Copart Inc. David Mizell 11/30/2004

Recommendation Recommendation: Hold Recommendation: Hold We currently own 1,000 shares We currently own 1,000 shares Bought at $7.82 per share on February 28, 2003 Bought at $7.82 per share on February 28, 2003 Current price of $22.44 per share Current price of $22.44 per share Cost Basis is $7,820. Cost Basis is $7,820. The market value is $22,440. The market value is $22, % increase 187% increase

Company Overview Founded in 1982, became public in 1994 Founded in 1982, became public in 1994 Provides vehicle suppliers, primarily insurance companies, with a full range of services to process and sell salvage vehicles through auctions, principally to licensed dismantlers, rebuilders and used vehicle dealers. Provides vehicle suppliers, primarily insurance companies, with a full range of services to process and sell salvage vehicles through auctions, principally to licensed dismantlers, rebuilders and used vehicle dealers. Generates revenue from auction fees paid by vehicle suppliers and buyers as well as fees for services such as towing and storage. Generates revenue from auction fees paid by vehicle suppliers and buyers as well as fees for services such as towing and storage. Operates 105 facilities in the US and Canada Operates 105 facilities in the US and Canada

Financial Performance Total revenues were: Total revenues were: - $316,455,800 in $347,423,100 in $400,796,300 in 2004 Basic net earnings per share: Basic net earnings per share: - $0.63 in $0.62 in $0.87 in 2004 Market Cap is 2.02 Billion Market Cap is 2.02 Billion P/E ratio is P/E ratio is 25.94

Copart’s Numbers Market Cap is 2.02B Market Cap is 2.02B P/E (ttm) is P/E (ttm) is EPS (ttm) is.865 EPS (ttm) is.865 Revenue (ttm) is M Revenue (ttm) is M Operating Margin (ttm) is 31.13% Operating Margin (ttm) is 31.13% Profit Margin (ttm) is 19.76% Profit Margin (ttm) is 19.76% Beta is Beta is 1.357

Stock Price Over Last 5 Years

Financial Analysis P/E Approach P/E Approach Returns a price of $22.25Returns a price of $22.25 DCF DCF Returns a price of $15.38Returns a price of $15.38 View Excel Spreadsheet View Excel Spreadsheet

Copart vs. NASDAQ

Competitor Comparison Copart Inc. Copart Inc. Market Cap:2.02BMarket Cap:2.02B Rev. Growth (ttm):15.40%Rev. Growth (ttm):15.40% Revenue (ttm):400.80MRevenue (ttm):400.80M Net Income (ttm):79.22MNet Income (ttm):79.22M EPS (ttm):0.865EPS (ttm):0.865 P/E (ttm):25.94P/E (ttm):25.94 Insurance Auto Auction Inc. Insurance Auto Auction Inc. Market Cap:256.25MMarket Cap:256.25M Rev. Growth (ttm):-10.50%Rev. Growth (ttm):-10.50% Revenue (ttm):235.14MRevenue (ttm):235.14M Net Income (ttm):10.61MNet Income (ttm):10.61M EPS (ttm):0.901EPS (ttm):0.901 P/E (ttm):24.63P/E (ttm):24.63

CPRT vs. IAAI

Porter’s Five Forces Threat of New Entrants: Low Threat of New Entrants: Low Threat of Substitutes: Low Threat of Substitutes: Low Bargaining Power of Buyers: High Bargaining Power of Buyers: High In auction format, people pay only what they want and have many choices from which to pick. The buyers in essence set the price.In auction format, people pay only what they want and have many choices from which to pick. The buyers in essence set the price. Industry Rivalry: Low Industry Rivalry: Low Bargaining Power of Suppliers: Low Bargaining Power of Suppliers: Low

Macroeconomic Review Motor Vehicle Crash Statistics Motor Vehicle Crash Statistics 6,328,000 auto accidents in 2003, up 12,000 from 20026,328,000 auto accidents in 2003, up 12,000 from 2002 Cost of auto accidents $231B in 2000Cost of auto accidents $231B in % of total cost is property damage ($60B) 26% of total cost is property damage ($60B) 50% of those costs paid by insurance companies50% of those costs paid by insurance companies Proliferation of Online Auction Systems Proliferation of Online Auction Systems EBay, Autotrader, Priceline, etc.EBay, Autotrader, Priceline, etc.

Company and Business Basics Copart’s Growth Strategy Copart’s Growth Strategy Acquiring new auto auction salvage facilities in key locationsAcquiring new auto auction salvage facilities in key locations Bought 3 sites, opened 2 more in 2004 Bought 3 sites, opened 2 more in 2004 Pursuing national and regional vehicle supply agreements with insurance companiesPursuing national and regional vehicle supply agreements with insurance companies Maximizing returns to suppliers and maximize product value to buyersMaximizing returns to suppliers and maximize product value to buyers For suppliers, real-time access to sales data online For suppliers, real-time access to sales data online For buyers, implementing VB2 bidding at all facilities For buyers, implementing VB2 bidding at all facilities

Company and Business Basics Copart’s Growth Strategy (continued) Copart’s Growth Strategy (continued) Increasing revenue and profitability at public auction facilitiesIncreasing revenue and profitability at public auction facilities Own 6 facilities just for public auto auctions Own 6 facilities just for public auto auctions Set up some online car auctions Set up some online car auctions Exploring new VB2 applications outside the auto auction industryExploring new VB2 applications outside the auto auction industry

Company and Business Basics Value-Added Services Value-Added Services Internet bidding, Internet proxy bidding and virtual sales powered by VB2Internet bidding, Internet proxy bidding and virtual sales powered by VB2 notifications to potential buyers of salvage vehicles that match desired characteristics notifications to potential buyers of salvage vehicles that match desired characteristics Ten-view digital imaging of each vehicle and the scanning of each vehicle’s title and other significant documents such as body shop invoices, all of which are available onlineTen-view digital imaging of each vehicle and the scanning of each vehicle’s title and other significant documents such as body shop invoices, all of which are available online

Company and Business Basics Value-Added Services (continued) Value-Added Services (continued) CoPartfinder- Internet-based used vehicle parts locator that provides vehicle dismantlers with resale opportunities for the salvage vehicles they purchaseCoPartfinder- Internet-based used vehicle parts locator that provides vehicle dismantlers with resale opportunities for the salvage vehicles they purchase Offsite sales that allow vehicle suppliers to sell any vehicle, boat, or heavy equipment from where it sitsOffsite sales that allow vehicle suppliers to sell any vehicle, boat, or heavy equipment from where it sits

Company and Business Basics VB2 (Virtual Bidding-2 nd generation) VB2 (Virtual Bidding-2 nd generation) What is VB2?What is VB2? VB2 is Copart’s online auto auction system VB2 is Copart’s online auto auction system As of this year, all of Copart’s auctions have been converted from live on-site to online As of this year, all of Copart’s auctions have been converted from live on-site to online Why is VB2 so important?Why is VB2 so important? Increases returns to sellers by expanding the pool of bidders to any person in the world with access to the Internet Increases returns to sellers by expanding the pool of bidders to any person in the world with access to the Internet Increases buyer convenience by eliminating the need to travel to the physical location of the auction Increases buyer convenience by eliminating the need to travel to the physical location of the auction

Company Updates Copart is expanding rapidly Copart is expanding rapidly They have added 24 auction yards since 2002.They have added 24 auction yards since Provide the most extensive vehicle services in the industry Provide the most extensive vehicle services in the industry VB2 online technology is now fully implemented, and it has greatly improved their business VB2 online technology is now fully implemented, and it has greatly improved their business Concerns Concerns This was a very low-tech company that has suddenly gone high tech very quickly.This was a very low-tech company that has suddenly gone high tech very quickly. Buyer and Website Issues Buyer and Website Issues

Summary Recommendation: Hold 1,000 shares Recommendation: Hold 1,000 shares I believe Copart will continue to lead their industry. They have a great niche, and I believe they will continue to take advantage of it. Also, they provide the best services in the industry, and their online auction system will yield great benefits for them moving forward. I believe Copart will continue to lead their industry. They have a great niche, and I believe they will continue to take advantage of it. Also, they provide the best services in the industry, and their online auction system will yield great benefits for them moving forward. Questions? Questions?