CarMax's Supercharged Quarter: Fool by Numbers

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On Dec. 20, auto dealer and Inside Value recommendation CarMax (NYSE: KMX) released its third-quarter earnings for the period ending Nov. 30.

• Sales grew 24% for the quarter. Used-car sales powered the quarter with solid increases in both volume and price.
• Margins increased across the board, causing net profit to almost double. You gotta love it when operating leverage works in your favor.
• CarMax is a four-star stock in our community intelligence service CAPS, with 120 of 129 investors thinking it will outperform the S&P500.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2006	Q3 2005	Change
Sales	$1,768.1	$1,424.0	24.2%
Net Profit	$45.4	$22.9	98.3%
EPS	$0.42	$0.22	90.9%
Diluted Shares	108.9	106.5	2.3%

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	12.9%	12.4%	0.5
Operating Margin	4.2%	2.7%	1.5
Net Margin	2.6%	1.6%	1.0

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest.	$12.4	$17.3	(28.4%)
Accounts Rec.*	$258.8	$216.0	19.8%
Inventory	$760.8	$606.4	25.5%

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	$222.2	$173.3	28.2%
Long-Term Debt**	$118.4	$125.0	(5.3%)

*Includes loan receivables and securitized receivables
**Includes current portion

Learn the ways of the balance sheet.

Cash Flow Highlights

	YTD 2006	YTD 2005	Change
Cash From Ops.	$137.6	$139.1	(1.1%)
Capital Expenditures*	$111.2	$75.3	47.7%
Free Cash Flow	$26.4	$63.8	(58.6%)

*Adjusted for assets sales

Find out why Fools always follow the money.

Related Companies:

• AutoNation (NYSE: AN)
• Group 1 Automotive (NYSE: GPI)
• United Auto Group (NYSE: UAG) .

Related Foolishness:

• CarMax Shifts Gears
• CarMax Revs Its Engine: Fool by Numbers
• Foolish Forecast: Reading CarMax's Manual

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.Foolanthropy is celebrating its 10th year! To learn more about our five Foolish charities or to make a donation, visit www.foolanthropy.com .

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At the time of publication, David Meier did not own shares in any of the companies mentioned. Fool rules for disclosure are here.