Copart, Inc.

Brandon HoneyMatt ByfordRob MainPresented April 16, 2009

Presentation Overview

Recommendation Company Overview Industry Overview Macroeconomic Overview Management’s Strategy for the Future Recent Company News and Financial

Results

Recommendation

Sell 200 shares at the market Keep on watch list Reconsider if the company issues

debt in the future Decreases overall cost of capital

Copart Overview

Founded in 1982 and headquartered in Fairfield, California

Operates in more than 140 facilities across the US, Canada, and the UK with 2500 employees

Provides remarketing services to process and sell vehicles over the Internet through its online auctions to vehicle suppliers - (similar to StubHub or eBay)

Services include online supplier access, salvage estimation services, end-of-life vehicle processing, virtual insured exchange, transportation services, vehicle inspection stations, on-demand reporting, and DMV processing

Offers CoPartfinder, an Internet-based used vehicle parts locator that provides vehicle dismantlers with resale opportunities for their salvage purchases

Copart Business Model

Accident totally destroys car

Insurance Co. deems car too costly to repair

Copart auctions car to buyers all around the globeand earns income from both parties

Dismantlers Exporters RebuildersUsed car dealers

SWOT AnalysisStrengths• Can acquire without issuing debt• Strong brand name as a public company• Large market share• Non-cyclical

Opportunities• Extensive supply of small competitors as buyout targets• Market domestically and globally is not saturated• Share repurchase program

Weaknesses• Does not hedge FX risk• Lack of experience operating outside of North America• Simple capital structure

Threats• Limited number of major vehicle sellers• Fuel and steel costs• Asset impairment risk UK

Industry Overview

Auto remarketing industry is relatively non-cyclical Slightly correlated with auto sales and with the

driving season Increased car purchases leads to an increase in

accidents Increase drivers on the road leads to an increase

in accidents Copart customers have increased purchases of

recycled parts to cut costs Potential of fuel prices rising back to summer 2008

highs Fewer drivers on the road will limit accidents,

which limit suppies for Copart

Market Share

Macroeconomic Conditions

Some domestic macroeconomic indicators seeming to near a bottom

Unemployment rate continues to rise towards 10%

Commodity prices (fuel) remain depressed but stable

Equity markets experiencing a bear market rally

Credit markets beginning to thaw as LIBOR creeps lower

Management’s Strategy for the Future

Continue growth by acquisition Facilities Software

Further expansion throughout Canada and UK, and into continental Europe

Considering issuing long-term debt to finance continued growth and/or repurchase shares

Planning to continue share buyback program Repurchased 6.5 million shares in 2008 Repurchased 3 million shares in 2007

Recent Company News

12/5/08 - Former Governor of Missouri Matt Blunt joins Board of Directors

2/17/09 - Reaches settlement with Auto Auction Services concerning an anti-trust suit

2/09 - Adds facilities in Alabama and South Carolina

2/09 - Signed an agreement with uShip to feature uShip as a preferred transport solution for Copart's buyers

3/5/09 - Announced $.32/share earnings on a 2.1% decrease in revenue, predominately in the UK, and an asset impairment charge

Recent Financial Results

2009 Q2 Net Income – $65.5 million Net Profit Margin – 18% EBIT Margin – 29%

2008 Net Income – $156.9 million Net Profit Margin – 18.1% EBIT Margin – 30.3%

Stock Performance

Correlation

CPRT AEE AEO DO FR JKHY KMB MCD SRCL WAG WFRCPRT 1AEE 0.0762 1AEO 0.1232 0.0722 1DO 0.237 0.2685 0.2337 1FR 0.1306 0.5116 0.0466 0.09342 1JKHY 0.4214 0.1139 0.1192 0.07586 0.2219 1KMB 0.1679 0.3298 0.0446 0.09803 0.3072 0.0889 1MCD 0.1159 0.3202 0.2327 0.21385 0.2016 0.3026 0.2989 1SRCL 0.1025 -0.014 0.1043 0.06171 0.1259 0.2524 0.1266 0.1455 1WAG 0.0323 0.1551 0.1156 -0.0118 0.137 0.1581 0.2332 0.2372 0.108 1WFR 0.1476 0.0759 0.2432 0.37791 0.0711 0.0909 -0.135 0.0908 0.1426 -0.014 1

Competitors

Auto Dealers Exchange Services of America Offers used- and salvage-vehicle redistribution services to

automakers, lessors, and dealers in the US, Canada, and Mexico. ADESA operates about 60 used-vehicle auctions and more than 40 salvage auctions

Insurance Auto Auctions, Inc. Leading US auto salvage company that auctions off cars declared

a total loss for insurance purposes; it auctions either whole vehicles or, if they can't be fixed, just the parts. IAA has about 150 auction sites throughout North America

Manheim remarkets vehicles for wholesale consignors, including car dealers

and makers, rental-car and fleet companies, and financial institutions. The company offers auction-related services, as well, such as reconditioning, wholesale inspections and certifications, and used car valuation

Comparables

Company Ticker Market Cap Trailing P/E Forward P/E Price/Sales Price/Book

COPART CPRT 2.53B 17.23 15.24 3.20 3.08

Carmax Inc. KMX 2.50B 41.23 22.63 0.36 1.56Ebay EBAY 18.37B 10.56 9.42 2.16 1.66AutoNation AN 2.78B N/A 16.90 0.20 1.26

Projections

Valuation is extremely dependent on growth rate

Copart will see higher volume Revenues will depend on the price of steel

50% of UK revenues have been related to the value of the selling price

Selling price is dependent on the price of steel

Margins will decline due to a higher % of business in the UK Copart, Inc. acts as a principal in the UK

Projections

Growth depends on: Acquisitions

Entered UK market in June 2007 Volume changes in the salvage car

market Growth in market share Fees dependent car selling prices Growth in non-insurance company

sellers

Projections

Higher Volume = More Fee Revenue More cars are declared totaled because

difference between value before accident and value after accident widens

Lower used-car pricing Auto manufacturers providing more

features in cars

Assumptions

0.00%100.00%

0.00%12.31%

1.01

4.00%

10.00%6.00%

37.00%12.31%

4.00%

β (Beta)Cost of EquityCost of DebtWeight of Equity

Tax RateWACCSustainable Growth

Weighted-Average Cost of CapitalWeight of Debt

Market Risk Premium (RPm)

Market Return (Rm)

Risk-Free Rate (Rf)

Valuation

CAPM DCF Valuation: $26.87 ROE DCF Valuation: $15.56 “Goal Post Valuation”: $19.70 Comparables Valuation: Current Price: 30.18

RCMP Historical Transactions

FEB 2003: Bought 1000 shares at $7.82 NOV 2007: Sold 300 shares at $36.20 APR 2008: Sold 300 shares at $41.30 SEP 2008: Sold 200 shares at $41.05 Current Holdings: 200 shares at $30.18

Recommendation

Sell 200 shares at the market Keep on watch list Reconsider if the company issues

debt in the future Decreases overall cost of capital