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CarMax Reports Quarterly Results

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.

Copyright Business Wire 2010
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