RICHMOND, Va.--(BUSINESS WIRE)--Sep. 20, 2012--
CarMax, Inc. (NYSE:KMX) today reported results for the second quarter
ended August 31, 2012.
-
Net sales and operating revenues increased 7% to $2.76 billion from
$2.59 billion in the second quarter of last year.
-
Used unit sales in comparable stores increased 5% for the quarter.
-
Total used unit sales rose 8% in the second quarter.
-
Total wholesale unit sales declined 2% in the second quarter.
-
CarMax Auto Finance (CAF) income increased 19% to $75.7 million from
$63.8 million in the prior year quarter.
-
Net earnings were $111.6 million, or $0.48 per diluted share, compared
with $111.2 million, or $0.48 per diluted share, in the second quarter
of fiscal 2012.
Second Quarter Business Performance Review
“We are pleased with our improved retail sales in the second quarter, as
used unit comps strengthened and we continued to open new stores,” said
Tom Folliard
, president and chief executive officer. “Net earnings were
flat, as the contributions from the growth in retail sales and CAF
income were offset by higher SG&A costs, which were pressured by the
ramp in our store growth rate, and the tough comparisons in our
wholesale operations.”
Sales. Used vehicle sales improved,
with total used units climbing 8% and comparable store used units up 5%.
The comparable store used unit growth was driven by improved conversion,
which was supported by better credit offers and continued strong
in-store execution. The used vehicle average selling price was similar
to the prior year’s quarter.
Wholesale vehicle unit sales declined 2% compared with last year’s
quarter, following increases of 23% and 20% in the second quarters of
the two previous fiscal years. Appraisal traffic in the current quarter
was higher than in the prior year period; however, the appraisal buy
rate was lower, which we believe reflected the effect of moderating
wholesale vehicle valuations.
Other sales and revenues declined 1% compared with the prior year’s
second quarter, as an increase in extended service plan (ESP) revenues
was more than offset by a reduction in net third-party finance fees.
Third-party subprime providers, who purchase subprime financings at a
discount, originated 14% of used vehicle unit sales in the current
quarter compared with 7% in the prior year quarter. ESP revenues climbed
18% largely due to the growth in our retail vehicle sales and an
increase in ESP penetration.
Gross Profit. Total gross profit
increased to $368.0 million from $354.3 million in the second quarter of
fiscal 2012, as increased used vehicle gross profits more than offset
modest reductions in wholesale, new and other gross profit. Used vehicle
gross profit climbed 8% to $241.8 million driven by the 8% increase in
used unit sales. Used gross profit per unit remained similar at $2,172
versus $2,178 in last year’s second quarter. Wholesale gross profit
declined 5% to $75.1 million, reflecting the combination of the 2%
decrease in wholesale unit sales and a 2% reduction in wholesale gross
profit per unit to $907 from $929 in the prior year quarter. Other gross
profit fell less than 1% to $49.5 million, similar to the change in
other sales and revenues.
CarMax Auto Finance. CAF income
increased 19% to $75.7 million compared with $63.8 million in last
year’s second quarter. The improvement in CAF income was primarily due
to the 14% increase in average managed receivables, which grew to $5.25
billion from $4.60 billion in last year’s second quarter. The increase
in average managed receivables reflected the growth in CAF origination
volume throughout fiscal 2012 and the first half of fiscal 2013 as we
transitioned back to a pre-recession origination strategy, as well as
higher average selling prices and retail unit sales growth over this
period.
The allowance for loan losses increased modestly, to 0.9% of managed
receivables as of August 31, 2012, compared with 0.8% as of August 31,
2011. Low unit charge-offs and strong recovery rates continued to
largely offset the effect of the change in credit mix resulting from the
transition in origination strategy.
SG&A. Selling, general and
administrative expenses increased 11% to $254.7 million from $229.9
million in the prior year’s second quarter. The increase primarily
reflected the 8% increase in our store base since the beginning of last
year’s second quarter (representing the addition of eight stores) and
higher growth-related costs resulting from the ramp in our store growth
rate. Growth-related costs include pre-opening expenses, relocation
expenses, and the cost of building and maintaining management bench
strength to support future growth. SG&A per retail unit increased to
$2,241 versus $2,197 in the prior year’s quarter mainly due to the costs
associated with this year’s higher store growth rate.
Superstore Openings. We plan to open
ten superstores in fiscal 2013, double the number opened in fiscal 2012.
During the second quarter of fiscal 2013, we opened three used car
superstores, entering the Ft. Myers, Florida, market with two stores and
opening a third store in the Nashville, Tennessee, market.
Supplemental Financial Information
Sales Components
|
|
|
|
|
|
|
(In millions)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
August 31 (1)
|
|
August 31 (1)
|
|
|
|
2012
|
|
|
2011
|
|
|
Change
|
|
2012
|
|
|
2011
|
|
|
Change
|
|
Used vehicle sales
|
|
$2,192.0
|
|
|
$2,015.0
|
|
|
8.8
|
%
|
|
$4,380.9
|
|
|
$4,086.5
|
|
|
7.2
|
%
|
|
New vehicle sales
|
|
61.4
|
|
|
46.9
|
|
|
31.0
|
%
|
|
116.9
|
|
|
108.7
|
|
|
7.5
|
%
|
|
Wholesale vehicle sales
|
|
437.1
|
|
|
457.9
|
|
|
(4.5
|
)%
|
|
904.8
|
|
|
935.7
|
|
|
(3.3
|
)%
|
|
Other sales and revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extended service plan revenues
|
|
52.9
|
|
|
44.9
|
|
|
17.7
|
%
|
|
104.2
|
|
|
91.3
|
|
|
14.1
|
%
|
|
Service department sales
|
|
26.8
|
|
|
26.0
|
|
|
2.9
|
%
|
|
51.6
|
|
|
51.2
|
|
|
0.8
|
%
|
|
Third-party finance fees, net
|
|
(12.1
|
)
|
|
(2.9
|
)
|
|
(322.4
|
)%
|
|
(25.9
|
)
|
|
(6.2
|
)
|
|
(320.2
|
)%
|
|
Total other sales and revenues
|
|
67.6
|
|
|
68.1
|
|
|
(0.8
|
)%
|
|
129.9
|
|
|
136.3
|
|
|
(4.7
|
)%
|
|
Net sales and operating revenues
|
|
$2,758.0
|
|
|
$2,587.8
|
|
|
6.6
|
%
|
|
$5,532.4
|
|
|
$5,267.2
|
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Percent calculations and amounts shown are
based on amounts presented on the attached consolidated statements of
earnings and may not sum due to rounding.
Used Vehicle Sales Changes
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
August 31
|
|
August 31
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Comparable store vehicle sales:
|
|
|
|
|
|
|
|
|
|
Used vehicle units
|
|
5%
|
|
(2)%
|
|
2%
|
|
2%
|
|
Used vehicle revenues
|
|
5%
|
|
5%
|
|
4%
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
Total vehicle sales:
|
|
|
|
|
|
|
|
|
|
Used vehicle units
|
|
8%
|
|
(1)%
|
|
6%
|
|
3%
|
|
Used vehicle revenues
|
|
9%
|
|
7%
|
|
7%
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
Unit Sales
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
August 31
|
|
August 31
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Used vehicles
|
|
111,316
|
|
102,825
|
|
223,607
|
|
211,336
|
|
New vehicles
|
|
2,352
|
|
1,798
|
|
4,459
|
|
4,233
|
|
Wholesale vehicles
|
|
82,771
|
|
84,885
|
|
166,312
|
|
169,947
|
|
|
|
|
|
|
|
|
|
|
Average Selling Prices
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
August 31
|
|
August 31
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Used vehicles
|
|
$
|
19,494
|
|
$
|
19,408
|
|
$
|
19,389
|
|
$
|
19,148
|
|
New vehicles
|
|
$
|
25,982
|
|
$
|
25,927
|
|
$
|
26,073
|
|
$
|
25,559
|
|
Wholesale vehicles
|
|
$
|
5,133
|
|
$
|
5,249
|
|
$
|
5,292
|
|
$
|
5,359
|
|
|
|
|
|
|
|
|
|
|
Selected Operating Ratios
|
|
|
|
|
|
|
(In millions)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
August 31
|
|
August 31
|
|
|
|
|
2012
|
|
% (1)
|
|
|
|
2011
|
|
% (1)
|
|
|
|
2012
|
|
% (1)
|
|
|
|
2011
|
|
% (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales and operating revenues
|
|
$
|
2,758.0
|
|
100.0
|
%
|
|
$
|
2,587.8
|
|
100.0
|
%
|
|
$
|
5,532.4
|
|
100.0
|
%
|
|
$
|
5,267.2
|
|
100.0
|
%
|
|
Gross profit
|
|
$
|
368.0
|
|
13.3
|
%
|
|
$
|
354.3
|
|
13.7
|
%
|
|
$
|
749.9
|
|
13.6
|
%
|
|
$
|
737.4
|
|
14.0
|
%
|
|
CarMax Auto Finance income
|
|
$
|
75.7
|
|
2.7
|
%
|
|
$
|
63.8
|
|
2.5
|
%
|
|
$
|
150.9
|
|
2.7
|
%
|
|
$
|
133.5
|
|
2.5
|
%
|
|
Selling, general, and administrative expenses
|
|
$
|
254.7
|
|
9.2
|
%
|
|
$
|
229.9
|
|
8.9
|
%
|
|
$
|
508.3
|
|
9.2
|
%
|
|
$
|
471.5
|
|
9.0
|
%
|
|
Interest expense
|
|
$
|
8.2
|
|
0.3
|
%
|
|
$
|
8.5
|
|
0.3
|
%
|
|
$
|
16.3
|
|
0.3
|
%
|
|
$
|
17.0
|
|
0.3
|
%
|
|
Earnings before income taxes
|
|
$
|
181.1
|
|
6.6
|
%
|
|
$
|
179.9
|
|
7.0
|
%
|
|
$
|
376.7
|
|
6.8
|
%
|
|
$
|
382.5
|
|
7.3
|
%
|
|
Net earnings
|
|
$
|
111.6
|
|
4.0
|
%
|
|
$
|
111.2
|
|
4.3
|
%
|
|
$
|
232.4
|
|
4.2
|
%
|
|
$
|
236.7
|
|
4.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated as the ratio of the applicable
amount to net sales and operating revenues.
Gross Profit
|
|
|
|
|
|
|
(In millions)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
August 31
|
|
August 31
|
|
|
|
2012
|
|
2011
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
|
Used vehicle gross profit
|
|
$
|
241.8
|
|
$
|
224.0
|
|
8.0
|
%
|
|
$
|
491.2
|
|
$
|
465.2
|
|
5.6
|
%
|
|
New vehicle gross profit
|
|
|
1.6
|
|
|
1.7
|
|
(6.7
|
)%
|
|
|
3.2
|
|
|
3.1
|
|
1.1
|
%
|
|
Wholesale vehicle gross profit
|
|
|
75.1
|
|
|
78.8
|
|
(4.8
|
)%
|
|
|
157.0
|
|
|
165.0
|
|
(4.9
|
)%
|
|
Other gross profit
|
|
|
49.5
|
|
|
49.8
|
|
(0.5
|
)%
|
|
|
98.6
|
|
|
104.0
|
|
(5.2
|
)%
|
|
Total gross profit
|
|
$
|
368.0
|
|
$
|
354.3
|
|
3.9
|
%
|
|
$
|
749.9
|
|
$
|
737.4
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit per Unit
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
August 31
|
|
August 31
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
$
|
/unit (1)
|
|
% (2)
|
|
$
|
/unit (1)
|
|
% (2)
|
|
|
$
|
/unit (1)
|
|
% (2)
|
|
|
$
|
/unit (1)
|
|
% (2)
|
|
|
Used vehicle gross profit
|
|
$
|
2,172
|
|
11.0
|
%
|
|
$
|
2,178
|
|
11.1
|
%
|
|
$
|
2,197
|
|
11.2
|
%
|
|
$
|
2,201
|
|
11.4
|
%
|
|
New vehicle gross profit
|
|
$
|
676
|
|
2.6
|
%
|
|
$
|
948
|
|
3.6
|
%
|
|
$
|
713
|
|
2.7
|
%
|
|
$
|
744
|
|
2.9
|
%
|
|
Wholesale vehicle gross profit
|
|
$
|
907
|
|
17.2
|
%
|
|
$
|
929
|
|
17.2
|
%
|
|
$
|
944
|
|
17.3
|
%
|
|
$
|
971
|
|
17.6
|
%
|
|
Other gross profit
|
|
$
|
436
|
|
73.3
|
%
|
|
$
|
476
|
|
73.1
|
%
|
|
$
|
432
|
|
75.9
|
%
|
|
$
|
482
|
|
76.3
|
%
|
|
Total gross profit
|
|
$
|
3,237
|
|
13.3
|
%
|
|
$
|
3,386
|
|
13.7
|
%
|
|
$
|
3,288
|
|
13.6
|
%
|
|
$
|
3,421
|
|
14.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated as category gross profit divided by
its respective units sold, except the other and total categories, which
are divided by total retail units sold.
(2) Calculated
as a percentage of its respective sales or revenue.
Components of CAF Income and Other CAF
Information
|
|
|
|
|
|
|
(In millions)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
August 31
|
|
August 31
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
$
|
|
% (1)
|
|
$
|
|
% (1)
|
|
$
|
|
% (1)
|
|
$
|
|
% (1)
|
|
Interest and fee income
|
|
$
|
123.5
|
|
|
9.4
|
|
|
$
|
111.8
|
|
|
9.7
|
|
|
$
|
243.8
|
|
|
9.4
|
|
|
$
|
219.7
|
|
|
9.8
|
|
|
Interest expense
|
|
|
(23.9
|
)
|
|
(1.8
|
)
|
|
|
(26.2
|
)
|
|
(2.3
|
)
|
|
|
(49.0
|
)
|
|
(1.9
|
)
|
|
|
(54.7
|
)
|
|
(2.4
|
)
|
|
Total interest margin
|
|
|
99.6
|
|
|
7.6
|
|
|
|
85.6
|
|
|
7.5
|
|
|
|
194.8
|
|
|
7.5
|
|
|
|
165.0
|
|
|
7.3
|
|
|
Provision for loan losses
|
|
|
(12.9
|
)
|
|
(1.0
|
)
|
|
|
(10.8
|
)
|
|
(0.9
|
)
|
|
|
(22.1
|
)
|
|
(0.9
|
)
|
|
|
(9.8
|
)
|
|
(0.4
|
)
|
|
Total interest margin after provision for loan losses
|
|
|
86.7
|
|
|
6.6
|
|
|
|
74.8
|
|
|
6.5
|
|
|
|
172.7
|
|
|
6.7
|
|
|
|
155.2
|
|
|
6.9
|
|
|
Other (loss) gain
|
|
|
(0.2
|
)
|
|
--
|
|
|
|
0.4
|
|
|
--
|
|
|
|
(0.2
|
)
|
|
--
|
|
|
|
1.1
|
|
|
--
|
|
|
Direct CAF expenses
|
|
|
(10.8
|
)
|
|
(0.8
|
)
|
|
|
(11.4
|
)
|
|
(1.0
|
)
|
|
|
(21.6
|
)
|
|
(0.8
|
)
|
|
|
(22.8
|
)
|
|
(1.0
|
)
|
|
CarMax Auto Finance income
|
|
$
|
75.7
|
|
|
5.8
|
|
|
$
|
63.8
|
|
|
5.6
|
|
|
$
|
150.9
|
|
|
5.8
|
|
|
$
|
133.5
|
|
|
5.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average managed receivables
|
|
$
|
5,245.4
|
|
|
|
|
$
|
4,596.6
|
|
|
|
|
$
|
5,160.3
|
|
|
|
|
$
|
4,492.2
|
|
|
|
|
Net loans originated
|
|
$
|
822.4
|
|
|
|
|
$
|
771.9
|
|
|
|
|
$
|
1,609.2
|
|
|
|
|
$
|
1,461.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance for loan losses
|
|
$
|
49.5
|
|
|
|
|
$
|
36.2
|
|
|
|
|
$
|
49.5
|
|
|
|
|
$
|
36.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse facility information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending funded receivables
|
|
$
|
1,066.0
|
|
|
|
|
$
|
1,559.0
|
|
|
|
|
$
|
1,066.0
|
|
|
|
|
$
|
1,559.0
|
|
|
|
|
Ending unused capacity
|
|
$
|
534.0
|
|
|
|
|
$
|
441.0
|
|
|
|
|
$
|
534.0
|
|
|
|
|
$
|
441.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized percent of total average managed
receivables.
Earnings Highlights
|
|
|
|
|
|
|
(In millions except per share data)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
August 31
|
|
August 31
|
|
|
|
2012
|
|
2011
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
|
Net earnings
|
|
$ 111.6
|
|
$ 111.2
|
|
0.4%
|
|
$ 232.4
|
|
$ 236.7
|
|
(1.8)%
|
|
Diluted weighted average shares outstanding
|
|
231.7
|
|
230.7
|
|
0.4%
|
|
231.7
|
|
230.5
|
|
0.6 %
|
|
Net earnings per diluted share
|
|
$ 0.48
|
|
$ 0.48
|
|
--
|
|
$ 1.00
|
|
$ 1.03
|
|
(2.9)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Planned Store Openings
We currently plan to open the following superstores within 12 months
from August 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
Television
|
|
Market
|
|
Planned
|
|
Location
|
|
Market
|
|
Status
|
|
Opening Date
|
|
Des Moines, Iowa
|
|
Des Moines
|
|
New
|
|
Q3 Fiscal 2013
|
|
Oxnard, California
|
|
Los Angeles
|
|
Existing
|
|
Q3 Fiscal 2013
|
|
Denver (Federal Heights), Colorado
|
|
Denver
|
|
New
|
|
Q3 Fiscal 2013
|
|
Denver (Littleton), Colorado
|
|
Denver
|
|
New
|
|
Q4 Fiscal 2013
|
|
Jacksonville, Florida
|
|
Jacksonville
|
|
Existing
|
|
Q4 Fiscal 2013
|
|
Harrisonburg, Virginia
|
|
Harrisonburg
|
|
New
|
|
Q1 Fiscal 2014
|
|
Columbus, Georgia
|
|
Columbus
|
|
New
|
|
Q1 Fiscal 2014
|
|
Savannah, Georgia
|
|
Savannah
|
|
New
|
|
Q1 Fiscal 2014
|
|
Houston, Texas
|
|
Houston
|
|
Existing
|
|
Q2 Fiscal 2014
|
|
Sacramento, California
|
|
Sacramento
|
|
Existing
|
|
Q2 Fiscal 2014
|
|
Frederick, Maryland
|
|
Washington/Baltimore
|
|
Existing
|
|
Q2 Fiscal 2014
|
|
|
|
|
|
|
|
|
Conference Call Information
We will host a conference call for investors at 9:00 a.m. ET today,
September 20, 2012. Domestic investors may access the call at
1-888-298-3261 (international callers dial 1-706-679-7457). The
conference I.D. for both domestic and international callers is 89958527.
A live webcast of the call will be available on our investor information
home page at investor.carmax.com and at www.streetevents.com.
A webcast replay of the call will be available at investor.carmax.com
beginning at approximately 1:00 p.m. ET on September 20, 2012, through
December 19, 2012. A telephone replay also will be available through
September 28, 2012, and may be accessed by dialing 1-855-859-2056
(international callers dial 1-404-537-3406). The conference I.D. for
both domestic and international callers is 89958527.
Third Quarter Fiscal 2012 Earnings Release Date
We currently plan to release third quarter results on Thursday, December
20, 2012, before the opening of the New York Stock Exchange. We will
host a conference call for investors at 9:00 a.m. ET on that date.
Information on this conference call will be available on our investor
information home page at investor.carmax.com in early December.
About CarMax
CarMax, a member of the Fortune 500 and the S&P 500,
and one of the Fortune “100 Best Companies to Work For,”
for eight consecutive years, is the nation’s largest retailer of used
cars. Headquartered in Richmond, Va., CarMax currently operates 113 used
car superstores in 56 markets. The CarMax consumer offer is structured
around four customer benefits: low, no-haggle prices; a broad selection;
high quality vehicles; and customer-friendly service. During the twelve
months ended February 29, 2012, the company retailed 408,080 used cars
and sold 316,649 wholesale vehicles at our in-store auctions. For more
information, access the CarMax website at www.carmax.com.
Forward-Looking Statements
We caution readers that the statements contained in this release about
our future business plans, operations, opportunities or prospects,
including without limitation any statements or factors regarding
expected sales, margins or earnings, are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based
upon management’s current knowledge and assumptions about future events
and involve risks and uncertainties that could cause actual results to
differ materially from anticipated results. Among the factors that could
cause actual results and outcomes to differ materially from those
contained in the forward-looking statements are the following:
-
Changes in general or regional U.S. economic conditions.
-
Changes in the availability or cost of capital and working capital
financing, including changes related to the asset-backed
securitization market.
-
Changes in consumer credit availability related to our third-party
financing providers.
-
Changes in the competitive landscape within our industry.
-
Significant changes in retail prices for used and new vehicles.
-
A reduction in the availability of or access to sources of inventory.
-
Factors related to the regulatory and legislative environment in which
we operate.
-
Security breaches or other events that result in the misappropriation,
loss or other unauthorized disclosure of confidential customer
information.
-
Events that damage our reputation or harm the perception of the
quality of our brand.
-
Factors related to geographic growth, including the inability to
acquire or lease suitable real estate at favorable terms or to
effectively manage our growth.
-
The loss of key employees from our store, regional or corporate
management teams or a significant increase in labor costs.
-
The failure of key information systems.
-
The effect of new accounting requirements or changes to U.S. generally
accepted accounting principles.
-
The effect of various litigation matters.
-
Adverse conditions affecting one or more automotive manufacturers or
manufacturer recalls.
-
The occurrence of severe weather events.
-
Factors related to the seasonal fluctuations in our business.
-
Factors related to the geographic concentration of our superstores.
-
Acts of terrorism, the outbreak of war, or other significant national
or international events.
For more details on factors that could affect expectations, see our
Annual Report on Form 10-K for the fiscal year ended February 29, 2012,
and our quarterly or current reports as filed with or furnished to the
Securities and Exchange Commission. Our filings are publicly available
on our investor information home page at investor.carmax.com. Requests
for information may also be made to the Investor Relations Department by
email to investor_relations@carmax.com
or by calling 1-804-747-0422 ext. 4287. We disclaim any intent or
obligation to update our forward-looking statements.
|
|
|
|
|
|
|
CARMAX, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
(UNAUDITED)
|
|
(In thousands except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended August 31
|
|
Six Months Ended August 31
|
|
|
|
|
2012
|
|
% (1)
|
|
2011 (2)
|
|
% (1)
|
|
2012
|
|
% (1)
|
|
2011 (2)
|
|
% (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Used vehicle sales
|
|
$
|
2,191,964
|
|
79.5
|
|
$
|
2,014,983
|
|
|
77.9
|
|
$
|
4,380,871
|
|
79.2
|
|
$
|
4,086,523
|
|
|
77.6
|
|
|
New vehicle sales
|
|
|
61,393
|
|
2.2
|
|
|
46,853
|
|
|
1.8
|
|
|
116,850
|
|
2.1
|
|
|
108,739
|
|
|
2.1
|
|
|
Wholesale vehicle sales
|
|
|
437,050
|
|
15.8
|
|
|
457,870
|
|
|
17.7
|
|
|
904,845
|
|
16.4
|
|
|
935,664
|
|
|
17.8
|
|
|
Other sales and revenues
|
|
|
67,597
|
|
2.5
|
|
|
68,113
|
|
|
2.6
|
|
|
129,858
|
|
2.3
|
|
|
136,310
|
|
|
2.6
|
|
Net sales and operating revenues
|
|
|
2,758,004
|
|
100.0
|
|
|
2,587,819
|
|
|
100.0
|
|
|
5,532,424
|
|
100.0
|
|
|
5,267,236
|
|
|
100.0
|
|
Cost of sales
|
|
|
2,390,011
|
|
86.7
|
|
|
2,233,544
|
|
|
86.3
|
|
|
4,782,516
|
|
86.4
|
|
|
4,529,866
|
|
|
86.0
|
|
Gross profit
|
|
|
367,993
|
|
13.3
|
|
|
354,275
|
|
|
13.7
|
|
|
749,908
|
|
13.6
|
|
|
737,370
|
|
|
14.0
|
|
CarMax Auto Finance income
|
|
|
75,676
|
|
2.7
|
|
|
63,826
|
|
|
2.5
|
|
|
150,855
|
|
2.7
|
|
|
133,487
|
|
|
2.5
|
|
Selling, general and administrative expenses
|
|
|
254,674
|
|
9.2
|
|
|
229,887
|
|
|
8.9
|
|
|
508,277
|
|
9.2
|
|
|
471,542
|
|
|
9.0
|
|
Interest expense
|
|
|
8,152
|
|
0.3
|
|
|
8,464
|
|
|
0.3
|
|
|
16,295
|
|
0.3
|
|
|
17,004
|
|
|
0.3
|
|
Interest income
|
|
|
259
|
|
--
|
|
|
110
|
|
|
--
|
|
|
544
|
|
--
|
|
|
213
|
|
|
--
|
|
Earnings before income taxes
|
|
|
181,102
|
|
6.6
|
|
|
179,860
|
|
|
7.0
|
|
|
376,735
|
|
6.8
|
|
|
382,524
|
|
|
7.3
|
|
Income tax provision
|
|
|
69,466
|
|
2.5
|
|
|
68,706
|
|
|
2.7
|
|
|
144,353
|
|
2.6
|
|
|
145,870
|
|
|
2.8
|
|
Net earnings
|
|
$
|
111,636
|
|
4.0
|
|
$
|
111,154
|
|
|
4.3
|
|
$
|
232,382
|
|
4.2
|
|
$
|
236,654
|
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
228,366
|
|
|
|
|
226,300
|
|
|
|
|
|
228,069
|
|
|
|
|
225,935
|
|
|
|
|
|
Diluted
|
|
|
231,696
|
|
|
|
|
230,681
|
|
|
|
|
|
231,749
|
|
|
|
|
230,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.49
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
1.02
|
|
|
|
$
|
1.05
|
|
|
|
|
|
Diluted
|
|
$
|
0.48
|
|
|
|
$
|
0.48
|
|
|
|
|
$
|
1.00
|
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated as a percentage of net sales and
operating revenues and sums may not equal totals due to rounding.
|
|
(2) As disclosed in our Annual Report on Form
10-K for the fiscal year ended February 29, 2012, fiscal 2012
reflects the revisions to correct our accounting for sale-leaseback
transactions.
|
|
|
|
|
CARMAX, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(UNAUDITED)
|
|
(In thousands)
|
|
|
|
|
|
August 31
|
|
August 31
|
|
February 29
|
|
|
|
|
2012
|
|
|
2011 (1)
|
|
|
|
2012
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
458,567
|
|
$
|
181,913
|
|
|
$
|
442,658
|
|
Restricted cash from collections on auto loan receivables
|
|
|
204,731
|
|
|
154,944
|
|
|
|
204,314
|
|
Accounts receivable, net
|
|
|
70,426
|
|
|
64,849
|
|
|
|
86,434
|
|
Inventory
|
|
|
1,198,013
|
|
|
1,061,309
|
|
|
|
1,092,592
|
|
Deferred income taxes
|
|
|
7,705
|
|
|
11,042
|
|
|
|
9,938
|
|
Other current assets
|
|
|
22,106
|
|
|
21,762
|
|
|
|
17,512
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
1,961,548
|
|
|
1,495,819
|
|
|
|
1,853,448
|
|
|
|
|
|
|
|
|
|
Auto loan receivables, net
|
|
|
5,315,232
|
|
|
4,699,074
|
|
|
|
4,959,847
|
|
Property and equipment, net
|
|
|
1,347,313
|
|
|
1,223,723
|
|
|
|
1,278,722
|
|
Deferred income taxes
|
|
|
143,754
|
|
|
120,658
|
|
|
|
133,134
|
|
Other assets
|
|
|
103,593
|
|
|
97,863
|
|
|
|
106,392
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
8,871,440
|
|
$
|
7,637,137
|
|
|
$
|
8,331,543
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
221,430
|
|
$
|
243,473
|
|
|
$
|
324,827
|
|
Accrued expenses and other current liabilities
|
|
|
116,167
|
|
|
110,262
|
|
|
|
128,973
|
|
Accrued income taxes
|
|
|
557
|
|
|
7,451
|
|
|
|
3,125
|
|
Short-term debt
|
|
|
1,068
|
|
|
1,333
|
|
|
|
943
|
|
Current portion of finance and capital lease obligations
|
|
|
15,325
|
|
|
13,152
|
|
|
|
14,108
|
|
Current portion of non-recourse notes payable
|
|
|
171,292
|
|
|
129,565
|
|
|
|
174,337
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
525,839
|
|
|
505,236
|
|
|
|
646,313
|
|
|
|
|
|
|
|
|
|
Finance and capital lease obligations, excluding current portion
|
|
|
345,628
|
|
|
360,989
|
|
|
|
353,566
|
|
Non-recourse notes payable, excluding current portion
|
|
|
4,909,702
|
|
|
4,169,037
|
|
|
|
4,509,752
|
|
Other liabilities
|
|
|
140,684
|
|
|
103,563
|
|
|
|
148,800
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
5,921,853
|
|
|
5,138,825
|
|
|
|
5,658,431
|
|
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
2,949,587
|
|
|
2,498,312
|
|
|
|
2,673,112
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
8,871,440
|
|
$
|
7,637,137
|
|
|
$
|
8,331,543
|
|
|
|
|
|
|
|
|
(1) As disclosed in our Annual Report on Form 10-K
for the fiscal year ended February 29, 2012, fiscal 2012 reflects the
revisions to correct our accounting for sale-leaseback transactions.
|
|
|
CARMAX, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(UNAUDITED)
|
|
(In thousands)
|
|
|
|
|
|
Six Months Ended August 31
|
|
|
|
2012
|
|
2011 (1)
|
|
Operating Activities:
|
|
|
|
|
|
Net earnings
|
|
$
|
232,382
|
|
|
$
|
236,654
|
|
|
Adjustments to reconcile net earnings to net cash used in
operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
46,442
|
|
|
|
39,454
|
|
|
Share-based compensation expense
|
|
|
30,206
|
|
|
|
26,303
|
|
|
Provision for loan losses
|
|
|
22,090
|
|
|
|
9,783
|
|
|
Loss on disposition of assets
|
|
|
446
|
|
|
|
1,195
|
|
|
Deferred income tax (benefit) provision
|
|
|
(76
|
)
|
|
|
3,608
|
|
|
Net decrease (increase) in:
|
|
|
|
|
|
Accounts receivable, net
|
|
|
16,008
|
|
|
|
54,748
|
|
|
Inventory
|
|
|
(105,421
|
)
|
|
|
(11,832
|
)
|
|
Other current assets
|
|
|
(4,605
|
)
|
|
|
11,648
|
|
|
Auto loan receivables, net
|
|
|
(377,475
|
)
|
|
|
(388,282
|
)
|
|
Other assets
|
|
|
971
|
|
|
|
(1,969
|
)
|
|
Net decrease in:
|
|
|
|
|
|
Accounts payable, accrued expenses and other current liabilities
and accrued income taxes
|
|
|
(132,469
|
)
|
|
|
(42,095
|
)
|
|
Other liabilities
|
|
|
(14,431
|
)
|
|
|
(15,139
|
)
|
|
Net cash used in operating activities
|
|
|
(285,932
|
)
|
|
|
(75,924
|
)
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
Capital expenditures
|
|
|
(103,918
|
)
|
|
|
(80,225
|
)
|
|
(Increase) decrease in restricted cash from collectionson auto
loan receivables
|
|
|
(417
|
)
|
|
|
6,108
|
|
|
Increase in restricted cash in reserve accounts
|
|
|
(3,151
|
)
|
|
|
(4,562
|
)
|
|
Release of restricted cash from reserve accounts
|
|
|
7,992
|
|
|
|
6,997
|
|
|
Purchases of money market securities, net
|
|
|
(2,104
|
)
|
|
|
(291
|
)
|
|
Purchases of investments available-for-sale
|
|
|
(1,227
|
)
|
|
|
(2,164
|
)
|
|
Sales of investments available-for-sale
|
|
|
318
|
|
|
|
--
|
|
|
Net cash used in investing activities
|
|
|
(102,507
|
)
|
|
|
(74,137
|
)
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
Increase in short-term debt, net
|
|
|
125
|
|
|
|
331
|
|
|
Payments on finance and capital lease obligations
|
|
|
(6,721
|
)
|
|
|
(6,093
|
)
|
|
Issuances of non-recourse notes payable
|
|
|
2,345,000
|
|
|
|
1,869,000
|
|
|
Payments on non-recourse notes payable
|
|
|
(1,948,095
|
)
|
|
|
(1,584,059
|
)
|
|
Equity issuances, net
|
|
|
4,209
|
|
|
|
4,362
|
|
|
Excess tax benefits from share-based payment arrangements
|
|
|
9,830
|
|
|
|
7,312
|
|
|
Net cash provided by financing activities
|
|
|
404,348
|
|
|
|
290,853
|
|
|
|
|
|
|
|
|
Increase in cash and cash equivalents
|
|
|
15,909
|
|
|
|
140,792
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
442,658
|
|
|
|
41,121
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
458,567
|
|
|
$
|
181,913
|
|
|
|
|
|
|
|
(1) As disclosed in our Annual Report on Form 10-K
for the fiscal year ended February 29, 2012, fiscal 2012 reflects the
revisions to correct our accounting for sale-leaseback transactions.
Source: CarMax, Inc.
CarMax, Inc.
Investors and Financial Media:
Katharine Kenny,
Vice President, Investor Relations, (804) 935-4591
Celeste Gunter,
Manager, Investor Relations, (804) 935-4597
or
General Media:
Trina
Lee, Director, Public Relations, (855) 887-2915
Elia Imler, Sr.
Coordinator, Public Relations, (855) 887-2915