Copart(CPRT) - 2024 Q4 - Annual Report

Financial Performance - Service revenues for fiscal 2024 increased by $362.9 million, or 11.3$284.5 million increase in the U.S. and a $78.4 million increase internationally[165]. - Total vehicle sales for fiscal 2024 increased by$4.4 million, or 0.7%, compared to fiscal 2023, with a decrease of $9.4 million in the U.S. offset by an increase of$13.8 million internationally[166]. - Operating income for fiscal 2024 was 37% of total revenues, down from 39% in fiscal 2023[163]. - Total operating expenses for fiscal 2024 increased to 63% of total revenues, compared to 61% in both fiscal 2023 and 2022[163]. - Net income for fiscal 2024 was 32% of total revenues, a decrease from 34% in fiscal 2023[163]. - International service revenues grew by 22.0% in fiscal 2024 compared to fiscal 2023, reaching $434.9 million[164]. - U.S. service revenues increased by 10.0$3,126.1 million[164]. - Vehicle sales totaled $675.8 million in fiscal 2024, slightly up from$671.4 million in fiscal 2023, indicating a growth of 0.6%[198]. Operational Developments - The company processed 81%, 83%, and 80% of total vehicles from insurance company sellers in fiscal years 2024, 2023, and 2022 respectively[147]. - The average age of cars on the road increased from 11.1 years in 2012 to 12.6 years in 2024, indicating a growing market for salvage vehicles[151]. - The company acquired a controlling interest in Purple Wave, an online offsite heavy equipment auction company, in October 2023[161]. - The company plans to expand its operations by acquiring and developing additional vehicle storage facilities in key markets, including foreign markets[162]. - The company aims to increase service offerings and pursue global, national, and regional vehicle seller agreements to boost revenues and profitability[162]. - The company operates in multiple countries including the U.S., U.K., Germany, Brazil, and Canada, providing a wide geographic service area[144]. Revenue and Cost Analysis - The company’s revenue is influenced by factors such as total loss frequency, average vehicle auction selling price, and used car pricing[151]. - The company’s auction and auction-related service revenues are recognized at the time of auction based on fees charged, not the gross vehicle selling price[150]. - Yard operations expenses for fiscal 2024 increased by $192.1 million, or 12.7$148.2 million[167]. - Cost of vehicle sales for fiscal 2024 increased by $5.0 million, or 0.8$13.3 million in the U.S. and an increase of $18.3 million internationally[169]. - General and administrative expenses increased by$84.8 million, or 33.9%, in fiscal 2024 compared to fiscal 2023, primarily due to a $80.3 million increase in the U.S. and a$4.5 million increase internationally[170]. Cash Flow and Liquidity - The company’s liquidity is primarily derived from cash operating results and revolving credit commitments under its credit agreement[153]. - Cash, cash equivalents, and restricted cash increased by $556.7 million to$1.5 billion as of July 31, 2024, primarily due to cash generated from operations and stock option exercises[176]. - Working capital rose by $1,019.8 million, or 36.8$3.79 billion as of July 31, 2024, reflecting improved cash generation and timing of cash receipts[176]. - Operating cash flows increased by $108.4 million, or 7.9$1.47 billion in fiscal 2024 compared to fiscal 2023, driven by higher service and vehicle sales revenues[176]. - Net cash used in investing activities decreased by $951.9 million, or 50.3$180.5 million of the $1.5 billion in cash and equivalents was held by foreign subsidiaries, with no immediate plans for repatriation[180]. - The company did not repurchase any shares under its stock repurchase program in fiscal 2024, maintaining a total of 325,803,208 shares available for future repurchase[184]. - As of July 31, 2024, the company had$0.0 million outstanding borrowings under the Revolving Loan Facility, down from $11.0 million in the previous year[187]. Tax and Other Income - Total other income for fiscal 2024 rose by$74.8 million, or 110.4%, compared to fiscal 2023, mainly driven by higher interest income from U.S. Treasury Bills and gains on the sale of fixed assets[172]. - The effective income tax rate for fiscal 2024 was 20.5%, slightly up from 20.4% in fiscal 2023, influenced by tax adjustments and excess tax benefits from employee stock options[173]. Internal Controls and Compliance - The company's disclosure controls were effective at the reasonable assurance level as of July 31, 2024[211]. - Management assessed the effectiveness of internal control over financial reporting as of July 31, 2024, concluding that effective controls were maintained[213]. - Ernst & Young LLP issued an unqualified opinion on the company's internal control over financial reporting as of July 31, 2024[217]. - There were no changes in internal control over financial reporting during the quarter ended July 31, 2024, that materially affected the controls[214]. - The internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting[220]. - The company maintained effective internal control over financial reporting based on the COSO criteria[217]. - The evaluation of internal control effectiveness is subject to inherent limitations and may not prevent or detect misstatements[221]. Future Plans and Governance - The company plans to file a definitive proxy statement for the 2024 Annual Meeting of Stockholders within 120 days after the fiscal year-end[225]. - No directors or officers adopted or terminated any trading arrangements during the three months ended July 31, 2024[223].