Close

Form 8-K CARMAX INC For: Dec 18

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 4/25/2024

1. META
2. CMG
3. LRCX
4. IBM
5. SPY
6. BA
7. HCP
8. SNAP
9. TMUS
10. MSFT


December 18, 2015 7:50 AM EST



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,  D.C. 20549 
___________ 

FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  December 18, 2015
___________
 
CARMAX, INC.
(Exact name of registrant as specified in its charter)
 
Virginia 
(State or other jurisdiction
of incorporation)
1-31420
(Commission File Number)
54-1821055
(I.R.S. Employer
Identification No.)
 
 
 
12800 Tuckahoe Creek Parkway 
Richmond,  Virginia
(Address of principal executive offices)
 
23238
(Zip Code)
 
Registrant’s telephone number, including area code: (804) 747-0422
 
Not applicable
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
____________________________________________________________________________





 
 
Item 2.02.
Results of Operations and Financial Condition.
 
The registrant issued a press release on December 18, 2015, announcing its third quarter results.  The press release is being furnished as Exhibit 99.1 hereto and is incorporated by reference into this Item 2.02.
 
 
Item 9.01.
Financial Statements and Exhibits.
(d) Exhibits
 
The following exhibit is being furnished pursuant to Item 2.02 above.
99.1
Press release, dated December 18, 2015, issued by CarMax, Inc., entitled “CarMax Reports Third Quarter Results.”




SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
CARMAX, INC.
(Registrant)
 
 
Dated:  December 18, 2015
 
By:/s/ Thomas W. Reedy
 
 
Thomas W. Reedy
 
 
Executive Vice President and
 
 
Chief Financial Officer

                
                        






EXHIBIT INDEX
 
 
 
Exhibit No.
Description
99.1
Press release, dated December 18, 2015, issued by CarMax, Inc., entitled “CarMax Reports Third Quarter Results.”
















CARMAX REPORTS THIRD QUARTER RESULTS

Richmond, Va., December 18, 2015 – CarMax, Inc. (NYSE: KMX) today reported results for the third quarter ended November 30, 2015.

▪
Net sales and operating revenues increased 4.1% to $3.54 billion.

▪
Used unit sales in comparable stores declined 0.8%.

▪
Total used unit sales rose 3.2%.

▪
Total wholesale unit sales increased 3.4%.

▪
CarMax Auto Finance (CAF) income increased 2.9% to $92.3 million.

▪
Net earnings declined 1.4% to $128.2 million, while net earnings per diluted share rose 5.0% to $0.63.

“We had a challenging sales quarter, which together with higher advertising expenses, contributed to the year-over-year decline in third quarter net earnings. However, we continued to grow both total revenues and EPS, reflecting the contributions from new stores and continued share repurchase activity," said Tom Folliard, president and chief executive officer.

Third Quarter Business Performance Review

Sales. While total used vehicle unit sales grew 3.2%, comparable store used unit sales fell 0.8% versus the prior year’s third quarter. The comparable store used unit sales performance reflected a modest decrease in store traffic, which was largely offset by improved conversion.

Wholesale vehicle unit sales grew 3.4% versus the third quarter of fiscal 2015, due to the growth in our store base.
Other sales and revenues increased 6.1% year-over-year. Extended protection plan revenues were flat, as the effect of the growth in our retail unit sales was offset by an increase in estimated cancellation reserves. Net third-party finance fees improved by 10.4% primarily due to shifts in the mix among finance providers. Vehicles financed by the Tier 3 providers (those providers to whom we pay a fee) and those included in the CAF loan origination test represented 13.7% of retail unit sales in the current quarter versus 15.2% in the prior year's third quarter.

-more-



Gross Profit. Total gross profit increased 4.0% versus last year's third quarter, to $464.3 million. Used vehicle gross profit rose 2.7%, primarily driven by the 3.2% increase in total used unit sales. Used vehicle gross profit per unit was relatively flat at $2,160 compared with $2,172 in the corresponding prior year period. Wholesale vehicle gross profit increased 5.9% versus the prior year’s quarter, driven by the combination of the 3.4% increase in wholesale vehicle unit sales and a 2.4% improvement in wholesale vehicle gross profit per unit to $949 from $927. Other gross profit rose 9.2%, primarily reflecting the increase in other sales and revenues.

SG&A. Compared with the third quarter of fiscal 2015, SG&A expenses increased 6.6% to $337.5 million. The growth primarily reflected the 10% increase in our store base since the beginning of last year’s third quarter (representing the addition of 14 stores). In addition, the increase reflected a shift in the timing of advertising expenses related to our new advertising campaign. These expenses were partially offset by a $6.5 million decrease in share-based compensation expense. SG&A per retail unit increased $81 to $2,324.

CarMax Auto Finance.(1) Compared with last year's third quarter, CAF income increased 2.9% to $92.3 million, driven by an increase in average managed receivables, which was largely offset by a lower total interest margin percentage and an increase in the provision for loan losses. Average managed receivables grew 15.4% to $9.26 billion. The total interest margin, which reflects the spread between interest and fees charged to consumers and our funding costs, declined to 6.0% of average managed receivables from 6.4% in last year’s third quarter.

Store Openings. During the third quarter, we opened two stores in existing markets (our sixth store in Houston and our second store in Minneapolis). We also relocated one store in the Washington, D.C. / Baltimore market. Subsequent to the end of the quarter, we entered the Boston market with two stores.

Financing Activities. During the third quarter, we repurchased 7.7 million shares of common stock for $445.7 million pursuant to our share repurchase program. As of November 30, 2015, we had $1.55 billion remaining available for repurchase under the program. At that date, we also had $564.0 million outstanding under our $1.2 billion revolving credit facility. The increase in outstanding revolver borrowings during the third quarter was due in large part to our stock repurchase activity and a seasonal increase in inventory.


(1) 
Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions.



-more-



Supplemental Financial Information
Amounts and percentage calculations may not total due to rounding.

Sales Components

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
(In millions)
2015
2014
 
Change
 
2015
2014
 
Change
Used vehicle sales
$
2,909.0

$
2,794.5

 
4.1
 %
 
$
9,351.8

$
8,775.0

 
6.6
 %
New vehicle sales
42.3

54.6

 
(22.5
)%
 
162.8

194.3

 
(16.2
)%
Wholesale vehicle sales
513.8

481.7

 
6.7
 %
 
1,682.2

1,557.2

 
8.0
 %
Other sales and revenues:
 
 
 
 
 
 
 
 
 
Extended protection plan revenues
61.6

61.7

 
(0.1
)%
 
197.4

188.4

 
4.8
 %
Service department sales
31.0

28.0

 
10.8
 %
 
94.8

84.9

 
11.6
 %
Third-party finance fees, net
(13.6
)
(15.2
)
 
10.4
 %
 
(45.1
)
(45.1
)
 
—
 %
Total other sales and revenues
79.0

74.5

 
6.1
 %
 
247.1

228.1

 
8.3
 %
Total net sales and operating revenues
$
3,544.1

$
3,405.2

 
4.1
 %
 
$
11,443.9

$
10,754.6

 
6.4
 %





Unit Sales

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
 
2015
2014
 
% Change
 
2015
2014
 
% Change
Used vehicles
143,673
139,158
 
3.2
 %
 
464,699
433,011
 
7.3
 %
New vehicles
1,576
2,009
 
(21.6
)%
 
6,039
7,187
 
(16.0
)%
Wholesale vehicles
94,066
90,988
 
3.4
 %
 
302,218
286,075
 
5.6
 %



Average Selling Prices

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
 
2015
2014
 
% Change
 
2015
2014
 
% Change
Used vehicles
$
20,094

$
19,914

 
0.9
 %
 
$
19,970

$
20,104

 
(0.7
)%
New vehicles
$
26,720

$
27,056

 
(1.2
)%
 
$
26,851

$
26,926

 
(0.3
)%
Wholesale vehicles
$
5,243

$
5,124

 
2.3
 %
 
$
5,345

$
5,277

 
1.3
 %


Vehicle Sales Changes

 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
 
2015
2014
 
2015
2014
Used vehicle units
3.2
%
14.0
%
 
7.3
%
9.9
%
Used vehicle revenues
4.1
%
16.6
%
 
6.6
%
13.4
%
 
 
 
 
 
 
Wholesale vehicle units
3.4
%
10.0
%
 
5.6
%
9.0
%
Wholesale vehicle revenues
6.7
%
10.2
%
 
8.0
%
11.0
%





-more-



Comparable Store Used Vehicle Sales Changes (1) 

 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
 
2015
2014
 
2015
2014
Used vehicle units
(0.8
)%
7.4
%
 
3.0
%
3.5
%
Used vehicle revenues
0.0
 %
9.9
%
 
2.3
%
6.8
%


(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

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
(In millions)
2015
% (1)
2014
% (1)
 
2015
% (1)
2014
% (1)
Net sales and operating revenues
$
3,544.1

100.0
$
3,405.2

100.0
 
$
11,443.9

100.0
$
10,754.6

100.0
Gross profit
$
464.3

13.1
$
446.6

13.1
 
$
1,529.5

13.4
$
1,411.7

13.1
CarMax Auto Finance income
$
92.3

2.6
$
89.7

2.6
 
$
299.7

2.6
$
276.9

2.6
Selling, general, and administrative
 
 
 
 
 
 
 
 
 
expenses
$
337.5

9.5
$
316.6

9.3
 
$
1,018.1

8.9
$
927.7

8.6
Interest expense
$
10.0

0.3
$
7.3

0.2
 
$
24.6

0.2
$
22.3

0.2
Earnings before income taxes
$
208.0

5.9
$
210.8

6.2
 
$
783.8

6.8
$
736.5

6.8
Net earnings
$
128.2

3.6
$
130.0

3.8
 
$
482.4

4.2
$
454.2

4.2



(1) 
Calculated as a percentage of net sales and operating revenues.

Gross Profit

 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
(In millions)
2015
2014
Change
 
2015
2014
Change
Used vehicle gross profit
$
310.4

$
302.2

2.7
 %
 
$
1,011.2

$
947.8

6.7
 %
New vehicle gross profit
0.7
1.5
(52.3
)%
 
2.7
5.4
(50.5
)%
Wholesale vehicle gross profit
89.3
84.3
5.9
 %
 
295.4
271.5
8.8
 %
Other gross profit
63.9
58.6
9.2
 %
 
220.2
186.9
17.8
 %
Total
$
464.3

$
446.6

4.0
 %
 
$
1,529.5

$
1,411.7

8.3
 %



Gross Profit per Unit

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
 
2015
2014
 
2015
2014
 
$ per unit(1)
%(2)
$ per unit(1)
%(2)
 
$ per unit(1)
%(2)
$ per unit(1)
%(2)
Used vehicle gross profit
$
2,160

10.7
$
2,172

10.8
 
$
2,176

10.8
$
2,189

10.8
New vehicle gross profit
$
440

1.6
$
724

2.7
 
$
440

1.6
$
747

2.8
Wholesale vehicle gross profit
$
949

17.4
$
927

17.5
 
$
977

17.6
$
949

17.4
Other gross profit
$
440

81.0
$
415

78.7
 
$
468

89.1
$
425

82.0
Total gross profit
$
3,197

13.1
$
3,164

13.1
 
$
3,249

13.4
$
3,207

13.1



(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.

-more-




SG&A Expenses


 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
(In millions)
2015
2014
Change
 
2015
2014
Change
Compensation and benefits (1)
$
176.9

$
179.6

(1.5
)%
 
$
559.0

$
540.1

3.5
%
Store occupancy costs
70.1
61.9
13.2
 %
 
204.0
180.1
13.3
%
Advertising expense
37.5
28.3
32.5
 %
 
106.0
88.4
19.9
%
Other overhead costs (2)
53.0
46.8
13.2
 %
 
149.1
119.1
25.2
%
Total SG&A expenses
$
337.5

$
316.6

6.6
 %
 
$
1,018.1

$
927.7

9.7
%
SG&A per retail unit
$
2,324

$
2,243

$
81

 
$
2,163

$
2,107

$
56



(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. Costs for the nine months ended November 30, 2014, were reduced by $20.9 million in connection with the receipt of settlement proceeds in a class action lawsuit.

Components of CAF Income and Other CAF Information

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
(In millions)
2015
% (1)
2014
% (1)
 
2015
% (1)
2014
% (1)
Interest margin:
 
 
 
 
 
 
 
 
 
Interest and fee income
$
172.3

7.4

$
152.7

7.6

 
$
507.0

7.5

$
450.4

7.8

Interest expense
(33.0
)
(1.4
)
(24.8
)
(1.2
)
 
(91.9
)
(1.4
)
(71.8
)
(1.2
)
Total interest margin
139.3

6.0

127.9

6.4

 
415.1

6.2

378.6

6.5

Provision for loan losses
(30.9
)
(1.3
)
(24.1
)
(1.2
)
 
(70.2
)
(1.0
)
(60.3
)
(1.0
)
Total interest margin after provision
 
 
 
 
 
 
 
 
 
for loan losses
108.4

4.7

103.8

5.2

 
344.9

5.1

318.3

5.5

 
 
 
 
 
 
 
 
 
 
Total other expense
(0.3
)
—

—

—

 
(0.4
)
—

—

—

 
 
 
 
 
 
 
 
 
 
Total direct expenses
(15.8
)
(0.7
)
(14.1
)
(0.7
)
 
(44.8
)
(0.7
)
(41.4
)
(0.7
)
CarMax Auto Finance income
$
92.3

4.0

$
89.7

4.5

 
$
299.7

4.5

$
276.9

4.8

 
 
 
 
 
 
 
 
 
 
Total average managed receivables
$
9,261.4

 
$
8,026.2

 
 
$
8,973.3

 
$
7,713.6

 
Net loans originated
$
1,224.0

 
$
1,152.6

 
 
$
3,912.1

 
$
3,554.3

 
Net CAF penetration rate
42.9
%
 
41.8
%
 
 
42.6
%
 
41.2
%
 
Weighted average contract rate
7.3
%
 
7.0
%
 
 
7.3
%
 
7.1
%
 
 
 
 
 
 
 
 
 
 
 
Ending allowance for loan losses
$
90.9

 
$
80.4

 
 
$
90.9

 
$
80.4

 
 
 
 
 
 
 
 
 
 
 
Warehouse facility information:
 
 
 
 
 
 
 
 
 
Ending funded receivables
$
1,391.0

 
$
959.0

 
 
$
1,391.0

 
$
959.0

 
Ending unused capacity
$
1,109.0

 
$
1,341.0

 
 
$
1,109.0

 
$
1,341.0

 
 
 
 
 
 
 
 
 
 
 


(1) 
Annualized percentage of total average managed receivables.





-more-




Earnings Highlights

 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
(In millions except per share data)
2015
2014
Change
 
2015
2014
Change
Net earnings
$
128.2

$
130.0

(1.4
)%
 
$
482.4

$
454.2

6.2
 %
Diluted weighted average shares outstanding
203.4
217.0
(6.3
)%
 
208.2
220.6
(5.6
)%
Net earnings per diluted share
$
0.63

$
0.60

5.0
 %
 
$
2.32

$
2.06

12.6
 %


Planned Store Openings

We currently plan to open the following stores within 12 months from November 30, 2015:

 
 
 
 
 
 
 
 
Location
Television Market
Market Status
Planned Opening Date
Norwood, Massachusetts (1)
Boston
New
Q4 Fiscal 2016
Danvers, Massachusetts (1)
Boston
New
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
Springfield, Illinois
Champaign/Springfield
New
Q1 Fiscal 2017
Pleasanton, California
San Francisco
New
Q1 Fiscal 2017
El Paso, Texas
El Paso
New
Q2 Fiscal 2017
Westborough, Massachusetts
Boston
Existing
Q2 Fiscal 2017
Fremont, California
San Francisco
Existing
Q2 Fiscal 2017
Santa Rosa, California
San Francisco
Existing
Q2 Fiscal 2017
Bristol, Tennessee
Tri-Cities TN/VA
New
Q2 Fiscal 2017
Meridian, Idaho
Boise
New
Q3 Fiscal 2017
Maple Shade, New Jersey
Philadelphia
Existing
Q3 Fiscal 2017
Daytona Beach, Florida
Orlando - Daytona Beach
Existing
Q3 Fiscal 2017
Kentwood, Michigan
Grand Rapids - Kalamazoo
New
Q3 Fiscal 2017

(1) Store opened in December 2015

Normal construction, permitting or other scheduling delays could shift the opening dates of any of these stores into a later period. In fiscal 2016, we plan to open 14 stores, and have relocated one store whose lease was set to expire. In each of the next two fiscal years, we plan to open between 13 and 16 stores. We currently estimate total capital expenditures will be approximately $360 million in fiscal 2016.


Conference Call Information

We will host a conference call for investors at 9:00 a.m. ET today, December 18, 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 84446739. A live webcast of the call will be available on our investor information home page at investors.carmax.com.

-more-



  

A webcast replay of the call will be available at investors.carmax.com through April 6, 2016. A telephone replay also will be available through December 25, 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 84446739.

Fourth Quarter Fiscal 2016 Earnings Release Date

We currently plan to release results for the fourth quarter and fiscal year ending February 29, 2016, on Thursday, April 7, 2016, 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 March 2016.

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 155 used car stores in 77 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, the company 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.

-more-



•
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 [email protected] 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:
[email protected], (855) 887-2915


-more-



CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)





 
 
 
 
 
 
 
 
 
 
 
Three Months Ended November 30
 
Nine Months Ended November 30
(In thousands except per share data)
2015
% (1)
2014
% (1)
 
2015
% (1)
2014
% (1)
SALES AND OPERATING REVENUES:
 
 
 
 
 
 
 
 
 
Used vehicle sales
$
2,908,963

82.1

$
2,794,515

82.1
 
$
9,351,841

81.7
$
8,775,021

81.6
New vehicle sales
42,291

1.2

54,561

1.6
 
162,832

1.4
194,294

1.8
Wholesale vehicle sales
513,796

14.5

481,676

14.1
 
1,682,195

14.7
1,557,191

14.5
Other sales and revenues
79,019

2.2

74,482

2.2
 
247,002

2.2
228,118

2.1
NET SALES AND OPERATING REVENUES
3,544,069

100.0

3,405,234

100.0
 
11,443,870

100.0
10,754,624

100.0
Cost of sales
3,079,738

86.9

2,958,614

86.9
 
9,914,375

86.6
9,342,934

86.9
GROSS PROFIT
464,331

13.1

446,620

13.1
 
1,529,495

13.4
1,411,690

13.1
CARMAX AUTO FINANCE INCOME
92,316

2.6

89,722

2.6
 
299,703

2.6
276,911

2.6
Selling, general and administrative expenses
337,512

9.5

316,632

9.3
 
1,018,075

8.9
927,716

8.6
Interest expense
10,021

0.3

7,338

0.2
 
24,574

0.2
22,290

0.2
Other expense
1,157

—

1,536

—
 
2,791

—
2,096

—
Earnings before income taxes
207,957

5.9

210,836

6.2
 
783,758

6.8
736,499

6.8
Income tax provision
79,758

2.3

80,787

2.4
 
301,357

2.6
282,279

2.6
NET EARNINGS
$
128,199

3.6

$
130,049

3.8
 
$
482,401

4.2
$
454,220

4.2
WEIGHTED AVERAGE COMMON SHARES:
 
 
 
 
 
 
 
 
 
Basic
201,291
 
214,228
 
 
205,760
 
217,568
 
Diluted
203,383
 
217,025
 
 
208,242
 
220,585
 
NET EARNINGS PER SHARE:
 
 
 
 
 
 
 
 
 
Basic
$
0.64

 
$
0.61

 
 
$
2.34

 
$
2.09

 
Diluted
$
0.63

 
$
0.60

 
 
$
2.32

 
$
2.06

 

(1)    Calculated as a percentage of net sales and operating revenues and sums may not equal totals due to rounding.


-more-



CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
(Unaudited)
 
 
November 30
 
February 28
 
November 30
(In thousands except share data)
2015
 
2015
 
2014
ASSETS
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
Cash and cash equivalents
$
33,346

 
$
27,606

 
$
189,880

 
Restricted cash from collections on auto loan receivables
316,186

 
294,122

 
275,718

 
Accounts receivable, net
88,530

 
137,690

 
88,180

 
Inventory
2,153,270

 
2,086,874

 
1,964,673

 
Deferred income taxes
10,878

 
8,100

 
6,368

 
Other current assets
32,673

 
44,646

 
48,433

 
TOTAL CURRENT ASSETS
2,634,883

 
2,599,038

 
2,573,252

 
Auto loan receivables, net
9,318,313

 
8,435,504

 
8,138,307

 
Property and equipment, net
2,105,807

 
1,862,538

 
1,833,600

 
Deferred income taxes
174,059

 
167,638

 
166,811

 
Other assets
148,103

 
133,483

 
131,436

 
TOTAL ASSETS
$
14,381,165

 
$
13,198,201

 
$
12,843,406

 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
 
 
Accounts payable
$
420,856

 
$
454,810

 
$
459,929

 
Accrued expenses and other current liabilities
211,833

 
250,307

 
202,533

 
Accrued income taxes
328

 
1,554

 
424

 
Short-term debt
36

 
785

 
2,574

 
Current portion of long-term debt
—

 
10,000

 
—

 
Current portion of finance and capital lease obligations
14,673

 
21,554

 
20,915

 
Current portion of non-recourse notes payable
275,828

 
258,163

 
241,807

 
TOTAL CURRENT LIABILITIES
923,554

 
997,173

 
928,182

 
Long-term debt, excluding current portion
864,000

 
300,000

 
300,000

 
Finance and capital lease obligations, excluding current portion
391,856

 
306,284

 
311,771

 
Non-recourse notes payable, excluding current portion
9,060,090

 
8,212,466

 
7,938,626

 
Other liabilities
229,910

 
225,493

 
182,675

 
TOTAL LIABILITIES
11,469,410

 
10,041,416

 
9,661,254

 
 
 
 
 
 
 
 
Commitments and contingent liabilities
—

 
—

 
—

 
SHAREHOLDERS’ EQUITY:
 
 
 
 
 
 
Common stock, $0.50 par value; 350,000,000 shares authorized; 197,563,192 and 208,869,688 shares issued and outstanding as of November 30, 2015 and February 28, 2015, respectively
98,781

 
104,435

 
105,459

 
Capital in excess of par value
1,136,607

 
1,123,520

 
1,080,267

 
Accumulated other comprehensive loss
(66,664
)
 
(65,391
)
 
(45,858
)
 
Retained earnings
1,743,031

 
1,994,221

 
2,042,284

 
TOTAL SHAREHOLDERS’ EQUITY
2,911,755

 
3,156,785

 
3,182,152

 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
14,381,165

 
$
13,198,201

 
$
12,843,406



-more-


CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
Nine Months Ended November 30
(In thousands)
2015
 
2014
OPERATING ACTIVITIES:
 
 
 
Net earnings
$
482,401

 
$
454,220

Adjustments to reconcile net earnings to net cash
 
 
 
used in operating activities:
 
 
 
Depreciation and amortization
100,504

 
84,994

Share-based compensation expense
45,284

 
57,192

Provision for loan losses
70,165

 
60,274

Provision for cancellation reserves
61,048

 
53,764

Deferred income tax benefit
(8,322
)
 
(13,347
)
Loss on disposition of assets and other
3,007

 
2,486

Net decrease (increase) in:
 
 
 
Accounts receivable, net
49,160

 
(8,257
)
Inventory
(66,396
)
 
(323,249
)
Other current assets
12,397

 
(22,061
)
Auto loan receivables, net
(952,974
)
 
(1,050,733
)
Other assets
268

 
(2,910
)
Net decrease in:
 
 
 
Accounts payable, accrued expenses and other current
 
 
 
liabilities and accrued income taxes
(109,243
)
 
(16,321
)
Other liabilities
(68,878
)
 
(60,667
)
NET CASH USED IN OPERATING ACTIVITIES
(381,579
)
 
(784,615
)
INVESTING ACTIVITIES:
 
 
 
Capital expenditures
(240,835
)
 
(238,860
)
Proceeds from sales of assets
1,520

 
5,833

Increase in restricted cash from collections on auto loan receivables
(22,064
)
 
(16,419
)
Increase in restricted cash in reserve accounts
(8,383
)
 
(11,323
)
Release of restricted cash from reserve accounts
5,907

 
6,340

Purchases of money market securities, net
(6,106
)
 
(8,604
)
Purchases of trading securities
(4,759
)
 
(3,468
)
Sales of trading securities
101

 
333

NET CASH USED IN INVESTING ACTIVITIES
(274,619
)
 
(266,168
)
FINANCING ACTIVITIES:
 
 
 
(Decrease) increase in short-term debt, net
(749
)
 
1,992

Proceeds from revolving line of credit and long-term debt
1,137,300

 
300,000

Payments on revolving line of credit and long-term debt
(583,300
)
 
—

Cash paid for debt issuance costs
(3,104
)
 
(496
)
Payments on finance and capital lease obligations
(13,310
)
 
(13,395
)
Issuances of non-recourse notes payable
7,430,805

 
5,882,000

Payments on non-recourse notes payable
(6,565,516
)
 
(4,950,011
)
Repurchase and retirement of common stock
(816,181
)
 
(695,582
)
Equity issuances
44,855

 
54,293

Excess tax benefits from share-based payment arrangements
31,138

 
33,961

NET CASH PROVIDED BY FINANCING ACTIVITIES
661,938

 
612,762

Increase (decrease) in cash and cash equivalents
5,740

 
(438,021
)
Cash and cash equivalents at beginning of year
27,606

 
627,901

CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
33,346

 
$
189,880


# # #

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings