CarMax, Inc. (NYSE:KMX), the nation’s largest and most
profitable retailer of used cars, today reported results for the
first quarter ended May 31, 2021.
Highlights:
- Diversified business model delivered record net revenues of
$7.70 billion, up 138.4% compared with the prior year first quarter
and up 43% over a record first quarter fiscal year 2020.
- Net earnings per diluted share of $2.63, up from $0.03 per
diluted share a year ago and up 65% over a record first quarter
fiscal year 2020.
- Sold 452,188 units through our retail and wholesale channels
combined, up 128% from the prior year quarter and up 31% over a
record first quarter in fiscal year 2020, primarily driven by
significant demand for used autos and solid execution supported by
our rapidly evolving omni-channel experience.
- Retail used unit sales increased 100.6% to 270,799 vehicles;
comparable store units increased 99.1% compared with a year ago and
two-year comparable units grew 16.0%(1).
- Wholesale units increased 186.6% to 181,389 from the prior year
first quarter and 50.2% versus the first quarter of fiscal year
2020.
- Bought 341,275 vehicles from consumers in the first quarter, a
236% increase versus the prior year quarter and 77% increase versus
the first quarter of fiscal year 2020. We believe CarMax became the
largest online buyer of used vehicles from consumers as a result of
our nationwide online instant appraisal offerings, with
approximately 163,000 vehicles bought in the quarter.
- Gross profit per retail used unit was $2,205 and wholesale
gross profit per unit was $1,025, a $268 and $47 per unit increase,
respectively, when compared with the first quarter last year.
- CarMax Auto Finance (CAF) income increased to $241.7 million
due to the combined effects of favorable loan loss performance,
higher net interest margin and an increase in average managed
receivables.
CEO Commentary:
“We delivered exceptional results in the first quarter thanks to
excellent execution by our team in a high demand environment,” said
Bill Nash, president and chief executive officer. “Our strong
performance, which included record net revenues and profitability,
reflects the strength of our omni-channel experience and
diversified business model across retail, wholesale and CAF.
“I am also pleased to report we completed our acquisition of
Edmunds on June 1, 2021, welcoming an extremely talented set of
associates into the CarMax family. While Edmunds will continue to
operate as an independent business within CarMax, we look forward
to extending and enhancing the success of our partnership,
including market leading products like our online instant appraisal
offering.
“As I said at our analyst day in May, we are really excited
about our future,” concluded Nash. “With the most customer-centric
experience in our industry, a highly profitable operating and
financial model, and significant opportunities to grow our existing
businesses and expand across the broader used auto ecosystem, we
remain confident in our ability to meet our long-term targets of
revenue growth, total unit growth and market share gains.”
First Quarter Business Performance
Review:
Sales. Combined retail and
wholesale used vehicle unit sales were 452,188, an increase of 128%
from the prior year’s first quarter. Compared with the first
quarter of fiscal 2020, combined retail and wholesale used vehicle
unit sales increased 31%. Online retail sales(2) accounted for 8%
of first quarter retail unit sales and revenue from online
transactions(3), including retail and wholesale revenues, was $1.9
billion, or approximately 24% of net revenues.
Retail used vehicle unit sales were 270,799, an increase of
100.6% from the prior year’s first quarter, and an increase of
20.7% compared with the first quarter of fiscal 2020. Comparable
store used unit sales increased 99.1% from the prior year’s first
quarter. On a two-year basis, comparable used unit sales growth for
the quarter, excluding stores that were opened in FY20 or later,
was 16.0%. In addition to the effects from COVID on our prior year
results, we believe several factors contributed to our strong
comparable store sales growth on both a one-year and two-year
basis, including a robust used auto demand environment, supported
by federal stimulus checks as well as a shift in the timing of
customer tax refunds, and solid execution supported by the adoption
of our rapidly evolving omni-channel customer experience. Total
used vehicle revenues increased 121.0% compared with the prior
year’s first quarter due to the increase in units sold and average
retail selling prices rising more than $2,000. This increase
largely reflected higher vehicle acquisition costs resulting from
strong wholesale industry valuations.
Total wholesale vehicle unit sales were 181,389, an increase of
186.6% compared with the prior year’s first quarter and an increase
of 50.2% compared with the first quarter of fiscal 2020. Our
wholesale sales benefited from: (i) the large increase in appraisal
volume from online offerings; (ii) a record buy rate, aided by
market prices; (iii) comparing to a COVID-impacted quarter last
year; and (iv) an extra auction day when compared with the first
quarter last year. Total wholesale revenue increased 300.9%
compared with the prior year’s first quarter due to the increase in
units sold and average wholesale selling prices rising more than
$2,000.
Other sales and revenues increased 66.4% compared with the first
quarter of fiscal 2021, reflecting an increase of $66.2 million in
other revenues. The increase in other revenues was largely driven
by an increase in extended protection plan (EPP) revenues primarily
reflecting strong used unit growth and the renegotiated fee
structures with our Tier 2 and Tier 3 third-party finance
providers.
Gross Profit. Total gross
profit increased to $924.5 million, an increase of 161.0% versus
last year’s first quarter. Retail used vehicle gross profit rose
128.3%, reflecting the increase in total used unit sales and a
strong pricing environment. Retail used vehicle gross profit per
unit increased to $2,205 compared with $1,937 in the prior year’s
quarter. Wholesale vehicle gross profit increased 200.1% versus the
prior year’s quarter, largely reflecting an increase in volume,
strong pricing, and an extra auction day in the current year’s
quarter. Wholesale vehicle gross profit of $1,025 per unit was up
from $978 in the prior year quarter. Other gross profit increased
361.0%, reflecting EPP growth from sales volume, the impact of
normalizing service operations when compared with the COVID-related
service inefficiencies during the prior year quarter and
renegotiated net third-party finance provider fees.
SG&A. Compared with the
first quarter of fiscal 2021, SG&A expenses increased 70.5% to
$554.1 million. Contributing factors included a planned increase in
advertising expense and continued spending to advance our
technology platforms and support our core and omni-channel
strategic initiatives. In the prior year’s first quarter we took
cost reduction actions in response to the pandemic, saw reductions
in variable expenses and experienced location closures and
occupancy restrictions. Additionally, we saw a decrease in
stock-based compensation expense related to changes in the
company’s share price. Fiscal 2021 also included a one-time benefit
of $40.3 million from the receipt of settlement proceeds in a class
action lawsuit related to the economic loss associated with
vehicles containing Takata airbags.
With strong sales in the first quarter and disciplined cost
management, SG&A as a percent of gross profit was 59.9%, down
from 91.7% in the prior year’s first quarter and comparable to the
first quarter of fiscal 2020.
CarMax Auto
Finance.(4) CAF income increased to $241.7
million, primarily reflecting the $24.4 million loan loss provision
income compared with the $122.0 million provision expense in the
same period last year, along with an increase in net interest
margin and average managed receivables. This favorable provision
for loan losses was the result of improved loss experience in the
first quarter versus the expectations we set at the end of the
fourth quarter, as well as our outlook on future losses. As of May
31, 2021, the allowance for loan losses of $379.5 million was 2.62%
of ending managed receivables, down from 2.97% as of February 28,
2021.
CAF’s total interest margin percentage, which represents the
spread between interest and fees charged to consumers and our
funding costs, improved to 6.9% of average managed receivables from
5.9% in the prior year’s first quarter, due to lower funding costs
and higher interest and fees from consumers. After the effect of
3-day payoffs, CAF financed 43.7% of units sold in the current
quarter, up from 36.1% in the prior year’s first quarter and 41.4%
in first quarter fiscal 2020. During the first quarter of last
year, CAF adjusted its origination strategy due to the uncertainty
of the macro environment from the impact of COVID.
During the first quarter, CAF progressively increased its
targeted Tier 3 share to a rate of 10% of loans by the end of the
first quarter, up from 5% in previous quarters. We will continue to
evaluate the lending environment and will consider future
adjustments to the target if and when we believe changes are
sustainable and in the best interest of our long-term business
goals.
Share Repurchase Activity.
We repurchased 1.0 million shares of common stock for $124.5
million pursuant to our share repurchase program during the first
quarter of fiscal 2022. As of May 31, 2021, we had $1.21 billion
remaining available for repurchase under the outstanding
authorization.
Other (Income) Expense.
Other income was $25.6 million in the first quarter of fiscal year
2022 compared with expense of $3.3 million in the first quarter of
fiscal year 2021. The increase was primarily due to an unrealized
gain on an equity investment recorded during the first quarter of
fiscal year 2022.
Store Openings. During the
first quarter of fiscal 2022, we opened two new locations, both in
existing Florida markets. In fiscal year 2022, we plan to open a
total of 10 new locations.
Long-Term Targets. In May,
we introduced long-term targets of $33 billion in revenue and 2
million units sold per year through our retail and wholesale
channels by fiscal year 2026. We also expect to grow our market
share of national used auto market of cars 0-10 years old to more
than 5% by calendar year 2025.
(1)
Two-year comparable store units excludes stores opened in
fiscal year 2020 or later.
(2)
Online retail units sold is defined as a sale where the
customer completes all four of these major transactional activities
remotely: reserving the vehicle; financing the vehicle, if needed;
trading-in or opting out of a trade in; and, creating a remote
sales order.
(3)
Revenue from online transactions is defined as revenue from
retail sales that qualify for an online retail sale, as well as any
EPP and third-party finance contribution, and wholesale sales where
the winning bid was an online bid.
(4)
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
Three Months Ended May
31
(In millions)
2021
2020
Change
Used vehicle sales
$
6,157.3
$
2,786.2
121.0
%
Wholesale vehicle sales
1,374.4
342.9
300.9
%
Other sales and revenues:
Extended protection plan revenues
134.2
73.4
83.0
%
Third-party finance fees, net
(4.6)
(10.7)
57.2
%
Other
36.3
37.0
(2.3)
%
Total other sales and revenues
165.9
99.7
66.4
%
Total net sales and operating revenues
$
7,697.6
$
3,228.8
138.4
%
Unit Sales
Three Months Ended May
31
2021
2020
Change
Used vehicles
270,799
135,028
100.6
%
Wholesale vehicles
181,389
63,295
186.6
%
Average Selling Prices
Three Months Ended May
31
2021
2020
Change
Used vehicles
$
22,533
$
20,346
10.7
%
Wholesale vehicles
$
7,266
$
5,110
42.2
%
Vehicle Sales Changes
Three Months Ended May
31
2021
2020
Used vehicle units
100.6
%
(39.8)
%
Used vehicle revenues
121.0
%
(38.6)
%
Wholesale vehicle units
186.6
%
(47.6)
%
Wholesale vehicle revenues
300.9
%
(48.2)
%
Comparable Store Used Vehicle Sales
Changes (1)
Three Months Ended May
31
2021
2020
Used vehicle units
99.1
%
(41.8)
%
Used vehicle revenues
120.6
%
(40.8)
%
(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.
Used Vehicle Financing Penetration by
Channel (Before the Impact of 3-day Payoffs) (1)
Three Months Ended May
31
2021
2020
CAF (2)
46.7
%
38.2
%
Tier 2 (3)
22.8
%
28.5
%
Tier 3 (4)
10.0
%
14.5
%
Other (5)
20.5
%
18.8
%
Total
100.0
%
100.0
%
(1)
Calculated as used vehicle units financed for respective
channel as a percentage of total used units sold.
(2)
Includes CAF's Tier 3 loan originations, which represent
less than 1% of total used units sold.
(3)
Third-party finance providers who generally pay us a fee or
to whom no fee is paid.
(4)
Third-party finance providers to whom we pay a fee.
(5)
Represents customers arranging their own financing and
customers that do not require financing.
Selected Operating
Ratios
Three Months Ended May
31
(In millions)
2021
% (1)
2020
% (1)
Net sales and operating revenues
$
7,697.6
100.0
$
3,228.8
100.0
Gross profit
$
924.5
12.0
$
354.2
11.0
CarMax Auto Finance income
$
241.7
3.1
$
51.0
1.6
Selling, general, and administrative
expenses
$
554.1
7.2
$
324.9
10.1
Interest expense
$
20.5
0.3
$
24.0
0.7
Earnings before income taxes
$
567.3
7.4
$
4.2
0.1
Net earnings
$
436.8
5.7
$
5.0
0.2
(1)
Calculated as a percentage of net sales and operating
revenues.
Gross Profit
Three Months Ended May
31
(In millions)
2021
2020
Change
Used vehicle gross profit
$
597.0
$
261.5
128.3
%
Wholesale vehicle gross profit
185.8
61.9
200.1
%
Other gross profit
141.7
30.8
361.0
%
Total
$
924.5
$
354.2
161.0
%
Gross Profit per Unit
Three Months Ended May
31
2021
2020
$ per unit(1)
%(2)
$ per unit(1)
%(2)
Used vehicle gross profit
$
2,205
9.7
$
1,937
9.4
Wholesale vehicle gross profit
$
1,025
13.5
$
978
18.1
Other gross profit
$
523
85.4
$
228
30.8
Total gross profit
$
3,414
12.0
$
2,623
11.0
(1)
Calculated as category gross profit divided by its
respective units sold, except the other and total categories, which
are divided by total used units sold.
(2)
Calculated as a percentage of its respective sales or
revenue.
SG&A Expenses (1)
Three Months Ended May
31
(In millions)
2021
2020
Change
Compensation and benefits:
Compensation and benefits, excluding
share-based compensation expense
$
284.2
$
191.2
48.6
%
Share-based compensation expense
38.4
23.7
62.5
%
Total compensation and benefits (2)
$
322.6
$
214.9
50.1
%
Store occupancy costs
50.6
45.8
10.5
%
Advertising expense
72.5
34.5
110.0
%
Other overhead costs (3)
108.4
29.7
264.8
%
Total SG&A expenses
$
554.1
$
324.9
70.5
%
SG&A as % of gross profit
59.9
%
91.7
%
(31.8)
%
(1)
Depreciation and amortization previously included in
SG&A expenses is now separately presented and is excluded from
this table. Prior period amounts have been reclassified to conform
to the current period’s presentation.
(2)
Excludes compensation and benefits related to reconditioning
and vehicle repair service, which are included in cost of sales.
(3)
Includes IT expenses, non-CAF bad debt, insurance,
preopening and relocation costs, charitable contributions, travel
and other administrative expenses.
Components of CAF Income and Other CAF
Information
Three Months Ended May
31
(In millions)
2021
% (1)
2020
% (1)
Interest margin:
Interest and fee income
$
310.3
8.8
$
282.5
8.4
Interest expense
(65.8)
(1.9)
(84.6)
(2.5)
Total interest margin
244.5
6.9
197.9
5.9
Provision for loan losses
24.4
0.7
(122.0)
(3.6)
Total interest margin after provision for
loan losses
268.9
7.6
75.9
2.3
Total other expense
—
—
(1.9)
(0.1)
Total direct expenses
(27.2)
(0.8)
(23.0)
(0.7)
CarMax Auto Finance income
$
241.7
6.8
$
51.0
1.5
Total average managed receivables
$
14,148.7
$
13,408.5
Net loans originated
$
2,483.4
$
992.3
Net penetration rate
43.7
%
36.1
%
Weighted average contract rate
9.0
%
8.4
%
Ending allowance for loan losses
$
379.5
$
437.2
Warehouse facility information:
Ending funded receivables
$
2,856.9
$
1,949.7
Ending unused capacity
$
1,068.1
$
1,550.3
(1)
Annualized percentage of total average managed receivables.
Earnings Highlights
Three Months Ended May
31
(In millions except per share data)
2021
2020
Change
Net earnings
$
436.8
$
5.0
8,673.7
%
Diluted weighted average shares
outstanding
166.3
163.5
1.7
%
Net earnings per diluted share
$
2.63
$
0.03
8,666.7
%
Conference Call
Information
We will host a conference call for investors at 9:00 a.m. ET
today, June 25, 2021. 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
3576577. A live webcast of the call will be available on our
investor information home page at investors.carmax.com.
A replay of the webcast will be available on the company’s
website at investors.carmax.com through September 29, 2021, or via
telephone (for approximately one week) by dialing 1-855-859-2056
(or 1-404-537-3406 for international access) and entering the
conference ID 3576577.
Second Quarter Fiscal 2022 Earnings
Release Date
We currently plan to release results for the second quarter
ending August 31, 2021, on Thursday, September 30, 2021, 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
2021.
About CarMax
CarMax, the nation’s largest retailer of used autos,
revolutionized the automotive retail industry by driving integrity,
honesty and transparency in every interaction. The company offers a
truly personalized experience with the option for customers to do
as much, or as little, online and in-store as they want. CarMax
also provides a variety of vehicle delivery methods, including home
delivery, contactless curbside pickup and appointments in its
stores. During the fiscal year ending February 28, 2021, CarMax
sold more than 750,000 used vehicles and more than 425,000
wholesale vehicles at its in-store and virtual auctions. In
addition, CarMax Auto Finance originated more than $6 billion in
receivables during fiscal year 2021, adding to its near $14 billion
portfolio. CarMax has more than 220 stores, approximately 27,000
Associates, and is proud to have been recognized for 17 consecutive
years as one of the Fortune 100 Best Companies to Work For®. For
more information, visit www.carmax.com.
Forward-Looking
Statements
We caution readers that the statements contained in this release
about our future business plans, operations, challenges,
opportunities or prospects, including without limitation any
statements or factors regarding strategic transactions, expected
operating capacity, sales, inventory, market share, revenue,
margins, expenses, liquidity, capital expenditures, debt
obligations, tax rates 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 the use of words such as
“anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,”
“may,” “outlook,” “plan,” “positioned,” “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:
- The effect and consequences of the Coronavirus public health
crisis on matters including U.S. and local economies; our business
operations and continuity; the availability of corporate and
consumer financing; the health and productivity of our associates;
the ability of third-party providers to continue uninterrupted
service; and the regulatory environment in which we operate.
- 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 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.
- Our inability to realize the benefits associated with our
omni-channel initiatives.
- Our inability to realize the expected benefits of strategic
transactions, including our acquisition of Edmunds.
- 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, associate or corporate information.
- Significant changes in prices of new and used vehicles.
- Changes in economic conditions or other factors that result in
greater credit losses for CAF’s portfolio of auto loans receivable
than anticipated.
- A reduction in the availability of or access to sources of
inventory or a failure to expeditiously liquidate inventory.
- Changes in consumer credit availability provided by our
third-party finance providers.
- Changes in the availability of extended protection plan
products from third-party providers.
- Factors related to the regulatory and legislative environment
in which we operate.
- Factors related to geographic and sales growth, including the
inability to effectively manage our growth.
- The failure of or inability to sufficiently enhance key
information systems.
- The performance of the third-party vendors we rely on for key
components of our business.
- The effect of various litigation matters.
- Adverse conditions affecting one or more automotive
manufacturers, and manufacturer recalls.
- The failure or inability to realize the benefits associated
with our strategic investments.
- 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.
- The volatility in the market price for our common stock.
- The failure or inability to adequately protect our intellectual
property.
- 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, 2021, 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 (804) 747-0422 x7865.
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.
CARMAX,
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended May
31
(In thousands except per share data)
2021
% (1)
2020
% (1)
SALES AND OPERATING REVENUES:
Used vehicle sales
$
6,157,344
80.0
$
2,786,202
86.3
Wholesale vehicle sales
1,374,357
17.9
342,852
10.6
Other sales and revenues
165,898
2.2
99,728
3.1
NET SALES AND OPERATING
REVENUES
7,697,599
100.0
3,228,782
100.0
COST OF SALES:
Used vehicle cost of sales
5,560,337
72.2
2,524,676
78.2
Wholesale vehicle cost of sales
1,188,513
15.4
280,922
8.7
Other cost of sales
24,240
0.3
69,001
2.1
TOTAL COST OF SALES
6,773,090
88.0
2,874,599
89.0
GROSS PROFIT
924,509
12.0
354,183
11.0
CARMAX AUTO FINANCE INCOME
241,731
3.1
50,950
1.6
Selling, general, and administrative
expenses
554,069
7.2
324,891
10.1
Depreciation and amortization (2)
49,890
0.6
48,825
1.5
Interest expense
20,534
0.3
23,958
0.7
Other (income) expense
(25,577)
(0.3)
3,295
0.1
Earnings before income taxes
567,324
7.4
4,164
0.1
Income tax provision
130,568
1.7
(814)
—
NET EARNINGS
$
436,756
5.7
$
4,978
0.2
WEIGHTED AVERAGE COMMON SHARES:
Basic
163,151
162,673
Diluted
166,295
163,537
NET EARNINGS PER SHARE:
Basic
$
2.68
$
0.03
Diluted
$
2.63
$
0.03
(1)
Percents are calculated as a percentage of net sales and
operating revenues and may not total due to rounding.
(2)
Depreciation and amortization previously included in
Selling, general, and administrative expenses is now separately
presented. Prior period amounts have been reclassified to conform
to the current period’s presentation.
CARMAX,
INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As of
May 31
February 28
May 31
(In thousands except share data)
2021
2021
2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
377,954
$
132,319
$
658,022
Restricted cash from collections on auto
loans receivable
549,578
496,415
480,565
Accounts receivable, net
413,219
239,070
145,018
Inventory
3,248,849
3,157,159
1,899,430
Other current assets
101,005
91,833
100,696
TOTAL CURRENT ASSETS
4,690,605
4,116,796
3,283,731
Auto loans receivable, net
14,159,044
13,489,819
12,794,622
Property and equipment, net
3,076,173
3,055,563
3,064,738
Deferred income taxes
138,487
164,261
119,066
Operating lease assets
453,851
431,652
443,678
Other assets
314,729
283,450
266,697
TOTAL ASSETS
$
22,832,889
$
21,541,541
$
19,972,532
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
1,058,005
$
799,333
$
390,160
Accrued expenses and other current
liabilities
401,043
415,465
290,080
Accrued income taxes
96,624
218
—
Current portion of operating lease
liabilities
30,836
30,953
30,881
Short-term debt
—
—
86
Current portion of long-term debt
10,210
9,927
9,744
Current portion of non-recourse notes
payable
496,669
442,652
430,055
TOTAL CURRENT LIABILITIES
2,093,387
1,698,548
1,151,006
Long-term debt, excluding current
portion
1,320,208
1,322,415
1,693,888
Non-recourse notes payable, excluding
current portion
13,840,787
13,297,504
12,722,292
Operating lease liabilities, excluding
current portion
446,497
423,618
435,325
Other liabilities
428,529
434,843
391,711
TOTAL LIABILITIES
18,129,408
17,176,928
16,394,222
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY:
Common stock, $0.50 par value; 350,000,000
shares authorized; 162,802,762 and 163,172,333 shares issued and
outstanding as of May 31, 2021 and February 28, 2021,
respectively
81,401
81,586
81,378
Capital in excess of par value
1,527,876
1,513,821
1,358,428
Accumulated other comprehensive loss
(115,754)
(118,691)
(165,405)
Retained earnings
3,209,958
2,887,897
2,303,909
TOTAL SHAREHOLDERS’ EQUITY
4,703,481
4,364,613
3,578,310
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
22,832,889
$
21,541,541
$
19,972,532
CARMAX,
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended May
31
(In thousands)
2021
2020
OPERATING ACTIVITIES:
Net earnings
$
436,756
$
4,978
Adjustments to reconcile net earnings to
net cash (used in) provided by operating activities:
Depreciation and amortization
62,356
58,340
Share-based compensation expense
41,074
25,057
Provision for loan losses
(24,375)
122,018
Provision for cancellation reserves
34,128
13,552
Deferred income tax provision
24,751
25,041
Other
(21,037)
5,386
Net (increase) decrease in:
Accounts receivable, net
(174,149)
46,072
Inventory
(91,690)
946,986
Other current assets
(9,873)
(13,769)
Auto loans receivable, net
(644,850)
433,044
Other assets
(2,853)
(3,247)
Net increase (decrease) in:
Accounts payable, accrued expenses and
other
current liabilities and accrued income
taxes
315,784
(382,102)
Other liabilities
(57,905)
(31,797)
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES
(111,883)
1,249,559
INVESTING ACTIVITIES:
Capital expenditures
(59,145)
(62,871)
Proceeds from sale of business
617
—
Purchases of investments
(4,701)
(2,369)
Sales and returns of investments
86
168
NET CASH USED IN INVESTING
ACTIVITIES
(63,143)
(65,072)
FINANCING ACTIVITIES:
Increase in short-term debt, net
—
46
Proceeds from issuances of long-term
debt
388,600
977,500
Payments on long-term debt
(391,235)
(1,062,578)
Cash paid for debt issuance costs
(3,910)
(2,610)
Payments on finance lease obligations
(2,789)
(1,370)
Issuances of non-recourse notes
payable
3,610,819
1,982,000
Payments on non-recourse notes payable
(3,014,131)
(2,420,291)
Repurchase and retirement of common
stock
(133,838)
(54,140)
Equity issuances
21,589
1,706
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES
475,105
(579,737)
Increase in cash, cash equivalents, and
restricted cash
300,079
604,750
Cash, cash equivalents, and restricted
cash at beginning of year
771,947
656,390
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH AT END OF PERIOD
$
1,072,026
$
1,261,140
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210625005039/en/
Investors: Stacy Frole, Vice President, Investor Relations
investor_relations@carmax.com, (804) 747-0422 x7865 Media:
pr@carmax.com, (855) 887-2915
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