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
CARMAX SIGNS INVENTORY CREDIT AGREEMENT WITH DAIMLERCHRYSLER
SERVICES AND TOYOTA FINANCIAL SERVICES
Richmond, Va., June 4, 2002 - CarMax Auto Superstores, Inc. (NYSE: KMX) today
announced that it has entered into a $200 million credit agreement secured by
vehicle inventory with DaimlerChrysler Services North America, LLC and Toyota
Financial Services.
The credit agreement includes a $100 million revolving loan commitment and a
$100 million term loan commitment. The terms for both commitments are a
LIBOR-based rate favorable to the company. Both commitments have initial
two-year terms, renewable annually thereafter. DaimlerChrysler Services serves
as agent for the credit agreement.
"The competitive terms that we have received from two highly respected finance
companies demonstrate CarMax's financial strength," said Keith D. Browning,
CarMax's executive vice president and chief financial officer. "We believe that
this credit facility, along with securitization of finance receivables,
sale/leasebacks and internally generated cash from operations, will provide
CarMax the capital capacity needed to meet our operational and capital
expenditure requirements for the foreseeable future."
"We are excited about building this new relationship with CarMax, to which we'll
bring our financial strength and expertise," said Mike L'Archer, vice president
- national accounts, DaimlerChrysler Services. "Together with our partner for
this deal, Toyota Financial Services, we have laid the foundation to assist
CarMax in their future growth plans. We believe that our specific financial
products will assist in the continued success of the CarMax business model."
CarMax is the nation's leading specialty retailer of used cars. With
headquarters in Richmond, Va., the company currently operates 41 retail units in
39 locations, including 36 used-car superstores. CarMax also operates 18 new-car
franchises, 15 of which are integrated or co-located with its used-car
superstores. For more information, access the company's Web site at 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 (NYSE:CC), which tracks the performance of
the Circuit City business 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.
Circuit City Stores, Inc. has previously announced that 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. The separation is expected to be
completed by late summer, subject to shareholder approval and final approval by
the board of directors.
In connection with the proposed separation, CarMax, Inc. has filed with the
Securities and Exchange Commission a registration statement, which includes a
preliminary proxy statement/prospectus of Circuit City Stores, Inc. and CarMax
and other materials. Security holders are urged to read these materials because
they will contain important information. Investors may obtain a free copy of
these materials, as well as other materials filed with the SEC concerning
Circuit City Stores, Inc. and CarMax, Inc., at the SEC's Web site at
http://www.sec.gov. At an appropriate time, holders of Circuit City Group and
CarMax Group stock will receive a proxy statement and information on how to
obtain transaction-related documents from Circuit City Stores at no cost. This
release does not constitute an offering of any securities.
With respect to the separation, Circuit City Stores, Inc. 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 2002 annual
meeting of shareholders filed with the SEC on May 15, 2002. This document is
available free of charge at the SEC's Web site or by directing a request to
Circuit City Stores, Inc. at 9950 Mayland Drive, Richmond, Virginia 23233,
Attention: Corporate Secretary.
DaimlerChrysler Services North America LLC provides brand specific financing for
automotive dealer inventories and retail consumers and does business as Chrysler
Financial and Mercedes-Benz Credit. It also finances commercial vehicles for
affiliate products such as Freightliner, Sterling and Western Star. The company
serves as the headquarters for the operations in the United States, Canada and
Mexico and has over 5,000 employees who manage a portfolio of $82 billion with
nearly four million contracts. DaimlerChrysler Services North America is a
member of the DaimlerChrysler Services Group, headquartered in Berlin, Germany,
which operates in 38 countries with an employee base of nearly 10,000 and a
global portfolio of EUR 132 billion. DaimlerChrysler Services is one of the
leading financial services companies worldwide.
Toyota Financial Services (TFS) is the finance and insurance brand for Toyota in
the U.S., offering retail auto financing and leasing through Toyota Motor Credit
Corporation (TMCC) and extended service contracts through Toyota Motor Insurance
Services (TMIS). Lexus Financial Services is the brand for financial products
for Lexus dealers and customers.
TFS is the seventh largest finance company in the United States (according to
SNL financial 4/02). TFS currently employs over 2,600 associates nationwide, and
has managed assets totaling more than $36 billion. It is part of a worldwide
network of comprehensive financial services
offered by Toyota Financial Services Corporation, a wholly owned subsidiary of
Toyota Motor Corporation.
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 the company 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 Circuit City Stores' SEC
filings and the registration statement filed with the SEC in connection with the
separation.
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Contact: Dandy Barrett, CarMax Director of Investor Relations, (804) 935-4591