About Copart Inc

Copart, Inc. operates as a global provider of online auctions and vehicle remarketing services with operations in the United States (U.S.), Canada, the United Kingdom (U.K.), Brazil, the Republic of Ireland, Germany, Finland, the United Arab Emirates (U.A.E.), Oman, Bahrain, and Spain. Many of the cars the company processes and remarkets are subsequently restored to driveable condition, reducing the new vehicle manufacturing burden the world would otherwise face. Many of the company’s cars are purchased by dismantlers, who recycle and refurbish parts for vehicle repairs, again reducing new and aftermarket parts manufacturing. The company provides vehicle sellers with a full range of services to process and sell vehicles primarily over the internet through the company’s Virtual Bidding Third Generation internet auction-style sales technology, which the company refers to as VB3. Vehicle sellers consist primarily of insurance companies, but also include banks, finance companies, charities, fleet operators, dealers, vehicle rental companies, and individuals. The company sells the vehicles principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and to the general public. The majority of the vehicles sold on behalf of insurance companies are either damaged vehicles deemed a total loss; 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 help expedite each stage of the vehicle sales process. In the U.S., Canada, Brazil, the Republic of Ireland, Finland, the U.A.E., Oman, and Bahrain, the company sells vehicles primarily as an agent and derive revenue primarily from auction and auction related sales transaction fees charged for vehicle remarketing services as well as fees for services subsequent to the auction, such as delivery and storage. In the U.K., Germany, and Spain the company operates both as an agent and on a principal basis, in some cases purchasing salvage vehicles outright and reselling the vehicles for the company’s own account. In Germany and Spain, the company also derives revenue from listing vehicles on behalf of insurance companies and insurance experts to determine the vehicle’s residual value and/or to facilitate a sale for the insured. Through the company’s VB3 auction platform, the company’s sales process is open to registered buyers (whom the company refers to as ‘members’) anywhere in the world with access to the internet. This technology and model employ a two-step bidding process. The first step is an open preliminary bidding feature that allows members to enter bids over the internet during the preview period. To improve the effectiveness of bidding, the VB3 system lets members see the current high bids on the vehicles they want to purchase. The preliminary bidding step is an open bid format similar to eBay. The company offers the highest level of service in the auction and vehicle remarketing industry and have established the company’s leading market position by providing coverage that facilitates seller access to buyers around the world, reducing towing and third-party storage expenses, offering a local presence for vehicle inspection stations, and providing prompt response to catastrophes and natural disasters by specially trained teams; providing a comprehensive range of services that includes merchandising, efficient title processing, timely pick-up and delivery of vehicles, and internet sales; establishing and efficiently integrating new facilities and acquisitions; increasing the number of bidders that can participate at each sale through the ease and convenience of internet bidding; and applying technology to enhance operating efficiency through internet bidding, web-based order processing, salvage value quotes, electronic communication with members and sellers, and vehicle imaging. The company’s service revenue consists of auction and auction related sales transaction fees charged for vehicle remarketing services. The company has certain contracts with insurance companies, primarily in the U.K., in which the company acts as a principal, purchasing vehicles and reselling them for the company’s own account. The company also purchases vehicles in the open market, primarily from individuals, and resell them for the company’s own account. Operating and Growth Strategy The company’s growth strategy is to increase revenues and profitability by, among other things, acquiring and developing additional vehicle storage facilities in key markets, including foreign markets; pursuing global, national, and regional vehicle seller agreements; increasing the company’s service offerings; and expanding the application of VB3 into new markets. To implement the company’s growth strategy, the company intends to continue to acquire and develop new vehicle storage facilities in key markets including foreign markets; pursue global, national, and regional vehicle supply agreements; and expand the company’s service offerings to sellers and members. Service Offerings The company offers vehicle sellers a full range of vehicle services, which expedite each stage of the vehicle sales process, helping to maximize proceeds and minimize costs. Not all service offerings are available in all markets. Additionally, in some cases a service offering may be applicable only to a particular subsidiary or operating segment. The company’s service offerings include the following: Online Seller Access Through Copart Access, the company’s internet-based service for vehicle sellers, the company enables sellers to assign vehicles for sale, check sales calendars, view vehicle images and history, view and reprint body shop invoices and towing receipts, and view the historical performance of the vehicles sold at the company’s sales. Salvage Estimation Services The company offers Copart ProQuote, a proprietary service that assists sellers in the vehicle claims evaluation process by providing online salvage value estimates, which helps sellers determine whether to repair a vehicle or deem it a total loss. IntelliSeller The company offers IntelliSeller, an automated tool leveraging the company’s vast and detailed vehicle and sales data to assist the company’s sellers in making vital auction decisions. Using machine learning, IntelliSeller optimizes the utilization of the company’s vehicle and sales data to determine when to establish minimum bid values and suggest when to re-auction a unit to ensure optimal returns while minimizing cycle time. Estimating Services The company offers vehicle sellers in the U.K. estimating services for vehicles taken to the company’s facilities. Estimating services provide the company’s insurance company sellers repair estimates which allow the insurance company to determine if the vehicle is a total loss vehicle. If the vehicle is determined to be a total loss, it is generally assigned to the company to sell. End-of-Life Vehicle Processing In the U.K., the company is an authorized treatment facility for the disposal of end-of-life vehicles. Transportation Services In the U.S. segment, the company performs transportation services through a combination of third-party vehicle transport companies and the company’s fleet. The company maintains contracts with third-party vehicle transport companies, which enable the company to pick up most of its sellers’ vehicles within 24 hours. The company’s national network and transportation capabilities provide cost and time savings to the company’s vehicle sellers and offer timely vehicle pick up and prompt response to catastrophes and natural disasters in the U.S. and Canada. In the International segment, the company performs transportation services through a combination of its fleet and third-party vehicle transport companies. The company’s international network and transportation capabilities provide cost and time savings to the company’s vehicle sellers throughout Europe, Brazil, and Middle east market. Vehicle Inspection Stations The company offers some of its’s major insurance company sellers office and yard space to house vehicle inspection stations on-site at the company’s facilities. The company has over 100 vehicle inspection stations at the company’s facilities. An on-site vehicle inspection station provides the company’s insurance company sellers with a central location to inspect potential total loss vehicles, which reduces storage charges that otherwise may be incurred at the initial storage or repair facility. On-Demand Reporting The company provides vehicle sellers with real time data for vehicles that the company processes for the seller. This includes vehicle sellers’ gross and net returns on each vehicle, service charges, and other data that enable the company’s vehicle sellers to more easily administer and monitor the vehicle disposition process. In addition, the company has developed a database containing over 300 fields of real-time and historical information accessible by the company’s sellers allowing for their generation of custom ad hoc reports and customer specific analysis. Title Processing and Procurement The company has extensive expertise in DMV document and title processing. The company has developed a computer system which provides a direct link to the DMV computer systems of multiple states, allowing the company to expedite the processing of vehicle title paperwork. The company also facilitates the title transfer from the original owner or financial institutions on behalf of some of the company’s sellers to streamline the documentation and vehicle auction process. Loan Payoff The company can obtain up-to-date loan payoff information electronically from hundreds of automotive lenders, including the remaining balance due and per diem on a vehicle loan, to expedite the loan payoff and title transfer process. Flexible Vehicle Processing Programs At the election of the seller, the company sells vehicles pursuant to its Percentage Incentive Program (‘PIP’), Consignment Program, or Purchase Program. Under each program the company may provide merchandising services such as covering or taping openings to protect vehicle interiors from weather, washing vehicle exteriors, vacuuming vehicle interiors, cleaning and polishing dashboards and tires, making keys for driveable vehicles, and identifying driveable vehicles. Percentage Incentive Program. Under PIP, the company agrees to sell all of the vehicles of a seller in a specified market, usually for a predetermined percentage of the vehicle sales price. Because the company’s revenues under PIP are directly linked to the vehicle’s sale price, the company has an incentive to actively merchandise those vehicles to maximize the net return. The company provides the vehicle seller with transportation of the vehicle to the company’s nearest facility. Consignment Program. Under the company’s Consignment Program, the company sells vehicles for a fixed consignment fee. Although sometimes included in the consignment fee, the company may also charge additional fees for the cost of transporting the vehicle to the company’s nearest facility, storage of the vehicle, and other incidental costs. Purchase Program. Under the Purchase Program, the company purchases vehicles from a vehicle seller at a formula price, based on a percentage of the vehicles’ estimated PAV, and sell the vehicles for the company’s own account. The purchase program is offered primarily in the U.K. Buy It Now, Make An Offer The company offers an option to its members to purchase specific pre-qualified vehicles immediately at a set price before the live auction process. This enables the company to provide a fast, easy, transparent and comprehensive buying option on these pre-qualified vehicles. Additionally, members have the option of submitting an offer amount on certain selected vehicles. If an offer is accepted, the member can purchase the vehicle before the live auction process. Member Network The company maintains a database of thousands of registered members (‘buyers’) in the vehicle dismantling and recycling, rebuilding, used vehicle dealer and export industries, as well as members that are a part of the general public, where applicable. The company’s database includes each member’s vehicle preference and purchasing history. This data enables the company to notify prospective buyers throughout the world via email of vehicles available for bidding that match their vehicle preferences. Listings of vehicles to be sold on a day and location are also made available on the internet. Sales Process The company offers a flexible and unique sales process designed to maximize the sale prices of the vehicles utilizing VB3. VB3 opens the company’s sales process to members and the general public to view auctions via the company’s website and its mobile application anywhere in the world where internet access is available. The VB3 technology and model employs a two-step bidding process. The first step is an open preliminary bidding feature that allows a member to enter bids either over the internet or at a bidding station at the storage facility during the preview days. To improve the effectiveness of bidding, the VB3 system lets a member see the current high bid on the vehicle they want to purchase. The preliminary bidding step is an open bid format similar to eBay. Members enter the maximum price they are willing to pay for a vehicle and VB3’s BID4U feature will incrementally bid the vehicle on their behalf during all steps of the auction. Preliminary bidding ends at a specified time prior to the start of a second bidding step, an internet-only virtual auction. This second step allows bidders the opportunity to bid against each other and the highest preliminary bidder. The bidders enter bids via the internet in real time, and then BID4U submits bids for the highest preliminary bidder, up to their maximum bid. When bidding stops, a countdown is initiated. If no bids are received during the countdown or any extensions, the vehicle sells to the highest bidder. Copart Dealer Services The company provides franchise and independent dealers with a convenient method to sell their trade-ins through any of the company’s facilities. The company has a dedicated group of employees in the U.S. that target these dealers and work with them throughout the sales process. Cash For Cars The company provides the general public with a fast and convenient method to sell their vehicles. Anyone can go to CashForCars.com; CashForCars.ca; CashForCars.de, CashForCars.co.uk, or Cash-for-cars.ie and arrange to obtain a valid offer to purchase their vehicle. Upon acceptance of the company’s offer to purchase their vehicle, the company provides them payment for their vehicle and then sell the vehicle on the company’s own behalf. National Powersport Auctions In the U.S., the company provides non-salvage powersport vehicle remarketing services through live and online auction platforms to dealers, financial institutions and OEMs through the company’s subsidiary National Powersport Auctions, or NPA. NPA also offers comprehensive data services including the NPA Value Guide, which is the industry’s most accurate wholesale valuation tool. NPA has facilities in San Diego, California; Philadelphia, Pennsylvania; Dallas, Texas; Cincinnati, Ohio; Atlanta, Georgia; Littleton, Colorado; Madison, Wisconsin; Portland, Oregon; Sacramento, California; and Orlando, Florida. Copart Recycling In the U.K., the company has six facilities from which the public can purchase parts from salvaged and end-of-life vehicles. In general, the buyer is responsible for detaching the parts from the vehicle and any associated hauling or transportation of the parts after detachment. After the valuable parts have been removed by the buyer, the remaining parts and car body are sold for their scrap value. Copart 360 The company pioneered posting vehicle images online for buyers in 2001, and the company has been improving the technology to provide top quality photos since then. In July 2020, the company enhanced online images and videos by launching Copart 360 (‘C360’), the company’s proprietary technology that captures clear 360-degree views of interiors and exteriors of cars, trucks, and vans across U.S. Copart locations. This capability was expanded out to the U.K. in 2021. Interested buyers can view everything from the backseat to the dashboard to the tires. Buyers can also zoom in and out or expand to full screen on computers or mobile devices. Buyers can access this feature by clicking the 360° icon under vehicle images on select lot details pages on Copart.com. Membership Tiers The company offers three tiers of membership in the U.S. - Guest, Basic, and Premier - for those registering to buy vehicles through Copart.com. Virtual Queue The Virtual Queue, available in multiple languages, secures a place in line while visiting one of the company’s locations. Whether a visitor is at a location to make a payment or preview a vehicle, the Virtual Queue lets them conveniently save their place and receive an estimated wait time, using the company’s mobile application, in the comfort of their own vehicle. The company notifies them via text message when it is their turn to speak to a customer service agent. Sales The company processes vehicles from hundreds of different vehicle sellers. The company typically contracts with the regional or branch office of an insurance company or other vehicle sellers. The agreements are customized to each vehicle seller’s needs and often provide for the disposition of different types of salvage vehicles by differing methods. The company’s arrangements generally provide that the company will sell total loss and recovered stolen vehicles generated by the vehicle seller in a designated geographic area. The company markets its services to vehicle sellers through an in-house sales force that utilizes a variety of sales techniques, including personal sales calls, internet search engines, employee referrals, tow shop referrals, and participation in trade shows and vehicle and insurance industry conventions, targeted mailing of the company’s sales literature, and telemarketing. The company markets its services to franchise and independent dealerships, as well as the general public. The company may, when appropriate, provide vehicle sellers with detailed analysis of the net return on vehicles and a proposal setting forth ways in which the company can improve net returns on vehicles and reduce administrative costs and expenses. Members The company maintains a database of thousands of registered members (‘buyers’) in the vehicle dismantling and recycling, rebuilding, used vehicle dealer and export industries, as well as members that are a part of the general public, where applicable. The company has established a broad international and domestic buyer base by providing members with a variety of programs and services. To become a registered member, a person or business must complete a basic application either online or through the company’s mobile application. Before any member may purchase a vehicle, they must provide copies of current government issued photo identification. Additionally, business members must provide current business information, including copies of licenses, which may include vehicle dismantler, dealer, resale, repair or export licenses, and as needed, completed sales tax exemption certificates. Registration entitles a member to transact business at any of the company’s sales, subject to local licensing and permitting requirements. The company may sell to the general public either directly or members may purchase a vehicle offered at Copart through a registered broker who meets local licensing and permitting requirements. Strict admission procedures are intended to prevent frivolous bids that will not result in a completed sale. The company markets to members online and via email notifications, sales notices, telemarketing, direct mail, in-location marketing, search engines, social media, radio, television, trade publications, and participation in trade show events. Intellectual Property and Proprietary Rights In 2008, the company obtained a patent issued by the United States Patent and Trademark Office that covers certain aspects of the company’s virtual bidding auction platform. Copart, BID4U, CI & Design, DRIVE Auto Auctions, 1-800 CAR BUYER, CA$HFORCARS.COM, COPART & DESIGN, VB3 & DESIGN, VB3, National Powersports Auctions, NPA, and CrashedToys.com are trademarks of the company or one of its direct or indirect wholly-owned subsidiaries. Seasonality Historically, the company’s consolidated results of operations have been subject to quarterly variations based on a variety of factors, of which the primary influence is the seasonal change in weather patterns. During the winter months the company tends to have higher demand for the company’s services because there are more weather-related accidents. History Copart, Inc. was founded in 1982. The company was incorporated in California in 1982 and reincorporated into Delaware in 2012.