Filed by Circuit City Stores, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
And deemed filed pursuant to Rule 14a-12
Of the Securities Exchange Act of 1934
Subject Company: Circuit City Stores, Inc.
Commission File No. 001-05767
The following is a PowerPoint presentation prepared by Circuit City Stores, Inc.
and given on the evening of April 24, 2002 to members of the financial
community.
SLIDE 1
CARMAX
[Picture of CarMax superstore lot]
SLIDE 2
FORWARD-LOOKING STATEMENT
This presentation 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 the company and create a separate
publicly traded 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.
[CarMax logo]
SLIDE 3
WHAT IS CARMAX?
o Nation's leading used-car specialist
o Pioneered used-car superstore - 1993
o Operate 36 used-car superstores o FY02:
-- Sales $3.2Bn
-- Net profit $91mm
[CarMax logo]
SLIDE 4
WHY CARMAX?: MARKET OPPORTUNITY
Used-Car Market
o Huge, fragmented
o Non-commodity
o Stable
o Consumer need
[CarMax logo]
SLIDE 5
U.S. USED-CAR MARKET
HUGE AND FRAGMENTED
[Graph]
Market Dollars
U.S. Retail Used-Car Market $376Bn
1- to 6-Yr.-Old Used Cars $260Bn
[CarMax logo]
Source: Manheim Auctions and CNW Research
SLIDE 6
NON-COMMODITY BUSINESS
o Every used car unique
o No large vendors
o No standard systems, processes
o Complexity creates
-- value-added opportunities
-- competitive advantage opportunities
[CarMax logo]
SLIDE 7
USED-VEHICLE SALES
STABLE
[Graph]
------- ----------------------------------- -----------------------------------
% Change New Vehicle Unit Sales % Change Used-Vehicle Unit Sales
------- ----------------------------------- -----------------------------------
1985 5.0%-- 10.0% -5.0% - 0.0%
------- ----------------------------------- -----------------------------------
1987 -10.0%-- -5.0% 0.0%-- 5.0%
------- ----------------------------------- -----------------------------------
1989 -5.0%-- 0.0% 0.0%-- 5.0%
------- ----------------------------------- -----------------------------------
1991 -15.0%-- -10.0% -5.0% - 0.0%
------- ----------------------------------- -----------------------------------
1993 5.0%-- 10.0% 0.0%-- 5.0%
------- ----------------------------------- -----------------------------------
1995 -5.0%-- 0.0% 0.0%-- 5.0%
------- ----------------------------------- -----------------------------------
1997 0.0%-- 5.0% 0.0%-- 5.0%
------- ----------------------------------- -----------------------------------
1999 5.0%-- 10.0% 0.0%-- 5.0%
------- ----------------------------------- -----------------------------------
2001 -5.0%-- 0.0% 0.0%-- 5.0%
------- ----------------------------------- -----------------------------------
Source: Manheim/CNW
[CarMax logo]
SLIDE 8
WHY CARMAX?: RESULTS
[Graph]
Fiscal Year Revenues
($MM)
FY97 $510
FY98 $874
FY99 $1,466
FY00 $2,015
FY01 $2,501
FY02 $3,202
44% CAGR
[CarMax logo]
SLIDE 9
RESULTS
[Graphs]
------------------- -------------------------- ----------------- ---------------- ----------------- ----------------
% Change
Fiscal Used-Car Net in Net Return on
Year Units in 000s Comps Earnings Earnings Sales
------------------- -------------------------- ----------------- ---------------- ----------------- ----------------
FY00 110K+ $1mm 0.1%
------------------- -------------------------- ----------------- ---------------- ----------------- ----------------
FY01 130K+ +13% $46mm 1.8%
------------------- -------------------------- ----------------- ---------------- ----------------- ----------------
FY02 160K+ +24% $91mm +99% 2.8%
------------------- -------------------------- ----------------- ---------------- ----------------- ----------------
[CarMax logo]
SLIDE 10
SALES AND PROFIT GROWTH
Sales Growth
o New store openings
o Comp used-unit growth
Profit Growth
o New store openings
o Store margin expansion
o Corporate overhead leverage
[CarMax logo]
SLIDE 11
CARMAX TODAY
Used-Car Superstores
Mid-Sized Markets (9) Large Markets (8)
Superstores Superstores
----------- -----------
Richmond 1 Atlanta 3
Raleigh 1 Baltimore/DC 4
Charlotte 1 Dallas/Fort Worth 4
Orlando 1 Miami/Ft. Lauderdale 3
San Antonio 1 Houston 4
Greenville 1 Chicago 6
Nashville 1 Tampa 2
Greensboro 1 Los Angeles 1
Sacramento 1 --
- 27
9
[CarMax logo]
SLIDE 12
GROWTH PLAN
Superstores
[Graph]
2006E Range: 57 - 65
Year # of Stores
1999 29
2000 33
2001 33
2002 35
2003E 40
2004E 45
2005E 53
2006E 61
[CarMax logo]
SLIDE 12
FY03 EXPECTATIONS
o Used-car comp unit growth
-- 1st half: low/mid teens
-- 2nd half: high single/low double digits
o EPS
-- 95(cent)to $1.00
o Excludes est. 8(cent)
-- one-time separation costs
[CarMax logo]
SLIDE 14
WHY CARMAX?: CONSUMER OFFER
o Low, no-haggle prices
o Comprehensive selection
o Guaranteed quality
o Customer-friendly
[CarMax logo]
SLIDE 15
PROPRIETARY OPERATING PROCESS
[Flowchart]
Consumer
Offer
Purchasing/
Inventory Management Reconditioning
Information Systems
[CarMax logo]
SLIDE 16
INFORMATION SYSTEMS
[Photo of CarMax superstore sales floor]
[CarMax logo]
SLIDE 17
RECONDITIONING
[Photo of mechanic under the hood of an automobile]
[CarMax logo]
SLIDE 18
PURCHASING
[Photo of CarMax employee appraising an automobile]
[CarMax logo]
SLIDE 19
INVENTORY MANAGEMENT
o Core inventory model by store
o Optimal discretionary buys
o Daily price change recommendations
[CarMax logo]
SLIDE 20
DEFENSIBLE COMPETITIVE ADVANTAGE
o Organization
o Process
o Execution
o Time
[CarMax logo]
SLIDE 21
[Photo of CarMax superstore]
ADDITIONAL INFORMATION
On February 22, 2002, Circuit City Stores, Inc. announced that its board of
directors had authorized management to initiate a process that would separate
its 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. In connection with the proposed
separation, on March 29, 2002, CarMax, Inc. filed a registration statement,
which includes a preliminary proxy statement/prospectus of Circuit City and
CarMax and other materials, with the Securities and Exchange Commission.
Security holders are urged to read these materials when they become available
because they will contain important information. Investors may obtain a free
copy of these materials when they become available as well as other materials
filed with the SEC concerning Circuit City and CarMax, Inc. at the SEC's Web
site at http://www.sec.gov. Holders of Circuit City Group and CarMax Group stock
will receive at an appropriate time a proxy statement and information on how to
obtain at no cost transaction-related documents from Circuit City. This
presentation does not constitute an offering of any securities.
With respect to the proposed separation, Circuit City and its officers and
directors may be deemed to be participants in the solicitation of proxies from
the company's shareholders. Information regarding Circuit City's officers and
directors is included in Circuit City's proxy statement for its 2001 annual
meeting of shareholders filed with the SEC on May 11, 2001. This document is
available free of charge at the SEC's Internet site or by directing a request to
Circuit City Stores, Inc. at 9950 Mayland Drive, Richmond, Virginia 23233,
Attention: Corporate Secretary. Carolyn Baldwin Byrd and Paula G. Rosput were
elected to the Circuit City board after the 2001 annual meeting, and therefore
their interests in Circuit City are not described in the proxy statement for
that meeting. Ms. Byrd beneficially owns 503 Circuit City Group shares and 60
CarMax Group shares and holds options to acquire 4,393 Circuit City Group shares
and 507 CarMax Group shares, and Ms. Rosput beneficially owns 342 Circuit City
Group shares and 60 CarMax Group shares and holds options to acquire 2,962
Circuit City Group shares and 517 CarMax Group shares. None of these options is
exercisable within 60 days of the date of this release. Since the 2001 annual
meeting, Kim D. Maguire has been appointed executive vice president -
merchandising for the company. He holds 40,500 restricted Circuit City Group
shares and options to acquire 200,000 Circuit City Group shares. Mr. Maguire's
options are not exercisable within 60 days of the date of this release.