900075--9/29/2009--COPART

related topics

{cost, regulation, environmental}

{customer, product, revenue}

{gas, price, oil}

{cost, operation, labor}

{condition, economic, financial}

{stock, price, operating}

{property, intellectual, protect}

{acquisition, growth, future}

{competitive, industry, competition}

{capital, credit, financial}

{operation, international, foreign}

{tax, income, asset}

{personnel, key, retain}

{loss, insurance, financial}

{regulation, change, law}

{provision, law, control}

{product, market, service}

We depend on a limited number of major vehicle sellers for a substantial portion of our revenues. The loss of one or more of these major sellers could adversely affect our results of operations and financial condition, and an inability to increase our sources of vehicle supply could adversely affect our growth rates. If we determine that our goodwill has become impaired, we could incur significant charges that would have a material adverse affect on our results of operations. In the UK we operate primarily on a principal basis, purchasing the salvage vehicle outright from the insurance companies and reselling the vehicle to buyers. Continued operations on a principal basis will have a negative impact on our future consolidated gross margin percentages and exposes us to additional inventory risks. Our strategic shift from live sales to an entirely Internet-based sales model presents risks, including substantial technology risks. Our results of operations may not continue to benefit from the implementation of VB 2 to the extent we have experienced in recent periods. Failure to have sufficient capacity to accept additional cars at one or more of our storage facilities could adversely affect our relationships with insurance companies or other sellers of vehicles. Factors such as mild weather conditions can have an adverse effect on our revenues and operating results as well as our revenue and earnings growth rates by reducing the available supply of salvage vehicles. Conversely, extreme weather conditions can result in an oversupply of salvage vehicles that requires us to incur abnormal expenses to respond to market demands. Macroeconomic factors such as high fuel prices, declines in commodity prices, and declines in used car prices may have an adverse effect on our revenues and operating results as well as our earnings growth rates. The salvage vehicle sales industry is highly competitive and we may not be able to compete successfully. Because the growth of our business has been due in large part to acquisitions and development of new facilities, the rate of growth of our business and revenues may decline if we are not able to successfully complete acquisitions and develop new facilities. As we continue to expand our operations, our failure to manage growth could harm our business and adversely affect our results of operations and financial condition. Our annual and quarterly performance may fluctuate, causing the price of our stock to decline. Our strategic shift to an Internet-based sales model has increased the relative importance of intellectual property assets to our business, and any inability to protect those rights could have a material adverse effect on our business, financial condition, or results of operations. We have in the past been and may in the future be subject to intellectual property rights claims, which are costly to defend, could require us to pay damages, and could limit our ability to use certain technologies in the future. Government regulation of the salvage vehicle sales industry may impair our operations, increase our costs of doing business and create potential liability. Changes in laws affecting the importation of salvage vehicles may have an adverse effect on our business and financial condition. New accounting pronouncements or new interpretations of existing standards could require us to make adjustments to accounting policies that could adversely affect the financial statements. The operation of our storage facilities poses certain environmental risks, which could adversely effect our financial position, results of operations or cash flows. If we experience problems with our trucking fleet operations, our business could be harmed. We are partially self-insured for certain losses and if our estimates of the cost of future claims differ from actual trends, our results of our operations could be harmed. Our executive officers, directors and their affiliates hold a large percentage of our stock and their interests may differ from other shareholders. We have a shareholder rights plan, or poison pill, which could affect the price of our common stock and make it more difficult for a potential acquirer to purchase a large portion of our securities, to initiate a tender offer or a proxy contest, or to acquire us. If we lose key management or are unable to attract and retain the talent required for our business, we may not be able to successfully manage our business or achieve our objectives. Our cash investments are subject to numerous risks. The recent financial crisis and economic downturn may negatively affect our business, operating results, or financial condition. Fluctuations in foreign currency exchange rates could result in declines in our reported revenues and earnings. Investment in NASCAR sponsorships and other advertising could impact our operating results New buyer programs could impact our operating results

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900075--9/29/2009--COPART_INC