CarMax Reports Quarterly Results--Unit Sales Down
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RICHMOND, VA--September 22, 2011: CarMax, Inc. today reported results for the second quarter ended August 31, 2011.
“We are pleased with our ability to increase earnings despite the 2% decline in comparable store used unit sales”
- Net sales and operating revenues increased 11% to $2.59 billion from $2.34 billion in the second quarter of last year.
- Comparable store used unit sales declined 2% for the quarter.
- Total used unit sales decreased 1% in the second quarter.
- Total wholesale unit sales increased 23% in the second quarter.
- Net income increased to $111.9 million, or $0.49 per diluted share, compared with $107.9 million, or $0.48 per diluted share, earned in the second quarter of fiscal 2011.
Second Quarter Business Performance Review
"We are pleased with our ability to increase earnings despite the 2% decline in comparable store used unit sales," said Tom Folliard, president and chief executive officer. "Our diversified business model enabled us to deliver the second highest quarterly earnings in our history, as the strength of our wholesale and finance operations offset the effect of softer used unit comps. We remain focused on continuing to expand our store base and drive execution and efficiencies."
Sales. We believe the 2% decline in used unit comps primarily reflected the recent economic slowdown and further reductions in consumer confidence levels. Traffic and conversion trends softened compared with recent quarters. Average selling prices continued to climb, as the tight supply of late-model used vehicles increased our acquisition costs compared with the prior year.
Wholesale unit sales increased 23% compared with the second quarter of fiscal 2011. Similar to the last several quarters, our wholesale volumes benefited from a strong increase in appraisal traffic and a continued strong buy rate.
Other sales and revenues fell 5% compared with the prior year's second quarter. This decline was largely driven by the decrease in third-party finance fees, which resulted from the decision by CarMax Auto Finance (CAF) earlier this year to retain an increased portion of the loans that third-party providers had been purchasing. This decision should result in increased CAF income over time.
Gross Profit. Total gross profit increased to $354.3 million from $349.1 million in the second quarter of fiscal 2011, primarily reflecting the strong results of our wholesale auctions.
Used vehicle gross profit was $224.0 million, similar to the $228.1 million in the prior year period. The decline resulted from the combination of a slight moderation in gross profit per unit, to $2,178 from $2,205 in the prior year quarter, and the 1% decline in total used unit volumes.
Wholesale gross profit increased 33% to $78.8 million compared with $59.3 million in the second quarter of the prior year, driven by the 23% increase in wholesale unit sales and an improvement in gross profit per unit to $929 from $858 in the prior year quarter. The strength of our wholesale profit per unit reflected the continued strong demand and pricing at our auctions.
CarMax Auto Finance. CAF income increased 21% to $63.8 million compared with $52.6 million in last year's second quarter primarily driven by higher interest margin, which rose to $85.6 million from $72.2 million. The increase in interest margin reflected increases in both average managed receivables and the spread between the interest charged to consumers and our related funding costs.
CAF net loans originated increased 27% compared with the prior year quarter. The increase reflected our previously reported decision to retain an increasing portion of the loans that third-party providers had been purchasing, as well as higher average selling prices.
SG&A. Selling, general and administrative expenses increased 5% to $236.4 million from $225.2 million in the prior year's second quarter. We have continued to fund initiatives that we believe will support the long-term growth of our company, including increased advertising and targeted spending to support future store growth. The SG&A ratio improved to 9.1% from 9.6% in the prior's year quarter, primarily due to the effect of higher average selling prices.
Superstore Openings. During the second quarter of fiscal 2012, we expanded our presence in the San Diego market, opening a store in Escondido, California.
Credit Facilities. During the quarter, we entered into a new 5-year, $700 million unsecured revolving credit facility, replacing the existing secured facility that was scheduled to expire in December. We also renewed our $800 million warehouse facility that was scheduled to expire in August. Included in this renewal was a temporary increase in our total warehouse capacity to $2.0 billion. The total warehouse capacity will return to $1.6 billion concurrent with the closing of the sale of $650 million of receivables in the 2011-2 term securitization.
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Supplemental Financial Information |
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Sales Components |
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(In millions) |
Three Months Ended
August 31 (1) |
Six Months Ended
August 31 (1) |
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2011 |
2010 |
Change |
2011 |
2010 |
Change |
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| Used vehicle sales | $ | 2,015.0 | $ | 1,889.6 | 6.6 | % | $ | 4,086.5 | $ | 3,721.7 | 9.8 | % | ||||||||||
| New vehicle sales | 46.9 | 51.1 | (8.2 | )% | 108.7 | 102.0 | 6.7 | % | ||||||||||||||
| Wholesale vehicle sales | 457.9 | 329.9 | 38.8 | % | 935.7 | 646.4 | 44.8 | % | ||||||||||||||
| Other sales and revenues: | ||||||||||||||||||||||
| Extended service plan revenues | 44.9 | 45.5 | (1.2 | )% | 91.3 | 86.9 | 5.1 | % | ||||||||||||||
| Service department sales | 26.0 | 27.1 | (3.9 | )% | 51.2 | 53.4 | (4.2 | )% | ||||||||||||||
| Third-party finance fees, net | (2.9 | ) | (1.2 | ) | (128.5 | )% | (6.2 | ) | (6.5 | ) | 5.3 | % | ||||||||||
| Total other sales and revenues | 68.1 | 71.3 | (4.5 | )% | 136.3 | 133.8 | 1.9 | % | ||||||||||||||
| Net sales and operating revenues | $ | 2,587.8 | $ | 2,341.9 | 10.5 | % | $ | 5,267.2 | $ | 4,603.8 | 14.4 | % | ||||||||||
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(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. |
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Retail Vehicle Sales Changes |
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Three Months Ended
August 31 |
Six Months Ended
August 31 |
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2011 |
2010 |
2011 |
2010 |
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| Comparable store vehicle sales: | ||||||||||||
| Used vehicle units | (2 | )% | 4 | % | 2 | % | 6 | % | ||||
| New vehicle units | (9 | )% | (19 | )% | 3 | % | (9 | )% | ||||
| Total units | (2 | )% | 3 | % | 2 | % | 6 | % | ||||
| Used vehicle dollars | 5 | % | 9 | % | 8 | % | 13 | % | ||||
| New vehicle dollars | 1 | % | (19 | )% | 12 | % | (9 | )% | ||||
| Total dollars | 5 | % | 8 | % | 8 | % | 13 | % | ||||
| Total vehicle sales: | ||||||||||||
| Used vehicle units | (1 | )% | 5 | % | 3 | % | 7 | % | ||||
| New vehicle units | (17 | )% | (19 | )% | (2 | )% | (9 | )% | ||||
| Total units | (1 | )% | 5 | % | 3 | % | 7 | % | ||||
| Used vehicle dollars | 7 | % | 11 | % | 10 | % | 14 | % | ||||
| New vehicle dollars | (8 | )% | (19 | )% | 7 | % | (9 | )% | ||||
| Total dollars | 6 | % | 10 | % | 10 | % | 14 | % | ||||
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Unit Sales |
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Three Months Ended
August 31 |
Six Months Ended
August 31 |
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2011 |
2010 |
2011 |
2010 |
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| Used vehicles | 102,825 | 103,433 | 211,336 | 204,358 | ||||
| New vehicles | 1,798 | 2,168 | 4,233 | 4,302 | ||||
| Wholesale vehicles | 84,885 | 69,140 | 169,947 | 133,499 | ||||
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Average Selling Prices |
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Three Months Ended
August 31 |
Six Months Ended
August 31 |
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2011 |
2010 |
2011 |
2010 |
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| Used vehicles | $ | 19,408 | $ | 18,084 | $ | 19,148 | $ | 18,025 | ||||
| New vehicles | $ | 25,927 | $ | 23,418 | $ | 25,559 | $ | 23,569 | ||||
| Wholesale vehicles | $ | 5,249 | $ | 4,642 | $ | 5,359 | $ | 4,711 | ||||
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Selected Operating Ratios |
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(In millions) |
Three Months Ended
August 31 |
Six Months Ended
August 31 |
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2011 |
% (1) |
2010 |
% (1) |
2011 |
% (1) |
2010 |
% (1) | |||||||||||||||||
| Net sales and operating revenues | $ | 2,587.8 | 100.0 | % | $ | 2,341.9 | 100.0 | % | $ | 5,267.2 | 100.0 | % | $ | 4,603.8 | 100.0 | % | ||||||||
| Gross profit | $ | 354.3 | 13.7 | % | $ | 349.1 | 14.9 | % | $ | 737.4 | 14.0 | % | $ | 682.7 | 14.8 | % | ||||||||
| CarMax Auto Finance income | $ | 63.8 | 2.5 | % | $ | 52.6 | 2.2 | % | $ | 133.5 | 2.5 | % | $ | 110.1 | 2.4 | % | ||||||||
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Selling, general, and administrative expenses |
$ | 236.4 | 9.1 | % | $ | 225.2 | 9.6 | % | $ | 484.6 | 9.2 | % | $ | 451.9 | 9.8 | % | ||||||||
| Earnings before income taxes | $ | 181.0 | 7.0 | % | $ | 175.2 | 7.5 | % | $ | 384.9 | 7.3 | % | $ | 339.5 | 7.4 | % | ||||||||
| Net earnings | $ | 111.9 | 4.3 | % | $ | 107.9 | 4.6 | % | $ | 238.2 | 4.5 | % | $ | 209.0 | 4.5 | % | ||||||||
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(1) |
Calculated as the ratio of the applicable amount to net sales and operating revenues. |
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Gross Profit |
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(In millions) |
Three Months Ended
August 31 |
Six Months Ended
August 31 |
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2011 |
2010 |
Change |
2011 |
2010 |
Change |
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| Used vehicle gross profit | $ | 224.0 | $ | 228.1 | (1.8 | )% | $ | 465.2 | $ | 451.3 | 3.1 | % | ||||||
| New vehicle gross profit | 1.7 | 1.2 | 47.6 | % | 3.1 | 2.7 | 16.6 | % | ||||||||||
| Wholesale vehicle gross profit | 78.8 | 59.3 | 32.9 | % | 165.0 | 120.0 | 37.6 | % | ||||||||||
| Other gross profit | 49.8 | 60.6 | (17.8 | )% | 104.0 | 108.7 | (4.3 | )% | ||||||||||
| Total gross profit | $ | 354.3 | $ | 349.1 | 1.5 | % | $ | 737.4 | $ | 682.7 | 8.0 | % | ||||||
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Gross Profit per Unit |
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Three Months Ended
August 31 |
Six Months Ended
August 31 |
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2011 |
2010 |
2011 |
2010 |
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$/unit (1) |
% (2) |
$/unit (1) |
% (2) |
$/unit (1) |
% (2) |
$/unit (1) |
% (2) | |||||||||||||||||||||
| Used vehicle gross profit | $ | 2,178 | 11.1 | % | $ | 2,205 | 12.1 | % | $ | 2,201 | 11.4 | % | $ | 2,208 | 12.1 | % | ||||||||||||
| New vehicle gross profit | $ | 948 | 3.6 | % | $ | 533 | 2.3 | % | $ | 744 | 2.9 | % | $ | 628 | 2.6 | % | ||||||||||||
| Wholesale vehicle gross profit | $ | 929 | 17.2 | % | $ | 858 | 18.0 | % | $ | 971 | 17.6 | % | $ | 899 | 18.6 | % | ||||||||||||
| Other gross profit | $ | 476 | 73.1 | % | $ | 574 | 84.9 | % | $ | 482 | 76.3 | % | $ | 521 | 81.2 | % | ||||||||||||
| Total gross profit | $ | 3,386 | 13.7 | % | $ | 3,306 | 14.9 | % | $ | 3,421 | 14.0 | % | $ | 3,272 | 14.8 | % | ||||||||||||
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(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. |
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(2) |
Calculated as a percentage of its respective sales or revenue. |
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Components of CAF Income and Other CAF Information |
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| (In millions) |
Three Months Ended
August 31 |
Six Months Ended
August 31 |
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2011 |
2010 |
2011 |
2010 |
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| $ | % (1) | $ | % (1) | $ | % (1) | $ | % (1) | |||||||||||||||||||||
| Interest and fee income | $ | 111.8 | 9.7 | $ | 107.5 | 10.2 | $ | 219.7 | 9.8 | $ | 207.3 | 10.0 | ||||||||||||||||
| Interest expense | (26.2 | ) | (2.3 | ) | (35.3 | ) | (3.4 | ) | (54.7 | ) | (2.4 | ) | (70.4 | ) | (3.4 | ) | ||||||||||||
| Interest margin | 85.6 | 7.5 | 72.2 | 6.9 | 165.0 | 7.3 | 136.9 | 6.6 | ||||||||||||||||||||
| Provision for loan losses | (10.8 | ) | (0.9 | ) | (9.0 | ) | (0.9 | ) | (9.8 | ) | (0.4 | ) | (9.9 | ) | (0.5 | ) | ||||||||||||
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Interest margin after provision for loan losses |
74.8 | 6.5 | 63.2 | 6.0 | 155.2 | 6.9 | 127.0 | 6.1 | ||||||||||||||||||||
| Other gain (loss) (2) | 0.4 | -- | (0.1 | ) | -- | 1.1 | -- | 5.0 | 0.2 | |||||||||||||||||||
| Direct CAF expenses | (11.4 | ) | (1.0 | ) | (10.5 | ) | (1.0 | ) | (22.8 | ) | (1.0 | ) | (21.9 | ) | (1.1 | ) | ||||||||||||
| CarMax Auto Finance income | $ | 63.8 | 5.6 | $ | 52.6 | 5.0 | $ | 133.5 | 5.9 | $ | 110.1 | 5.3 | ||||||||||||||||
| Total average managed receivables (3) | $ | 4,596.6 | $ | 4,205.4 | $ | 4,492.2 | $ | 4,164.2 | ||||||||||||||||||||
| Net loans originated | $ | 771.9 | $ | 607.9 | $ | 1,461.2 | $ | 1,125.1 | ||||||||||||||||||||
| Ending allowance for loan losses | $ | 36.2 | $ | 46.6 | $ | 36.2 | $ | 46.6 | ||||||||||||||||||||
| Warehouse facility information: | ||||||||||||||||||||||||||||
| Ending funded receivables | $ | 1,559.0 | $ | 718.0 | $ | 1,559.0 | $ | 718.0 | ||||||||||||||||||||
| Ending unused capacity | $ | 441.0 | $ | 882.0 | $ | 441.0 | $ | 882.0 | ||||||||||||||||||||
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(1) |
Annualized percent of total average managed receivables. |
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(2) |
The amount for the six months ended August 31, 2010, includes $2.5 million of service fee income and interest income on retained interest in securitized receivables that previously was reported separately. |
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(3) |
Principal balance only. |
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Earnings Highlights |
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(In millions except per share data) |
Three Months Ended
August 31 |
Six Months Ended
August 31 |
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2011 |
2010 |
Change |
2011 |
2010 |
Change |
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| Net earnings | $ | 111.9 | $ | 107.9 | 3.7 | % | $ | 238.2 | $ | 209.0 | 14.0 | % | ||||||
| Diluted weighted average shares outstanding |
230.7 |
226.1 |
2.0 |
% |
230.5 |
226.2 |
1.9 |
% |
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| Net earnings per share | $ | 0.49 | $ | 0.48 | 2.1 | % | $ | 1.03 | $ | 0.92 | 12.0 | % | ||||||
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Planned Store Openings |
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We currently plan to open the following superstores within 12 months from August 31, 2011: |
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Location |
Television
Market |
Market
Status |
Planned
Opening Date |
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| North Attleborough, Massachusetts | Providence | New | Q3 Fiscal 2012 | |||
| Chattanooga, Tennessee | Chattanooga | New | Q4 Fiscal 2012 | |||
| Lancaster, Pennsylvania | Harrisburg | New | Q1 Fiscal 2013 | |||
| Bakersfield, California | Bakersfield | New | Q1 Fiscal 2013 | |||
| Nashville, Tennessee | Nashville | Existing | Q1 Fiscal 2013 | |||
| Fort Myers, Florida | Fort Myers | New | Q2 Fiscal 2013 | |||
| Oxnard, California | Los Angeles | Existing | Q2 Fiscal 2013 | |||
| Naples, Florida | Fort Myers | New | Q2 Fiscal 2013 | |||
We expect to open a total of between eight and ten superstores in the fiscal year ending February 28, 2013.
Conference Call Information
We will host a conference call for investors at 9:00 a.m. ET today, September 22, 2011. 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 97138755. 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 22, 2011, through December 20, 2011. A telephone replay also will be available through September 29, 2011, and may be accessed by dialing 1-800-642-1687 (international callers dial 1-706-645-9291). The conference I.D. for both domestic and international callers is 97138755.
Third Quarter Fiscal 2011 Earnings Release Date
We currently plan to release third quarter sales and earnings on Wednesday, December 21, 2011, 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 2011 "100 Best Companies to Work For," is the nation's largest retailer of used cars. Headquartered in Richmond, Va., CarMax currently operates 106 used car superstores in 51 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 28, 2011, the company retailed 396,181 used cars and sold 263,061 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.
- 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.
- The failure of key information systems.
- The effect of new accounting requirements or changes to U.S. generally accepted accounting principles.
- Security breaches or other events that result in the misappropriation, loss or other unauthorized disclosure of confidential customer information.
- The effect of various litigation matters.
- Adverse conditions affecting one or more automotive manufacturers.
- The occurrence of severe weather events.
- Factors related to the seasonal fluctuations in our business.
- Factors related to the geographic concentration of our superstores.
- The occurrence of certain other material events.
For more details on factors that could affect expectations, see our Annual Report on Form 10-K for the fiscal year ended February 28, 2011, 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.
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CARMAX, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF EARNINGS |
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(UNAUDITED) |
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| Three Months Ended August 31 | Six Months Ended August 31 | |||||||||||||||||||
| 2011 | % (1) | 2010 | % (1) | 2011 | % (1) | 2010 | % (1) | |||||||||||||
| Sales and operating revenues: | ||||||||||||||||||||
| Used vehicle sales | $ | 2,014,983 | 77.9 | $ | 1,889,598 | 80.7 | $ | 4,086,523 | 77.6 | $ | 3,721,664 | 80.8 | ||||||||
| New vehicle sales | 46,853 | 1.8 | 51,057 | 2.2 | 108,739 | 2.1 | 101,955 | 2.2 | ||||||||||||
| Wholesale vehicle sales | 457,870 | 17.7 | 329,889 | 14.1 | 935,664 | 17.8 | 646,378 | 14.0 | ||||||||||||
| Other sales and revenues | 68,113 | 2.6 | 71,336 | 3.0 | 136,310 | 2.6 | 133,795 | 2.9 | ||||||||||||
| Net sales and operating revenues | 2,587,819 | 100.0 | 2,341,880 | 100.0 | 5,267,236 | 100.0 | 4,603,792 | 100.0 | ||||||||||||
| Cost of sales | 2,233,544 | 86.3 | 1,992,762 | 85.1 | 4,529,866 | 86.0 | 3,921,126 | 85.2 | ||||||||||||
| Gross profit | 354,275 | 13.7 | 349,118 | 14.9 | 737,370 | 14.0 | 682,666 | 14.8 | ||||||||||||
| CarMax Auto Finance income | 63,826 | 2.5 | 52,604 | 2.2 | 133,487 | 2.5 | 110,099 | 2.4 | ||||||||||||
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Selling, general and administrative expenses |
236,435 | 9.1 | 225,236 | 9.6 | 484,640 | 9.2 | 451,928 | 9.8 | ||||||||||||
| Interest expense | 787 | -- | 1,413 | 0.1 | 1,578 | -- | 1,485 | -- | ||||||||||||
| Interest income | 110 | -- | 102 | -- | 213 | -- | 182 | -- | ||||||||||||
| Earnings before income taxes | 180,989 | 7.0 | 175,175 | 7.5 | 384,852 | 7.3 | 339,534 | 7.4 | ||||||||||||
| Income tax provision | 69,094 | 2.7 | 67,290 | 2.9 | 146,669 | 2.8 | 130,530 | 2.8 | ||||||||||||
| Net earnings | $ | 111,895 | 4.3 | $ | 107,885 | 4.6 | $ | 238,183 | 4.5 | $ | 209,004 | 4.5 | ||||||||
| Weighted average common shares: | ||||||||||||||||||||
| Basic | 226,300 | 222,857 | 225,935 | 222,539 | ||||||||||||||||
| Diluted | 230,681 | 226,132 | 230,479 | 226,155 | ||||||||||||||||
| Net earnings per share: | ||||||||||||||||||||
| Basic | $ | 0.49 | $ | 0.48 | $ | 1.05 | $ | 0.93 | ||||||||||||
| Diluted | $ | 0.49 | $ | 0.48 | $ | 1.03 | $ | 0.92 | ||||||||||||
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(1) |
Percents are calculated as a percentage of net sales and operating revenues and may not equal totals due to rounding |
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CARMAX, INC. AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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(UNAUDITED) |
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| (In thousands) | ||||||
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August 31
2011 |
August 31
2010 |
February 28
2011 |
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ASSETS |
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| Current assets: | ||||||
| Cash and cash equivalents | $ 181,913 | $ 55,163 | $ 41,121 | |||
| Restricted cash from collections on auto loan receivables | 154,944 | 166,574 | 161,052 | |||
| Accounts receivable, net | 64,849 | 65,982 | 119,597 | |||
| Inventory | 1,061,309 | 929,170 | 1,049,477 | |||
| Deferred income taxes | 11,042 | 8,829 | 5,191 | |||
| Other current assets | 21,762 | 8,854 | 33,660 | |||
| Total current assets | 1,495,819 | 1,234,572 | 1,410,098 | |||
| Auto loan receivables, net | 4,699,074 | 4,262,590 | 4,320,575 | |||
| Property and equipment, net | 976,901 | 880,197 | 920,045 | |||
| Deferred income taxes | 88,451 | 100,554 | 92,278 | |||
| Other assets | 98,730 | 99,266 | 96,913 | |||
| TOTAL ASSETS | $7,358,975 | $6,577,179 | $ 6,839,909 | |||
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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| Current liabilities: | ||||||
| Accounts payable | $ 243,473 | $ 236,997 | $ 269,763 | |||
| Accrued expenses and other current liabilities | 107,653 | 92,144 | 103,389 | |||
| Accrued income taxes | 7,451 | 15,499 | 772 | |||
| Short-term debt | 1,333 | 565 | 1,002 | |||
| Current portion of long-term debt | 815 | 681 | 772 | |||
| Current portion of non-recourse notes payable | 129,565 | 139,952 | 132,519 | |||
| Total current liabilities | 490,290 | 485,838 | 508,217 | |||
| Long-term debt, excluding current portion | 27,931 | 28,747 | 28,350 | |||
| Non-recourse notes payable, excluding current portion | 4,169,037 | 3,867,045 | 3,881,142 | |||
| Other liabilities | 119,495 | 126,546 | 130,570 | |||
| TOTAL LIABILITIES | 4,806,753 | 4,508,176 | 4,548,279 | |||
| TOTAL SHAREHOLDERS' EQUITY | 2,552,222 | 2,069,003 | 2,291,630 | |||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $7,358,975 | $ 6,577,179 | $ 6,839,909 | |||
|
CARMAX, INC. AND SUBSIDIARIES |
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|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
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|
(UNAUDITED) |
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| (In thousands) | ||||||||
|
|
||||||||
| Six Months Ended August 31 | ||||||||
| 2011 | 2010 | |||||||
|
Operating Activities: |
||||||||
| Net earnings | $ | 238,183 | $ | 209,004 | ||||
|
Adjustments to reconcile net earnings to net cash used in operating activities: |
||||||||
| Depreciation and amortization | 31,004 | 29,048 | ||||||
| Share-based compensation expense | 26,303 | 21,957 | ||||||
| Provision for loan losses | 9,783 | 9,883 | ||||||
| Loss on disposition of assets | 1,195 | 316 | ||||||
| Deferred income tax provision | 4,408 | 10,304 | ||||||
| Net decrease (increase) in: | ||||||||
| Accounts receivable, net | 54,748 | 13,077 | ||||||
| Retained interest in securitized receivables | -- | 43,746 | ||||||
| Inventory | (11,832 | ) | (86,037 | ) | ||||
| Other current assets | 11,648 | (4,702 | ) | |||||
| Auto loan receivables, net | (388,282 | ) | (228,878 | ) | ||||
| Other assets | (1,797 | ) | (4,688 | ) | ||||
| Net (decrease) increase in: | ||||||||
|
Accounts payable, accrued expenses and other current liabilities and accrued income taxes |
(42,095 | ) | (26,102 | ) | ||||
| Other liabilities | (14,907 | ) | 3,606 | |||||
| Net cash used in operating activities | (81,641 | ) | (9,466 | ) | ||||
|
Investing Activities: |
||||||||
| Capital expenditures | (80,225 | ) | (15,232 | ) | ||||
|
Decrease (increase) in restricted cash from collections on auto loan receivables |
6,108 | (3,966 | ) | |||||
| Increase in restricted cash in reserve accounts | (4,562 | ) | (8,680 | ) | ||||
| Release of restricted cash from reserve accounts | 6,997 | 7,028 | ||||||
| (Purchases) sales of money market securities, net | (291 | ) | 1 | |||||
| Purchases of investments available-for-sale | (2,164 | ) | -- | |||||
| Net cash used in investing activities | (74,137 | ) | (20,849 | ) | ||||
|
Financing Activities: |
||||||||
| Increase (decrease) in short-term debt, net | 331 | (318 | ) | |||||
| Issuances of long-term debt | -- | 243,300 | ||||||
| Payments on long-term debt | (376 | ) | (365,299 | ) | ||||
| Issuances of non-recourse notes payable | 1,869,000 | 1,873,000 | ||||||
| Payments on non-recourse notes payable | (1,584,059 | ) | (1,692,413 | ) | ||||
| Equity issuances, net | 4,362 | 6,387 | ||||||
| Excess tax benefits from share-based payment arrangements | 7,312 | 2,543 | ||||||
| Net cash provided by financing activities | 296,570 | 67,200 | ||||||
| Increase in cash and cash equivalents | 140,792 | 36,885 | ||||||
| Cash and cash equivalents at beginning of year | 41,121 | 18,278 | ||||||
| Cash and cash equivalents at end of period | $ | 181,913 | $ | 55,163 | ||||
