Exhibit 99.1
CARMAX REPORTS FIRST QUARTER RESULTS
Richmond, Va., June 21, 2012 – CarMax, Inc. (NYSE:KMX) today reported results for the first quarter ended May 31, 2012.
| | • | | Net sales and operating revenues increased 4% to $2.77 billion from $2.68 billion in the first quarter of last year. |
| | • | | Used unit sales in comparable stores were flat for the quarter. |
| | • | | Total used unit sales rose 3% in the first quarter. |
| | • | | Total wholesale unit sales declined 2% in the first quarter. |
| | • | | CarMax Auto Finance (CAF) income increased 8% to $75.2 million from $69.7 million in the prior year quarter. |
| | • | | Net earnings decreased 4% to $120.7 million, or $0.52 per diluted share, compared with $125.5 million, or $0.54 per diluted share, in the first quarter of fiscal 2012. |
| | • | | Net earnings were increased by $0.01 per share in the current year period and $0.03 per share in the prior year period as a result of favorable CAF loss experience. |
First Quarter Business Performance Review
“Although comparable store used unit sales were flat, solid execution resulted in strong used and wholesale gross profit per unit and higher CAF income,” said Tom Folliard, president and chief executive officer. Total customer traffic and conversion at comparable stores were both similar to the prior year’s quarter.
Wholesale unit sales declined 2% in the first quarter of fiscal 2013, following increases of 32% and 52% in the first quarter of the two previous fiscal years. The decline reflected the challenging year-over-year comparison, as well as a shift in the calendar that resulted in one less Tuesday auction date. Absent the calendar shift, we estimate wholesale unit sales would have been similar to last year’s first quarter. Appraisal traffic remained higher than in the prior year; however, our appraisal buy rate was slightly below the prior year level.
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Other sales and revenues declined 9% compared with the prior year’s quarter primarily due to a mix shift among finance providers. Third-party subprime providers, who purchase subprime financings at a discount, originated 16% of used vehicle sales in the current quarter compared with 8% in the prior year quarter. In addition, CAF increased its share of financings, reducing fees received from other third-parties. The change in third-party finance fees was partially offset by an 11% increase in extended service plan (ESP) revenues, which resulted from an increase in ESP penetration and the growth in our retail vehicle sales.
Gross Profit.Total gross profit was $381.9 million in the first quarter of fiscal 2013 compared with $383.1 million in the prior year quarter, as an increase in used vehicle gross profit was offset by reductions in wholesale and other gross profit. Used vehicle gross profit increased 3%, to $249.4 million, primarily driven by the growth in used unit sales. Used vehicle gross profit per unit was virtually unchanged, at $2,221 per unit compared with $2,224 per unit in the prior year quarter.
Wholesale vehicle gross profit declined 5%, to $81.9 million, as a result of the 2% decrease in wholesale unit sales and a reduction in wholesale gross profit per unit to $980 from $1,013 in the prior year quarter. While below the prior year’s record amount, the $980 per unit still represented the second highest level of wholesale gross profit per unit in the company’s history.
Other gross profit declined 9% to $49.1 million from $54.2 million in the prior year period. The decrease was primarily due to the reduction in third-party finance fees.
CarMax Auto Finance. CAF income grew 8% to $75.2 million compared with $69.7 million in the first quarter of the prior year. Favorable CAF loss experience increased net earnings by $0.01 per share in this year’s first quarter and $0.03 per share in last year’s quarter. Excluding the loss favorability in both periods, the percentage growth in CAF income would have more closely resembled the increase in average managed receivables.
CAF’s average managed receivables grew 16% to $5.08 billion in the first quarter of fiscal 2013 compared with $4.39 billion in the prior year period. The growth reflected increased origination volume throughout fiscal 2012 and in the first quarter of fiscal 2013. Origination volumes benefited from an increase in CAF’s loan penetration, as we transitioned back to a pre-recession origination strategy and reduced the volume of loans sold to third-party providers. Originations also benefited from increased average selling prices and retail unit sales during fiscal 2012 and 2013. The allowance for loan losses increased modestly to 0.9% of managed receivables as of May 31, 2012, compared with 0.8% as of May 31, 2011, as the effect of the change in the credit mix was largely offset by favorable loss performance.
SG&A. Selling, general and administrative expenses increased 5% to $253.6 million from $241.7 million in the prior year’s first quarter. The increase in SG&A expenses reflected the addition of five stores to our base since the end of last year’s first quarter and higher growth-related costs, which include pre-opening and relocation expenses and the cost of building management bench strength. SG&A per retail unit increased to $2,217 versus $2,178 in the prior year’s quarter, reflecting the investment associated with this year’s higher store growth rate and the lack of overhead leverage resulting from flat comparable store used unit sales.
Superstore Openings. We plan to open ten superstores in fiscal 2013, double the number opened in fiscal 2012. During the first quarter of fiscal 2013, we opened two used car superstores, entering the Lancaster, Pennsylvania, and Bakersfield, California, markets. Subsequent to the end of the first quarter, we opened stores in Nashville, Tennessee, and Ft. Myers, Florida.
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Supplemental Financial Information
Sales Components
| | | | | | | | | | | | |
| (In millions) | | Three Months Ended May 31(1) | |
| | | 2012 | | | 2011 | | | Change | |
Used vehicle sales | | $ | 2,188.9 | | | $ | 2,071.5 | | | | 5.7 | % |
New vehicle sales | | | 55.5 | | | | 61.9 | | | | (10.4 | )% |
Wholesale vehicle sales | | | 467.8 | | | | 477.8 | | | | (2.1 | )% |
Other sales and revenues: | | | | | | | | | | | | |
Extended service plan revenues | | | 51.3 | | | | 46.3 | | | | 10.7 | % |
Service department sales | | | 24.8 | | | | 25.2 | | | | (1.4 | )% |
Third-party finance fees, net | | | (13.8 | ) | | | (3.3 | ) | | | (318.4 | )% |
| | | | | | | | | | | | |
Total other sales and revenues | | | 62.3 | | | | 68.2 | | | | (8.7 | )% |
| | | | | | | | | | | | |
Net sales and operating revenues | | $ | 2,774.4 | | | $ | 2,679.4 | | | | 3.5 | % |
| | | | | | | | | | | | |
| (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. |
Retail Vehicle Sales Changes
| | | | | | | | |
| | | Three Months Ended May 31 | |
| | | 2012 | | | 2011 | |
Comparable store vehicle sales: | | | | | | | | |
Used vehicle units | | | 0 | % | | | 6 | % |
New vehicle units | | | 0 | % | | | 14 | % |
Total | | | 0 | % | | | 6 | % |
| | |
Used vehicle dollars | | | 2 | % | | | 11 | % |
New vehicle dollars | | | 3 | % | | | 22 | % |
Total | | | 2 | % | | | 12 | % |
| | |
Total vehicle sales: | | | | | | | | |
Used vehicle units | | | 3 | % | | | 8 | % |
New vehicle units | | | (13 | )% | | | 14 | % |
Total | | | 3 | % | | | 8 | % |
| | |
Used vehicle dollars | | | 6 | % | | | 13 | % |
New vehicle dollars | | | (10 | )% | | | 22 | % |
Total | | | 5 | % | | | 13 | % |
Unit Sales
| | | | | | | | |
| | | Three Months Ended May 31 | |
| | | 2012 | | | 2011 | |
Used vehicles | | | 112,291 | | | | 108,511 | |
New vehicles | | | 2,107 | | | | 2,435 | |
Wholesale vehicles | | | 83,541 | | | | 85,062 | |
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Average Selling Prices
| | | | | | | | |
| | | Three Months Ended May 31 | |
| | | 2012 | | | 2011 | |
Used vehicles | | $ | 19,285 | | | $ | 18,902 | |
New vehicles | | $ | 26,174 | | | $ | 25,288 | |
Wholesale vehicles | | $ | 5,449 | | | $ | 5,469 | |
Selected Operating Ratios
| | | | | | | | | | | | | | | | |
| (In millions) | | Three Months Ended May 31 | |
| | | 2012 | | | % (1) | | | 2011 | | | % (1) | |
Net sales and operating revenues | | $ | 2,774.4 | | | | 100.0 | % | | $ | 2,679.4 | | | | 100.0 | % |
Gross profit | | $ | 381.9 | | | | 13.8 | % | | $ | 383.1 | | | | 14.3 | % |
CarMax Auto Finance income | | $ | 75.2 | | | | 2.7 | % | | $ | 69.7 | | | | 2.6 | % |
Selling, general and administrative expenses | | $ | 253.6 | | | | 9.1 | % | | $ | 241.7 | | | | 9.0 | % |
Earnings before income taxes | | $ | 195.6 | | | | 7.1 | % | | $ | 202.7 | | | | 7.6 | % |
Net earnings | | $ | 120.7 | | | | 4.4 | % | | $ | 125.5 | | | | 4.7 | % |
| (1) | Calculated as the ratio of the applicable amount to net sales and operating revenues. |
Gross Profit
| | | | | | | | | | | | |
| (In millions) | | Three Months Ended May 31 | |
| | | 2012 | | | 2011 | | | Change | |
Used vehicle gross profit | | $ | 249.4 | | | $ | 241.3 | | | | 3.3 | % |
New vehicle gross profit | | | 1.6 | | | | 1.4 | | | | 10.3 | % |
Wholesale vehicle gross profit | | | 81.9 | | | | 86.2 | | | | (5.0 | )% |
Other gross profit | | | 49.1 | | | | 54.2 | | | | (9.4 | )% |
| | | | | | | | | | | | |
Total gross profit | | $ | 381.9 | | | $ | 383.1 | | | | (0.3 | )% |
| | | | | | | | | | | | |
Gross Profit per Unit
| | | | | | | | | | | | | | | | |
| | | Three Months Ended May 31 | |
| | | 2012 | | | 2011 | |
| | | $/unit (1) | | | % (2) | | | $/unit (1) | | | % (2) | |
Used vehicle gross profit | | $ | 2,221 | | | | 11.4 | % | | $ | 2,224 | | | | 11.6 | % |
New vehicle gross profit | | $ | 755 | | | | 2.9 | % | | $ | 593 | | | | 2.3 | % |
Wholesale vehicle gross profit | | $ | 980 | | | | 17.5 | % | | $ | 1,013 | | | | 18.0 | % |
Other gross profit | | $ | 429 | | | | 78.8 | % | | $ | 488 | | | | 79.5 | % |
Total gross profit | | $ | 3,338 | | | | 13.8 | % | | $ | 3,453 | | | | 14.3 | % |
| (1) | Calculated as category gross profit divided by its respective units sold, except the other and the total categories, which are divided by total retail units sold. |
| (2) | Calculated as a percentage of its respective sales or revenue. |
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Components of CAF Income and Other CAF Information
| | | | | | | | | | | | | | | | |
| (in millions) | | Three Months Ended May 31 | |
| | | 2012 | | | 2011 | |
| | | $ | | | % (1) | | | $ | | | % (1) | |
Interest and fee income | | $ | 120.3 | | | | 9.5 | | | $ | 107.9 | | | | 9.8 | |
Interest expense | | | (25.1 | ) | | | (2.0 | ) | | | (28.5 | ) | | | (2.6 | ) |
| | | | | | | | | | | | | | | | |
Interest margin | | | 95.2 | | | | 7.5 | | | | 79.4 | | | | 7.2 | |
Provision for loan losses | | | (9.2 | ) | | | (0.7 | ) | | | 1.0 | | | | 0.1 | |
| | | | | | | | | | | | | | | | |
Interest margin after provision for loan losses | | | 86.0 | | | | 6.8 | | | | 80.4 | | | | 7.3 | |
Other gain | | | — | | | | — | | | | 0.7 | | | | 0.1 | |
Direct CAF expenses | | | (10.8 | ) | | | (0.9 | ) | | | (11.4 | ) | | | (1.0 | ) |
| | | | | | | | | | | | | | | | |
CarMax Auto Finance income | | $ | 75.2 | | | | 5.9 | | | $ | 69.7 | | | | 6.4 | |
| | | | | | | | | | | | | | | | |
| | | | |
Total average managed receivables | | $ | 5,075.2 | | | | | | | $ | 4,387.8 | | | | | |
Net loans originated | | $ | 786.8 | | | | | | | $ | 689.3 | | | | | |
| | | | |
Ending allowance for loan losses | | $ | 46.6 | | | | | | | $ | 34.3 | | | | | |
| | | | |
Warehouse facility information: | | | | | | | | | | | | | | | | |
Ending funded receivables | | $ | 1,251.0 | | | | | | | $ | 924.0 | | | | | |
Ending unused capacity | | $ | 349.0 | | | | | | | $ | 676.0 | | | | | |
| (1) | Annualized percent of total average managed receivables. |
Earnings Highlights
| | | | | | | | | | | | |
| (In millions except per share data) | | Three Months Ended May 31 | |
| | | 2012 | | | 2011 | | | Change | |
Net earnings | | $ | 120.7 | | | $ | 125.5 | | | | (3.8 | )% |
Diluted weighted average shares outstanding | | | 231.8 | | | | 230.3 | | | | 0.7 | % |
Net earnings per share | | $ | 0.52 | | | $ | 0.54 | | | | (3.7 | )% |
Planned Store Openings
We currently plan to open the following superstores within 12 months from May 31, 2012:
| | | | | | |
Location | | Television Market | | Market Status | | Planned Opening Date |
Nashville, Tennessee(1) | | Nashville | | Existing | | Q2 Fiscal 2013 |
Fort Myers, Florida(1) | | Fort Myers | | New | | Q2 Fiscal 2013 |
Naples, Florida | | Fort Myers | | New | | Q2 Fiscal 2013 |
Des Moines, Iowa | | Des Moines | | New | | Q3 Fiscal 2013 |
Oxnard, California | | Los Angeles | | Existing | | Q3 Fiscal 2013 |
Denver (Federal Heights), Colorado | | Denver | | New | | Q3 Fiscal 2013 |
Denver (Littleton), Colorado | | Denver | | New | | Q3 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 |
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Conference Call Information
We will host a conference call for investors at 9:00 a.m. ET today, June 21, 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 89949497. 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 June 21, 2012, through September 19, 2012. A telephone replay also will be available through June 29, 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 89949497.
Second Quarter Fiscal 2013 Earnings Release Date
We currently plan to release second quarter results on Thursday, September 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 September.
About CarMax
CarMax, a member of theFortune 500and theS&P 500, and one of theFortune“100 Best Companies to Work For” for eight consecutive years, is the nation’s largest retailer of used cars. Headquartered in Richmond, Va., we currently operate 112 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 fiscal year ended February 29, 2012, we 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. |
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| | • | | 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. |
| | • | | 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 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.
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, (804) 747-0422, ext. 4197
Britt Farrar, Manager, Public Relations, (804) 747-0422, ext. 3473
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CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(In thousands except per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended May 31 | |
| | | 2012 | | | % (1) | | | 2011 (2) | | | % (1) | |
| | | | |
Sales and operating revenues: | | | | | | | | | | | | | | | | |
Used vehicle sales | | $ | 2,188,907 | | | | 78.9 | | | $ | 2,071,540 | | | | 77.3 | |
New vehicle sales | | | 55,457 | | | | 2.0 | | | | 61,886 | | | | 2.3 | |
Wholesale vehicle sales | | | 467,795 | | | | 16.9 | | | | 477,794 | | | | 17.8 | |
Other sales and revenues | | | 62,261 | | | | 2.2 | | | | 68,197 | | | | 2.5 | |
| | | | | | | | | | | | | | | | |
Net sales and operating revenues | | | 2,774,420 | | | | 100.0 | | | | 2,679,417 | | | | 100.0 | |
Cost of sales | | | 2,392,505 | | | | 86.2 | | | | 2,296,322 | | | | 85.7 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 381,915 | | | | 13.8 | | | | 383,095 | | | | 14.3 | |
CarMax Auto Finance income | | | 75,179 | | | | 2.7 | | | | 69,661 | | | | 2.6 | |
Selling, general and administrative expenses | | | 253,603 | | | | 9.1 | | | | 241,655 | | | | 9.0 | |
Interest expense | | | 8,143 | | | | 0.3 | | | | 8,540 | | | | 0.3 | |
Interest income | | | 285 | | | | — | | | | 103 | | | | — | |
| | | | | | | | | | | | | | | | |
Earnings before income taxes | | | 195,633 | | | | 7.1 | | | | 202,664 | | | | 7.6 | |
Income tax provision | | | 74,887 | | | | 2.7 | | | | 77,164 | | | | 2.9 | |
| | | | | | | | | | | | | | | | |
Net earnings | | $ | 120,746 | | | | 4.4 | | | $ | 125,500 | | | | 4.7 | |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted average common shares: | | | | | | | | | | | | | | | | |
Basic | | | 227,773 | | | | | | | | 225,570 | | | | | |
Diluted | | | 231,802 | | | | | | | | 230,278 | | | | | |
| | | | |
Net earnings per share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.53 | | | | | | | $ | 0.56 | | | | | |
Diluted | | $ | 0.52 | | | | | | | $ | 0.54 | | | | | |
| (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 2011 reflects the revisions to correct our accounting for sale-leaseback transactions. |
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CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands)
| | | | | | | | | | | | |
| | | May 31, 2012 | | | May 31, 2011 (1) | | | Feb. 29, 2012 | |
ASSETS | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 456,413 | | | $ | 156,003 | | | $ | 442,658 | |
Restricted cash from collections on auto loan receivables | | | 182,316 | | | | 170,096 | | | | 204,314 | |
Accounts receivable, net | | | 65,705 | | | | 85,058 | | | | 86,434 | |
Inventory | | | 1,210,196 | | | | 1,116,341 | | | | 1,092,592 | |
Deferred income taxes | | | 6,119 | | | | 4,268 | | | | 9,938 | |
Other current assets | | | 10,258 | | | | 9,187 | | | | 17,512 | |
| | | | | | | | | | | | |
| | | |
Total current assets | | | 1,931,007 | | | | 1,540,953 | | | | 1,853,448 | |
| | | |
Auto loan receivables, net | | | 5,132,163 | | | | 4,483,612 | | | | 4,959,847 | |
Property and equipment, net | | | 1,305,462 | | | | 1,200,670 | | | | 1,278,722 | |
Deferred income taxes | | | 130,583 | | | | 118,412 | | | | 133,134 | |
Other assets | | | 98,948 | | | | 98,297 | | | | 106,392 | |
| | | | | | | | | | | | |
| | | |
TOTAL ASSETS | | $ | 8,598,163 | | | $ | 7,441,944 | | | $ | 8,331,543 | |
| | | | | | | | | | | | |
| | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | |
Accounts payable | | $ | 293,924 | | | $ | 288,073 | | | $ | 324,827 | |
Accrued expenses and other current liabilities | | | 108,733 | | | | 110,205 | | | | 128,973 | |
Accrued income taxes | | | 48,070 | | | | 38,236 | | | | 3,125 | |
Short-term debt | | | 791 | | | | 1,172 | | | | 943 | |
Current portion of financing and capital lease obligations | | | 14,730 | | | | 12,758 | | | | 14,108 | |
Current portion of non-recourse notes payable | | | 152,268 | | | | 140,940 | | | | 174,337 | |
| | | | | | | | | | | | |
| | | |
Total current liabilities | | | 618,516 | | | | 591,384 | | | | 646,313 | |
| | | |
Financing and capital lease obligations, excluding current portion | | | 349,648 | | | | 364,479 | | | | 353,566 | |
Non-recourse notes payable, excluding current portion | | | 4,672,921 | | | | 4,001,122 | | | | 4,509,752 | |
Other liabilities | | | 136,730 | | | | 107,702 | | | | 148,800 | |
| | | | | | | | | | | | |
| | | |
TOTAL LIABILITIES | | | 5,777,815 | | | | 5,064,687 | | | | 5,658,431 | |
| | | |
TOTAL SHAREHOLDERS’ EQUITY | | | 2,820,348 | | | | 2,377,257 | | | | 2,673,112 | |
| | | | | | | | | | | | |
| | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 8,598,163 | | | $ | 7,441,944 | | | $ | 8,331,543 | |
| | | | | | | | | | | | |
| (1) | As disclosed in our Annual Report on Form 10-K for the fiscal year ended February 29, 2012, fiscal 2011 reflects the revisions to correct our accounting for sale-leaseback transactions. |
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CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
| | | | | | | | |
| | | Three Months Ended May 31 | |
| | | 2012 | | | 2011 (1) | |
Operating Activities: | | | | | | | | |
Net earnings | | $ | 120,746 | | | $ | 125,500 | |
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: | | | | | | | | |
Depreciation and amortization | | | 22,982 | | | | 19,629 | |
Share-based compensation expense | | | 15,592 | | | | 15,010 | |
Provision for loan losses | | | 9,176 | | | | (1,047 | ) |
Loss on disposition of assets | | | 192 | | | | 191 | |
Deferred income tax provision | | | 7,511 | | | | 8,426 | |
Net decrease (increase) in: | | | | | | | | |
Accounts receivable, net | | | 20,729 | | | | 34,539 | |
Inventory | | | (117,604 | ) | | | (66,864 | ) |
Other current assets | | | 7,242 | | | | 24,128 | |
Auto loan receivables, net | | | (181,492 | ) | | | (161,990 | ) |
Other assets | | | 2,225 | | | | (3,034 | ) |
Net (decrease) increase in: | | | | | | | | |
Accounts payable, accrued expenses and other current liabilities and accrued income taxes | | | (7,641 | ) | | | 40,920 | |
Other liabilities | | | (15,178 | ) | | | (10,504 | ) |
| | | | | | | | |
Net cash (used in) provided by operating activities | | | (115,520 | ) | | | 24,904 | |
| | | | | | | | |
| | |
Investing Activities: | | | | | | | | |
Capital expenditures | | | (47,636 | ) | | | (31,046 | ) |
Decrease (increase) in restricted cash from collections on auto loan receivables | | | 21,998 | | | | (9,044 | ) |
Increase in restricted cash in reserve accounts | | | (236 | ) | | | (2,582 | ) |
Release of restricted cash from reserve accounts | | | 6,382 | | | | 3,193 | |
Sales of money market securities, net | | | 169 | | | | — | |
Purchases of investments available-for-sale | | | (1,096 | ) | | | — | |
| | | | | | | | |
Net cash used in investing activities | | | (20,419 | ) | | | (39,479 | ) |
| | | | | | | | |
| | |
Financing Activities: | | | | | | | | |
(Decrease) increase in short-term debt, net | | | (152 | ) | | | 170 | |
Payments on financing and capital lease obligations | | | (3,296 | ) | | | (2,997 | ) |
Issuances of non-recourse notes payable | | | 698,000 | | | | 1,234,000 | |
Payments on non-recourse notes payable | | | (556,900 | ) | | | (1,105,599 | ) |
Equity issuances, net | | | 2,529 | | | | (2,132 | ) |
Excess tax benefits from share-based payment arrangements | | | 9,513 | | | | 6,015 | |
| | | | | | | | |
Net cash provided by financing activities | | | 149,694 | | | | 129,457 | |
| | | | | | | | |
| | |
Increase in cash and cash equivalents | | | 13,755 | | | | 114,882 | |
Cash and cash equivalents at beginning of year | | | 442,658 | | | | 41,121 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 456,413 | | | $ | 156,003 | |
| | | | | | | | |
| (1) | As disclosed in our Annual Report on Form 10-K for the fiscal year ended February 29, 2012, fiscal 2011 reflects the revisions to correct our accounting for sale-leaseback transactions. |
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