest and penalties. On August 4, 2015 , the DOR issued an official Assessment and Demand for Payment for $96.1 million for sales taxes, penalties, and interest that the DOR alleges the Company owes the State of Georgia. The Company filed an appeal of this notice of assessment from the DOR with the Georgia Tax Tribunal on September 3, 2015. Based on the opinion from the Company’s outside law firm, advice from its outside tax advisors, and the Company's best estimate of a probable outcome, the Company has adequately provided for the payment of any assessment in its consolidated financial statements. The Company believes it has strong defenses to the DOR’s notice of assessment and intends to defend this matter. There can be no assurance that this matter will be resolved in the Company’s favor or that the Company will not ultimately be required to make a substantial payment to the Georgia DOR. The Company understands that litigating and defending the matter in Georgia could be expensive and time-consuming and result in substantial management distraction. If the matter were to be resolved in a manner adverse to the Company, it could have a material adverse effect on the Company’s consolidated results of operations and financial position. |
Guarantees - Indemnifications t
Guarantees - Indemnifications to Officers and Directors | 12 Months Ended |
Jul. 31, 2015 | |
Guarantees [Abstract] | |
Guarantees - Indemnifications to Officers and Directors | 15 — Guarantees — Indemnifications to Officers and Directors The Company typically enters into indemnification agreements with its directors and certain of its officers to indemnify them to the extent permitted by law against any and all liabilities, costs, expenses, amounts paid in settlement and damages incurred by the directors as a result of any lawsuit, or any judicial, administrative or investigative proceeding in which the directors are sued as a result of their service as members of its Board of Directors. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jul. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 16 — Related Party Transactions The Company leases certain of its facilities from officers and directors of the Company under various lease agreements. Rental payments under these leases totaled $0.8 million , $1.4 million , and $0.4 million for the years ended July 31, 2015 , 2014 and 2013 , respectively. During the year ended July 31, 2015 the company purchased three properties previously leased from an executive which totaled $11.9 million . During the year ended July 31, 2014 , the Company purchased a property previously leased from an executive for $1.8 million . During the year ended July 31, 2013 , the Company purchased one commercial property from an executive who relocated to the corporate headquarters in Dallas, Texas for $1.1 million . There were no amounts due to or from related parties as of July 31, 2015 and 2014 that are not separately or previously disclosed. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Jul. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plan | 17 — Employee Benefit Plan The Company sponsors a 401(k) defined contribution plan covering its eligible employees. The plan is available to all U.S. employees who meet minimum age and service requirements and provides employees with tax deferred salary deductions and alternative investment options. The Company matches 20% of employee contributions up to 15% of employee salary deferral. The Company recognized expenses of $0.8 million for the years ended July 31, 2015 and 2014 , and $0.5 million for the year ended July 31, 2013 , related to this plan. The Company also sponsors an additional defined contribution plan for its U.K. employees, which is available to all U.K. employees who meet minimum service requirements. The Company matches up to 5% of employee contributions. The Company recognized expenses of $0.7 million , $0.6 million , and $0.2 million for the years ended July 31, 2015 , 2014 and 2013 , respectively, related to this plan. |
Restructuring
Restructuring | 12 Months Ended |
Jul. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 18 — Restructuring The Company relocated its corporate headquarters to Dallas, Texas in 2012. Restructuring costs were as follows: Year ended July 31, (In thousands) 2015 2014 2013 General and Administrative Severance $ 310 $ 4,598 $ 978 Relocation 255 491 759 Total general and administrative $ 565 $ 5,089 $ 1,737 Yard Operations Relocation $ 25 $ (28 ) $ 189 Impairment — — — Total yard operations $ 25 $ (28 ) $ 189 Severance for the year ended July 31, 2014 included a benefit for the reversal of previously accrued costs as a result of adjusting the severance accrual based upon the Company’s reassessment of its strategy of utilizing a third-party enterprise operating system. See Capitalized Software Costs in Note 1 — Summary of Significant Accounting Policies . The movements in the severance accrual were as follows: Year ended July 31, (In thousands) 2015 2014 Beginning balance $ 1,898 $ 2,224 Expense 590 4,598 Payments (1,538 ) (4,924 ) Ending balance $ 950 $ 1,898 The Company started transitioning its data center to a third-party managed data center during the year ended July 31, 2013. The Company reviewed the useful life of certain assets related to its data centers and determined they should be revised from an average of 60 months to an average of 45 months to reflect the shorter useful lives of these assets. Additionally, facility depreciation related to the Company’s information technology operations, previously located in the Company’s offices in Fairfield, California, was accelerated as the department relocated to the Dallas, Texas corporate headquarters. These changes in estimates were accounted for on a prospective basis, resulting in increased depreciation expense over the revised useful lives. These changes resulted in additional depreciation expense of $2.8 million and $7.0 million for the years ended July 31, 2014 and 2013 , respectively. |
Quarterly Information
Quarterly Information | 12 Months Ended |
Jul. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Information (in thousands, except per share data) (Unaudited) | 19 — Quarterly Financial Information (in thousands, except per share data) (Unaudited) (1) Fiscal quarter Fiscal year 2015 First Second Third Fourth Total revenue $ 290,386 $ 276,258 $ 297,142 $ 282,293 Gross margin 122,308 114,867 127,417 118,784 Operating income 82,401 80,468 94,767 86,765 Income before income taxes 82,223 80,104 88,296 81,446 Net income 52,615 52,193 57,563 57,412 Basic net income per common share $ 0.42 $ 0.41 $ 0.46 $ 0.46 Diluted net income per common share $ 0.40 $ 0.40 $ 0.44 $ 0.44 Fiscal quarter Fiscal year 2014 First Second Third Fourth Total revenue $ 279,883 $ 286,434 $ 309,722 $ 287,450 Gross margin 107,836 111,546 132,252 116,939 Operating income 64,959 71,484 62,633 75,858 Income before income taxes 64,245 70,588 61,318 73,884 Net income 41,422 45,345 40,877 51,043 Basic net income per common share $ 0.33 $ 0.36 $ 0.32 $ 0.41 Diluted net income per common share $ 0.32 $ 0.35 $ 0.31 $ 0.39 (1) Earnings per share were computed independently for each of the periods presented; therefore, the sum of the earnings per share amounts for the quarters may not equal the total for the year. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 2015 | |
Accounting Policies [Abstract] | |
Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block] | 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. Significant intercompany transactions and balances have been eliminated in consolidation. |
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; self-insured reserves; allowance for doubtful accounts; income taxes; revenue recognition; stock-based payment compensation; purchase price allocations; long-lived asset and goodwill impairment calculations and contingencies. Actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition The Company provides a portfolio of services to its sellers and buyers that facilitate the sale and delivery of a vehicle from seller to buyer. These services include the ability to use the Company’s Internet sales technology and vehicle delivery, loading, title processing, preparation and storage. The Company evaluates multiple-element arrangements relative to its member and seller agreements. The services provided to the seller of a vehicle involve disposing of a vehicle on the seller’s behalf and, under most of the Company’s current North American contracts, collecting the proceeds from the member. The Company applies Accounting Standard Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (ASU 2009-13) for revenue recognition. Pre-sale services, including towing, title processing, preparation and storage, as well as sale fees and other enhancement services meet the criteria for separate units of accounting. Revenue associated with each service is recognized upon completion of the respective service, net of applicable rebates or allowances. For certain sellers who are charged a proportionate fee based on high bid of the vehicle, the revenue associated with the pre-sale services is recognized upon completion of the sale when the total arrangement is fixed and determinable. The estimated selling price of each service is determined based on management’s best estimate and allotted based on the relative selling price method. Vehicle sales, where vehicles are purchased and remarketed on the Company’s own behalf, are recognized on the sale date, which is typically the point of high bid acceptance. Upon high bid acceptance, a legal binding contract is formed with the member, and the gross sales price is recorded as revenue. The Company also provides a number of services to the buyer of the vehicle, charging a separate fee for each service. Each of these services has been assessed to determine whether the requirements have been met to separate them into units of accounting within a multiple-element arrangement. The Company has concluded that the sale and the post-sale services are separate units of accounting. The fees for sale services are recognized upon completion of the sale, and the fees for the post-sale services are recognized upon successful completion of those services using the relative selling price method. The Company also charges members an annual registration fee for the right to participate in its vehicle sales program, which is recognized ratably over the term of the arrangement, and relist and late-payment fees, which are recognized upon receipt of payment by the member. No provision for returns has been established, as all sales are final with no right of return, although the Company provides for bad debt expense in the case of non-performance by its members or sellers. The Company allocates arrangement consideration based upon management’s best estimate of the selling price of the separate units of accounting contained within arrangements including multiple deliverables. Significant inputs in the Company’s estimates of the selling price of separate units of accounting include market and pricing trends, pricing customization and practices, and profit objectives for the services. |
Vehicle Pooling Costs | Vehicle Pooling Costs The Company defers in vehicle pooling costs certain yard operation expenses 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 certain facility costs, labor, transportation, and vehicle processing. 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. The Company applies the provisions of accounting guidance for subsequent measurement of inventory to our vehicle pooling costs. The provision requires that items such as idle facility expenses, double freight and rehandling costs be recognized as current period charges regardless of whether they meet the criteria of “abnormal” as provided in the guidance. In addition, the guidance requires that the allocation of fixed production overhead to the costs of conversion be based on the normal capacity of production facilities. In early November 2012, Hurricane Sandy hit the northeastern coast of the United States. As a result of the extensive flooding that it caused, the Company expended additional costs for (i) temporary storage facilities; (ii) premiums for subhaulers as they were reassigned from other regions; and (iii) labor costs incurred for overtime, travel and lodging due to the reassignment of employees to the affected region. These costs, which are characterized as “abnormal” under ASC 330, Inventory , were expensed as incurred and not included in inventory. At July 31, 2013, the incremental salvage vehicles received as a result of Hurricane Sandy were sold. |
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, U.A.E. dirham, Bahraini dinar, Omani rial, Brazilian real, and Euro 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. |
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. Interest rate hedges are valued at exit prices obtained from the counter-party. 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 and accrued liabilities approximated their fair values as of July 31, 2015 and 2014 , 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 8 — Long-Term Debt for additional fair value disclosures. |
Derivatives and Hedging | Derivatives and Hedging The Company has entered into two interest rate swaps to eliminate interest rate risk on the Company’s variable interest rate debt, and the swaps are designated as effective cash flow hedges under ASC 815, Derivatives and Hedging. See Note 9 — Derivatives and Hedging . Each quarter, the Company measures hedge effectiveness using the “hypothetical derivative method” and records in earnings any hedge ineffectiveness with the effective portion of the change in fair value recorded in other comprehensive income or loss. |
Cost of Vehicle Sales | Cost of Vehicle Sales Cost of vehicle sales includes the purchase price of vehicles sold for the Company’s own account. |
Yard Operations | Yard Operations Yard operations consists primarily of operating personnel (which includes yard management, clerical and yard employees), rent, contract vehicle towing, insurance, fuel and equipment maintenance and repair. The Company recognizes the costs of pre-sale services, including towing, title processing, and preparation and storage within yard operation expenses at the time the related services are provided. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses consist primarily of executive, accounting and data processing, sales personnel, professional services, system maintenance and enhancements and marketing expenses. |
Advertising | Advertising All advertising costs are expensed as incurred and are included in general and administrative expenses on the consolidated statements of income. |
Other (Expense) Income | Other (Expense) Income Other (expense) income consists primarily of interest expense, interest income, gains and losses from the disposal of fixed assets, rental income, and earnings from unconsolidated affiliates. |
Net Income Per Share | Net Income Per Share Basic net income per share amounts were computed by dividing consolidated net income by the weighted average number of common shares outstanding during the period. Diluted net income per share amounts were computed by dividing consolidated net income by the weighted average number of common shares outstanding plus dilutive potential common shares calculated for stock options outstanding during the period using the treasury stock method. |
Cash and Cash Equivalents | 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. |
Bank Overdraft | Bank Overdraft As a result of maintaining a consolidated cash management system, the Company utilizes controlled disbursement bank accounts. These accounts are funded as checks are presented for payment, not when checks are issued. The resulting bank overdraft position was included in current liabilities as of July 31, 2013. |
Inventory | Inventory Inventories of purchased vehicles are stated at the lower of cost or estimated realizable value. Cost includes the Company’s cost of acquiring ownership of the vehicle. The cost of vehicles sold is charged to cost of vehicle sales as sold on a specific identification basis. |
Accounts Receivable | Accounts Receivable Accounts receivable, which consist primarily of advance charges due from insurance companies and the gross sales price of the vehicle due from members, are recorded when billed, advanced or accrued and represent claims against third parties that will be settled in cash. |
Allowance For Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts in order to provide for estimated losses resulting from disputed amounts billed to sellers or members and the inability of sellers or members to make required payments. If billing disputes exceed expectations and/or if the financial condition of sellers or members were to deteriorate, additional allowances may be required. The allowance is calculated by considering both seller and member accounts receivables written off during the previous twelve-month period as a percentage of the total accounts receivable balance. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which subject the Company to potential credit risk, consist of its cash and cash equivalents, short-term investments and accounts receivable. The Company adheres to its investment policy when placing investments. The investment policy has established guidelines to limit the Company’s exposure to credit risk by placing investments with high credit quality financial institutions, diversifying its investment portfolio, limiting investments in any one issuer or pooled fund and placing investments with maturities that maintain safety and liquidity. The Company places its cash and cash equivalents with high credit quality financial institutions. Deposits with these financial institutions may exceed the amount of insurance provided; however, these deposits typically are redeemable upon demand and, therefore, the Company believes that the financial risks associated with these financial instruments are minimal. The Company performs ongoing credit evaluations of its customers, and generally does not require collateral on its accounts receivable. The Company estimates its allowances for doubtful accounts based on historical collection trends, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past-due account balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amounts due. The Company does not have off-balance sheet credit exposure related to its customers and to date, the Company has not experienced significant credit-related losses. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, less accumulated depreciation and amortization. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful lives of the respective improvements, which is between five and ten years . Significant improvements which substantially extend the useful lives of assets are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives: three to five years for internally developed or purchased software; three to seven years for transportation and other equipment; three to ten years for office furniture and equipment; and 5 to 40 years or the lease term, whichever is shorter , for buildings and improvements. Amortization of equipment under capital leases is included in depreciation expense. |
Long-Lived Asset Valuation | Long-Lived Asset Valuation The Company evaluates long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In accordance with ASC 360, Property, Plant, and Equipment , a long-lived asset is initially measured at the lower of its carrying amount or fair value. An impairment loss is recognized when the estimated undiscounted future cash flows expected to be generated from the use of the asset are less than the carrying amount of the asset. The impairment loss is then calculated by comparing the carrying amount with its fair value, which is usually estimated using discounted cash flows expected to be generated from the use of the asset. |
Goodwill and Other Identifiable Intangible Assets | Goodwill and Other Identifiable Intangible Assets In accordance with ASC 350-30-35, Intangibles—Goodwill and Other , goodwill is not amortized but is tested for potential impairment, at a minimum on an annual basis, or when indications of potential impairment exist. The Company performed its annual impairment test for goodwill during the fourth quarter of the year ended July 31, 2015 , utilizing a market value and discounted cash flow approach. The impairment test for identifiable intangible assets not subject to amortization is also performed annually or when impairment indicators exist. The impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount. Identifiable intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate other long-lived assets. |
Capitalized Software Costs | Capitalized Software Costs The Company capitalizes system development costs and website development costs related to the 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 July 31, 2015 and 2014 was $65.1 million and $61.7 million , respectively. Accumulated amortization expense related to software as of July 31, 2015 and 2014 totaled $42.6 million and $38.6 million , respectively. The Company reassessed its strategy of utilizing a third-party enterprise operating system to address its international expansion needs based on the projected cost to complete, deployment risk and certain other factors. The Company decided to cease development of this software and address its international technology needs through an internally developed proprietary solution. |
Retained Insurance Liabilities | Retained Insurance Liabilities The Company is partially self-insured for certain losses related to medical, general liability, workers’ compensation and auto liability. The Company’s insurance policies are subject to a $250,000 deductible per claim, with the exception of its medical policy which has a $225,000 stop loss per claim and a stop loss limiting total exposure to 120% of expected claims. In addition, each of the Company’s policies contains an aggregate stop loss which limits its ultimate exposure. The Company’s liability represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. The estimated liability is not discounted and is established based upon analysis of historical data and actuarial estimates. The primary estimates used in the actuarial analysis include total payroll and revenue. The Company’s estimates have not materially fluctuated from actual results. While the Company believes these estimates are reasonable based on the information currently available, if actual trends, including the severity of claims and medical cost inflation, differ from the Company’s estimates, the Company’s consolidated results of operations, financial position or cash flows could be impacted. The process of determining the Company’s insurance reserves requires estimates with various assumptions, each of which can positively or negatively impact those balances. |
Stock-Based Payment Compensation | Stock-Based Payment Compensation The Company accounts for stock-based awards to employees and non-employees using the fair value method as required by ASC 718, Compensation—Stock Compensation (ASC 718), which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees, consultants and directors based on estimated fair value. ASC 718 requires companies to estimate the fair value of stock-based payment awards on the measurement date using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized in expense over the requisite service periods. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the input assumptions can materially affect their fair value estimate, it is the Company’s opinion that the existing models do not necessarily provide a reliable single measure of the fair value of the employee stock options. The fair value of each option was estimated on the measurement date using the Black-Scholes Merton (BSM) option-pricing model utilizing the following assumptions: July 31, 2015 2014 2013 Expected life (in years) 5.3 – 7.2 5.1 – 7.1 5.2 – 6.9 Risk-free interest rate 1.58 – 2.26 1.55 – 2.3 0.61 – 1.5 Estimated volatility 22 – 28 20 – 25 24 – 26 Expected dividends — % — % — % Weighted average fair value at measurement date $ 10.18 $ 11.10 $ 7.87 Expected life—The Company’s expected life represents the period that the Company’s stock-based payment awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based payment awards, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its stock-based payment awards. Estimated volatility—The Company uses the trading history of its common stock in determining an estimated volatility factor when using the BSM option-pricing model to determine the fair value of options granted. Expected dividend—The Company has not declared dividends. Therefore, the Company uses a zero value for the expected dividend value factor when using the BSM option-pricing model to determine the fair value of options granted. Risk-free interest rate—The Company bases the risk-free interest rate used in the BSM option-pricing model on the implied yield currently available on U.S. Treasury zero-coupon issues with the same or substantially equivalent expected life. Estimated forfeitures—When estimating forfeitures, the Company considers voluntary and involuntary termination behavior as well as analysis of actual option forfeitures. Net cash proceeds from the exercise of stock options were $3.6 million , $10.4 million and $21.4 million for the years ended July 31, 2015 , 2014 and 2013 , respectively. The Company realized an income tax benefit of $3.0 million , $2.3 million and $6.1 million from stock option exercises during the years ended July 31, 2015 , 2014 and 2013 , respectively. In accordance with ASC 718, the Company presents excess tax benefits from disqualifying dispositions of the exercise of incentive stock options, vested prior to August 1, 2005, if any, as financing cash flows rather than operating cash flows. |
Comprehensive Income | Comprehensive Income Comprehensive income includes all changes in stockholders’ equity during a period from non-stockholder sources. For the years ended July 31, 2015 , 2014 and 2013 , accumulated other comprehensive income (loss) was the effect of foreign currency translation adjustments and the effective portion of the interest rate swaps’ change in fair value. Deferred taxes are not provided on cumulative translation adjustments where the Company expects earnings of a foreign subsidiary to be indefinitely reinvested. |
Reclassification | Reclassifications Certain reclassifications have been made to prior years' consolidated financial statements to conform to the classifications used in fiscal 2015. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments are effective for financial statements issued for annual and interim periods beginning after December 15, 2015. The amendments are to be applied on a retrospective basis, wherein the balance sheet of each individual period presented is adjusted to reflect the period-specific effects of applying the new guidance. The Company’s adoption of ASU 2015-03 will not have a material impact on the Company’s consolidated results of operations and financial position. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810), which is intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The ASU focuses on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. In addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards Codification and improves current U.S. GAAP by placing more emphasis on risk of loss when determining a controlling financial interest, reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity (“VIE”), and changing consolidation conclusions for companies in several industries that typically make use of limited partnerships or VIEs. The ASU will be effective for annual and interim periods beginning after December 15, 2015. The Company’s adoption of ASU 2015-02 will not have a material impact on the Company’s consolidated results of operations and financial position. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 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 beginning after December 15, 2016, . On July 9, 2015, the FASB issued a proposed ASU to defer the effective date for one year for annual and interim periods beginning after December 15, 2017. ASU 2014-09 allows adoption with either retrospective application to each period presented, or retrospective application with the cumulative effect recognized as of the date of initial application. The Company has not determined the potential effects of implementing ASU 2014-09 on the consolidated financial statements. |
Acquisitions | Acquisitions The Company recognizes and measures identifiable assets acquired and liabilities assumed in acquired entities in accordance with ASC 805, Business Combinations . The accounting for acquisitions involves significant judgments and estimates, including the fair value of certain forms of consideration, the fair value of acquired intangible assets, which involve projections of future revenues, cash flows and terminal value, which are then either discounted at an estimated discount rate or measured at an estimated royalty rate, and the fair value of other acquired assets and assumed liabilities, including potential contingencies and the useful lives of the assets. The projections are developed using internal forecasts, available industry and market data and estimates of long-term growth rates of the Company. Historical experience is additionally utilized, in which historical or current costs have approximated fair value for certain assets acquired. |
Segments and Other Geographic Reporting | Segments and Other Geographic Reporting The Company’s North American and U.K. regions are considered two separate operating segments, which have been aggregated into one reportable segment because they share similar economic characteristics. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Accounting Policies [Abstract] | |
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, 2013 $ (45,420 ) Gain on foreign currency translation 26,428 Cumulative loss on foreign currency translation as of July 31, 2014 $ (18,992 ) Loss on foreign currency translation (49,518 ) Cumulative loss on foreign currency translation as of July 31, 2015 $ (68,510 ) |
Schedule of fair value assumptions | The fair value of each option was estimated on the measurement date using the Black-Scholes Merton (BSM) option-pricing model utilizing the following assumptions: July 31, 2015 2014 2013 Expected life (in years) 5.3 – 7.2 5.1 – 7.1 5.2 – 6.9 Risk-free interest rate 1.58 – 2.26 1.55 – 2.3 0.61 – 1.5 Estimated volatility 22 – 28 20 – 25 24 – 26 Expected dividends — % — % — % Weighted average fair value at measurement date $ 10.18 $ 11.10 $ 7.87 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
2014 Acquisitions | |
Business Acquisition [Line Items] | |
Schedule of purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed | The following table summarizes the purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed for these acquisitions (in thousands): Allocation of the acquisition: Accounts receivable and prepaid expenses $ 734 Property and equipment 71 Inventory 81 Intangible assets 6,071 Goodwill 7,682 Liabilities assumed (171 ) Fair value of net assets and liabilities acquired $ 14,468 |
2013 Acquisitions | |
Business Acquisition [Line Items] | |
Schedule of purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed | The following table summarizes the purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed for these acquisitions (in thousands): Total cash paid, net of cash acquired $ 83,866 Contingent consideration 3,092 Total acquisition price $ 86,958 Allocation of the acquisition: Accounts receivable and prepaid expenses $ 21,082 Deferred income taxes 2,845 Vehicle pooling costs 1,187 Property and equipment 21,158 Inventory 634 Intangible assets 24,186 Goodwill 72,666 Liabilities assumed (56,800 ) Fair value of net assets and liabilities acquired $ 86,958 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Accounts Receivable, Net [Abstract] | |
Schedule of accounts receivable | Accounts receivable, net consisted of: July 31, (In thousands) 2015 2014 Advance charges receivable $ 143,724 $ 126,307 Trade accounts receivable 73,773 72,170 Other receivables 1,187 2,092 218,684 200,569 Less: allowance for doubtful accounts (2,988 ) (3,584 ) Accounts receivable, net $ 215,696 $ 196,985 |
Schedule of movements in the allowance for doubtful accounts | The movements in the allowance for doubtful accounts were as follows: July 31, (In thousands) 2015 2014 2013 Balance at beginning of year $ 3,584 $ 2,683 $ 2,920 Charged to costs and expenses 2,221 3,376 1,424 Deductions to bad debt (2,817 ) (2,475 ) (1,661 ) Balance at end of year $ 2,988 $ 3,584 $ 2,683 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment, net consisted of the following: July 31, (In thousands) 2015 2014 Transportation and other equipment $ 70,133 $ 68,956 Office furniture and equipment 44,837 41,504 Software 65,072 61,698 Land 481,748 475,564 Buildings and leasehold improvements 453,965 429,895 1,115,755 1,077,617 Less: accumulated depreciation and amortization (415,353 ) (385,234 ) Property and equipment, net $ 700,402 $ 692,383 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of change in carrying amount of goodwill | The change in the carrying amount of goodwill was as follows: July 31, (In thousands) 2015 2014 Beginning balance $ 283,780 $ 267,463 Goodwill recorded during the period (790 ) 7,724 Effect of foreign currency exchange rates (11,140 ) 8,593 Ending balance $ 271,850 $ 283,780 |
Intangibles, Net (Tables)
Intangibles, Net (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of intangible assets | The following table sets forth amortizable intangible assets by major asset class: Gross Carrying Amount Accumulated Amortization Net Book Value Weighted Average Remaining Useful Life (in years) July 31, July 31, July 31, July 31, (In thousands, except remaining useful life) 2015 2014 2015 2014 2015 2014 2015 2014 Amortized intangibles: Covenants not to compete $ 1,691 $ 1,797 $ (900 ) $ (615 ) $ 791 $ 1,182 3 4 Supply contracts & customer relationships 27,506 29,128 (13,551 ) (9,747 ) 13,955 19,381 4 5 Trade name 5,129 5,791 (2,467 ) (1,479 ) 2,662 4,312 3 4 Licenses and databases 2,498 1,810 (2,049 ) (1,443 ) 449 367 2 3 Intangibles, net $ 36,824 $ 38,526 $ (18,967 ) $ (13,284 ) $ 17,857 $ 25,242 |
Schedule of aggregate amortization expense on intangible assets | Intangible amortization expense for the next five fiscal years based upon July 31, 2015 intangible assets is expected to be as follows: (In thousands) 2016 $ 5,811 2017 5,497 2018 4,414 2019 817 2020 574 Thereafter 744 Total future intangible amortization expense $ 17,857 |
Accounts Payable and Accrued 34
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | Accounts payable and accrued liabilities consisted of the following: July 31, (In thousands) 2015 2014 Trade accounts payable $ 15,287 $ 22,108 Accounts payable to sellers 42,230 40,105 Buyer deposits and prepayments 33,871 28,117 Accrued compensation and benefits 25,647 25,721 Accrued insurance 5,796 5,703 Other accrued liabilities 24,621 30,402 Total accounts payable and accrued expenses $ 147,452 $ 152,156 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of future annual payments | As of July 31, 2015 , future payments on the Term Loan and Note Purchase Agreement were as follows: (In thousands) July 31, 2016 $ 52,500 2017 30,000 2018 30,000 2019 30,000 2020 101,250 Thereafter 400,000 Total future payments $ 643,750 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Equity [Abstract] | |
Schedule of stock options exercised | The exercised stock options are summarized in the following table: Period Options Exercised Exercise Price Shares Net Settled for Exercise Shares Withheld for Taxes(1) Net Shares to Employee Share Price for Withholding Tax Withholding (in 000s) FY 2013—Q2 73,228 $ 8.89 18,127 17,461 37,640 $ 35.91 $ 627 FY 2014—Q1 14,000 16.43 7,241 2,519 4,240 31.77 80 FY 2015—Q1 201,333 19.59 124,621 35,416 41,296 31.65 1,121 FY 2015—Q3 139,690 20.27 76,021 20,656 43,013 37.27 770 FY 2015—Q4 200,000 12.02 66,602 52,158 81,240 36.08 1,882 (1) Shares withheld for taxes are treated as a repurchase of shares for accounting purposes but do not count against the Company’s stock repurchase program. |
Schedule of share-based compensation expense | The following table details stock-based payment compensation expense included in the company’s consolidated statements of income: Year Ended July 31, (In thousands) 2015 2014 2013 General and administrative $ 15,938 $ 19,489 $ 17,238 Yard operations 2,216 2,610 2,319 Total stock-based payment compensation $ 18,154 $ 22,099 $ 19,557 |
Schedule of non-vested shares | A summary of the status of the Company’s non-vested shares and its activity during the year ended July 31, 2015 was as follows: (In thousands, except per share amounts) Number of Shares Weighted Average Grant- date Fair Value Non-vested shares at July 31, 2014 5,921 $ 10.39 Grants of non-vested shares 2,891 10.18 Vested (1,984 ) 9.83 Forfeitures or expirations (213 ) 10.37 Non-vested shares at July 31, 2015 6,615 $ 10.48 |
Schedule of option activity | Stock option activity for the year ended July 31, 2015 was as follows: (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, 2014 19,082 $ 21.64 6.01 $ 235,734 Grants of options 2,891 35.95 Exercises (749 ) 17.11 Forfeitures or expirations (213 ) 33.40 Outstanding as of July 31, 2015 21,011 $ 23.65 5.78 $ 261,339 Exercisable as of July 31, 2015 14,396 $ 18.38 4.37 $ 254,158 Vested and expected to vest as of July 31, 2015 20,542 $ 23.39 5.72 $ 260,845 |
Schedule of stock options outstanding and exercisable | The following table summarizes stock options outstanding and exercisable as of July 31, 2015 : (In thousands, except per share amount) Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Weighted Average Exercise Price $12.02–$17.20 10,484 3.61 $ 15.42 10,464 $ 15.42 $17.32–$21.05 2,122 4.90 19.83 1,942 19.76 $22.47–$35.45 2,503 8.95 32.29 594 25.21 $35.62–$37.22 5,902 8.61 35.99 1,396 35.71 21,011 5.78 23.65 14,396 18.38 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of income from continuing operations before taxes | Income before taxes consisted of the following: Year ended July 31, (In thousands) 2015 2014 2013 U.S. $ 286,169 $ 218,450 $ 236,118 Non-U.S. 45,900 51,585 40,754 Total income before taxes $ 332,069 $ 270,035 $ 276,872 |
Schedule of income tax expense (benefit) from continuing operations | Income tax expense (benefit) from continuing operations consisted of the following: Year ended July 31, (In thousands) 2015 2014 2013 Federal: Current $ 95,468 $ 90,207 $ 87,484 Deferred 5,841 (9,589 ) (1,073 ) 101,309 80,618 86,411 State: Current 1,160 1,912 3,871 Deferred (86 ) (279 ) 66 1,074 1,633 3,937 Foreign: Current 11,062 10,077 9,090 Deferred (1,159 ) (980 ) (2,591 ) 9,903 9,097 6,499 Income tax expense $ 112,286 $ 91,348 $ 96,847 |
Schedule of reconciliation of Income tax | A reconciliation of the expected U.S. statutory tax rate to the actual effective income tax rate is as follows: Year ended July 31, (In thousands) 2015 2014 2013 Federal statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal income tax benefit 1.1 1.1 1.1 Foreign rate differential (1.9 ) (2.1 ) (1.8 ) Compensation and fringe benefits 0.1 0.1 0.1 Other differences (0.5 ) (0.3 ) 0.6 Effective tax rate 33.8 % 33.8 % 35.0 % |
Schedule of tax effects on deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) are presented below: July 31, (In thousands) 2015 2014 Deferred tax assets: Allowance for doubtful accounts $ 992 $ 1,209 Accrued compensation and benefits 40,391 36,780 State taxes 577 416 Accrued other 3,967 2,962 Deferred revenue 798 1,301 Property and equipment 16,957 18,627 Losses carried forward 4,362 4,312 Federal tax benefit 7,832 10,457 Total gross deferred tax assets 75,876 76,064 Less valuation allowance (2,650 ) (2,210 ) Net deferred tax assets 73,226 73,854 Deferred tax liabilities: Vehicle pooling costs (7,749 ) (7,420 ) Prepaid insurance (890 ) (1,950 ) Intangibles and goodwill (37,673 ) (33,332 ) Total gross deferred tax liabilities (46,312 ) (42,702 ) Net deferred tax assets $ 26,914 $ 31,152 |
Schedule of net deferred tax liability | The above net deferred tax assets and liabilities have been reflected in the accompanying consolidated balance sheets as follows: July 31, (In thousands) 2015 2014 North America current assets $ 3,396 $ 1,803 North America non-current assets 28,856 36,639 Foreign non-current liabilities (5,338 ) (7,290 ) Net deferred tax assets $ 26,914 $ 31,152 |
Schedule of unrecognized tax benefits | The following table summarizes the activities related to the Company’s unrecognized tax benefits: July 31, (In thousands) 2015 2014 2013 Beginning balance $ 18,419 $ 17,178 $ 16,946 Increases related to current year tax position 3,441 1,805 1,844 Prior year tax positions: Prior year increase 599 2,997 1,474 Prior year decrease — (523 ) — Cash settlement (225 ) — — Lapse of statute of limitations (4,806 ) (3,038 ) (3,086 ) Ending balance $ 17,428 $ 18,419 $ 17,178 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of basic weighted shares outstanding to diluted weighted average shares outstanding | The table below reconciles basic weighted shares outstanding to diluted weighted average shares outstanding: July 31, (In thousands) 2015 2014 2013 Weighted average common shares outstanding 125,914 125,693 124,912 Effect of dilutive securities — stock options 5,511 5,537 4,869 Weighted average common and dilutive potential common shares outstanding 131,425 131,230 129,781 |
Segments and Other Geographic39
Segments and Other Geographic Information (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of revenues by geographic location | Total revenues by geographic location of the selling facility are summarized in the following table: Year ended July 31, (In thousands) 2015 2014 2013 North America $ 914,443 $ 904,000 $ 826,030 United Kingdom 209,823 235,245 209,186 Other 21,813 24,244 11,170 Total revenue $ 1,146,079 $ 1,163,489 $ 1,046,386 International total $ 243,199 $ 269,915 $ 228,945 |
Schedule of long-lived assets by geographic location | Long-lived assets by geographic location are summarized in the following table: Year ended July 31, (In thousands) 2015 2014 2013 North America $ 580,691 $ 551,182 $ 565,590 United Kingdom 118,958 139,845 102,934 Other 47,174 57,743 44,219 Total long-lived assets $ 746,823 $ 748,770 $ 712,743 International total $ 171,396 $ 204,076 $ 151,179 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease commitments under noncancelable capital and operating leases | The future minimum lease commitments for the next five fiscal years, under non-cancelable capital and operating leases with initial or remaining lease terms in excess of one year were as follows: Year ended July 31, (In thousands) 2016 2017 2018 2019 2020 Thereafter Subtotal Less Amount Representing Interest Total Operating leases $ 22,311 $ 19,734 $ 17,431 $ 14,113 $ 10,895 $ 71,885 $ 156,369 $ — $ 156,369 Capital leases 1,312 37 3 — — — 1,352 (28 ) 1,324 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring-related costs | The Company relocated its corporate headquarters to Dallas, Texas in 2012. Restructuring costs were as follows: Year ended July 31, (In thousands) 2015 2014 2013 General and Administrative Severance $ 310 $ 4,598 $ 978 Relocation 255 491 759 Total general and administrative $ 565 $ 5,089 $ 1,737 Yard Operations Relocation $ 25 $ (28 ) $ 189 Impairment — — — Total yard operations $ 25 $ (28 ) $ 189 |
Schedule of movements in severance accrual | The movements in the severance accrual were as follows: Year ended July 31, (In thousands) 2015 2014 Beginning balance $ 1,898 $ 2,224 Expense 590 4,598 Payments (1,538 ) (4,924 ) Ending balance $ 950 $ 1,898 |
Quarterly Information (Tables)
Quarterly Information (Tables) | 12 Months Ended |
Jul. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | Fiscal quarter Fiscal year 2015 First Second Third Fourth Total revenue $ 290,386 $ 276,258 $ 297,142 $ 282,293 Gross margin 122,308 114,867 127,417 118,784 Operating income 82,401 80,468 94,767 86,765 Income before income taxes 82,223 80,104 88,296 81,446 Net income 52,615 52,193 57,563 57,412 Basic net income per common share $ 0.42 $ 0.41 $ 0.46 $ 0.46 Diluted net income per common share $ 0.40 $ 0.40 $ 0.44 $ 0.44 Fiscal quarter Fiscal year 2014 First Second Third Fourth Total revenue $ 279,883 $ 286,434 $ 309,722 $ 287,450 Gross margin 107,836 111,546 132,252 116,939 Operating income 64,959 71,484 62,633 75,858 Income before income taxes 64,245 70,588 61,318 73,884 Net income 41,422 45,345 40,877 51,043 Basic net income per common share $ 0.33 $ 0.36 $ 0.32 $ 0.41 Diluted net income per common share $ 0.32 $ 0.35 $ 0.31 $ 0.39 (1) Earnings per share were computed independently for each of the periods presented; therefore, the sum of the earnings per share amounts for the quarters may not equal the total for the year. |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Cumulative Translation Adjustment Summary [Roll Forward] | |||
Cumulative loss on foreign currency translation, Beginning balance | $ (18,992) | $ (45,420) | |
Gain (loss) on foreign currency translation | (49,518) | 26,428 | $ (10,487) |
Cumulative loss on foreign currency translation, Ending balance | $ (68,510) | $ (18,992) | $ (45,420) |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details 1) - Stock Options - $ / shares | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value assumptions, method used | Black-Scholes Merton (BSM) option-pricing model | Black-Scholes Merton (BSM) option-pricing model | Black-Scholes Merton (BSM) option-pricing model |
Risk-free interest rate, minimum | 1.58% | 1.55% | 0.61% |
Risk-free interest rate, maximum | 2.26% | 2.30% | 1.50% |
Estimated volatility, minimum | 22.00% | 24.00% | 24.00% |
Estimated volatility, maximum | 28.00% | 26.00% | 26.00% |
Expected dividends | 0.00% | 0.00% | 0.00% |
Weighted average fair value at measurement date (in dollars per share) | $ 10.18 | $ 11.10 | $ 7.87 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life (in years) | 5 years 3 months 18 days | 5 years 1 month 6 days | 5 years 2 months 12 days |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life (in years) | 7 years 2 months 12 days | 7 years 1 month 6 days | 6 years 10 months 24 days |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Details Textuals) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015USD ($)DerivativeSegment | Jul. 31, 2014USD ($) | Jul. 31, 2013USD ($) | |
Accounting Policies [Abstract] | |||
Number of interest rate derivatives held | Derivative | 2 | ||
Advertising expenses | $ 4,900 | $ 5,000 | |
Proceeds from stock options exercised | 3,634 | 10,412 | $ 21,442 |
Income tax benefit realized from stock-based payment compensation | $ 2,971 | $ 2,289 | $ 6,097 |
Number of operating segments | Segment | 2 | ||
Number of reportable segment | Segment | 1 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Details Textuals 1) - customer | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Total revenues | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, benchmark description | more than 10 | more than 10 | more than 10 |
Concentration risk, customer | No single customer accounted for more than 10 | no single customer accounted for more than 10 | no single customer accounted for more than 10 |
Number of customers exceeding threshold | 0 | 0 | 0 |
Accounts receivables | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, benchmark description | more than 10 | more than 10 | |
Concentration risk, customer | one customer accounted for more than 10 | one customer accounted for more than 10 | |
Number of customers exceeding threshold | 1 | 1 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies (Details Textuals 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Software development costs, gross | $ 65,100 | $ 61,700 | |
Accumulated amortization | 42,600 | 38,600 | |
Impairment of capitalized software costs | 29,100 | ||
Retained Insurance Liabilities [Abstract] | |||
Amount deductible per claim - insurance policies | 250,000 | ||
Amount deductible per claim - medical policy | $ 225,000 | ||
Percentage of medical claim | 120.00% | ||
Self insured claims reserve | $ 5,800 | 5,700 | |
Share-based Arrangements with Employees and Nonemployees [Abstract] | |||
Proceeds from the exercise of stock options | 3,634 | 10,412 | $ 21,442 |
Income tax benefit realized from stock-based payment compensation | $ 2,971 | $ 2,289 | $ 6,097 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Description of useful lives | between five and ten years | ||
Internally developed or purchased software | |||
Property, Plant and Equipment [Line Items] | |||
Description of useful lives | three to five years | ||
Transportation and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Description of useful lives | three to seven years | ||
Office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Description of useful lives | three to ten years | ||
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Description of useful lives | 5 to 40 years or the lease term, whichever is shorter | ||
Minimum | Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 5 years | ||
Minimum | Internally developed or purchased software | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 3 years | ||
Minimum | Transportation and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 3 years | ||
Minimum | Office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 3 years | ||
Minimum | Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 5 years | ||
Maximum | Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 10 years | ||
Maximum | Internally developed or purchased software | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 5 years | ||
Maximum | Transportation and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 7 years | ||
Maximum | Office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 10 years | ||
Maximum | Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 40 years |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Business Acquisition [Line Items] | |||
Total cash paid, net of cash acquired | $ 0 | $ 14,300 | $ 84,022 |
2014 Acquisitions | |||
Business Acquisition [Line Items] | |||
Total acquisition price | 14,500 | ||
Allocation of the acquisition: | |||
Accounts receivable and prepaid expenses | 734 | ||
Property and equipment | 71 | ||
Inventory | 81 | ||
Intangible assets | 6,071 | ||
Goodwill | 7,682 | ||
Liabilities assumed | (171) | ||
Fair value of net assets and liabilities acquired | $ 14,468 | ||
2013 Acquisitions | |||
Business Acquisition [Line Items] | |||
Total cash paid, net of cash acquired | 83,866 | ||
Contingent consideration | 3,092 | ||
Total acquisition price | 86,958 | ||
Allocation of the acquisition: | |||
Accounts receivable and prepaid expenses | 21,082 | ||
Deferred income taxes | 2,845 | ||
Vehicle pooling costs | 1,187 | ||
Property and equipment | 21,158 | ||
Inventory | 634 | ||
Intangible assets | 24,186 | ||
Goodwill | 72,666 | ||
Liabilities assumed | (56,800) | ||
Fair value of net assets and liabilities acquired | $ 86,958 |
Acquisitions (Details Textuals)
Acquisitions (Details Textuals) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015USD ($) | Jul. 31, 2014USD ($)business | Jul. 31, 2013USD ($)business | |
Business Acquisition [Line Items] | |||
Goodwill | $ 271,850 | $ 283,780 | $ 267,463 |
Intangibles, net | $ 17,857 | $ 25,242 | |
Covenants not to compete | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 3 years | 4 years | |
Intangibles, net | $ 791 | $ 1,182 | |
Licenses and databases | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 2 years | 3 years | |
Intangibles, net | $ 449 | $ 367 | |
2014 Acquisitions | |||
Business Acquisition [Line Items] | |||
Total purchase price | $ 14,500 | ||
Increase (decrease) in goodwill during the period | (800) | ||
Increase in intangible assets | $ 900 | ||
2014 Acquisitions | Covenants not to compete | Minimum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 3 years | ||
2014 Acquisitions | Covenants not to compete | Maximum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 8 years | ||
2014 Acquisitions | Supply contracts | Minimum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 3 years | ||
2014 Acquisitions | Supply contracts | Maximum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 8 years | ||
2014 Acquisitions | Customer relationships | Minimum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 3 years | ||
2014 Acquisitions | Customer relationships | Maximum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 8 years | ||
2014 Acquisitions | Trade name | Minimum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 3 years | ||
2014 Acquisitions | Trade name | Maximum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 8 years | ||
2014 Acquisitions | Licenses and databases | Minimum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 3 years | ||
2014 Acquisitions | Licenses and databases | Maximum | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets | 8 years | ||
2013 Acquisitions | |||
Business Acquisition [Line Items] | |||
Total purchase price | $ 86,958 | ||
Increase (decrease) in goodwill during the period | $ (800) | ||
Voting stock, percent | 100.00% | ||
Accrued liabilities | 11,500 | ||
Intangibles, net | 9,300 | ||
Pre-acquisition contingency low | 7,000 | ||
Pre-acquisition contingency high | 28,000 | ||
Fair value of this contingency | $ 14,000 | ||
CA | |||
Business Acquisition [Line Items] | |||
Number of businesses acquired | business | 1 | ||
DE and ES | |||
Business Acquisition [Line Items] | |||
Number of businesses acquired | business | 2 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Less allowance for doubtful accounts | $ (2,988) | $ (3,584) | $ (2,683) | $ (2,920) |
Accounts receivable, gross, current | 218,684 | 200,569 | ||
Accounts receivable, net | 215,696 | 196,985 | ||
Advance charges receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross, current | 143,724 | 126,307 | ||
Trade accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross, current | 73,773 | 72,170 | ||
Other receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross, current | $ 1,187 | $ 2,092 |
Accounts Receivable, Net (Det51
Accounts Receivable, Net (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of year | $ 3,584 | $ 2,683 | $ 2,920 |
Charged to costs and expenses | 2,221 | 3,376 | 1,424 |
Deductions to bad debt | (2,817) | (2,475) | (1,661) |
Balance at end of year | $ 2,988 | $ 3,584 | $ 2,683 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Jul. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,115,755 | $ 1,077,617 |
Less: accumulated depreciation and amortization | (415,353) | (385,234) |
Property and equipment, net | 700,402 | 692,383 |
Transportation and other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 70,133 | 68,956 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 44,837 | 41,504 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 65,072 | 61,698 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 481,748 | 475,564 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 453,965 | $ 429,895 |
Property and Equipment, Net (53
Property and Equipment, Net (Details Textuals) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 34.9 | $ 37 | $ 42 |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Amortization expense | $ 5 | $ 9.8 | $ 9.5 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 283,780 | $ 267,463 |
Goodwill recorded during the period | (790) | 7,724 |
Effect of foreign currency exchange rates | (11,140) | 8,593 |
Ending balance | $ 271,850 | $ 283,780 |
Goodwill (Details Textuals)
Goodwill (Details Textuals) - USD ($) $ in Millions | Jul. 31, 2015 | Jul. 31, 2014 |
Goodwill [Abstract] | ||
Goodwill impairment losses | $ 21.8 | $ 21.8 |
Intangibles, Net (Details)
Intangibles, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Amortized intangible assets: | ||
Gross Carrying Amount | $ 36,824 | $ 38,526 |
Accumulated Amortization | (18,967) | (13,284) |
Intangibles, net | 17,857 | 25,242 |
Covenants not to compete | ||
Amortized intangible assets: | ||
Gross Carrying Amount | 1,691 | 1,797 |
Accumulated Amortization | (900) | (615) |
Intangibles, net | $ 791 | $ 1,182 |
Useful life of intangible assets | 3 years | 4 years |
Supply contracts & customer relationships | ||
Amortized intangible assets: | ||
Gross Carrying Amount | $ 27,506 | $ 29,128 |
Accumulated Amortization | (13,551) | (9,747) |
Intangibles, net | $ 13,955 | $ 19,381 |
Useful life of intangible assets | 4 years | 5 years |
Trade name | ||
Amortized intangible assets: | ||
Gross Carrying Amount | $ 5,129 | $ 5,791 |
Accumulated Amortization | (2,467) | (1,479) |
Intangibles, net | $ 2,662 | $ 4,312 |
Useful life of intangible assets | 3 years | 4 years |
Licenses and databases | ||
Amortized intangible assets: | ||
Gross Carrying Amount | $ 2,498 | $ 1,810 |
Accumulated Amortization | (2,049) | (1,443) |
Intangibles, net | $ 449 | $ 367 |
Useful life of intangible assets | 2 years | 3 years |
Intangibles, Net (Details 1)
Intangibles, Net (Details 1) - USD ($) $ in Thousands | Jul. 31, 2015 | Jul. 31, 2014 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2,016 | $ 5,811 | |
2,017 | 5,497 | |
2,018 | 4,414 | |
2,019 | 817 | |
2,020 | 574 | |
Thereafter | 744 | |
Intangibles, net | $ 17,857 | $ 25,242 |
Intangibles, Net (Details Textu
Intangibles, Net (Details Textuals) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Amortization expenses | $ 6.8 | $ 6.9 | $ 4.8 |
Accounts Payable and Accrued 59
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Jul. 31, 2014 |
Payables and Accruals [Abstract] | ||
Trade accounts payable | $ 15,287 | $ 22,108 |
Accounts payable to sellers | 42,230 | 40,105 |
Buyer deposits and prepayments | 33,871 | 28,117 |
Accrued compensation and benefits | 25,647 | 25,721 |
Accrued insurance | 5,796 | 5,703 |
Other accrued liabilities | 24,621 | 30,402 |
Total accounts payable and accrued expenses | $ 147,452 | $ 152,156 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands | Jul. 31, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,016 | $ 52,500 |
2,017 | 30,000 |
2,018 | 30,000 |
2,019 | 30,000 |
2,020 | 101,250 |
Thereafter | 400,000 |
Total future payments | $ 643,750 |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textuals) - USD ($) $ in Millions | Dec. 03, 2014 | Apr. 30, 2016 | Jul. 31, 2015 | Jul. 31, 2015 | Sep. 29, 2011 | Dec. 14, 2010 |
Line of Credit Facility [Line Items] | ||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 1.25% | |||||
Reference rate | 0.19% | 0.19% | ||||
Debt instrument costs | $ 2.1 | |||||
Capitalized debt issuance fees | 1 | |||||
Debt discount | 1.1 | |||||
Federal Funds Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 0.50% | |||||
LIBOR | ||||||
Line of Credit Facility [Line Items] | ||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 1.00% | |||||
Adjusted LIBOR One | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Applicable interest rate added to reference rate in order to compute variable interest rate | 0.25% | |||||
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% | |||||
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 | 1.25% | |||||
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% | |||||
Line of Credit | Revolving Credit Facility | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee rate range | 0.20% | |||||
Line of Credit | Revolving Credit Facility | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee rate range | 0.35% | |||||
Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Senior notes | 400 | |||||
Bank of America | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 100 | |||||
Repayments of lines of credit | 275 | |||||
Bank of America | Line of Credit | Alternative Currency Borrowing Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 100 | |||||
Bank of America | Line of Credit | Letter of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 50 | |||||
Bank of America | Line of Credit | Term Loan Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 500 | $ 400 | ||||
Wells Fargo and Bank of America | ||||||
Line of Credit Facility [Line Items] | ||||||
Maturity date | Dec. 3, 2019 | |||||
Wells Fargo and Bank of America | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 300 | |||||
Outstanding borrowings | 0 | $ 0 | $ 0 | |||
Wells Fargo and Bank of America | Line of Credit | Term Loan Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 300 | |||||
Outstanding borrowings | 243.8 | $ 243.8 | ||||
Amortization of financing costs | $ 18.8 | |||||
Wells Fargo and Bank of America | Line of Credit | Forecast | Term Loan Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Amortization of financing costs | $ 7.5 | |||||
4.07% Senior Notes, Series A | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Senior notes | $ 100 | |||||
Stated interest rate | 4.07% | |||||
4.19% Senior Notes, Series B | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Senior notes | $ 100 | |||||
Stated interest rate | 4.19% | |||||
4.25% Senior Notes, Series C | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Senior notes | $ 100 | |||||
Stated interest rate | 4.25% | |||||
4.35% Senior Notes, Series D | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Senior notes | $ 100 | |||||
Stated interest rate | 4.35% |
Derivatives and Hedging (Detail
Derivatives and Hedging (Details Textuals) $ in Millions | 12 Months Ended | ||
Jul. 31, 2015USD ($)Derivative | Jul. 31, 2014USD ($) | Jul. 31, 2013USD ($) | |
Derivative [Line Items] | |||
Number of interest rate derivatives held | Derivative | 2 | ||
Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Derivative, type of instrument | interest rate swaps | ||
Amount reclassified into earnings | $ 1.7 | $ 2.2 | $ 2.5 |
Description of interest rate cash flow hedge accounting method | hypothetical derivative method | ||
Interest Rate Swap [Member] | Level II [Member] | |||
Derivative [Line Items] | |||
Derivative designated as cash flow hedge, Fair value | $ 0.4 | $ 1.7 | |
First interest rate swap [Member] | |||
Derivative [Line Items] | |||
Derivative, fixed interest rate | 85.00% | ||
Second interest rate swap [Member] | |||
Derivative [Line Items] | |||
Derivative, fixed interest rate | 69.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Jul. 31, 2015 | Apr. 30, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Jan. 31, 2013 | |
Share-Based Compensation Arrangement By Share-Based Payment Award, Options Exercisable [Abstract] | |||||
Options Exercised | 200,000 | 139,690 | 201,333 | 14,000 | 73,228 |
Exercise Price | $ 12.02 | $ 20.27 | $ 19.59 | $ 16.43 | $ 8.89 |
Shares Net Settled for Exercise | 66,602 | 76,021 | 124,621 | 7,241 | 18,127 |
Shares Withheld for Taxes | 52,158 | 20,656 | 35,416 | 2,519 | 17,461 |
Net Shares to Employee | 81,240 | 43,013 | 41,296 | 4,240 | 37,640 |
Share Price for Withholding | $ 36.08 | $ 37.27 | $ 31.65 | $ 31.77 | $ 35.91 |
Tax Withholding (in 000's) | $ 1,882 | $ 770 | $ 1,121 | $ 80 | $ 627 |
Stockholder's Equity (Details 1
Stockholder's Equity (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based payment compensation | $ 18,154 | $ 22,099 | $ 19,557 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based payment compensation | 15,938 | 19,489 | 17,238 |
Yard operations | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based payment compensation | $ 2,216 | $ 2,610 | $ 2,319 |
Stockholder's Equity (Details 2
Stockholder's Equity (Details 2) - Stock Options - $ / shares | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,891,000 | ||
Number Of Shares [Roll Forward] | |||
Non-vested shares at July 31, 2014 | 5,921,000 | ||
Vested (in shares) | (1,984,000) | ||
Forfeitures or expirations (in shares) | (213,000) | ||
Non-vested shares at July 31, 2015 | 6,615,000 | 5,921,000 | |
Weighted Average Grant Date Fair Value [Roll Forward] | |||
Non-vested shares at July 31, 2014, fair value | $ 10.39 | ||
Grants of non-vested shares, fair value | 10.18 | $ 11.10 | $ 7.87 |
Vested, fair value | 9.83 | ||
Forfeitures or expirations, fair value | 10.37 | ||
Non-vested shares at July 31, 2015, fair value | $ 10.48 | $ 10.39 |
Stockholder's Equity (Details 3
Stockholder's Equity (Details 3) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jul. 31, 2015 | Apr. 30, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Jan. 31, 2013 | Jul. 31, 2015 | |
Number Of Options [Roll Forward] | ||||||
Exercise of stock options, net of repurchased shares (in shares) | (200,000) | (139,690) | (201,333) | (14,000) | (73,228) | |
Weighted Average Exercise Price [Roll Forward] | ||||||
Exercises (in dollars per share) | $ 12.02 | $ 20.27 | $ 19.59 | $ 16.43 | $ 8.89 | |
Stock Options | ||||||
Number Of Options [Roll Forward] | ||||||
Outstanding at July 31, 2013 (in shares) | 19,082,000 | 19,082,000 | ||||
Grants of options (in shares) | 2,891,000 | |||||
Exercise of stock options, net of repurchased shares (in shares) | (749,000) | |||||
Forfeitures or expirations (in shares) | (213,000) | |||||
Outstanding at July 31, 2014 (in shares) | 21,011,000 | 21,011,000 | ||||
Exercisable at July 31, 2014 (in shares) | 14,396,000 | 14,396,000 | ||||
Vested and expected to vest at July 31, 2014 (in shares) | 20,542,000 | 20,542,000 | ||||
Weighted Average Exercise Price [Roll Forward] | ||||||
Outstanding at July 31, 2013 (in dollars per share) | $ 21.64 | $ 21.64 | ||||
Grants of options (in dollars per share) | 35.95 | |||||
Exercises (in dollars per share) | 17.11 | |||||
Forfeitures or expirations (in dollars per share) | 33.40 | |||||
Outstanding at July 31, 2014 (in dollars per share) | $ 23.65 | 23.65 | ||||
Exercisable at July 31, 2015 (in dollars per share) | 18.38 | 18.38 | ||||
Vested and expected to vest at July 31, 2014 (in dollars per share) | $ 23.39 | $ 23.39 | ||||
Weighted-Average Remaining Contractual Term [Roll Forward] | ||||||
Outstanding at July 31, 2014 | 6 years 4 days | |||||
Outstanding at July 31, 2015 | 5 years 9 months 11 days | |||||
Exercisable at July 31, 2015 | 4 years 4 months 13 days | |||||
Vested and expected to vest at July 31, 2014 | 5 years 8 months 19 days | |||||
Aggregate Intrinsic Value [Roll Forward] | ||||||
Outstanding at July 31, 2014 | $ 235,734 | $ 235,734 | ||||
Outstanding at July 31, 2015 | $ 261,339 | 261,339 | ||||
Exercisable at July 31, 2015 | 254,158 | 254,158 | ||||
Vested and expected to vest at July 31, 2015 | $ 260,845 | $ 260,845 |
Stockholder's Equity (Details 4
Stockholder's Equity (Details 4) - Jul. 31, 2015 - Stock Options - $ / shares | Total |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number Outstanding at July 31, 2015 (in shares) | 21,011,000 |
Weighted-Average Remaining Contractual Life | 5 years 9 months 11 days |
Weighted- Average Exercise Price, Options Outstanding | $ 23.65 |
Number Exercisable at July 31, 2015 (in shares) | 14,396,000 |
Weighted-Average Exercise Price, Options Exercisable | $ 18.38 |
$12.02–$17.20 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price lower range | 12.02 |
Exercise price upper range | $ 17.20 |
Number Outstanding at July 31, 2015 (in shares) | 10,484,000 |
Weighted-Average Remaining Contractual Life | 3 years 7 months 10 days |
Weighted- Average Exercise Price, Options Outstanding | $ 15.42 |
Number Exercisable at July 31, 2015 (in shares) | 10,464,000 |
Weighted-Average Exercise Price, Options Exercisable | $ 15.42 |
$17.32–$21.05 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price lower range | 17.32 |
Exercise price upper range | $ 21.05 |
Number Outstanding at July 31, 2015 (in shares) | 2,122,000 |
Weighted-Average Remaining Contractual Life | 4 years 10 months 24 days |
Weighted- Average Exercise Price, Options Outstanding | $ 19.83 |
Number Exercisable at July 31, 2015 (in shares) | 1,942,000 |
Weighted-Average Exercise Price, Options Exercisable | $ 19.76 |
$22.47–$35.45 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price lower range | 22.47 |
Exercise price upper range | $ 35.45 |
Number Outstanding at July 31, 2015 (in shares) | 2,503,000 |
Weighted-Average Remaining Contractual Life | 8 years 11 months 12 days |
Weighted- Average Exercise Price, Options Outstanding | $ 32.29 |
Number Exercisable at July 31, 2015 (in shares) | 594,000 |
Weighted-Average Exercise Price, Options Exercisable | $ 25.21 |
$35.62–$37.22 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price lower range | 35.62 |
Exercise price upper range | $ 37.22 |
Number Outstanding at July 31, 2015 (in shares) | 5,902,000 |
Weighted-Average Remaining Contractual Life | 8 years 7 months 10 days |
Weighted- Average Exercise Price, Options Outstanding | $ 35.99 |
Number Exercisable at July 31, 2015 (in shares) | 1,396,000 |
Weighted-Average Exercise Price, Options Exercisable | $ 35.71 |
Stockholder's Equity (Details T
Stockholder's Equity (Details Textuals) - $ / shares | Jul. 31, 2015 | Jul. 31, 2014 |
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares outstanding | 120,156,340 | 126,143,366 |
Common stock, reserved for issuance of stock options | 22,682,820 | 23,472,855 |
Common stock, shares issued | 120,156,340 | 126,143,366 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Employee Stock Purchase Plan (ESPP) | ||
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Common stock, reserved for issuance of stock options | 1,097,943 | 1,158,921 |
Stockholder's Equity (Details69
Stockholder's Equity (Details Textuals 1) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 46 Months Ended | ||||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2015 | Jul. 09, 2015 | Sep. 22, 2011 | |
Stock Repurchase [Abstract] | ||||||
Additional common stock authorized for repurchase (in shares) | 40,000,000 | |||||
Common stock authorized for repurchase (in shares) | 98,000,000 | |||||
Company repurchased common stock (in shares) | 231,500 | 500,000 | 50,518,282 | |||
Stock repurchase price per share (in dollars per share) | $ 36.02 | $ 27.77 | $ 36.02 | |||
Company repurchased common stock | $ 8.3 | $ 13.9 | ||||
Shares remaining available for repurchase | 47,481,718 | 47,481,718 | ||||
Number of shares accepted for purchase under tender offer | 13,888,888 | |||||
Purchase of common shares from tender offer | 6,254,061 | |||||
Common shares purchased under tender offer, value | $ 225.1 | |||||
Remittance to taxing authorities under statutory withholding in fiscal year 2013, 2012 and 2011 | $ 3.8 | $ 0.1 | $ 0.6 | |||
Maximum | ||||||
Stock Repurchase [Abstract] | ||||||
Tender price to purchase common shares | $ 36 | |||||
Minimum | ||||||
Stock Repurchase [Abstract] | ||||||
Tender price to purchase common shares | $ 34.75 |
Stockholder's Equity (Details70
Stockholder's Equity (Details Textuals 2) - USD ($) | 12 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | Dec. 31, 2007 | |
Employee Stock Purchase Plan (ESPP) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock authorized to purchase | 5,000,000 | |||
Discount from market price | 15.00% | |||
Offering period | 6 months | |||
Maximum percentage of salary withheld for employee contribution | up to 10% | |||
Compensation contribution limit in percentage | may not exceed 15 | |||
Number of shares of common stock issued pursuant to the ESPP | 101,015 | 81,967 | 84,761 | |
Common stock have been issued pursuant to the ESPP | 3,942,094 | |||
Shares were available for future grant under the Plan (in shares) | 1,097,943 | |||
Maximum annual contributions per employee, percent | 10.00% | |||
Share-based compensation arrangement by share-based payment award, maximum employee contribution permitted value | $ 25,000 | |||
Maximum annual contributions per employee, conditional percent | 15.00% | |||
2007 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock authorized to purchase | 8,000,000 | |||
Shares were available for future grant under the Plan (in shares) | 1,671,530 |
Stockholder's Equity (Details71
Stockholder's Equity (Details Textuals 3) - USD ($) $ / shares in Units, $ in Millions | Apr. 14, 2009 | Oct. 31, 2013 | Apr. 30, 2009 | Dec. 31, 2007 | Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | Oct. 31, 2014 |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||||
Vesting term of second group of options | 4 years | 4 years | ||||||
Equity Incentive 2007 Plan | ||||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||||
Maximum vesting term for incentive and non-qualified stock options determined by board of directors | 10 years | |||||||
Share-based compensation arrangement by share-based payment award, award requisite service period | 5 years | |||||||
April 2009 Grants | ||||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||||
Nonqualified stock options to purchase shares, exercise price | $ 15.11 | |||||||
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 | |||||||
Percentage of total aggregate options vested on April 14, 2010 | 20.00% | |||||||
Deferred compensation arrangement with individual - maximum contractual term | Each option became fully vested due to continued service on April 14, 2014, the fifth anniversary of the date of grant. | |||||||
Total compensation expense to be recognized per grant | $ 26.1 | |||||||
Recognized compensation expense | $ 0 | $ 7.2 | $ 10.2 | |||||
October 2013 Grants | ||||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||||
Nonqualified stock options to purchase shares, exercise price | $ 35.62 | |||||||
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 | |||||||
Percentage of total aggregate options vested on April 14, 2010 | 20.00% | |||||||
Deferred compensation arrangement with individual - maximum contractual term | Each option will become fully vested, assuming continued service, on April 15, 2019 and December 16, 2018, respectively. | |||||||
Total compensation expense to be recognized per grant | $ 40 | |||||||
Recognized compensation expense | $ 7.5 | $ 4.7 | ||||||
Percentage of stock options which would get immediately vested on termination of executive | 100.00% | |||||||
Percentage of stock options which would get immediately vested on change of control | 100.00% | |||||||
Fair value of each option of grant | $ 11.43 | |||||||
Willis J. Johnson | April 2009 Grants | ||||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||||
Nonqualified stock options to purchase shares | 4,000,000 | |||||||
A. Jayson Adair | April 2009 Grants | ||||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||||
Nonqualified stock options to purchase shares | 4,000,000 | |||||||
A. Jayson Adair | October 2013 Grants | ||||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||||
Nonqualified stock options to purchase shares | 2,000,000 | |||||||
Vincent W. Mitz | October 2013 Grants | ||||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||||
Nonqualified stock options to purchase shares | 1,500,000 |
Stockholder's Equity (Details72
Stockholder's Equity (Details Textuals 4) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Equity [Abstract] | |||
Aggregate intrinsic value of options exercised | $ 13.4 | $ 10.5 | $ 25.4 |
Unrecognized total compensation cost related to non-vested stock-based awards | $ 60.9 | ||
Amortized cost on a straight-line basis over a weighted average term | 3 years 9 months 11 days | ||
Fair value of options vested | $ 19.5 | $ 15 | $ 22.9 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Jul. 31, 2015 | [1] | Apr. 30, 2015 | [1] | Jan. 31, 2015 | [1] | Oct. 31, 2014 | [1] | Jul. 31, 2014 | [1] | Apr. 30, 2014 | [1] | Jan. 31, 2014 | [1] | Oct. 31, 2013 | [1] | Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Income From Continuing Operations Before Taxes [Abstract] | |||||||||||||||||||
US | $ 286,169 | $ 218,450 | $ 236,118 | ||||||||||||||||
Non-U.S. | 45,900 | 51,585 | 40,754 | ||||||||||||||||
Income before income taxes | $ 81,446 | $ 88,296 | $ 80,104 | $ 82,223 | $ 73,884 | $ 61,318 | $ 70,588 | $ 64,245 | $ 332,069 | $ 270,035 | $ 276,872 | ||||||||
[1] | Earnings per share were computed independently for each of the periods presented; therefore, the sum of the earnings per share amounts for the quarters may not equal the total for the year. |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Federal: | |||
Current | $ 95,468 | $ 90,207 | $ 87,484 |
Deferred | 5,841 | (9,589) | (1,073) |
Federal Income Tax Expense (Benefit), Continuing Operations | 101,309 | 80,618 | 86,411 |
State: | |||
Current | 1,160 | 1,912 | 3,871 |
Deferred | (86) | (279) | 66 |
State and Local Income Tax Expense (Benefit), Continuing Operations | 1,074 | 1,633 | 3,937 |
Foreign: | |||
Current | 11,062 | 10,077 | 9,090 |
Deferred | (1,159) | (980) | (2,591) |
Foreign Income Tax Expense (Benefit), Continuing Operations | 9,903 | 9,097 | 6,499 |
Income tax expense (benefit), total | $ 112,286 | $ 91,348 | $ 96,847 |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal income tax benefit | 1.10% | 1.10% | 1.10% |
Foreign rate differential | (1.90%) | (2.10%) | (1.80%) |
Compensation and fringe benefits | 0.10% | 0.10% | 0.10% |
Other differences | (0.50%) | (0.30%) | 0.60% |
Effective tax rate | 33.80% | 33.80% | 35.00% |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Jul. 31, 2015 | Jul. 31, 2014 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 992 | $ 1,209 |
Accrued compensation and benefits | 40,391 | 36,780 |
State taxes | 577 | 416 |
Accrued other | 3,967 | 2,962 |
Deferred revenue | 798 | 1,301 |
Property and equipment | 16,957 | 18,627 |
Losses carried forward | 4,362 | 4,312 |
Federal tax benefit | 7,832 | 10,457 |
Total gross deferred tax assets | 75,876 | 76,064 |
Less valuation allowance | (2,650) | (2,210) |
Net deferred tax assets | 73,226 | 73,854 |
Deferred tax liabilities: | ||
Vehicle pooling costs | (7,749) | (7,420) |
Prepaid insurance | (890) | (1,950) |
Intangibles and goodwill | (37,673) | (33,332) |
Total gross deferred tax liabilities | (46,312) | (42,702) |
Net deferred tax assets | $ 26,914 | $ 31,152 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | Jul. 31, 2015 | Jul. 31, 2014 |
Schedule Of Deferred Tax Assets (Liabilities) [Line Items] | ||
Net deferred tax assets | $ 26,914 | $ 31,152 |
North America | ||
Schedule Of Deferred Tax Assets (Liabilities) [Line Items] | ||
North America current assets | 3,396 | 1,803 |
North America non-current assets | 28,856 | 36,639 |
Foreign | ||
Schedule Of Deferred Tax Assets (Liabilities) [Line Items] | ||
Foreign non-current liabilities | $ (5,338) | $ (7,290) |
Income Taxes (Details 5)
Income Taxes (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance as of August 1 | $ 18,419 | $ 17,178 | $ 16,946 |
Increases related to current year tax positions | 3,441 | 1,805 | 1,844 |
Prior year tax positions: | |||
Prior year increase | 599 | 2,997 | 1,474 |
Prior year decrease | 0 | (523) | 0 |
Cash settlement | (225) | 0 | 0 |
Lapse of statute of limitations | (4,806) | (3,038) | (3,086) |
Balance at July 31 | $ 17,428 | $ 18,419 | $ 17,178 |
Income Taxes (Details Textuals)
Income Taxes (Details Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $ 2,650 | $ 2,210 | |
Unrecognized tax benefits that would impact effective tax rate | 17,400 | 18,400 | |
Interest and penalties related to income tax | 3,800 | 5,400 | $ 5,900 |
Income tax benefit realized from stock-based payment compensation | 2,971 | $ 2,289 | $ 6,097 |
Retained earnings, undistributed earnings from equity method investees | $ 134,000 |
Net Income Per Share (Details)
Net Income Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Earnings Per Share [Abstract] | |||
Weighted average common shares outstanding | 125,914 | 125,693 | 124,912 |
Effect of dilutive securities — stock options | 5,511 | 5,537 | 4,869 |
Weighted average common and dilutive potential common shares outstanding | 131,425 | 131,230 | 129,781 |
Net Income Per Share (Details T
Net Income Per Share (Details Textuals) - shares | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Earnings Per Share [Abstract] | |||
Stock options excluded from the calculation of dilutive earnings per share | 5,905,374 | 3,684,735 | 298,408 |
Segments and Other Geographic82
Segments and Other Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Jul. 31, 2015 | [1] | Apr. 30, 2015 | [1] | Jan. 31, 2015 | [1] | Oct. 31, 2014 | [1] | Jul. 31, 2014 | [1] | Apr. 30, 2014 | [1] | Jan. 31, 2014 | [1] | Oct. 31, 2013 | [1] | Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||||||
Revenues | $ 282,293 | $ 297,142 | $ 276,258 | $ 290,386 | $ 287,450 | $ 309,722 | $ 286,434 | $ 279,883 | $ 1,146,079 | $ 1,163,489 | $ 1,046,386 | ||||||||
Other | |||||||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||||||
Revenues | 21,813 | 24,244 | 11,170 | ||||||||||||||||
International | |||||||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||||||
Revenues | 243,199 | 269,915 | 228,945 | ||||||||||||||||
Operating segments | North America | |||||||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||||||
Revenues | 914,443 | 904,000 | 826,030 | ||||||||||||||||
Operating segments | United Kingdom | |||||||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||||||
Revenues | $ 209,823 | $ 235,245 | $ 209,186 | ||||||||||||||||
[1] | Earnings per share were computed independently for each of the periods presented; therefore, the sum of the earnings per share amounts for the quarters may not equal the total for the year. |
Segments and Other Geographic83
Segments and Other Geographic Information (Details 1) - USD ($) $ in Thousands | Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 |
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Total long-lived assets | $ 746,823 | $ 748,770 | $ 712,743 |
Other | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Total long-lived assets | 47,174 | 57,743 | 44,219 |
International | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Total long-lived assets | 171,396 | 204,076 | 151,179 |
Operating segments | North America | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Total long-lived assets | 580,691 | 551,182 | 565,590 |
Operating segments | United Kingdom | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Total long-lived assets | $ 118,958 | $ 139,845 | $ 102,934 |
Segments and Other Geographic84
Segments and Other Geographic Information (Details Textuals) | 12 Months Ended |
Jul. 31, 2015Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segment | 1 |
Commitments and Contingencies85
Commitments and Contingencies (Details) $ in Thousands | Jul. 31, 2015USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,016 | $ 22,311 |
2,017 | 19,734 |
2,018 | 17,431 |
2,019 | 14,113 |
2,020 | 10,895 |
Thereafter | 71,885 |
Subtotal | 156,369 |
Less Amount Representing Interest | 0 |
Total | 156,369 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,016 | 1,312 |
2,017 | 37 |
2,018 | 3 |
2,019 | 0 |
2,020 | 0 |
Thereafter | 0 |
Subtotal | 1,352 |
Less Amount Representing Interest | (28) |
Total | $ 1,324 |
Commitments and Contingencies86
Commitments and Contingencies (Details Textuals) - USD ($) $ in Millions | Aug. 04, 2015 | Jun. 22, 2015 | Jun. 05, 2015 | Jun. 04, 2015 | Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 |
Major Operating and Capital Expenses [Abstract] | |||||||
Outstanding letter of credit | $ 17.5 | ||||||
Facilities Rental Expense | |||||||
Major Operating and Capital Expenses [Abstract] | |||||||
Rental expense | 21.7 | $ 26.4 | $ 20.6 | ||||
Yard Operations Equipment Rental Expense | |||||||
Major Operating and Capital Expenses [Abstract] | |||||||
Rental expense | $ 3.6 | $ 3 | $ 2.8 | ||||
Georgia Department of Revenue | Insurance-related Assessments | |||||||
Major Operating and Capital Expenses [Abstract] | |||||||
Sales tax liability contingency | $ 100 | $ 2.7 | $ 73.8 | ||||
Subsequent Event | Georgia Department of Revenue | Insurance-related Assessments | |||||||
Major Operating and Capital Expenses [Abstract] | |||||||
Sales tax liability contingency | $ 96.1 |
Related Party Transactions (Det
Related Party Transactions (Details Textuals) $ in Millions | 12 Months Ended | ||
Jul. 31, 2015USD ($)property | Jul. 31, 2014USD ($) | Jul. 31, 2013USD ($)Derivative | |
Board of Directors and Officers | |||
Related Party Transactions, By Related Party [Abstract] | |||
Rental payments | $ 0.8 | $ 1.4 | $ 0.4 |
Executive Officer | |||
Related Party Transactions, By Related Party [Abstract] | |||
Related party transaction number of property purchased | 3 | 1 | |
Related party property purchased amount | $ 11.9 | $ 1.8 | $ 1.1 |
Employee Benefit Plan (Details
Employee Benefit Plan (Details Textuals) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
U.S. 401(k) Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, contributions by employer, percentage | 20.00% | ||
Maximum employer contribution on employees salary deferral | 15.00% | ||
Recognized deferred compensation expenses | $ 0.8 | $ 0.8 | $ 0.5 |
U.K. Defined Contribution Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, contributions by employer, percentage | 5.00% | ||
Recognized deferred compensation expenses | $ 0.7 | $ 0.6 | $ 0.2 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
General and administrative expense | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring-related costs | $ 565 | $ 5,089 | $ 1,737 |
Yard operations | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring-related costs | 25 | (28) | 189 |
Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring-related costs | 590 | 4,598 | |
Severance | General and administrative expense | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring-related costs | 310 | 4,598 | 978 |
Relocation | General and administrative expense | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring-related costs | 255 | 491 | 759 |
Relocation | Yard operations | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring-related costs | 25 | (28) | 189 |
Impairment | Yard operations | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring-related costs | $ 0 | $ 0 | $ 0 |
Restructuring (Details 1)
Restructuring (Details 1) - Severance - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | $ 1,898 | $ 2,224 |
Expense | 590 | 4,598 |
Payments | (1,538) | (4,924) |
Ending Balance | $ 950 | $ 1,898 |
Restructuring (Detail Textuals)
Restructuring (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Additional depreciation expense | $ 34.9 | $ 37 | $ 42 |
Data Centers | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 60 months | ||
Service Life | Data Centers | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 45 months | ||
Additional depreciation expense | $ 2.8 | $ 7 |
Quarterly Information (Unaudite
Quarterly Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 | ||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||
Total revenue | $ 282,293 | [1] | $ 297,142 | [1] | $ 276,258 | [1] | $ 290,386 | [1] | $ 287,450 | [1] | $ 309,722 | [1] | $ 286,434 | [1] | $ 279,883 | [1] | $ 1,146,079 | $ 1,163,489 | $ 1,046,386 | |
Gross margin | [1] | 118,784 | 127,417 | 114,867 | 122,308 | 116,939 | 132,252 | 111,546 | 107,836 | |||||||||||
Operating income | 86,765 | [1] | 94,767 | [1] | 80,468 | [1] | 82,401 | [1] | 75,858 | [1] | 62,633 | [1] | 71,484 | [1] | 64,959 | [1] | 344,401 | 274,934 | 282,992 | |
Income before income taxes | 81,446 | [1] | 88,296 | [1] | 80,104 | [1] | 82,223 | [1] | 73,884 | [1] | 61,318 | [1] | 70,588 | [1] | 64,245 | [1] | 332,069 | 270,035 | 276,872 | |
Net income | $ 57,412 | [1] | $ 57,563 | [1] | $ 52,193 | [1] | $ 52,615 | [1] | $ 51,043 | [1] | $ 40,877 | [1] | $ 45,345 | [1] | $ 41,422 | [1] | $ 219,783 | $ 178,687 | $ 180,025 | |
Basic net income per share (in dollars per share) | $ 0.46 | [1] | $ 0.46 | [1] | $ 0.41 | [1] | $ 0.42 | [1] | $ 0.41 | [1] | $ 0.32 | [1] | $ 0.36 | [1] | $ 0.33 | [1] | $ 1.75 | $ 1.42 | $ 1.44 | |
Diluted net income per share (in dollars per share) | $ 0.44 | [1] | $ 0.44 | [1] | $ 0.40 | [1] | $ 0.40 | [1] | $ 0.39 | [1] | $ 0.31 | [1] | $ 0.35 | [1] | $ 0.32 | [1] | $ 1.67 | $ 1.36 | $ 1.39 | |
[1] | Earnings per share were computed independently for each of the periods presented; therefore, the sum of the earnings per share amounts for the quarters may not equal the total for the year. |