CarMax Group Reports Record Second Quarter Sales
ICHMOND, Va., Sept. 6 In a separate release, Circuit City Stores, Inc. today reported second quarter sales for the company, including record second quarter sales for the CarMax Group.Total sales for the CarMax Group rose 15 percent for the quarter ended August 31, 2002, to $1.08 billion from $938.9 million in the same period last year.
Comparable Store Sales Change
Three Months Ended Six Months Ended
August 31 August 31
2002 2001 2002 2001
Vehicle units:
Used vehicles 12% 22% 12% 21%
New vehicles 5% 12% 1% 15%
Total 11% 21% 10% 20%
Vehicle dollars:
Used vehicles 12% 30% 13% 29%
New vehicles 8% 14% 2% 18%
Total 11% 27% 11% 27%
"Our second quarter used-unit comp growth of 12 percent on top of last year's 22 percent growth reflects our continuing ability to increase market share even at our most mature superstores," said W. Austin Ligon, president of CarMax. "Used-car sales growth was somewhat softer in July while the market adjusted to pricing pressures resulting from the introduction once again of broad-scale zero-percent financing incentives on new cars, but resumed the healthy pace experienced prior to July once the adjustment occurred. Our three new used-car superstores continue to perform well, in line with our expectations. New-car sales benefited from manufacturers' zero-percent financing incentives in July and to a lesser extent in August as manufacturers worked through their inventories.
"Including the one-time costs associated with the proposed separation of CarMax from Circuit City, we now expect to meet or slightly exceed our second quarter earnings expectations," said Ligon.
Percent Vehicle Sales by Category
Three Months Ended Six Months Ended
August 31 August 31
2002 2001 2002 2001
Vehicle units:
Used vehicles 89% 87% 89% 87%
New vehicles 11 13 11 13
Total 100% 100% 100% 100%
Vehicle dollars:
Used vehicles 84% 81% 84% 81%
New vehicles 16 19 16 19
Total 100% 100% 100% 100%
Unit Sales by Category
Three Months Ended Six Months Ended
August 31 August 31
2002 2001 2002 2001
Used vehicles 50,900 43,100 98,200 83,500
New vehicles 6,500 6,600 12,200 12,900
Total 57,400 49,700 110,400 96,400
Average Retails
Three Months Ended
August 31
2002 2001
Used vehicles $15,400 $15,300
New vehicles $23,400 $22,800
Weighted average $16,300 $16,300
CarMax expects to open four superstores in the second half of the fiscal year, including entering the Knoxville, Tenn., market and adding satellite superstores in the Chicago, Ill., Charlotte, N.C., and Atlanta, Ga., markets. A fifth superstore, in the Las Vegas, Nev., market, is now expected to open in early March 2003, shortly after the end of this fiscal year.
CarMax Separation
As previously announced, the company's board of directors has authorized management to initiate a process that would separate the CarMax auto superstore business from the Circuit City consumer electronics business through a tax-free transaction in which CarMax, Inc., presently a wholly owned subsidiary of Circuit City Stores, Inc., would become an independent, separately traded public company. Accordingly, CarMax, Inc. has filed a registration statement, including a proxy statement/prospectus, with the Securities and Exchange Commission with regard to the transaction, and a special meeting for shareholders to vote on the separation is scheduled for September 10, 2002. The separation is expected to be completed on October 1, 2002, subject to shareholder approval and final approval by the board of directors.
Expanded Disclosures in Annual Report on Form 10-K for Fiscal 2002
To reflect income statement reclassifications and additional disclosures related to the company's finance operation that were effective beginning in the first quarter of the current fiscal year, Circuit City Stores, Inc. plans to file an amendment to the Annual Report on Form 10-K for the fiscal year ended February 28, 2002. The reclassifications resulted in no changes to the previously reported net results or earnings per share of either the CarMax Group or Circuit City Stores, Inc. In conjunction with the amended filing, company executives will provide the certifications required by Section 302 of the Sarbanes-Oxley Act.
Earnings Release and Conference Call Information
Circuit City Stores, Inc. plans to release second quarter earnings on September 18, 2002. The company will host a conference call for investors at 10:00 a.m. ET on that date. Domestic investors may access the call at 1-888-423-3276, and international investors at 1-612-288-0337. No access code is required. A live Web cast of the call will be available on the company's investor information home pages at http://investor.circuitcity.com and http://investor.carmax.com or at http://www.streetevents.com . The call will begin with a discussion of the CarMax results, followed by a discussion of the Circuit City results.
A replay of the call will be available beginning at approximately 2:00 p.m. ET on September 18 and will run through midnight, September 25, 2002. Domestic investors may access the recording at 1-800-475-6701, and international investors at 1-320-365-3844. No access code is required. A replay of the call also will be available on the Circuit City Group and CarMax Group investor information home pages or at http://www.streetevents.com .
CarMax is the nation's leading specialty retailer of used cars. With headquarters in Richmond, Va., CarMax operates 40 retail units in 38 locations, including 36 used-car superstores. CarMax also operates 17 new-car franchises, 15 of which are integrated or co-located with its used-car superstores. For more information, access the CarMax Web site at http://www.carmax.com .
CarMax is a subsidiary of Circuit City Stores, Inc. Circuit City Stores, Inc. has two series of common stock, one of which is the CarMax Group Common Stock, which tracks the performance of the CarMax operations, and the other of which is the Circuit City Group Common Stock, which tracks the performance of the Circuit City operations and the shares of CarMax Group Common Stock reserved for the Circuit City Group or for issuance to holders of Circuit City Group Common Stock. A portion of the earnings of the CarMax business is attributed to the CarMax Group Common Stock; the balance is attributed to the Circuit City Group Common Stock.
This release contains forward-looking statements, which are subject to risks and uncertainties, including, but not limited to, risks associated with plans to separate the CarMax business from Circuit City Stores, Inc. and create an independent, separately traded public company. Additional discussion of factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is contained in the Circuit City Stores, Inc. and CarMax, Inc. SEC filings.