Fourth Quarter and Fiscal Year 2013 Earnings Release DateWe 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. 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.
|CARMAX, INC. AND SUBSIDIARIES|
|CONSOLIDATED STATEMENTS OF EARNINGS|
|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|
|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|
|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|
|WEIGHTED AVERAGE COMMON SHARES:|
|NET EARNINGS PER SHARE:|
|(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|
|November 30||February 29||November 30|
|(In thousands except share data)||2012||2012||2011 (1)|
|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|
|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|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|Accrued expenses and other current liabilities||116,629||128,973||125,683|
|Accrued income taxes||266||3,125||13,069|
|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|
|Commitments and contingent liabilities|
|Common stock, $0.50 par value; 350,000,000 shares authorized;|
|228,216,842 and 227,118,666 shares issued and outstanding|
|as of November 30, 2012 and February 29, 2012, respectively||114,108||113,559||113,237|
|Capital in excess of par value||942,017||877,493||858,790|
|Accumulated other comprehensive loss||(51,745)||(62,459)||(39,257)|
|TOTAL SHAREHOLDERS’ EQUITY||3,023,669||2,673,112||2,582,258|
|TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY||$||9,297,683||$||8,331,543||$||7,907,781|
|CARMAX, INC. AND SUBSIDIARIES|
|CONSOLIDATED STATEMENTS OF CASH FLOWS|
|Nine Months Ended November 30|
|(In thousands)||2012||2011 (1)|
|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|
|Other current assets||(7,336)||24,038|
|Auto loan receivables, net||(632,342)||(512,107)|
|Net decrease in:|
|Accounts payable, accrued expenses and other current|
|liabilities and accrued income taxes||(102,666)||(21,673)|
|NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES||(499,228)||6,333|
|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)|
|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|