Circuit City Stores, Inc. Releases Fiscal Year 2001 Results For the Circuit City Group and the CarMax Group

Apr 02, 2001, 01:00 ET from Circuit City Stores, Inc.

    RICHMOND, Va., April 2 /PRNewswire/ -- Circuit City Stores, Inc. today
 released results for the fourth quarter and fiscal year for the company, the
 Circuit City Group (NYSE:   CC) and the CarMax Group (NYSE:   KMX).
 
     FOURTH QUARTER AND FISCAL YEAR RESULTS
     Circuit City Stores, Inc.:
     Sales:  For the fourth quarter ended February 28, 2001, Circuit City
 Stores, Inc. total sales declined 4 percent to $3.82 billion from $3.98
 billion in the fourth quarter of the prior year.  For the fiscal year ended
 February 28, 2001, total sales for Circuit City Stores, Inc. increased 3
 percent to $12.96 billion from $12.61 billion.
 
     Earnings:  Earnings from continuing operations were $103.2 million in the
 fourth quarter of fiscal 2001, compared with $159.7 million in the fourth
 quarter of fiscal 2000.  Earnings from continuing operations were $160.8
 million for the fiscal year ended February 28, 2001, compared with $327.8
 million for the fiscal year ended February 29, 2000.
 
     Circuit City Group:
     Sales:  Total sales for the Circuit City Group declined 9 percent in the
 quarter ended February 28, 2001, to $3.18 billion from $3.48 billion in the
 same prior year period.  Comparable store sales declined 11 percent for the
 quarter.  For the fiscal year, total sales for the Circuit City Group declined
 1 percent to $10.46 billion from $10.60 billion.  Comparable store sales
 declined 4 percent.  Excluding the major appliance category, which declined
 significantly beginning late in the first quarter and from which the company
 completed its exit during the third quarter, comparable store sales declined 2
 percent for the fourth quarter and increased 3 percent for the fiscal year.
 
     Comparable Store Sales Changes
 
                                           Quarter Ended     Fiscal Year Ended
                                         February 28, 2001   February 28, 2001
     All Comparable Stores                     (11%)                 (4%)
     Excluding Appliances                       (2%)                  3%
 
     Earnings:  Fourth quarter earnings from continuing operations for the
 Circuit City Group include the total sales and earnings for the company's
 Circuit City store business and the Group's retained interest in the equity of
 the CarMax Group.
     *  Including the Inter-Group Interest in CarMax, earnings from continuing
        operations for the Circuit City Group were $101.2 million in the fourth
        quarter ended February 28, 2001, compared with $160.1 million in the
        same prior year period.  Earnings per share from continuing operations
        were 49 cents in the fourth quarter of fiscal 2001, compared with 78
        cents in the fourth quarter of fiscal 2000.
     *  Excluding the interest in CarMax, earnings from continuing operations
        for the Circuit City Group were $95.4 million in the fourth quarter of
        fiscal 2001, compared with $161.5 million in the same prior year
        period.  Earnings per share from continuing operations were 46 cents
        compared with 79 cents.
 
     Earnings from continuing operations for the fiscal year also include the
 total sales and earnings for the company's Circuit City store business and the
 Group's retained interest in the equity of the CarMax Group.
     *  Including the Inter-Group Interest in CarMax, earnings from continuing
        operations for the Circuit City Group were $149.2 million for the
        fiscal year ended February 28, 2001, compared with $327.6 million in
        the prior fiscal year, and earnings per share from continuing
        operations were 73 cents compared with $1.60.
     *  Excluding the interest in CarMax, earnings from continuing operations
        for the Circuit City Group were $115.2 million, or 56 cents per share,
        for the fiscal year ended February 28, 2001, compared with $326.7
        million, or $1.60 per share, in the prior year.
 
     Appliance merchandise markdowns had an 8-cent per share impact and one-
 time costs associated with the exit from the appliance business had a 9-cent
 per share impact on the earnings of the Circuit City business for the fiscal
 year ended February 28, 2001.  The one-time costs, incurred in the second
 fiscal quarter, included lease terminations, employee severance, fixed asset
 impairment and other related costs.  Costs associated with fully remodeling
 the central and south Florida stores reduced earnings for the fiscal year by
 13 cents, and the costs associated with partial remodels, largely incurred in
 the third fiscal quarter, reduced earnings per share by 9 cents.  Sales
 disruption, which also was largely incurred in the third quarter and was
 caused by the absence of any product in the former appliance space during the
 seven to 10 days of partial remodeling, reduced earnings per share by an
 estimated 3 cents.  Employee severance costs related to a workforce reduction
 that occurred at the end of the fiscal year, primarily at the company's
 corporate and division offices, reduced earnings per share by 2 cents.
 Excluding the appliance merchandise markdowns, exit costs, remodel expenses
 and the workforce reduction and excluding the retained interest in CarMax,
 earnings per share for the Circuit City Group would have been $1.00 for the
 fiscal year ended February 28, 2001, compared with earnings per share of $1.60
 in the prior year.
 
     Earnings per Share from Continuing Operations - Circuit City Group
 
                                  Quarter Ended            Fiscal Year Ended
                                February 28 or 29          February 28 or 29
                               2001          2000         2001          2000
     Circuit City Store
       Business               $0.48         $0.79         $1.00        $1.60
     Impact of Merchandise
       Markdowns*                --            --         (0.08)          --
     Impact of Appliance Exit    --            --         (0.09)          --
 
     Impact of Florida
       Remodels**                --            --         (0.13)          --
     Impact of Partial
       Remodels**                --            --         (0.09)          --
     Impact of Sales
       Disruption                --            --         (0.03)          --
     Impact of Workforce
       Reduction**            (0.02)           --         (0.02)          --
     Inter-Group Interest
       in CarMax               0.03         (0.01)         0.17           --
 
     Circuit City Group       $0.49         $0.78         $0.73        $1.60
 
     *  Reflected as a reduction in gross profit margins.
     ** Reflected as an increase in selling, general and administrative
        expenses.
 
     Discontinued Operations:
     In June 1999, the company's Digital Video Express business ceased
 operations.  The operating results of Divx and the loss on the disposal of the
 Divx business were segregated from continuing operations and reported as
 separate line items after tax on the company's and the Circuit City Group's
 statements of earnings for the fiscal year ended February 29, 2000.
 Discontinuation of the Divx business had no impact on the statements of
 earnings for the fourth quarter of either fiscal year or for the fiscal year
 ended February 28, 2001.
 
     CarMax Group:
     Sales:  Total sales for the CarMax Group rose 27 percent for the quarter
 ended February 28, 2001, to $640.0 million from $504.2 million in the fourth
 quarter of the prior year.  Comparable store sales rose 23 percent.  For the
 fiscal year ended February 28, 2001, total sales for the CarMax Group rose 24
 percent to $2.50 billion from $2.01 billion in the prior year, and comparable
 store sales rose 17 percent.
 
     Earnings:  Net earnings for the CarMax Group rose to $7.8 million in the
 fourth quarter ended February 28, 2001, from a net loss of $1.7 million in the
 fourth quarter of the prior year.  The fiscal 2001 earnings reflect a write-
 off of goodwill associated with two under performing new-car franchises, which
 reduced net earnings by $5.4 million.  The fiscal 2000 results reflect lease
 termination costs on undeveloped property and a write-down of assets
 associated with excess property for sale, which reduced net earnings by $3.0
 million.  The net earnings attributed to the CarMax Group stock were $2.0
 million in the fourth quarter of fiscal 2001, compared with a net loss of
 $408,000 in the fourth quarter of fiscal 2000.  The remainder of the CarMax
 Group's net earnings are attributed to the Inter-Group Interest held by the
 Circuit City Group and thus to the Circuit City Group shares.  Net earnings
 per CarMax Group share rose to 7 cents from a net loss of 2 cents in the same
 prior year period.
     Net earnings for the CarMax Group rose to $45.6 million for the fiscal
 year ended February 28, 2001, from $1.1 million in the prior fiscal year; net
 earnings attributed to the CarMax Group stock increased to $11.6 million from
 $256,000.  The fiscal 2001 net earnings reflect the $5.4 million reduction
 resulting from the goodwill write-off discussed above.  The fiscal 2000 net
 earnings include the $3.0 million lease termination costs and write-down of
 assets discussed above.  The remainder of the CarMax Group's net earnings are
 attributed to the Inter-Group Interest held by the Circuit City Group and thus
 to the Circuit City Group shares.  Net earnings per CarMax Group share rose to
 43 cents in fiscal year 2001 from 1 cent per share in fiscal year 2000.
 
     CarMax Group Earnings (Loss)
     (Amounts in millions except per share data)
 
                                Quarter Ended             Fiscal Year Ended
                              February 28 or 29           February 28 or 29
                              2001          2000          2001         2000
     CarMax Group
       Net Earnings (Loss)    $7.78       $(1.71)       $45.56         $1.12
     Net Earnings (Loss)
       Attributed to the
       Circuit City Group      5.81        (1.30)        34.01          0.86
     Net Earnings (Loss)
       Attributed to the
       CarMax Group            1.97        (0.41)        11.55          0.26
     CarMax Group Diluted
       Weighted Average
     Shares Outstanding       27.03        26.18         26.98         25.79
     Net Earnings (Loss)
       per CarMax
       Group Share            $0.07       $(0.02)        $0.43         $0.01
 
     BUSINESS PERFORMANCE REVIEWS
     Circuit City Group Review:
     "The comparable store sales pace for our Circuit City business was erratic
 throughout the fiscal year," said W. Alan McCollough, president and chief
 executive officer of Circuit City Stores, Inc.  "Sales were strong across
 virtually all categories early in the year, but the major appliance business
 especially softened late in the first quarter.  Given the increased
 competition in that business and the greater profit opportunities represented
 by other categories, we decided to exit the appliance category.  That exit was
 completed by late in the third quarter, prior to the peak holiday sales period
 for all categories.  We experienced a general softening across categories in
 the third quarter, followed by an improved sales pace in December and then a
 more significant fall off in January and February.  The late-year softening
 impacted all categories, but was especially visible in desktop personal
 computer sales.  Throughout the year, we have experienced declines in average
 retails for more traditional consumer electronics, but double or triple-digit
 comparable store sales growth in some of the newest technologies and in new or
 expanded categories in the stores."
     In fiscal year 2001, Circuit City fully remodeled 26 stores, primarily in
 central and south Florida.  The company opened 25 stores, including two
 relocations.  One of the relocated stores closed early in the new fiscal year,
 although the replacement store opened in late February.  The new stores,
 relocations and remodels give the retailer a total of 49 stores that follow
 its new design.  The design features a contemporary look and floor plan that
 is easier to navigate.  The new layout and store operating system provide
 higher service levels for more complex technologies while also enhancing the
 consumer's ability to browse and self-select products such as entertainment
 and computer software, accessories, and more traditional consumer electronics
 products.  As part of its exit from the appliance business, Circuit City also
 partially remodeled 545 stores and expanded its selections of computer
 software, peripherals, accessories, video games, 35 mm cameras and portable
 audio products, matching the selections in the new and fully remodeled stores.
     Excluding the major appliance category, the Circuit City Group's gross
 profit margin was 24.7 percent in fiscal 2001, compared with 25.4 percent in
 fiscal 2000.  Including appliances, the gross profit margin was 23.6 percent
 in fiscal 2001, compared with 24.7 percent in fiscal 2000.  "The gross profit
 margin was reduced by one-time costs of $28.3 million and merchandise
 markdowns of $28.0 million associated with our exit from the appliance
 business, significantly lower appliance gross margins prior to our announced
 plans to exit the business and a merchandise mix that included a high
 percentage of traditional products that carry lower gross profit margins,"
 said McCollough.  "The weakness in desktop computer sales, which carry lower-
 than-average gross profit margins, helped the gross profit margin at the end
 of the year, although the lower sales volumes hurt overall operating profits."
 
     Gross Margin Components
 
                                 Quarter Ended             Fiscal Year Ended
                               February 28 or 29           February 28 or 29
                              2001          2000          2001          2000
     Circuit City Store
       Business               24.4%         24.7%        24.1%         24.7%
     Impact of Appliance
       Markdowns                 --            --        (0.2%)           --
     One-Time Appliance
       Exit Costs                --            --        (0.3%)           --
     Gross Profit Margin      24.4%         24.7%        23.6%         24.7%
     Gross Profit Margin
       Excluding Appliances   24.4%         25.4%        24.7%         25.4%
 
     The expense ratio rose to 21.7 percent of sales in fiscal 2001, compared
 with 19.6 percent of sales in fiscal 2000.  The fiscal 2001 ratio reflects the
 decline in comparable store sales and $41.9 million in remodeling costs for
 the Florida stores, $30.0 million in costs related to the partial remodels and
 $5.0 million in severance costs associated with the fourth quarter workforce
 reduction.  Excluding these costs and the estimated sales disruption during
 the seven to 10 days of partial remodeling that occurred primarily in the
 third quarter, the fiscal 2001 expense ratio would have been 20.9 percent of
 sales.  "Although we have not yet replaced the appliance sales, we believe
 that our exit from this business to focus on more profitable categories that
 our customers expect to find in Circuit City stores and that offer higher
 growth opportunities as we proceed through the decade was an important
 strategic move," said McCollough.  "Unfortunately, the costs of and sales
 disruption related to our full remodels exceeded our expectations, and so, we
 have refined the remodel design to reduce both the costs of remodeling and the
 amount of time from start to completion.  We currently anticipate that the
 average costs of this year's remodels will be approximately $1.5 million per
 store."
 
     Expense Ratio Components
 
                                 Quarter Ended            Fiscal Year Ended
                               February 28 or 29          February 28 or 29
                               2001         2000          2001         2000
     Circuit City Store
       Business               19.3%         17.1%        20.9%         19.6%
     Florida Remodel Costs       --            --         0.4%            --
     Partial Remodel Costs       --            --         0.3%            --
     Sales Disruption Impact     --            --         0.1%            --
     Workforce Reduction       0.2%            --         0.0%            --
     Expense Ratio            19.5%         17.1%        21.7%         19.6%
 
     Net earnings related to the Circuit City Group's Inter-Group Interest in
 the CarMax Group contributed $34.0 million to the net earnings of the Circuit
 City Group for the fiscal year ended February 28, 2001, compared with a
 contribution of $862,000 for the prior fiscal year.
     "Fiscal 2001 was a challenging year for our Circuit City business, and we
 believe that many of these challenges will continue in the new fiscal year,"
 said McCollough.  "We are focusing our attention on:
     (1)  stronger marketing programs that build brand awareness and increase
          foot traffic for all categories in our stores;
     (2)  construction of 15 to 20 new stores, 20 to 25 remodels and
          approximately 10 relocations to bring our newest shopping environment
          to more consumers;
     (3)  building sales in key categories that drive profitability;
     (4)  cost reductions through improvement in supply chain management; and
     (5)  application of the Six-Sigma cost-reduction methodology to specific
          processes.
 
     Given the extreme variability in sales that we experienced throughout
 fiscal 2001 and the uncertain economic environment, we are cautious in our
 outlook for the new fiscal year -- especially the first half.  Nevertheless,
 our research continues to show that customers like our new stores, and we are
 encouraged by the industry's continued technological developments.  We will
 continue to position Circuit City to take advantage of the industry's
 projected growth opportunities, while also working to improve the cost
 efficiencies in our overall operations."
 
     CarMax Group Review:
     "CarMax generated strong sales growth throughout the year, including the
 second half when our unique store concept produced strong used-car sales
 growth despite an industry-wide slowdown in new-car sales," said W. Austin
 Ligon, president of CarMax.  "Sales growth remained strong in the fourth
 quarter, even against the anniversary of a significant competitor's exit from
 the used-car superstore business.  We believe the sales performance throughout
 the year reflects our focus over the past two years on sales and profit
 improvement in our existing store base.  During the fourth quarter, we
 benefited from the lack of severe winter weather in most all our markets.
     "The increase in used-car sales as a percent of our total sales mix and
 continued strong inventory management throughout the year, but especially
 during the second half when the model-year transition occurs in the new-car
 segment, contributed to a higher gross profit margin of 13.2 percent of sales
 in fiscal 2001, compared with 11.9 percent of sales in fiscal 2000," said
 Ligon.  "The significantly better expense ratio of 9.8 percent in fiscal 2001
 versus 11.3 percent in fiscal 2000 reflects the leverage achieved from strong
 total and comparable store sales growth; more efficient advertising
 expenditures; overall improvements in store productivity, including those
 achieved through the hub and satellite strategy we adopted in multi-store
 markets; and a favorable contribution from CarMax Auto Finance."  The
 improvements in CarMax's fiscal 2001 expense ratio were partly offset by an
 $8.7 million pretax write-off of goodwill associated with two under performing
 new-car franchises."
     CarMax's operating margin before interest and taxes rose to 3.4 percent in
 fiscal 2001 from 0.6 percent in fiscal 2000.  Excluding the goodwill write-
 off, the operating margin before interest and taxes was 3.8 percent.
 
     CarMax Group Operating Ratios
 
                                 Quarter Ended            Fiscal Year Ended
                               February 28 or 29          February 28 or 29
                              2001          2000          2001         2000
     Net Sales and Operating
       Revenues              100.0%        100.0%       100.0%        100.0%
     Gross Profit Margin      12.8%         12.3%        13.2%         11.9%
     Expense Ratio            10.4%         12.2%         9.8%         11.3%
     Operating Margin
       Before Interest
       and Taxes               2.4%          0.1%         3.4%          0.6%
 
     For the year, the CarMax business produced pretax earnings of $73.5
 million in fiscal 2001, compared with pretax earnings of $1.8 million in
 fiscal 2000.  The pretax profit margin was 2.9 percent this year, compared
 with 0.1 percent last year.
     "We believe that our fiscal 2001 growth and profitability indicate that
 CarMax has developed a firm foundation for sustained, profitable growth and
 our used-car superstore concept is well positioned to succeed in economic down
 cycles," said Ligon.  "We expect to resume geographic expansion this fiscal
 year with two store openings in single-store markets. We would expect to open
 another four to six superstores in fiscal 2003 and six to eight superstores
 per year from fiscal 2004 through fiscal 2006, assuming that we continue to
 achieve success with our new-market openings.  We will focus our expansion
 plans on openings in single-store markets, which are the markets where we
 historically have achieved the highest returns, and satellite fill-ins, where
 we can improve the productivity of our existing multi-store markets, for the
 next several years."
     Circuit City will host a conference call for investors today, April 2,
 2001, at 10:00 a.m. Eastern time to discuss this morning's announcement.
 Domestic investors may access the call at 888-790-1720 (access code:
 earnings).  International investors should dial 312-470-0162 (access code:
 earnings). The call will be led by Alan McCollough, president and chief
 executive officer of Circuit City.  A replay of the conference call will be
 available beginning today, April 2, 2001, at approximately 2:00 p.m. Eastern
 time and will run through midnight, April 6, 2001.  Domestic investors may
 access the recording at 888-568-0856 (no access code required) and
 international investors at 402-998-0241 (no access code required).  A replay
 of the call also will be available on the Circuit City Group's investor
 information home page http://investor.circuitcity.com , the CarMax Group's
 investor information home page http://investor.carmax.com or at
 http://www.streetevents.com .
     Circuit City is a leading national retailer of brand-name consumer
 electronics, personal computers and entertainment software.  CarMax is the
 nation's leading specialty retailer of used cars.  With headquarters in
 Richmond, Va., Circuit City Stores, Inc. operates 593 Circuit City Superstores
 and 34 mall-based Circuit City Express stores, giving it more locations in
 more markets than any other consumer electronics specialty retailer.  The
 company operates 40 CarMax retail units in 37 locations, including 33 used-car
 superstores.  CarMax operates 21 new-car franchises, most of which are
 integrated or co-located with its used-car superstores.  For more information,
 access the company's Web sites at CircuitCity.com and CarMax.com.
     This release contains forward-looking statements, which are subject to
 risks and uncertainties.  Additional discussion of factors that could cause
 actual results to differ materially from management's projections, forecasts,
 estimates and expectations is contained in the company's SEC filings.
 
                           CIRCUIT CITY STORES, INC.
                      CONSOLIDATED STATEMENTS OF EARNINGS
                        PERIODS ENDED FEBRUARY 28 OR 29
                  (Amounts in thousands except per share data)
 
                               Three Months               Twelve Months
                             2001         2000         2001           2000
 
     NET SALES AND
       OPERATING
       REVENUES          $3,817,127    $3,980,407  $12,959,028   $12,614,390
     Cost of sales,
       buying and
       warehousing        2,960,660     3,059,770   10,135,380     9,751,833
     Appliance exit
       costs                      -             -       28,326             -
 
     GROSS PROFIT           856,467       920,637    2,795,322     2,862,557
     Selling, general and
       administrative
       expenses             685,555       655,883    2,514,912     2,309,593
     Appliance exit costs         -             -        1,670             -
     Interest expense         4,518         7,108       19,383        24,206
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS
     BEFORE INCOME TAXES    166,394       257,646      259,357       528,758
     Provision for
       income taxes          63,230        97,905       98,555       200,928
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS           103,164       159,741      160,802       327,830
     Discontinued
       operations:
     Loss from
       discontinued
       operations of
       Divx, less income
       tax benefit                -             -            -       (16,215)
     Loss on disposal
       of Divx, less
       income tax benefit         -             -            -      (114,025)
 
     LOSS FROM
       DISCONTINUED
       OPERATIONS                 -             -            -      (130,240)
 
     NET EARNINGS          $103,164      $159,741     $160,802      $197,590
     Net earnings (loss)
       attributed to:
     Circuit City Group
       common stock:
       Continuing
       operations          $101,190      $160,149     $149,247      $327,574
       Discontinued
       operations                $-            $-           $-     $(130,240)
     CarMax Group
       common stock          $1,974         $(408)     $11,555          $256
 
     Weighted average
       common shares:
       Circuit City
       Group basic          204,401       201,999      203,774       201,345
       Circuit City
       Group diluted        206,380       204,749      205,830       204,321
       CarMax Group basic    25,579        24,611       25,554        23,778
       CarMax Group diluted  27,026        26,181       26,980        25,788
 
     NET EARNINGS (LOSS)
       PER SHARE:
     Circuit City Group
       basic:
       Continuing
       operations             $0.50         $0.79        $0.73         $1.63
       Discontinued
       operations                $-            $-           $-        $(0.65)
       Net earnings           $0.50         $0.79        $0.73         $0.98
 
     Circuit City Group
       diluted:
       Continuing
       operations             $0.49         $0.78        $0.73         $1.60
       Discontinued
       operations                $-            $-           $-        $(0.64)
       Net earnings           $0.49         $0.78        $0.73         $0.96
 
     CarMax Group basic       $0.08        $(0.02)       $0.45         $0.01
     CarMax Group diluted     $0.07        $(0.02)       $0.43         $0.01
 
                           CIRCUIT CITY STORES, INC.
                          CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)
 
                                                        February 28 or 29
                                                       2001           2000
     ASSETS
 
     Current Assets:
     Cash and cash equivalents                       $446,131       $643,933
     Net accounts receivable                          585,761        593,276
     Inventory                                      1,757,664      1,689,209
     Prepaid expenses and other current assets         57,623         16,197
     Total Current Assets                           2,847,179      2,942,615
 
     Property and equipment, net                      988,947        965,181
     Other assets                                      35,207         47,552
 
     TOTAL ASSETS                                  $3,871,333     $3,955,348
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current Liabilities:
     Current installments of long-term debt          $132,388       $177,344
     Accounts payable                                 902,560        960,131
     Short-term debt                                    1,200          3,005
     Accrued expenses and other current liabilities   162,972        204,561
     Deferred income taxes                             92,479         61,118
     Total Current Liabilities                      1,291,599      1,406,159
 
     Long-term debt, excluding current installments   116,137        249,241
     Deferred revenue and other liabilities            92,165        130,020
     Deferred income taxes                             14,949         27,754
     TOTAL LIABILITIES                              1,514,850      1,813,174
 
     STOCKHOLDERS' EQUITY                           2,356,483      2,142,174
 
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $3,871,333     $3,955,348
 
                               CIRCUIT CITY GROUP
                             STATEMENTS OF EARNINGS
                        PERIODS ENDED FEBRUARY 28 OR 29
                  (Amounts in thousands except per share data)
 
                               Three Months               Twelve Months
                             2001         2000         2001          2000
 
     NET SALES AND
       OPERATING
       REVENUES          $3,177,131    $3,476,171  $10,458,037   $10,599,406
     Cost of sales,
       buying and
       warehousing        2,402,733     2,617,395    7,964,148     7,977,214
     Appliance exit
       costs                      -             -       28,326             -
 
     GROSS PROFIT           774,398       858,776    2,465,563     2,622,192
     Selling, general and
     administrative
       expenses             618,989       594,484    2,270,745     2,081,393
     Appliance exit costs         -             -        1,670             -
     Interest expense         1,558         3,884        7,273        13,844
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS
     BEFORE INCOME TAXES
       AND INTER-GROUP
       INTEREST IN THE
       CARMAX GROUP         153,851       260,408      185,875       526,955
 
     Provision for
       income taxes          58,468        98,955       70,637       200,243
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS
       BEFORE INTER-GROUP
       INTEREST IN THE
       CARMAX GROUP          95,383       161,453      115,238       326,712
 
     Net earnings (loss)
       related to the
       Inter-Group Interest
       in the CarMax Group    5,807        (1,304)      34,009           862
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS           101,190       160,149      149,247       327,574
 
     Discontinued
       operations:
     Loss from discontinued
       operations of
       Divx, less income
       tax benefit                -             -            -       (16,215)
     Loss on disposal
       of Divx, less
       income tax benefit         -             -            -      (114,025)
 
     LOSS FROM
       DISCONTINUED
       OPERATIONS                 -             -            -      (130,240)
     NET EARNINGS          $101,190      $160,149     $149,247      $197,334
 
     Weighted average
       common shares:
       Basic                204,401       201,999      203,774       201,345
       Diluted              206,380       204,749      205,830       204,321
 
     NET EARNINGS (LOSS)
       PER SHARE:
     Basic:
       Continuing
       operations             $0.50         $0.79        $0.73         $1.63
       Discontinued
       operations                $-            $-           $-        $(0.65)
       Net earnings           $0.50         $0.79        $0.73         $0.98
 
     Diluted:
       Continuing operations  $0.49         $0.78        $0.73         $1.60
       Discontinued operations   $-            $-           $-        $(0.64)
       Net earnings           $0.49         $0.78        $0.73         $0.96
 
                               CIRCUIT CITY GROUP
                                 BALANCE SHEETS
                             (Amounts in thousands)
 
                                                         February 28 or 29
                                                       2001           2000
     ASSETS
     Current Assets:
     Cash and cash equivalents                       $437,329       $633,952
     Net accounts receivable                          451,099        464,023
     Merchandise inventory                          1,410,527      1,405,617
     Prepaid expenses and other current assets         55,317         13,353
     Total Current Assets                           2,354,272      2,516,945
     Property and equipment, net                      796,789        753,325
     Inter-Group Interest in the CarMax Group         292,179        257,535
     Other assets                                       9,319          9,583
 
     TOTAL ASSETS                                  $3,452,559     $3,537,388
     LIABILITIES AND GROUP EQUITY
     Current Liabilities:
     Current installments of long-term debt           $24,237        $85,735
     Accounts payable                                 820,077        884,172
     Short-term debt                                      213          1,453
     Accrued expenses and other current
       liabilities                                    146,818        184,705
     Deferred income taxes                             74,317         53,971
     Total Current Liabilities                      1,065,662      1,210,036
     Long-term debt, excluding current
       installments                                    33,080        127,984
     Deferred revenue and other liabilities            85,329        122,771
     Deferred income taxes                             11,329         21,877
     TOTAL LIABILITIES                              1,195,400      1,482,668
     GROUP EQUITY                                   2,257,159      2,054,720
     TOTAL LIABILITIES AND GROUP EQUITY            $3,452,559     $3,537,388
 
                                  CARMAX GROUP
                            STATEMENTS OF OPERATIONS
                        PERIODS ENDED February 28 or 29
                  (Amounts in thousands except per share data)
 
                                 Three Months              Twelve Months
                              2001         2000         2001           2000
 
     NET SALES AND
       OPERATING REVENUES  $639,996      $504,236   $2,500,991    $2,014,984
     Cost of sales          557,927       442,375    2,171,232     1,774,619
     GROSS PROFIT            82,069        61,861      329,759       240,365
     Selling, general and
     administrative
       expenses              66,566        61,399      244,167       228,200
     Interest expense         2,960         3,224       12,110        10,362
     EARNINGS (loss)
       BEFORE INCOME TAXES   12,543        (2,762)      73,482         1,803
     Income tax provision
       (benefit)              4,762        (1,050)      27,918           685
     NET EARNINGS (loss)     $7,781       $(1,712)     $45,564        $1,118
     Net earnings (loss)
       attributed to:
       Circuit City Group
       common stock          $5,807       $(1,304)     $34,009          $862
       CarMax Group
       common stock          $1,974         $(408)     $11,555          $256
     Weighted average
       common shares:
       Basic                 25,579        24,611       25,554        23,778
       Diluted               27,026        26,181       26,980        25,788
 
     NET EARNINGS (loss)
       PER SHARE:
       Basic                  $0.08        $(0.02)       $0.45         $0.01
       Diluted                $0.07        $(0.02)       $0.43         $0.01
 
                                  CARMAX GROUP
                                 BALANCE SHEETS
                             (Amounts in thousands)
 
                                                         February 28 or 29
                                                       2001            2000
     ASSETS
     Current Assets:
     Cash and cash equivalents                         $8,802         $9,981
     Net accounts receivable                          134,662        129,253
     Inventory                                        347,137        283,592
     Prepaid expenses and other current assets          2,306          2,844
     Total Current Assets                             492,907        425,670
     Property and equipment, net                      192,158        211,856
     Other assets                                      25,888         37,969
 
     TOTAL ASSETS                                    $710,953       $675,495
 
     LIABILITIES AND GROUP EQUITY
     Current Liabilities:
     Current installments of long-term debt          $108,151        $91,609
     Accounts payable                                  82,483         75,959
     Short-term debt                                      987          1,552
     Accrued expenses and other current
       liabilities                                     16,154         19,856
     Deferred income taxes                             18,162          7,147
     Total Current Liabilities                        225,937        196,123
     Long-term debt, excluding current
       installments                                    83,057        121,257
     Deferred revenue and other liabilities             6,836          7,249
     Deferred income taxes                              3,620          5,877
     TOTAL LIABILITIES                                319,450        330,506
     GROUP EQUITY                                     391,503        344,989
     TOTAL LIABILITIES AND GROUP EQUITY              $710,953       $675,495
 
 

SOURCE Circuit City Stores, Inc.
    RICHMOND, Va., April 2 /PRNewswire/ -- Circuit City Stores, Inc. today
 released results for the fourth quarter and fiscal year for the company, the
 Circuit City Group (NYSE:   CC) and the CarMax Group (NYSE:   KMX).
 
     FOURTH QUARTER AND FISCAL YEAR RESULTS
     Circuit City Stores, Inc.:
     Sales:  For the fourth quarter ended February 28, 2001, Circuit City
 Stores, Inc. total sales declined 4 percent to $3.82 billion from $3.98
 billion in the fourth quarter of the prior year.  For the fiscal year ended
 February 28, 2001, total sales for Circuit City Stores, Inc. increased 3
 percent to $12.96 billion from $12.61 billion.
 
     Earnings:  Earnings from continuing operations were $103.2 million in the
 fourth quarter of fiscal 2001, compared with $159.7 million in the fourth
 quarter of fiscal 2000.  Earnings from continuing operations were $160.8
 million for the fiscal year ended February 28, 2001, compared with $327.8
 million for the fiscal year ended February 29, 2000.
 
     Circuit City Group:
     Sales:  Total sales for the Circuit City Group declined 9 percent in the
 quarter ended February 28, 2001, to $3.18 billion from $3.48 billion in the
 same prior year period.  Comparable store sales declined 11 percent for the
 quarter.  For the fiscal year, total sales for the Circuit City Group declined
 1 percent to $10.46 billion from $10.60 billion.  Comparable store sales
 declined 4 percent.  Excluding the major appliance category, which declined
 significantly beginning late in the first quarter and from which the company
 completed its exit during the third quarter, comparable store sales declined 2
 percent for the fourth quarter and increased 3 percent for the fiscal year.
 
     Comparable Store Sales Changes
 
                                           Quarter Ended     Fiscal Year Ended
                                         February 28, 2001   February 28, 2001
     All Comparable Stores                     (11%)                 (4%)
     Excluding Appliances                       (2%)                  3%
 
     Earnings:  Fourth quarter earnings from continuing operations for the
 Circuit City Group include the total sales and earnings for the company's
 Circuit City store business and the Group's retained interest in the equity of
 the CarMax Group.
     *  Including the Inter-Group Interest in CarMax, earnings from continuing
        operations for the Circuit City Group were $101.2 million in the fourth
        quarter ended February 28, 2001, compared with $160.1 million in the
        same prior year period.  Earnings per share from continuing operations
        were 49 cents in the fourth quarter of fiscal 2001, compared with 78
        cents in the fourth quarter of fiscal 2000.
     *  Excluding the interest in CarMax, earnings from continuing operations
        for the Circuit City Group were $95.4 million in the fourth quarter of
        fiscal 2001, compared with $161.5 million in the same prior year
        period.  Earnings per share from continuing operations were 46 cents
        compared with 79 cents.
 
     Earnings from continuing operations for the fiscal year also include the
 total sales and earnings for the company's Circuit City store business and the
 Group's retained interest in the equity of the CarMax Group.
     *  Including the Inter-Group Interest in CarMax, earnings from continuing
        operations for the Circuit City Group were $149.2 million for the
        fiscal year ended February 28, 2001, compared with $327.6 million in
        the prior fiscal year, and earnings per share from continuing
        operations were 73 cents compared with $1.60.
     *  Excluding the interest in CarMax, earnings from continuing operations
        for the Circuit City Group were $115.2 million, or 56 cents per share,
        for the fiscal year ended February 28, 2001, compared with $326.7
        million, or $1.60 per share, in the prior year.
 
     Appliance merchandise markdowns had an 8-cent per share impact and one-
 time costs associated with the exit from the appliance business had a 9-cent
 per share impact on the earnings of the Circuit City business for the fiscal
 year ended February 28, 2001.  The one-time costs, incurred in the second
 fiscal quarter, included lease terminations, employee severance, fixed asset
 impairment and other related costs.  Costs associated with fully remodeling
 the central and south Florida stores reduced earnings for the fiscal year by
 13 cents, and the costs associated with partial remodels, largely incurred in
 the third fiscal quarter, reduced earnings per share by 9 cents.  Sales
 disruption, which also was largely incurred in the third quarter and was
 caused by the absence of any product in the former appliance space during the
 seven to 10 days of partial remodeling, reduced earnings per share by an
 estimated 3 cents.  Employee severance costs related to a workforce reduction
 that occurred at the end of the fiscal year, primarily at the company's
 corporate and division offices, reduced earnings per share by 2 cents.
 Excluding the appliance merchandise markdowns, exit costs, remodel expenses
 and the workforce reduction and excluding the retained interest in CarMax,
 earnings per share for the Circuit City Group would have been $1.00 for the
 fiscal year ended February 28, 2001, compared with earnings per share of $1.60
 in the prior year.
 
     Earnings per Share from Continuing Operations - Circuit City Group
 
                                  Quarter Ended            Fiscal Year Ended
                                February 28 or 29          February 28 or 29
                               2001          2000         2001          2000
     Circuit City Store
       Business               $0.48         $0.79         $1.00        $1.60
     Impact of Merchandise
       Markdowns*                --            --         (0.08)          --
     Impact of Appliance Exit    --            --         (0.09)          --
 
     Impact of Florida
       Remodels**                --            --         (0.13)          --
     Impact of Partial
       Remodels**                --            --         (0.09)          --
     Impact of Sales
       Disruption                --            --         (0.03)          --
     Impact of Workforce
       Reduction**            (0.02)           --         (0.02)          --
     Inter-Group Interest
       in CarMax               0.03         (0.01)         0.17           --
 
     Circuit City Group       $0.49         $0.78         $0.73        $1.60
 
     *  Reflected as a reduction in gross profit margins.
     ** Reflected as an increase in selling, general and administrative
        expenses.
 
     Discontinued Operations:
     In June 1999, the company's Digital Video Express business ceased
 operations.  The operating results of Divx and the loss on the disposal of the
 Divx business were segregated from continuing operations and reported as
 separate line items after tax on the company's and the Circuit City Group's
 statements of earnings for the fiscal year ended February 29, 2000.
 Discontinuation of the Divx business had no impact on the statements of
 earnings for the fourth quarter of either fiscal year or for the fiscal year
 ended February 28, 2001.
 
     CarMax Group:
     Sales:  Total sales for the CarMax Group rose 27 percent for the quarter
 ended February 28, 2001, to $640.0 million from $504.2 million in the fourth
 quarter of the prior year.  Comparable store sales rose 23 percent.  For the
 fiscal year ended February 28, 2001, total sales for the CarMax Group rose 24
 percent to $2.50 billion from $2.01 billion in the prior year, and comparable
 store sales rose 17 percent.
 
     Earnings:  Net earnings for the CarMax Group rose to $7.8 million in the
 fourth quarter ended February 28, 2001, from a net loss of $1.7 million in the
 fourth quarter of the prior year.  The fiscal 2001 earnings reflect a write-
 off of goodwill associated with two under performing new-car franchises, which
 reduced net earnings by $5.4 million.  The fiscal 2000 results reflect lease
 termination costs on undeveloped property and a write-down of assets
 associated with excess property for sale, which reduced net earnings by $3.0
 million.  The net earnings attributed to the CarMax Group stock were $2.0
 million in the fourth quarter of fiscal 2001, compared with a net loss of
 $408,000 in the fourth quarter of fiscal 2000.  The remainder of the CarMax
 Group's net earnings are attributed to the Inter-Group Interest held by the
 Circuit City Group and thus to the Circuit City Group shares.  Net earnings
 per CarMax Group share rose to 7 cents from a net loss of 2 cents in the same
 prior year period.
     Net earnings for the CarMax Group rose to $45.6 million for the fiscal
 year ended February 28, 2001, from $1.1 million in the prior fiscal year; net
 earnings attributed to the CarMax Group stock increased to $11.6 million from
 $256,000.  The fiscal 2001 net earnings reflect the $5.4 million reduction
 resulting from the goodwill write-off discussed above.  The fiscal 2000 net
 earnings include the $3.0 million lease termination costs and write-down of
 assets discussed above.  The remainder of the CarMax Group's net earnings are
 attributed to the Inter-Group Interest held by the Circuit City Group and thus
 to the Circuit City Group shares.  Net earnings per CarMax Group share rose to
 43 cents in fiscal year 2001 from 1 cent per share in fiscal year 2000.
 
     CarMax Group Earnings (Loss)
     (Amounts in millions except per share data)
 
                                Quarter Ended             Fiscal Year Ended
                              February 28 or 29           February 28 or 29
                              2001          2000          2001         2000
     CarMax Group
       Net Earnings (Loss)    $7.78       $(1.71)       $45.56         $1.12
     Net Earnings (Loss)
       Attributed to the
       Circuit City Group      5.81        (1.30)        34.01          0.86
     Net Earnings (Loss)
       Attributed to the
       CarMax Group            1.97        (0.41)        11.55          0.26
     CarMax Group Diluted
       Weighted Average
     Shares Outstanding       27.03        26.18         26.98         25.79
     Net Earnings (Loss)
       per CarMax
       Group Share            $0.07       $(0.02)        $0.43         $0.01
 
     BUSINESS PERFORMANCE REVIEWS
     Circuit City Group Review:
     "The comparable store sales pace for our Circuit City business was erratic
 throughout the fiscal year," said W. Alan McCollough, president and chief
 executive officer of Circuit City Stores, Inc.  "Sales were strong across
 virtually all categories early in the year, but the major appliance business
 especially softened late in the first quarter.  Given the increased
 competition in that business and the greater profit opportunities represented
 by other categories, we decided to exit the appliance category.  That exit was
 completed by late in the third quarter, prior to the peak holiday sales period
 for all categories.  We experienced a general softening across categories in
 the third quarter, followed by an improved sales pace in December and then a
 more significant fall off in January and February.  The late-year softening
 impacted all categories, but was especially visible in desktop personal
 computer sales.  Throughout the year, we have experienced declines in average
 retails for more traditional consumer electronics, but double or triple-digit
 comparable store sales growth in some of the newest technologies and in new or
 expanded categories in the stores."
     In fiscal year 2001, Circuit City fully remodeled 26 stores, primarily in
 central and south Florida.  The company opened 25 stores, including two
 relocations.  One of the relocated stores closed early in the new fiscal year,
 although the replacement store opened in late February.  The new stores,
 relocations and remodels give the retailer a total of 49 stores that follow
 its new design.  The design features a contemporary look and floor plan that
 is easier to navigate.  The new layout and store operating system provide
 higher service levels for more complex technologies while also enhancing the
 consumer's ability to browse and self-select products such as entertainment
 and computer software, accessories, and more traditional consumer electronics
 products.  As part of its exit from the appliance business, Circuit City also
 partially remodeled 545 stores and expanded its selections of computer
 software, peripherals, accessories, video games, 35 mm cameras and portable
 audio products, matching the selections in the new and fully remodeled stores.
     Excluding the major appliance category, the Circuit City Group's gross
 profit margin was 24.7 percent in fiscal 2001, compared with 25.4 percent in
 fiscal 2000.  Including appliances, the gross profit margin was 23.6 percent
 in fiscal 2001, compared with 24.7 percent in fiscal 2000.  "The gross profit
 margin was reduced by one-time costs of $28.3 million and merchandise
 markdowns of $28.0 million associated with our exit from the appliance
 business, significantly lower appliance gross margins prior to our announced
 plans to exit the business and a merchandise mix that included a high
 percentage of traditional products that carry lower gross profit margins,"
 said McCollough.  "The weakness in desktop computer sales, which carry lower-
 than-average gross profit margins, helped the gross profit margin at the end
 of the year, although the lower sales volumes hurt overall operating profits."
 
     Gross Margin Components
 
                                 Quarter Ended             Fiscal Year Ended
                               February 28 or 29           February 28 or 29
                              2001          2000          2001          2000
     Circuit City Store
       Business               24.4%         24.7%        24.1%         24.7%
     Impact of Appliance
       Markdowns                 --            --        (0.2%)           --
     One-Time Appliance
       Exit Costs                --            --        (0.3%)           --
     Gross Profit Margin      24.4%         24.7%        23.6%         24.7%
     Gross Profit Margin
       Excluding Appliances   24.4%         25.4%        24.7%         25.4%
 
     The expense ratio rose to 21.7 percent of sales in fiscal 2001, compared
 with 19.6 percent of sales in fiscal 2000.  The fiscal 2001 ratio reflects the
 decline in comparable store sales and $41.9 million in remodeling costs for
 the Florida stores, $30.0 million in costs related to the partial remodels and
 $5.0 million in severance costs associated with the fourth quarter workforce
 reduction.  Excluding these costs and the estimated sales disruption during
 the seven to 10 days of partial remodeling that occurred primarily in the
 third quarter, the fiscal 2001 expense ratio would have been 20.9 percent of
 sales.  "Although we have not yet replaced the appliance sales, we believe
 that our exit from this business to focus on more profitable categories that
 our customers expect to find in Circuit City stores and that offer higher
 growth opportunities as we proceed through the decade was an important
 strategic move," said McCollough.  "Unfortunately, the costs of and sales
 disruption related to our full remodels exceeded our expectations, and so, we
 have refined the remodel design to reduce both the costs of remodeling and the
 amount of time from start to completion.  We currently anticipate that the
 average costs of this year's remodels will be approximately $1.5 million per
 store."
 
     Expense Ratio Components
 
                                 Quarter Ended            Fiscal Year Ended
                               February 28 or 29          February 28 or 29
                               2001         2000          2001         2000
     Circuit City Store
       Business               19.3%         17.1%        20.9%         19.6%
     Florida Remodel Costs       --            --         0.4%            --
     Partial Remodel Costs       --            --         0.3%            --
     Sales Disruption Impact     --            --         0.1%            --
     Workforce Reduction       0.2%            --         0.0%            --
     Expense Ratio            19.5%         17.1%        21.7%         19.6%
 
     Net earnings related to the Circuit City Group's Inter-Group Interest in
 the CarMax Group contributed $34.0 million to the net earnings of the Circuit
 City Group for the fiscal year ended February 28, 2001, compared with a
 contribution of $862,000 for the prior fiscal year.
     "Fiscal 2001 was a challenging year for our Circuit City business, and we
 believe that many of these challenges will continue in the new fiscal year,"
 said McCollough.  "We are focusing our attention on:
     (1)  stronger marketing programs that build brand awareness and increase
          foot traffic for all categories in our stores;
     (2)  construction of 15 to 20 new stores, 20 to 25 remodels and
          approximately 10 relocations to bring our newest shopping environment
          to more consumers;
     (3)  building sales in key categories that drive profitability;
     (4)  cost reductions through improvement in supply chain management; and
     (5)  application of the Six-Sigma cost-reduction methodology to specific
          processes.
 
     Given the extreme variability in sales that we experienced throughout
 fiscal 2001 and the uncertain economic environment, we are cautious in our
 outlook for the new fiscal year -- especially the first half.  Nevertheless,
 our research continues to show that customers like our new stores, and we are
 encouraged by the industry's continued technological developments.  We will
 continue to position Circuit City to take advantage of the industry's
 projected growth opportunities, while also working to improve the cost
 efficiencies in our overall operations."
 
     CarMax Group Review:
     "CarMax generated strong sales growth throughout the year, including the
 second half when our unique store concept produced strong used-car sales
 growth despite an industry-wide slowdown in new-car sales," said W. Austin
 Ligon, president of CarMax.  "Sales growth remained strong in the fourth
 quarter, even against the anniversary of a significant competitor's exit from
 the used-car superstore business.  We believe the sales performance throughout
 the year reflects our focus over the past two years on sales and profit
 improvement in our existing store base.  During the fourth quarter, we
 benefited from the lack of severe winter weather in most all our markets.
     "The increase in used-car sales as a percent of our total sales mix and
 continued strong inventory management throughout the year, but especially
 during the second half when the model-year transition occurs in the new-car
 segment, contributed to a higher gross profit margin of 13.2 percent of sales
 in fiscal 2001, compared with 11.9 percent of sales in fiscal 2000," said
 Ligon.  "The significantly better expense ratio of 9.8 percent in fiscal 2001
 versus 11.3 percent in fiscal 2000 reflects the leverage achieved from strong
 total and comparable store sales growth; more efficient advertising
 expenditures; overall improvements in store productivity, including those
 achieved through the hub and satellite strategy we adopted in multi-store
 markets; and a favorable contribution from CarMax Auto Finance."  The
 improvements in CarMax's fiscal 2001 expense ratio were partly offset by an
 $8.7 million pretax write-off of goodwill associated with two under performing
 new-car franchises."
     CarMax's operating margin before interest and taxes rose to 3.4 percent in
 fiscal 2001 from 0.6 percent in fiscal 2000.  Excluding the goodwill write-
 off, the operating margin before interest and taxes was 3.8 percent.
 
     CarMax Group Operating Ratios
 
                                 Quarter Ended            Fiscal Year Ended
                               February 28 or 29          February 28 or 29
                              2001          2000          2001         2000
     Net Sales and Operating
       Revenues              100.0%        100.0%       100.0%        100.0%
     Gross Profit Margin      12.8%         12.3%        13.2%         11.9%
     Expense Ratio            10.4%         12.2%         9.8%         11.3%
     Operating Margin
       Before Interest
       and Taxes               2.4%          0.1%         3.4%          0.6%
 
     For the year, the CarMax business produced pretax earnings of $73.5
 million in fiscal 2001, compared with pretax earnings of $1.8 million in
 fiscal 2000.  The pretax profit margin was 2.9 percent this year, compared
 with 0.1 percent last year.
     "We believe that our fiscal 2001 growth and profitability indicate that
 CarMax has developed a firm foundation for sustained, profitable growth and
 our used-car superstore concept is well positioned to succeed in economic down
 cycles," said Ligon.  "We expect to resume geographic expansion this fiscal
 year with two store openings in single-store markets. We would expect to open
 another four to six superstores in fiscal 2003 and six to eight superstores
 per year from fiscal 2004 through fiscal 2006, assuming that we continue to
 achieve success with our new-market openings.  We will focus our expansion
 plans on openings in single-store markets, which are the markets where we
 historically have achieved the highest returns, and satellite fill-ins, where
 we can improve the productivity of our existing multi-store markets, for the
 next several years."
     Circuit City will host a conference call for investors today, April 2,
 2001, at 10:00 a.m. Eastern time to discuss this morning's announcement.
 Domestic investors may access the call at 888-790-1720 (access code:
 earnings).  International investors should dial 312-470-0162 (access code:
 earnings). The call will be led by Alan McCollough, president and chief
 executive officer of Circuit City.  A replay of the conference call will be
 available beginning today, April 2, 2001, at approximately 2:00 p.m. Eastern
 time and will run through midnight, April 6, 2001.  Domestic investors may
 access the recording at 888-568-0856 (no access code required) and
 international investors at 402-998-0241 (no access code required).  A replay
 of the call also will be available on the Circuit City Group's investor
 information home page http://investor.circuitcity.com , the CarMax Group's
 investor information home page http://investor.carmax.com or at
 http://www.streetevents.com .
     Circuit City is a leading national retailer of brand-name consumer
 electronics, personal computers and entertainment software.  CarMax is the
 nation's leading specialty retailer of used cars.  With headquarters in
 Richmond, Va., Circuit City Stores, Inc. operates 593 Circuit City Superstores
 and 34 mall-based Circuit City Express stores, giving it more locations in
 more markets than any other consumer electronics specialty retailer.  The
 company operates 40 CarMax retail units in 37 locations, including 33 used-car
 superstores.  CarMax operates 21 new-car franchises, most of which are
 integrated or co-located with its used-car superstores.  For more information,
 access the company's Web sites at CircuitCity.com and CarMax.com.
     This release contains forward-looking statements, which are subject to
 risks and uncertainties.  Additional discussion of factors that could cause
 actual results to differ materially from management's projections, forecasts,
 estimates and expectations is contained in the company's SEC filings.
 
                           CIRCUIT CITY STORES, INC.
                      CONSOLIDATED STATEMENTS OF EARNINGS
                        PERIODS ENDED FEBRUARY 28 OR 29
                  (Amounts in thousands except per share data)
 
                               Three Months               Twelve Months
                             2001         2000         2001           2000
 
     NET SALES AND
       OPERATING
       REVENUES          $3,817,127    $3,980,407  $12,959,028   $12,614,390
     Cost of sales,
       buying and
       warehousing        2,960,660     3,059,770   10,135,380     9,751,833
     Appliance exit
       costs                      -             -       28,326             -
 
     GROSS PROFIT           856,467       920,637    2,795,322     2,862,557
     Selling, general and
       administrative
       expenses             685,555       655,883    2,514,912     2,309,593
     Appliance exit costs         -             -        1,670             -
     Interest expense         4,518         7,108       19,383        24,206
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS
     BEFORE INCOME TAXES    166,394       257,646      259,357       528,758
     Provision for
       income taxes          63,230        97,905       98,555       200,928
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS           103,164       159,741      160,802       327,830
     Discontinued
       operations:
     Loss from
       discontinued
       operations of
       Divx, less income
       tax benefit                -             -            -       (16,215)
     Loss on disposal
       of Divx, less
       income tax benefit         -             -            -      (114,025)
 
     LOSS FROM
       DISCONTINUED
       OPERATIONS                 -             -            -      (130,240)
 
     NET EARNINGS          $103,164      $159,741     $160,802      $197,590
     Net earnings (loss)
       attributed to:
     Circuit City Group
       common stock:
       Continuing
       operations          $101,190      $160,149     $149,247      $327,574
       Discontinued
       operations                $-            $-           $-     $(130,240)
     CarMax Group
       common stock          $1,974         $(408)     $11,555          $256
 
     Weighted average
       common shares:
       Circuit City
       Group basic          204,401       201,999      203,774       201,345
       Circuit City
       Group diluted        206,380       204,749      205,830       204,321
       CarMax Group basic    25,579        24,611       25,554        23,778
       CarMax Group diluted  27,026        26,181       26,980        25,788
 
     NET EARNINGS (LOSS)
       PER SHARE:
     Circuit City Group
       basic:
       Continuing
       operations             $0.50         $0.79        $0.73         $1.63
       Discontinued
       operations                $-            $-           $-        $(0.65)
       Net earnings           $0.50         $0.79        $0.73         $0.98
 
     Circuit City Group
       diluted:
       Continuing
       operations             $0.49         $0.78        $0.73         $1.60
       Discontinued
       operations                $-            $-           $-        $(0.64)
       Net earnings           $0.49         $0.78        $0.73         $0.96
 
     CarMax Group basic       $0.08        $(0.02)       $0.45         $0.01
     CarMax Group diluted     $0.07        $(0.02)       $0.43         $0.01
 
                           CIRCUIT CITY STORES, INC.
                          CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)
 
                                                        February 28 or 29
                                                       2001           2000
     ASSETS
 
     Current Assets:
     Cash and cash equivalents                       $446,131       $643,933
     Net accounts receivable                          585,761        593,276
     Inventory                                      1,757,664      1,689,209
     Prepaid expenses and other current assets         57,623         16,197
     Total Current Assets                           2,847,179      2,942,615
 
     Property and equipment, net                      988,947        965,181
     Other assets                                      35,207         47,552
 
     TOTAL ASSETS                                  $3,871,333     $3,955,348
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current Liabilities:
     Current installments of long-term debt          $132,388       $177,344
     Accounts payable                                 902,560        960,131
     Short-term debt                                    1,200          3,005
     Accrued expenses and other current liabilities   162,972        204,561
     Deferred income taxes                             92,479         61,118
     Total Current Liabilities                      1,291,599      1,406,159
 
     Long-term debt, excluding current installments   116,137        249,241
     Deferred revenue and other liabilities            92,165        130,020
     Deferred income taxes                             14,949         27,754
     TOTAL LIABILITIES                              1,514,850      1,813,174
 
     STOCKHOLDERS' EQUITY                           2,356,483      2,142,174
 
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $3,871,333     $3,955,348
 
                               CIRCUIT CITY GROUP
                             STATEMENTS OF EARNINGS
                        PERIODS ENDED FEBRUARY 28 OR 29
                  (Amounts in thousands except per share data)
 
                               Three Months               Twelve Months
                             2001         2000         2001          2000
 
     NET SALES AND
       OPERATING
       REVENUES          $3,177,131    $3,476,171  $10,458,037   $10,599,406
     Cost of sales,
       buying and
       warehousing        2,402,733     2,617,395    7,964,148     7,977,214
     Appliance exit
       costs                      -             -       28,326             -
 
     GROSS PROFIT           774,398       858,776    2,465,563     2,622,192
     Selling, general and
     administrative
       expenses             618,989       594,484    2,270,745     2,081,393
     Appliance exit costs         -             -        1,670             -
     Interest expense         1,558         3,884        7,273        13,844
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS
     BEFORE INCOME TAXES
       AND INTER-GROUP
       INTEREST IN THE
       CARMAX GROUP         153,851       260,408      185,875       526,955
 
     Provision for
       income taxes          58,468        98,955       70,637       200,243
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS
       BEFORE INTER-GROUP
       INTEREST IN THE
       CARMAX GROUP          95,383       161,453      115,238       326,712
 
     Net earnings (loss)
       related to the
       Inter-Group Interest
       in the CarMax Group    5,807        (1,304)      34,009           862
 
     EARNINGS FROM
       CONTINUING
       OPERATIONS           101,190       160,149      149,247       327,574
 
     Discontinued
       operations:
     Loss from discontinued
       operations of
       Divx, less income
       tax benefit                -             -            -       (16,215)
     Loss on disposal
       of Divx, less
       income tax benefit         -             -            -      (114,025)
 
     LOSS FROM
       DISCONTINUED
       OPERATIONS                 -             -            -      (130,240)
     NET EARNINGS          $101,190      $160,149     $149,247      $197,334
 
     Weighted average
       common shares:
       Basic                204,401       201,999      203,774       201,345
       Diluted              206,380       204,749      205,830       204,321
 
     NET EARNINGS (LOSS)
       PER SHARE:
     Basic:
       Continuing
       operations             $0.50         $0.79        $0.73         $1.63
       Discontinued
       operations                $-            $-           $-        $(0.65)
       Net earnings           $0.50         $0.79        $0.73         $0.98
 
     Diluted:
       Continuing operations  $0.49         $0.78        $0.73         $1.60
       Discontinued operations   $-            $-           $-        $(0.64)
       Net earnings           $0.49         $0.78        $0.73         $0.96
 
                               CIRCUIT CITY GROUP
                                 BALANCE SHEETS
                             (Amounts in thousands)
 
                                                         February 28 or 29
                                                       2001           2000
     ASSETS
     Current Assets:
     Cash and cash equivalents                       $437,329       $633,952
     Net accounts receivable                          451,099        464,023
     Merchandise inventory                          1,410,527      1,405,617
     Prepaid expenses and other current assets         55,317         13,353
     Total Current Assets                           2,354,272      2,516,945
     Property and equipment, net                      796,789        753,325
     Inter-Group Interest in the CarMax Group         292,179        257,535
     Other assets                                       9,319          9,583
 
     TOTAL ASSETS                                  $3,452,559     $3,537,388
     LIABILITIES AND GROUP EQUITY
     Current Liabilities:
     Current installments of long-term debt           $24,237        $85,735
     Accounts payable                                 820,077        884,172
     Short-term debt                                      213          1,453
     Accrued expenses and other current
       liabilities                                    146,818        184,705
     Deferred income taxes                             74,317         53,971
     Total Current Liabilities                      1,065,662      1,210,036
     Long-term debt, excluding current
       installments                                    33,080        127,984
     Deferred revenue and other liabilities            85,329        122,771
     Deferred income taxes                             11,329         21,877
     TOTAL LIABILITIES                              1,195,400      1,482,668
     GROUP EQUITY                                   2,257,159      2,054,720
     TOTAL LIABILITIES AND GROUP EQUITY            $3,452,559     $3,537,388
 
                                  CARMAX GROUP
                            STATEMENTS OF OPERATIONS
                        PERIODS ENDED February 28 or 29
                  (Amounts in thousands except per share data)
 
                                 Three Months              Twelve Months
                              2001         2000         2001           2000
 
     NET SALES AND
       OPERATING REVENUES  $639,996      $504,236   $2,500,991    $2,014,984
     Cost of sales          557,927       442,375    2,171,232     1,774,619
     GROSS PROFIT            82,069        61,861      329,759       240,365
     Selling, general and
     administrative
       expenses              66,566        61,399      244,167       228,200
     Interest expense         2,960         3,224       12,110        10,362
     EARNINGS (loss)
       BEFORE INCOME TAXES   12,543        (2,762)      73,482         1,803
     Income tax provision
       (benefit)              4,762        (1,050)      27,918           685
     NET EARNINGS (loss)     $7,781       $(1,712)     $45,564        $1,118
     Net earnings (loss)
       attributed to:
       Circuit City Group
       common stock          $5,807       $(1,304)     $34,009          $862
       CarMax Group
       common stock          $1,974         $(408)     $11,555          $256
     Weighted average
       common shares:
       Basic                 25,579        24,611       25,554        23,778
       Diluted               27,026        26,181       26,980        25,788
 
     NET EARNINGS (loss)
       PER SHARE:
       Basic                  $0.08        $(0.02)       $0.45         $0.01
       Diluted                $0.07        $(0.02)       $0.43         $0.01
 
                                  CARMAX GROUP
                                 BALANCE SHEETS
                             (Amounts in thousands)
 
                                                         February 28 or 29
                                                       2001            2000
     ASSETS
     Current Assets:
     Cash and cash equivalents                         $8,802         $9,981
     Net accounts receivable                          134,662        129,253
     Inventory                                        347,137        283,592
     Prepaid expenses and other current assets          2,306          2,844
     Total Current Assets                             492,907        425,670
     Property and equipment, net                      192,158        211,856
     Other assets                                      25,888         37,969
 
     TOTAL ASSETS                                    $710,953       $675,495
 
     LIABILITIES AND GROUP EQUITY
     Current Liabilities:
     Current installments of long-term debt          $108,151        $91,609
     Accounts payable                                  82,483         75,959
     Short-term debt                                      987          1,552
     Accrued expenses and other current
       liabilities                                     16,154         19,856
     Deferred income taxes                             18,162          7,147
     Total Current Liabilities                        225,937        196,123
     Long-term debt, excluding current
       installments                                    83,057        121,257
     Deferred revenue and other liabilities             6,836          7,249
     Deferred income taxes                              3,620          5,877
     TOTAL LIABILITIES                                319,450        330,506
     GROUP EQUITY                                     391,503        344,989
     TOTAL LIABILITIES AND GROUP EQUITY              $710,953       $675,495
 
 SOURCE  Circuit City Stores, Inc.

RELATED LINKS

http://www.circuitcity.com