Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CARMAX INC | kmx-20121220x8k.htm |
CARMAX REPORTS RECORD THIRD QUARTER RESULTS
Richmond, Va., December 20, 2012 – CarMax, Inc. (NYSE:KMX) today reported record results for the third quarter ended November 30, 2012.
| § | Net sales and operating revenues increased 15% to $2.60 billion from $2.26 billion in the third quarter of last year. |
| § | Used unit sales in comparable stores increased 12% for the quarter. |
| § | Total used unit sales rose 16% in the third quarter. |
| § | Total wholesale unit sales increased 10% in the third quarter. |
| § | CarMax Auto Finance (CAF) income increased 16% to $72.5 million in the third quarter. |
| § | Net earnings grew 15% to $94.7 million, or $0.41 per diluted share, compared with $82.1 million, or $0.36 per diluted share, in the third quarter of fiscal 2012. |
Third Quarter Business Performance Review
“We are pleased to report strong increases in used and wholesale vehicle unit sales and CAF income, which drove solid bottom-line earnings growth,” said Tom Folliard, president and chief executive officer. “Our strong comparable store sales growth allowed us to leverage SG&A expenses, even as we expanded our store base.”
Sales. Used vehicle sales improved significantly, with total used units climbing 16% and comparable store used units up 12%. The comparable store used unit growth was driven by improved conversion, which we believe benefited from a variety of factors, including more compelling credit offers from third-party finance providers and CAF, increased inventory selection, improved customer sentiment and continued strong in-store execution. The used vehicle average selling price was similar to the prior year’s quarter.
Wholesale vehicle unit sales grew 10% compared with last year’s quarter. Wholesale unit sales benefited from an increase in appraisal traffic, while the appraisal buy rate was similar to the prior year’s quarter.
-more-
Other sales and revenues increased 5% compared with the prior year’s third quarter, as an increase in extended service plan (ESP) revenues was largely 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 9% in the prior year quarter. ESP revenues climbed 22% due to both the growth in used vehicle sales and an increase in ESP penetration.
Gross Profit. Total gross profit increased 14% to $345.2 million from $303.2 million in the third quarter of fiscal 2012, primarily reflecting the increased used and wholesale vehicle unit sales, as well as higher other gross profit.
Used vehicle gross profit rose 15% to $227.0 million driven by the 16% increase in used unit sales. Used vehicle gross profit per unit was relatively consistent at $2,146 versus $2,171 in last year’s third quarter.
Wholesale gross profit increased 11% to $73.6 million, driven by the 10% increase in wholesale unit sales. Wholesale vehicle gross profit per unit remained stable at $923 compared with $914 in the prior year quarter.
Other gross profit rose 18% to $43.7 million, as improved ESP and service department profits were partially offset by the lower net third-party finance fees.
CarMax Auto Finance. CAF income increased 16% to $72.5 million compared with $62.6 million in last year’s third quarter. The growth in CAF income was largely attributable to the 15% increase in average managed receivables, which grew to $5.48 billion from $4.77 billion in the prior year period. The increase in average managed receivables reflected the rise in CAF origination volume throughout fiscal 2012 and fiscal 2013 as we transitioned back to our pre-recession origination strategy, higher average amounts financed and the growth in retail unit sales.
The allowance for loan losses was 1.0% of managed receivables as of November 30, 2012, compared with 0.9% as of November 30, 2011. Continued favorable loss experience partially offset the effect of the change in credit mix resulting from the transition in origination strategy.
SG&A. Selling, general and administrative expenses increased 14% to $257.3 million from $225.8 million in the prior year’s third quarter. The increase primarily reflected the combination of the 9% increase in our store base since the beginning of last year’s third quarter (representing the addition of 10 stores) and higher variable selling costs resulting from the 12% increase in comparable store used unit sales. SG&A per retail unit declined to $2,393 versus $2,436 in the prior year’s quarter as the leverage resulting from the comparable store unit sales growth was partially offset by higher costs related to growing our store base.
Superstore Openings. As of November 30, 2012, we had opened eight of the ten used car superstores that we plan to open in fiscal 2013. During the third quarter, we opened three stores, entering the Des Moines and Denver markets, and adding our tenth store in the Los Angeles market.
Share Repurchase Program. During the third quarter of fiscal 2013, we repurchased 1.7 million shares of common stock for $60.2 million pursuant to our share repurchase program. The repurchase activity had no effect on reported third quarter net earnings per share.
-more-
Supplemental Financial Information
Sales Components
|
|
Three Months Ended |
Nine Months Ended |
||||||||||||||
|
|
November 30(1) |
November 30(1) |
||||||||||||||
|
(In millions) |
2012 |
2011 |
Change |
2012 |
2011 |
Change |
||||||||||
|
Used vehicle sales |
$ |
2,068.7 |
|
$ |
1,766.7 |
|
17.1 |
% |
$ |
6,449.6 |
|
$ |
5,853.2 |
|
10.2 |
% |
|
New vehicle sales |
|
45.7 |
|
|
46.0 |
|
(0.7) |
% |
|
162.5 |
|
|
154.7 |
|
5.0 |
% |
|
Wholesale vehicle sales |
|
427.7 |
|
|
390.3 |
|
9.6 |
% |
|
1,332.5 |
|
|
1,325.9 |
|
0.5 |
% |
|
Other sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extended service plan revenues |
|
48.6 |
|
|
39.8 |
|
22.2 |
% |
|
152.7 |
|
|
131.0 |
|
16.6 |
% |
|
Service department sales |
|
24.8 |
|
|
23.5 |
|
5.9 |
% |
|
76.4 |
|
|
74.6 |
|
2.4 |
% |
|
Third-party finance fees, net |
|
(13.1) |
|
|
(5.6) |
|
(131.2) |
% |
|
(38.9) |
|
|
(11.8) |
|
(229.8) |
% |
|
Total other sales and revenues |
|
60.4 |
|
|
57.6 |
|
4.9 |
% |
|
190.2 |
|
|
193.9 |
|
(1.9) |
% |
|
Total net sales and operating revenues |
$ |
2,602.4 |
|
$ |
2,260.5 |
|
15.1 |
% |
$ |
8,134.9 |
|
$ |
7,527.8 |
|
8.1 |
% |
(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.
Comparable Store Used Vehicle Sales Changes
|
|
Three Months Ended |
Nine Months Ended |
||||||||||
|
|
November 30 |
November 30 |
||||||||||
|
|
2012 |
2011 |
2012 |
2011 |
||||||||
|
Used vehicle units |
|
12 |
% |
|
(3) |
% |
|
5 |
% |
|
0 |
% |
|
Used vehicle dollars |
|
13 |
% |
|
3 |
% |
|
6 |
% |
|
7 |
% |
Total Used Vehicle Sales Changes
|
|
Three Months Ended |
Nine Months Ended |
||||||||||
|
|
November 30 |
November 30 |
||||||||||
|
|
2012 |
2011 |
2012 |
2011 |
||||||||
|
Used vehicle units |
|
16 |
% |
|
(1) |
% |
|
9 |
% |
|
2 |
% |
|
Used vehicle dollars |
|
17 |
% |
|
5 |
% |
|
10 |
% |
|
8 |
% |
Unit Sales
|
|
Three Months Ended |
Nine Months Ended |
||||||||||
|
|
November 30 |
November 30 |
||||||||||
|
|
2012 |
2011 |
2012 |
2011 |
||||||||
|
Used vehicles |
|
105,815 |
|
|
90,975 |
|
|
329,422 |
|
|
302,311 |
|
|
New vehicles |
|
1,705 |
|
|
1,719 |
|
|
6,164 |
|
|
5,952 |
|
|
Wholesale vehicles |
|
79,747 |
|
|
72,805 |
|
|
246,059 |
|
|
242,752 |
|
Average Selling Prices
|
|
Three Months Ended |
Nine Months Ended |
||||||||||
|
|
November 30 |
November 30 |
||||||||||
|
|
2012 |
2011 |
2012 |
2011 |
||||||||
|
Used vehicles |
$ |
19,344 |
|
$ |
19,221 |
|
$ |
19,375 |
|
$ |
19,170 |
|
|
New vehicles |
$ |
26,681 |
|
$ |
26,611 |
|
$ |
26,241 |
|
$ |
25,863 |
|
|
Wholesale vehicles |
$ |
5,214 |
|
$ |
5,215 |
|
$ |
5,267 |
|
$ |
5,316 |
|
-more-
Selected Operating Ratios
|
|
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
|
|
November 30 |
November 30 |
||||||||||||||||||
|
(In millions) |
2012 |
% (1) |
2011 (2) |
% (1) |
2012 |
% (1) |
2011 (2) |
% (1) |
||||||||||||
|
Net sales and operating revenues |
$ |
2,602.4 |
|
100.0 |
|
$ |
2,260.5 |
|
100.0 |
|
$ |
8,134.9 |
|
100.0 |
|
$ |
7,527.8 |
|
100.0 |
|
|
Gross profit |
$ |
345.2 |
|
13.3 |
|
$ |
303.2 |
|
13.4 |
|
$ |
1,095.1 |
|
13.5 |
|
$ |
1,040.6 |
|
13.8 |
|
|
CarMax Auto Finance income |
$ |
72.5 |
|
2.8 |
|
$ |
62.6 |
|
2.8 |
|
$ |
223.3 |
|
2.7 |
|
$ |
196.1 |
|
2.6 |
|
|
Selling, general, and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expenses |
$ |
257.3 |
|
9.9 |
|
$ |
225.8 |
|
10.0 |
|
$ |
765.6 |
|
9.4 |
|
$ |
697.3 |
|
9.3 |
|
|
Interest expense |
$ |
8.1 |
|
0.3 |
|
$ |
8.4 |
|
0.4 |
|
$ |
24.4 |
|
0.3 |
|
$ |
25.4 |
|
0.3 |
|
|
Earnings before income taxes |
$ |
152.5 |
|
5.9 |
|
$ |
131.6 |
|
5.8 |
|
$ |
529.2 |
|
6.5 |
|
$ |
514.2 |
|
6.8 |
|
|
Net earnings |
$ |
94.7 |
|
3.6 |
|
$ |
82.1 |
|
3.6 |
|
$ |
327.1 |
|
4.0 |
|
$ |
318.8 |
|
4.2 |
|
(1)Calculated as the ratio of the applicable amount to net sales and operating revenues.
(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.
Gross Profit
|
|
Three Months Ended |
Nine Months Ended |
||||||||||||||||
|
|
November 30 |
November 30 |
||||||||||||||||
|
(In millions) |
2012 |
2011 |
Change |
2012 |
2011 |
Change |
||||||||||||
|
Used vehicle gross profit |
$ |
227.0 |
|
$ |
197.5 |
|
|
15.0 |
% |
$ |
718.2 |
|
$ |
662.7 |
|
|
8.4 |
% |
|
New vehicle gross profit |
|
0.9 |
|
|
2.0 |
|
|
(55.9) |
% |
|
4.1 |
|
|
5.1 |
|
|
(21.1) |
% |
|
Wholesale vehicle gross profit |
|
73.6 |
|
|
66.5 |
|
|
10.6 |
% |
|
230.5 |
|
|
231.6 |
|
|
(0.4) |
% |
|
Other gross profit |
|
43.7 |
|
|
37.2 |
|
|
17.5 |
% |
|
142.3 |
|
|
141.2 |
|
|
0.8 |
% |
|
Total |
$ |
345.2 |
|
$ |
303.2 |
|
|
13.9 |
% |
$ |
1,095.1 |
|
$ |
1,040.6 |
|
|
5.2 |
% |
Gross Profit per Unit
|
|
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
|
|
November 30 |
November 30 |
||||||||||||||||||
|
|
2012 |
2011 |
2012 |
2011 |
||||||||||||||||
|
|
$ per unit(1) |
%(2) |
|
$ per unit(1) |
%(2) |
|
$ per unit(1) |
%(2) |
|
$ per unit(1) |
%(2) |
|
||||||||
|
Used vehicle gross profit |
$ |
2,146 |
|
11.0 |
|
$ |
2,171 |
|
11.2 |
|
$ |
2,180 |
|
11.1 |
|
$ |
2,192 |
|
11.3 |
|
|
New vehicle gross profit |
$ |
518 |
|
1.9 |
|
$ |
1,164 |
|
4.4 |
|
$ |
659 |
|
2.5 |
|
$ |
865 |
|
3.3 |
|
|
Wholesale vehicle gross profit |
$ |
923 |
|
17.2 |
|
$ |
914 |
|
17.0 |
|
$ |
937 |
|
17.3 |
|
$ |
954 |
|
17.5 |
|
|
Other gross profit |
$ |
407 |
|
72.4 |
|
$ |
401 |
|
64.6 |
|
$ |
424 |
|
74.8 |
|
$ |
458 |
|
72.8 |
|
|
Total gross profit |
$ |
3,211 |
|
13.3 |
|
$ |
3,271 |
|
13.4 |
|
$ |
3,263 |
|
13.5 |
|
$ |
3,376 |
|
13.8 |
|
(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.
-more-
Components of CAF Income and Other CAF Information
|
|
Three Months Ended November 30 |
Nine Months Ended November 30 |
||||||||||||||||||
|
(In millions) |
2012 |
% (1) |
2011 |
% (1) |
2012 |
% (1) |
2011 |
% (1) |
||||||||||||
|
Interest margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fee income |
|
$ |
125.1 |
|
9.1 |
|
$ |
114.3 |
|
9.6 |
|
$ |
368.9 |
|
9.3 |
|
$ |
334.0 |
|
9.7 |
|
Interest expense |
|
|
(23.3) |
|
(1.7) |
|
|
(25.6) |
|
(2.2) |
|
|
(72.4) |
|
(1.8) |
|
|
(80.3) |
|
(2.3) |
|
Total interest margin |
|
|
101.8 |
|
7.4 |
|
|
88.7 |
|
7.4 |
|
|
296.5 |
|
7.5 |
|
|
253.7 |
|
7.4 |
|
Provision for loan losses |
|
|
(18.1) |
|
(1.3) |
|
|
(15.1) |
|
(1.3) |
|
|
(40.2) |
|
(1.0) |
|
|
(24.9) |
|
(0.7) |
|
Total interest margin after |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
provision for loan losses |
|
|
83.7 |
|
6.1 |
|
|
73.6 |
|
6.2 |
|
|
256.3 |
|
6.5 |
|
|
228.8 |
|
6.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
0.2 |
|
― |
|
|
0.3 |
|
― |
|
|
― |
|
― |
|
|
1.4 |
|
― |
|
Total direct expenses |
|
|
(11.4) |
|
(0.8) |
|
|
(11.3) |
|
(0.9) |
|
|
(33.0) |
|
(0.8) |
|
|
(34.1) |
|
(1.0) |
|
CarMax Auto Finance income |
|
$ |
72.5 |
|
5.3 |
|
$ |
62.6 |
|
5.3 |
|
$ |
223.3 |
|
5.7 |
|
$ |
196.1 |
|
5.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average managed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
receivables |
|
$ |
5,477.4 |
|
|
|
$ |
4,770.9 |
|
|
|
$ |
5,266.0 |
|
|
|
$ |
4,585.1 |
|
|
|
Net loans originated |
|
$ |
856.2 |
|
|
|
$ |
664.0 |
|
|
|
$ |
2,465.4 |
|
|
|
$ |
2,125.2 |
|
|
|
Net CAF penetration rate |
|
|
41.2 |
% |
|
|
|
38.1 |
% |
|
|
|
38.3 |
% |
|
|
|
36.7 |
% |
|
|
Weighted average contract rate |
|
|
7.7 |
% |
|
|
|
8.7 |
% |
|
|
|
8.2 |
% |
|
|
|
8.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance for loan losses |
|
$ |
54.3 |
|
|
|
$ |
41.4 |
|
|
|
$ |
54.3 |
|
|
|
$ |
41.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse facility information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending funded receivables |
|
$ |
876.0 |
|
|
|
$ |
876.0 |
|
|
|
$ |
876.0 |
|
|
|
$ |
876.0 |
|
|
|
Ending unused capacity |
|
$ |
724.0 |
|
|
|
$ |
724.0 |
|
|
|
$ |
724.0 |
|
|
|
$ |
724.0 |
|
|
(1)Annualized percent of total average managed receivables.
SG&A Expenses
|
|
Three Months Ended |
Nine Months Ended |
||||||||||
|
|
November 30 |
November 30 |
||||||||||
|
(In millions) |
2012 |
2011 (1) |
2012 |
2011 (1) |
||||||||
|
Compensation and benefits (2) |
$ |
144.0 |
|
$ |
124.0 |
|
$ |
427.1 |
|
$ |
384.2 |
|
|
Store occupancy costs |
|
51.1 |
|
|
48.5 |
|
|
149.8 |
|
|
142.4 |
|
|
Advertising expense |
|
22.5 |
|
|
22.4 |
|
|
76.7 |
|
|
75.4 |
|
|
Other overhead costs (3) |
|
39.7 |
|
|
30.9 |
|
|
112.0 |
|
|
95.3 |
|
|
Total SG&A expenses |
$ |
257.3 |
|
$ |
225.8 |
|
$ |
765.6 |
|
$ |
697.3 |
|
(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.
(2)Excludes compensation and benefits related to reconditioning and vehicle repair service, which is included in cost of sales.
(3)Includes IT expenses, insurance, bad debt, travel, preopening and relocation costs, charitable contributions and other administrative expenses.
-more-
Earnings Highlights
|
|
Three Months Ended |
Nine Months Ended |
||||||||||||||||
|
|
November 30 |
November 30 |
||||||||||||||||
|
(In millions except per share data) |
2012 |
2011 (1) |
Change |
2012 |
2011 (1) |
Change |
||||||||||||
|
Net earnings |
$ |
94.7 |
|
$ |
82.1 |
|
|
15.3 |
% |
$ |
327.1 |
|
$ |
318.8 |
|
|
2.6 |
% |
|
Diluted weighted average shares outstanding |
|
232.7 |
|
|
230.6 |
|
|
0.9 |
% |
|
232.0 |
|
|
230.5 |
|
|
0.7 |
% |
|
Net earnings per diluted share |
$ |
0.41 |
|
$ |
0.36 |
|
|
13.9 |
% |
$ |
1.41 |
|
$ |
1.38 |
|
|
2.2 |
% |
(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.
Planned Store Openings
We currently plan to open the following superstores within 12 months from November 30, 2012:
|
Location |
Television Market |
Market Status |
Planned Opening Date |
|
Denver (Littleton), Colorado (1) |
Denver |
Existing |
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 |
|
Jackson, Tennessee |
Jackson |
New |
Q3 Fiscal 2014 |
|
Waldorf, Maryland |
Washington/Baltimore |
Existing |
Q3 Fiscal 2014 |
|
St. Louis (St. Peters), Missouri |
St. Louis |
New |
Q3 Fiscal 2014 |
|
St. Louis (Lindbergh), Missouri |
St. Louis |
New |
Q3 Fiscal 2014 |
|
|
|
|
|
(1)Store opened in December 2012.
Conference Call Information
We will host a conference call for investors at 9:00 a.m. ET today, December 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 89964196. 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 December 20, 2012, through April 9, 2013. A telephone replay also will be available through December 31, 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 89964196.
Fourth Quarter and Fiscal Year 2013 Earnings Release Date
We currently plan to release fourth quarter and fiscal year 2013 results on Wednesday, April 10, 2013, 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 March 2013.
-more-
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 vehicles. Headquartered in Richmond, Va., CarMax currently operates 117 used car superstores in 58 markets. The CarMax consumer offer features low, no-haggle prices, a broad selection of CarMax Quality Certified used vehicles and superior customer service. During the twelve months ended February 29, 2012, the company retailed 408,080 used vehicles 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.
-more-
Contacts:
Investors and Financial Media:
Katharine Kenny, Vice President, Investor Relations, (804) 935-4591
Celeste Gunter, Manager, Investor Relations, (804) 935-4597
General Media:
Trina Lee, Director, Public Relations, (855) 887-2915
Britt Farrar, Manager, Public Relations, (855) 887-2915
-more-
CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
|
|
|
Three Months Ended November 30 |
|
Nine Months Ended November 30 |
||||||||
|
(In thousands except per share data) |
|
2012 |
% (1) |
|
2011 (2) |
% (1) |
|
2012 |
% (1) |
|
2011 (2) |
% (1) |
|
SALES AND OPERATING REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Used vehicle sales |
$ |
2,068,742 | 79.5 |
$ |
1,766,690 | 78.2 |
$ |
6,449,613 | 79.3 |
$ |
5,853,213 | 77.8 |
|
New vehicle sales |
|
45,693 | 1.8 |
|
45,997 | 2.0 |
|
162,543 | 2.0 |
|
154,736 | 2.1 |
|
Wholesale vehicle sales |
|
427,650 | 16.4 |
|
390,262 | 17.3 |
|
1,332,495 | 16.4 |
|
1,325,926 | 17.6 |
|
Other sales and revenues |
|
60,361 | 2.3 |
|
57,565 | 2.5 |
|
190,219 | 2.3 |
|
193,875 | 2.6 |
|
NET SALES AND OPERATING REVENUES |
|
2,602,446 | 100.0 |
|
2,260,514 | 100.0 |
|
8,134,870 | 100.0 |
|
7,527,750 | 100.0 |
|
Cost of sales |
|
2,257,227 | 86.7 |
|
1,957,295 | 86.6 |
|
7,039,743 | 86.5 |
|
6,487,161 | 86.2 |
|
GROSS PROFIT |
|
345,219 | 13.3 |
|
303,219 | 13.4 |
|
1,095,127 | 13.5 |
|
1,040,589 | 13.8 |
|
CARMAX AUTO FINANCE INCOME |
|
72,454 | 2.8 |
|
62,625 | 2.8 |
|
223,309 | 2.7 |
|
196,112 | 2.6 |
|
Selling, general and administrative expenses |
|
257,282 | 9.9 |
|
225,765 | 10.0 |
|
765,559 | 9.4 |
|
697,307 | 9.3 |
|
Interest expense |
|
8,065 | 0.3 |
|
8,359 | 0.4 |
|
24,360 | 0.3 |
|
25,363 | 0.3 |
|
Other income (expense) |
|
139 |
― |
|
(94) |
― |
|
683 |
― |
|
119 |
― |
|
Earnings before income taxes |
|
152,465 | 5.9 |
|
131,626 | 5.8 |
|
529,200 | 6.5 |
|
514,150 | 6.8 |
|
Income tax provision |
|
57,784 | 2.2 |
|
49,516 | 2.2 |
|
202,137 | 2.5 |
|
195,386 | 2.6 |
|
NET EARNINGS |
$ |
94,681 | 3.6 |
$ |
82,110 | 3.6 |
$ |
327,063 | 4.0 |
$ |
318,764 | 4.2 |
|
WEIGHTED AVERAGE COMMON SHARES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
228,904 |
|
|
226,446 |
|
|
228,346 |
|
|
226,104 |
|
|
Diluted |
|
232,656 |
|
|
230,632 |
|
|
232,048 |
|
|
230,529 |
|
|
NET EARNINGS PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.41 |
|
$ |
0.36 |
|
$ |
1.43 |
|
$ |
1.41 |
|
|
Diluted |
$ |
0.41 |
|
$ |
0.36 |
|
$ |
1.41 |
|
$ |
1.38 |
|
(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.
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CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
|
|
(Unaudited) |
|
|
|
(Unaudited) |
||||
|
|
|
|
November 30 |
February 29 |
November 30 |
||||||
|
(In thousands except share data) |
|
2012 |
2012 |
2011 (1) |
|||||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
445,110 |
|
$ |
442,658 |
|
$ |
383,411 |
|
|
|
Restricted cash from collections on auto loan receivables |
|
|
204,360 |
|
|
204,314 |
|
|
174,392 |
|
|
|
Accounts receivable, net |
|
|
62,660 |
|
|
86,434 |
|
|
54,522 |
|
|
|
Inventory |
|
|
1,339,044 |
|
|
1,092,592 |
|
|
1,013,183 |
|
|
|
Deferred income taxes |
|
|
9,315 |
|
|
9,938 |
|
|
13,085 |
|
|
|
Other current assets |
|
|
24,875 |
|
|
17,512 |
|
|
9,806 |
|
|
|
TOTAL CURRENT ASSETS |
|
|
2,085,364 |
|
|
1,853,448 |
|
|
1,648,399 |
|
|
|
Auto loan receivables, net |
|
|
5,552,035 |
|
|
4,959,847 |
|
|
4,807,804 |
|
|
|
Property and equipment, net |
|
|
1,411,588 |
|
|
1,278,722 |
|
|
1,230,897 |
|
|
|
Deferred income taxes |
|
|
147,571 |
|
|
133,134 |
|
|
120,268 |
|
|
|
Other assets |
|
|
101,125 |
|
|
106,392 |
|
|
100,413 |
|
|
|
TOTAL ASSETS |
|
$ |
9,297,683 |
|
$ |
8,331,543 |
|
$ |
7,907,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
272,807 |
|
$ |
324,827 |
|
$ |
246,393 |
|
|
|
Accrued expenses and other current liabilities |
|
|
116,629 |
|
|
128,973 |
|
|
125,683 |
|
|
|
Accrued income taxes |
|
|
266 |
|
|
3,125 |
|
|
13,069 |
|
|
|
Short-term debt |
|
|
706 |
|
|
943 |
|
|
759 |
|
|
|
Current portion of finance and capital lease obligations |
|
|
15,885 |
|
|
14,108 |
|
|
13,615 |
|
|
|
Current portion of non-recourse notes payable |
|
|
169,399 |
|
|
174,337 |
|
|
147,183 |
|
|
|
TOTAL CURRENT LIABILITIES |
|
|
575,692 |
|
|
646,313 |
|
|
546,702 |
|
|
|
Finance and capital lease obligations, excluding current portion |
|
|
341,424 |
|
|
353,566 |
|
|
357,288 |
|
|
|
Non-recourse notes payable, excluding current portion |
|
|
5,211,064 |
|
|
4,509,752 |
|
|
4,318,046 |
|
|
|
Other liabilities |
|
|
145,834 |
|
|
148,800 |
|
|
103,487 |
|
|
|
TOTAL LIABILITIES |
|
|
6,274,014 |
|
|
5,658,431 |
|
|
5,325,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingent liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.50 par value; 350,000,000 shares authorized; |
|
|
|
|
|
|
|
|
|
|
|
|
228,216,842 and 227,118,666 shares issued and outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
as of November 30, 2012 and February 29, 2012, respectively |
|
|
114,108 |
|
|
113,559 |
|
|
113,237 |
|
|
|
Capital in excess of par value |
|
|
942,017 |
|
|
877,493 |
|
|
858,790 |
|
|
|
Accumulated other comprehensive loss |
|
|
(51,745) |
|
|
(62,459) |
|
|
(39,257) |
|
|
|
Retained earnings |
|
|
2,019,289 |
|
|
1,744,519 |
|
|
1,649,488 |
|
|
|
TOTAL SHAREHOLDERS’ EQUITY |
|
|
3,023,669 |
|
|
2,673,112 |
|
|
2,582,258 |
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
9,297,683 |
|
$ |
8,331,543 |
|
$ |
7,907,781 |
|
(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.
-more-
CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Nine Months Ended November 30 |
|||||
|
(In thousands) |
|
2012 |
|
2011 (1) |
|||
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
327,063 |
|
$ |
318,764 |
|
|
Adjustments to reconcile net earnings to net cash |
|
|
|
|
|
|
|
|
(used in) provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
70,721 |
|
|
60,696 |
|
|
Share-based compensation expense |
|
|
46,597 |
|
|
37,148 |
|
|
Provision for loan losses |
|
|
40,154 |
|
|
24,878 |
|
|
Loss on disposition of assets |
|
|
1,554 |
|
|
1,331 |
|
|
Deferred income tax benefit |
|
|
(6,569) |
|
|
(5,014) |
|
|
Net decrease (increase) in: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
23,774 |
|
|
65,075 |
|
|
Inventory |
|
|
(246,452) |
|
|
36,294 |
|
|
Other current assets |
|
|
(7,336) |
|
|
24,038 |
|
|
Auto loan receivables, net |
|
|
(632,342) |
|
|
(512,107) |
|
|
Other assets |
|
|
(506) |
|
|
(5,334) |
|
|
Net decrease in: |
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other current |
|
|
|
|
|
|
|
|
liabilities and accrued income taxes |
|
|
(102,666) |
|
|
(21,673) |
|
|
Other liabilities |
|
|
(13,220) |
|
|
(17,763) |
|
|
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES |
|
|
(499,228) |
|
|
6,333 |
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(184,942) |
|
|
(105,990) |
|
|
Increase in restricted cash from collections on auto loan receivables |
|
|
(46) |
|
|
(13,340) |
|
|
Increase in restricted cash in reserve accounts |
|
|
(6,912) |
|
|
(8,573) |
|
|
Release of restricted cash from reserve accounts |
|
|
15,980 |
|
|
12,088 |
|
|
Purchases of money market securities, net |
|
|
(2,088) |
|
|
(520) |
|
|
Purchases of investments available-for-sale |
|
|
(1,525) |
|
|
(2,252) |
|
|
Sales of investments available-for-sale |
|
|
318 |
|
|
52 |
|
|
NET CASH USED IN INVESTING ACTIVITIES |
|
|
(179,215) |
|
|
(118,535) |
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Decrease in short-term debt, net |
|
|
(237) |
|
|
(243) |
|
|
Payments on finance and capital lease obligations |
|
|
(10,365) |
|
|
(9,331) |
|
|
Issuances of non-recourse notes payable |
|
|
4,010,000 |
|
|
3,633,000 |
|
|
Payments on non-recourse notes payable |
|
|
(3,313,626) |
|
|
(3,181,432) |
|
|
Repurchase and retirement of common stock |
|
|
(51,091) |
|
|
― |
|
|
Equity issuances, net |
|
|
29,486 |
|
|
5,039 |
|
|
Excess tax benefits from share-based payment arrangements |
|
|
16,728 |
|
|
7,459 |
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
680,895 |
|
|
454,492 |
|
|
Increase in cash and cash equivalents |
|
|
2,452 |
|
|
342,290 |
|
|
Cash and cash equivalents at beginning of year |
|
|
442,658 |
|
|
41,121 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
445,110 |
|
$ |
383,411 |
|
(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.
# # #