CARMAX REPORTS RECORD FIRST QUARTER RESULTS
Richmond, Va., June 19, 2015 – CarMax, Inc. (NYSE:KMX) today reported record results for the first quarter ended May 31, 2015.
§ | Net sales and operating revenues increased 7.1% to $4.01 billion. |
§ | Used unit sales in comparable stores increased 4.9%. |
§ | Total used unit sales rose 9.3%. |
§ | Total wholesale unit sales increased 4.7%. |
§ | CarMax Auto Finance (CAF) income increased 15.3% to $109.1 million. |
§ | Net earnings grew 7.3% to $182.0 million. Net earnings per diluted share rose 13.2% to $0.86. |
“We had another great quarter, setting all-time records for quarterly sales and earnings,” said Tom Folliard, president and chief executive officer. “Continued strong performances in our used, wholesale and CAF operations, along with the growth of our store base and our ongoing share repurchase program, contributed to our solid results.”
First Quarter Business Performance Review
Sales. Total used vehicle unit sales grew 9.3% and comparable store used unit sales increased 4.9% versus the prior year’s first quarter. Comparable store used unit sales benefited from a combination of factors, including improved conversion and continued growth in customer traffic.
Wholesale vehicle unit sales grew 4.7% versus the first quarter of fiscal 2015. Wholesale unit sales benefited from the growth of our store base, partially offset by a decline in our vehicle buy rate.
Other sales and revenues increased 14.3% year-over-year. Extended protection plan revenues rose 12.5% versus the prior year’s quarter, primarily due to the growth in our retail unit sales. Net third-party finance fees were relatively flat compared with last year’s first quarter, reflecting the net effect of changes in mix among providers and the overall increase in units sold. Vehicles financed by the Tier 3 providers and those included in the CAF loan origination test represented 14.5% of retail unit sales in the current quarter versus 16.1% in the corresponding prior year period.
Gross Profit. Total gross profit increased 8.4% versus the first quarter of fiscal 2015, to $543.8 million. Used vehicle gross profit rose 8.3%, primarily driven by the 9.3% increase in total used unit sales. Used vehicle gross profit per unit was relatively flat at $2,200 compared with $2,220 in the prior year period. Wholesale vehicle gross profit increased 3.3% versus the prior year’s first quarter, driven by the 4.7% increase in wholesale unit sales. Wholesale vehicle gross profit per unit of $1,032 was similar to the $1,046 reported in the first quarter of fiscal 2015. Other gross profit rose 18.7% largely due to the improvement in other sales and revenues.
SG&A. Compared with the first quarter of fiscal 2015, SG&A expenses increased 11.6% to $349.8 million. The increase primarily reflected the 12% growth in our store base since the beginning of last year’s first quarter (representing the addition of 16 stores) and a $7.9 million increase in share-based compensation expense, as well as higher variable selling costs associated with our comparable store used unit sales growth. SG&A per retail unit was $2,098 in the current quarter, up $51 year-over-year, of which $39 related to the increase in share-based compensation expense.
CarMax Auto Finance.(1) Compared with last year’s first quarter, CAF income increased 15.3% to $109.1 million. The improvement was driven by an increase in average managed receivables and continued favorable loss experience, partially offset by a lower total interest margin percentage. Average managed receivables grew 17.2% to $8.66 billion. In recent quarters, we experienced better than anticipated loan charge-offs, which had a favorable effect on both the provision for loan losses and the ending allowance for loan losses. The total interest margin, which reflects the spread between interest and fees charged to consumers and our funding costs, declined to 6.3% of average managed receivables in the current quarter from 6.7% in last year’s first quarter.
Store Openings. During the first quarter of fiscal 2016, we opened three stores, including two stores in new markets (Minneapolis and Gainesville). We also opened our third store in the Philadelphia market. Subsequent to the end of the quarter, we expanded our presence in the Denver market with two additional stores and we added a second store in the Providence market.
Share Repurchase Program. During the first quarter of fiscal 2016, we repurchased 1.8 million shares of common stock for $119.9 million. As of May 31, 2015, we had $2.25 billion remaining available for repurchase under the program.
(1) | Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions. |
Supplemental Financial Information
Amounts and percentage calculations may not total due to rounding.
Sales Components
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| Three Months Ended May 31 | |||||||
(In millions) |
| 2015 | 2014 | Change | |||||
Used vehicle sales |
| $ | 3,292.7 |
| $ | 3,060.3 |
| 7.6 | % |
New vehicle sales |
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| 60.0 |
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| 69.8 |
| (14.0) | % |
Wholesale vehicle sales |
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| 576.6 |
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| 545.2 |
| 5.8 | % |
Other sales and revenues: |
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Extended protection plan revenues |
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| 71.7 |
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| 63.7 |
| 12.5 | % |
Service department sales |
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| 30.9 |
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| 28.3 |
| 9.0 | % |
Third-party finance fees, net |
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| (17.0) |
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| (17.2) |
| 1.2 | % |
Total other sales and revenues |
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| 85.6 |
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| 74.8 |
| 14.3 | % |
Total net sales and operating revenues |
| $ | 4,014.9 |
| $ | 3,750.2 |
| 7.1 | % |
Unit Sales
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| Three Months Ended May 31 | ||||||||
| 2015 |
| 2014 |
| % Change | ||||
Used vehicles |
| 164,510 |
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| 150,528 |
| 9.3 | % |
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New vehicles |
| 2,215 |
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| 2,597 |
| (14.7) | % |
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Wholesale vehicles |
| 101,630 |
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| 97,098 |
| 4.7 | % |
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Average Selling Prices
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| Three Months Ended May 31 | ||||||||
| 2015 |
| 2014 |
| % Change | ||||
Used vehicles | $ | 19,851 |
| $ | 20,173 |
| (1.6) | % |
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New vehicles | $ | 26,997 |
| $ | 26,761 |
| 0.9 | % |
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Wholesale vehicles | $ | 5,449 |
| $ | 5,450 |
| (0.0) | % |
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Vehicle Sales Changes
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| Three Months Ended May 31 | ||||
| 2015 | 2014 |
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Used vehicle units |
| 9.3% |
| 9.8% |
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Used vehicle revenues |
| 7.6% |
| 13.3% |
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Wholesale vehicle units |
| 4.7% |
| 9.9% |
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Wholesale vehicle revenues |
| 5.8% |
| 11.1% |
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Comparable Store Used Vehicle Sales Changes (1)
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| Three Months Ended May 31 | ||||
| 2015 | 2014 |
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Used vehicle units |
| 4.9% |
| 3.4% |
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Used vehicle revenues |
| 3.4% |
| 6.6% |
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(1)Stores are added to the comparable store base beginning in their fourteenth full month of operation. Comparable store calculations include results for a set of stores that were included in our comparable store base in both the current and corresponding prior year periods.
Selected Operating Ratios
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| Three Months Ended May 31 | |||||||||
(In millions) | 2015 | % (1) | 2014 | % (1) | ||||||
Net sales and operating revenues | $ | 4,014.9 |
| 100.0 |
| $ | 3,750.2 |
| 100.0 |
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Gross profit | $ | 543.8 |
| 13.5 |
| $ | 501.7 |
| 13.4 |
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CarMax Auto Finance income | $ | 109.1 |
| 2.7 |
| $ | 94.6 |
| 2.5 |
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Selling, general, and administrative |
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expenses | $ | 349.8 |
| 8.7 |
| $ | 313.4 |
| 8.4 |
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Interest expense | $ | 7.1 |
| 0.2 |
| $ | 7.6 |
| 0.2 |
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Earnings before income taxes | $ | 296.0 |
| 7.4 |
| $ | 275.0 |
| 7.3 |
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Net earnings | $ | 182.0 |
| 4.5 |
| $ | 169.7 |
| 4.5 |
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(1) | Calculated as a percentage of net sales and operating revenues. |
Gross Profit
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| Three Months Ended May 31 | ||||||||
(In millions) | 2015 | 2014 | Change | ||||||
Used vehicle gross profit | $ | 361.9 |
| $ | 334.1 |
|
| 8.3 | % |
New vehicle gross profit |
| 0.8 |
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| 1.8 |
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| (55.4) | % |
Wholesale vehicle gross profit |
| 104.9 |
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| 101.6 |
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| 3.3 | % |
Other gross profit |
| 76.2 |
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| 64.2 |
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| 18.7 | % |
Total | $ | 543.8 |
| $ | 501.7 |
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| 8.4 | % |
Gross Profit per Unit
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| Three Months Ended May 31 | |||||||||
| 2015 | 2014 | ||||||||
| $ per unit(1) | %(2) |
| $ per unit(1) | %(2) |
| ||||
Used vehicle gross profit | $ | 2,200 |
| 11.0 |
| $ | 2,220 |
| 10.9 |
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New vehicle gross profit | $ | 371 |
| 1.4 |
| $ | 709 |
| 2.6 |
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Wholesale vehicle gross profit | $ | 1,032 |
| 18.2 |
| $ | 1,046 |
| 18.6 |
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Other gross profit | $ | 457 |
| 89.1 |
| $ | 419 |
| 85.8 |
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Total gross profit | $ | 3,262 |
| 13.5 |
| $ | 3,277 |
| 13.4 |
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(1)Calculated as category gross profit divided by each category’s respective units sold, except the other and total categories, which are calculated by dividing their respective gross profit by total retail units sold.
(2)Calculated as a percentage of its respective sales or revenue.
SG&A Expenses
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| Three Months Ended May 31 | ||||||||
(In millions) | 2015 | 2014 | Change | ||||||
Compensation and benefits (1) | $ | 201.8 |
| $ | 178.9 |
|
| 12.8 | % |
Store occupancy costs |
| 65.3 |
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| 58.3 |
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| 12.0 | % |
Advertising expense |
| 33.7 |
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| 30.7 |
|
| 9.8 | % |
Other overhead costs (2) |
| 49.0 |
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| 45.5 |
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| 7.7 | % |
Total SG&A expenses | $ | 349.8 |
| $ | 313.4 |
|
| 11.6 | % |
SG&A per retail unit | $ | 2,098 |
| $ | 2,047 |
| $ | 51 |
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(1)Excludes compensation and benefits related to reconditioning and vehicle repair service, which are included in cost of sales.
(2)Includes IT expenses, insurance, non-CAF bad debt, travel, preopening and relocation costs, charitable contributions and other administrative expenses.
Components of CAF Income and Other CAF Information
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| Three Months Ended May 31 | |||||||||
(In millions) |
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| 2015 |
| % (1) |
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| 2014 |
| % (1) |
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Interest margin: |
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Interest and fee income |
| $ | 164.9 |
| 7.6 |
| $ | 147.0 |
| 8.0 |
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Interest expense |
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| (28.1) |
| (1.3) |
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| (23.1) |
| (1.2) |
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Total interest margin |
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| 136.8 |
| 6.3 |
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| 123.9 |
| 6.7 |
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Provision for loan losses |
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| (13.6) |
| (0.6) |
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| (15.8) |
| (0.9) |
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Total interest margin after provision |
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for loan losses |
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| 123.2 |
| 5.7 |
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| 108.1 |
| 5.8 |
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Total direct expenses |
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| (14.1) |
| (0.7) |
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| (13.5) |
| (0.7) |
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CarMax Auto Finance income |
| $ | 109.1 |
| 5.0 |
| $ | 94.6 |
| 5.1 |
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Total average managed receivables |
| $ | 8,664.6 |
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| $ | 7,390.1 |
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Net loans originated |
| $ | 1,364.7 |
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| $ | 1,236.3 |
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Net CAF penetration rate |
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| 42.2 | % |
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| 41.3 | % |
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Weighted average contract rate |
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| 7.4 | % |
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| 7.2 | % |
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Ending allowance for loan losses |
| $ | 83.7 |
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| $ | 75.4 |
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Warehouse facility information: |
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Ending funded receivables |
| $ | 1,089.0 |
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| $ | 964.0 |
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Ending unused capacity |
| $ | 1,211.0 |
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| $ | 836.0 |
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(1) | Annualized percentage of total average managed receivables. |
Earnings Highlights
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| Three Months Ended May 31 | ||||||||
(In millions except per share data) | 2015 | 2014 | Change | ||||||
Net earnings | $ | 182.0 |
| $ | 169.7 |
|
| 7.3 | % |
Diluted weighted average shares outstanding |
| 211.7 |
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| 223.6 |
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| (5.4) | % |
Net earnings per diluted share | $ | 0.86 |
| $ | 0.76 |
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| 13.2 | % |
Planned Store Openings
We currently plan to open the following stores within 12 months from May 31, 2015:
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Location | Television Market | Market Status | Planned Opening Date |
Cranston, Rhode Island (1) | Providence | Existing | Q2 Fiscal 2016 |
Parker, Colorado (1) | Denver | Existing | Q2 Fiscal 2016 |
Loveland, Colorado (1) | Denver | Existing | Q2 Fiscal 2016 |
Tallahassee, Florida | Tallahassee | New | Q2 Fiscal 2016 |
Richmond, Texas | Houston | Existing | Q3 Fiscal 2016 |
Gaithersburg, Maryland (2) | Washington/Baltimore | Existing | Q3 Fiscal 2016 |
Maplewood, Minnesota | Minneapolis/St Paul | Existing | Q3 Fiscal 2016 |
Norwood, Massachusetts | Boston | New | Q4 Fiscal 2016 |
Danvers, Massachusetts | Boston | Existing | Q4 Fiscal 2016 |
Bloomington, Illinois | Peoria/Bloomington | New | Q4 Fiscal 2016 |
Buford, Georgia | Atlanta | Existing | Q4 Fiscal 2016 |
O'Fallon, Illinois | St. Louis | Existing | Q4 Fiscal 2016 |
Pleasanton, California | San Francisco | New | Q1 Fiscal 2017 |
Santa Rosa, California | San Francisco | Existing | Q1 Fiscal 2017 |
Springfield, Illinois | Springfield | New | Q1 Fiscal 2017 |
(1) | Store opened in June 2015 |
(2) | Represents a store relocation being made in connection with the expiration of the lease on our Rockville, Maryland store. |
Normal construction, permitting or other scheduling delays could shift the opening dates of any of these stores into a later period. We currently estimate total capital expenditures will be approximately $360 million in fiscal 2016. We plan to open 14 stores and relocate one store whose lease is expiring in fiscal 2016 and between 13 and 16 stores in each of the following two fiscal years.
Conference Call Information
We will host a conference call for investors at 9:00 a.m. ET today, June 19, 2015. 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 84423648. A live webcast of the call will be available on our investor information home page at investors.carmax.com.
A webcast replay of the call will be available at investors.carmax.com through September 21, 2015. A telephone replay also will be available through June 26, 2015, 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 84423648.
Second Quarter Fiscal 2016 Earnings Release Date
We currently plan to release results for the second quarter ending August 31, 2015, on Tuesday, September 22, 2015, before the opening of trading on the New York Stock Exchange. We plan to 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 investors.carmax.com in September 2015.
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 11 consecutive years, is the nation’s largest retailer of used vehicles. Headquartered in Richmond, Va., CarMax currently operates 150 used car stores in 75 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 fiscal year ended February 28, 2015, we retailed 582,282 used vehicles and sold 376,186 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. You can identify these forward-looking statements by use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “predict,” “should,” “will” and other similar expressions, whether in the negative or affirmative. 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 the competitive landscape and/or our failure to successfully adjust to such changes. |
· | Events that damage our reputation or harm the perception of the quality of our brand. |
· | 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 provided by our third-party financing providers. |
· | Changes in the availability of extended protection plan products from third-party providers. |
· | Our inability to recruit, develop and retain associates and maintain positive associate relations. |
· | The loss of key associates from our store, regional or corporate management teams or a significant increase in labor costs. |
· | Security breaches or other events that result in the misappropriation, loss or other unauthorized disclosure of confidential customer or associate information. |
· | Significant changes in prices of new and used vehicles. |
· | A reduction in the availability of or access to sources of inventory or a failure to expeditiously liquidate 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 failure of key information systems. |
· | The effect of various litigation matters. |
· | Adverse conditions affecting one or more automotive manufacturers, and manufacturer recalls. |
· | The inaccuracy of estimates and assumptions used in the preparation of our financial statements, or the effect of new accounting requirements or changes to U.S. generally accepted accounting principles. |
· | Factors related to seasonal fluctuations in our business. |
· | The occurrence of severe weather events. |
· | Factors related to the geographic concentration of our stores. |
For more details on factors that could affect expectations, see our Annual Report on Form 10-K for the fiscal year ended February 28, 2015, and our quarterly or current reports as filed with or furnished to the U.S. Securities and Exchange Commission. Our filings are publicly available on our investor information home page at investors.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. 4391. We undertake no obligation to update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
Contacts:
Investors:
Katharine Kenny, Vice President, Investor Relations, (804) 935-4591
Celeste Gunter, Manager, Investor Relations, (804) 935-4597
Media:
pr@carmax.com, (855) 887-2915
CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
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| Three Months Ended May 31 | ||||
(In thousands except per share data) |
| 2015 | % (1) |
| 2014 | % (1) |
SALES AND OPERATING REVENUES: |
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Used vehicle sales | $ | 3,292,658 | 82.0 | $ | 3,060,341 | 81.6 |
New vehicle sales |
| 60,048 | 1.5 |
| 69,789 | 1.9 |
Wholesale vehicle sales |
| 576,625 | 14.4 |
| 545,245 | 14.5 |
Other sales and revenues |
| 85,557 | 2.1 |
| 74,821 | 2.0 |
NET SALES AND OPERATING REVENUES |
| 4,014,888 | 100.0 |
| 3,750,196 | 100.0 |
Cost of sales |
| 3,471,094 | 86.5 |
| 3,248,465 | 86.6 |
GROSS PROFIT |
| 543,794 | 13.5 |
| 501,731 | 13.4 |
CARMAX AUTO FINANCE INCOME |
| 109,108 | 2.7 |
| 94,615 | 2.5 |
Selling, general and administrative expenses |
| 349,779 | 8.7 |
| 313,446 | 8.4 |
Interest expense |
| 7,103 | 0.2 |
| 7,601 | 0.2 |
Other expense |
| 41 | ― |
| 277 | ― |
Earnings before income taxes |
| 295,979 | 7.4 |
| 275,022 | 7.3 |
Income tax provision |
| 114,005 | 2.8 |
| 105,369 | 2.8 |
NET EARNINGS | $ | 181,974 | 4.5 | $ | 169,653 | 4.5 |
WEIGHTED AVERAGE COMMON SHARES: |
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Basic |
| 208,698 |
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| 220,268 |
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Diluted |
| 211,652 |
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| 223,632 |
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NET EARNINGS PER SHARE: |
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Basic | $ | 0.87 |
| $ | 0.77 |
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Diluted | $ | 0.86 |
| $ | 0.76 |
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(1)Calculated as a percentage of net sales and operating revenues and sums may not equal totals due to rounding.
CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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| (Unaudited) |
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| (Unaudited) | ||||
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| May 31 | February 28 | May 31 | ||||||
(In thousands except share data) |
| 2015 | 2015 | 2014 | |||||||
ASSETS |
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| CURRENT ASSETS: |
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| Cash and cash equivalents |
| $ | 351,698 |
| $ | 27,606 |
| $ | 532,191 |
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| Restricted cash from collections on auto loan receivables |
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| 328,054 |
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| 294,122 |
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| 290,653 |
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| Accounts receivable, net |
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| 103,663 |
|
| 137,690 |
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| 97,810 |
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| Inventory |
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| 1,844,077 |
|
| 2,086,874 |
|
| 1,681,800 |
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| Deferred income taxes |
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| 9,245 |
|
| 8,100 |
|
| 8,080 |
|
| Other current assets |
|
| 29,088 |
|
| 44,646 |
|
| 26,202 |
|
| TOTAL CURRENT ASSETS |
|
| 2,665,825 |
|
| 2,599,038 |
|
| 2,636,736 |
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| Auto loan receivables, net |
|
| 8,812,883 |
|
| 8,435,504 |
|
| 7,547,665 |
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| Property and equipment, net |
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| 1,896,348 |
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| 1,862,538 |
|
| 1,696,940 |
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| Deferred income taxes |
|
| 156,726 |
|
| 167,638 |
|
| 150,905 |
|
| Other assets |
|
| 138,895 |
|
| 133,483 |
|
| 116,714 |
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| TOTAL ASSETS |
| $ | 13,670,677 |
| $ | 13,198,201 |
| $ | 12,148,960 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| CURRENT LIABILITIES: |
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| Accounts payable |
| $ | 446,453 |
| $ | 454,810 |
| $ | 433,115 |
|
| Accrued expenses and other current liabilities |
|
| 184,277 |
|
| 250,307 |
|
| 159,298 |
|
| Accrued income taxes |
|
| 59,089 |
|
| 1,554 |
|
| 94,816 |
|
| Short-term debt |
|
| 781 |
|
| 785 |
|
| 1,242 |
|
| Current portion of long-term debt |
|
| ― |
|
| 10,000 |
|
| ― |
|
| Current portion of finance and capital lease obligations |
|
| 21,623 |
|
| 21,554 |
|
| 19,715 |
|
| Current portion of non-recourse notes payable |
|
| 287,350 |
|
| 258,163 |
|
| 253,972 |
|
| TOTAL CURRENT LIABILITIES |
|
| 999,573 |
|
| 997,173 |
|
| 962,158 |
|
| Long-term debt, excluding current portion |
|
| 300,000 |
|
| 300,000 |
|
| ― |
|
| Finance and capital lease obligations, excluding current portion |
|
| 301,480 |
|
| 306,284 |
|
| 315,762 |
|
| Non-recourse notes payable, excluding current portion |
|
| 8,574,773 |
|
| 8,212,466 |
|
| 7,373,003 |
|
| Other liabilities |
|
| 220,185 |
|
| 225,493 |
|
| 168,665 |
|
| TOTAL LIABILITIES |
|
| 10,396,011 |
|
| 10,041,416 |
|
| 8,819,588 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commitments and contingent liabilities |
|
|
|
|
|
|
|
|
|
|
| SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
|
| Common stock, $0.50 par value; 350,000,000 shares authorized; |
|
|
|
|
|
|
|
|
|
|
| 208,682,123 and 208,869,688 shares issued and outstanding |
|
|
|
|
|
|
|
|
|
|
| as of May 31, 2015 and February 28, 2015, respectively |
|
| 104,341 |
|
| 104,435 |
|
| 109,242 |
|
| Capital in excess of par value |
|
| 1,170,030 |
|
| 1,123,520 |
|
| 1,036,197 |
|
| Accumulated other comprehensive loss |
|
| (66,458) |
|
| (65,391) |
|
| (45,776) |
|
| Retained earnings |
|
| 2,066,753 |
|
| 1,994,221 |
|
| 2,229,709 |
|
| TOTAL SHAREHOLDERS’ EQUITY |
|
| 3,274,666 |
|
| 3,156,785 |
|
| 3,329,372 |
|
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
| $ | 13,670,677 |
| $ | 13,198,201 |
| $ | 12,148,960 |
|
CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
| Three Months Ended May 31 | |||||
(In thousands) |
| 2015 |
| 2014 | |||
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net earnings |
| $ | 181,974 |
| $ | 169,653 |
|
Adjustments to reconcile net earnings to net cash |
|
|
|
|
|
|
|
provided by (used in) operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 32,066 |
|
| 27,343 |
|
Share-based compensation expense |
|
| 23,409 |
|
| 15,388 |
|
Provision for loan losses |
|
| 13,598 |
|
| 15,847 |
|
Provision for cancellation reserves |
|
| 20,330 |
|
| 21,118 |
|
Deferred income tax provision |
|
| 10,475 |
|
| 771 |
|
Loss on disposition of assets and other |
|
| 77 | – |
| 424 |
|
Net decrease (increase) in: |
|
|
|
|
|
|
|
Accounts receivable, net |
|
| 34,027 |
|
| (17,887) |
|
Inventory |
|
| 242,797 |
|
| (40,376) |
|
Other current assets |
|
| 14,423 |
|
| 664 |
|
Auto loan receivables, net |
|
| (390,977) |
|
| (415,664) |
|
Other assets |
|
| 57 |
|
| 3,467 |
|
Net (decrease) increase in: |
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other current |
|
|
|
|
|
|
|
liabilities and accrued income taxes |
|
| (31,043) |
|
| 40,424 |
|
Other liabilities |
|
| (33,659) |
|
| (30,252) |
|
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
|
| 117,554 |
|
| (209,080) |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Capital expenditures |
|
| (59,437) |
|
| (53,709) |
|
Proceeds from sales of assets |
|
| 1,419 |
|
| ― |
|
Increase in restricted cash from collections on auto loan receivables |
|
| (33,932) |
|
| (31,354) |
|
Increase in restricted cash in reserve accounts |
|
| (2,972) |
|
| (3,259) |
|
Release of restricted cash from reserve accounts |
|
| 1,633 |
|
| 4 |
|
Sales (purchases) of money market securities, net |
|
| 82 |
|
| (3,035) |
|
Purchases of trading securities |
|
| (3,942) |
|
| (2,798) |
|
Sales of trading securities |
|
| 72 |
|
| 32 |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
| (97,077) |
|
| (94,119) |
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
(Decrease) increase in short-term debt, net |
|
| (4) |
|
| 660 |
|
Proceeds from revolving line of credit and long-term debt |
|
| 20,000 |
|
| ― |
|
Payments on revolving line of credit and long-term debt |
|
| (30,000) |
|
| ― |
|
Payments on finance and capital lease obligations |
|
| (4,652) |
|
| (4,204) |
|
Issuances of non-recourse notes payable |
|
| 3,047,805 |
|
| 1,897,000 |
|
Payments on non-recourse notes payable |
|
| (2,656,311) |
|
| (1,518,469) |
|
Repurchase and retirement of common stock |
|
| (117,628) |
|
| (171,924) |
|
Equity issuances, net |
|
| 17,725 |
|
| 120 |
|
Excess tax benefits from share-based payment arrangements |
|
| 26,680 |
|
| 4,306 |
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
| 303,615 |
|
| 207,489 |
|
Increase (decrease) in cash and cash equivalents |
|
| 324,092 |
|
| (95,710) |
|
Cash and cash equivalents at beginning of year |
|
| 27,606 |
|
| 627,901 |
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
| $ | 351,698 |
| $ | 532,191 |
|