America's Car-Mart Reports Diluted Earnings per Share of $.87 on Revenues of $146 Million
August 18 2016 - 4:08PM
America’s Car-Mart, Inc. (NASDAQ:CRMT) today announced its
operating results for the first quarter of fiscal 2017.
Highlights of first quarter operating
results:
- Net income of $7.1 million – $.87 per diluted share vs. $.52
per diluted share for prior year quarter
- Revenues of $146 million compared to $143 million for the prior
year quarter (a 2.2% increase)
- Retail unit sales decrease of 2.3% to 11,957 from 12,244 for
the prior year quarter with decreased productivity at 27.9 retail
units sold per store per month, down from 28.9 for the prior year
quarter
- Average retail sales price increased $428 to $10,393 or 4.3%
from the prior year quarter (decreased $248 or 2.3%
sequentially)
- Gross profit margin percentage increased to 41.8% from 41.2%
for the prior year quarter and from 38.7% sequentially
- Collections as a percentage of average finance receivables of
13.0% compared to 14.0% for the prior year quarter. The
weighted average contract term increased to 31.7 months from
30.4.
- Net Charge-offs as a percent of average finance receivables of
6.2%, down from 7.8% for prior year quarter
- Accounts over 30 days past due increased to 4.4% from 3.8% at
July 31, 2015
- Average percentage of finance receivables current of 80.0%
compared to 80.5% at April 30, 2016
- Provision for credit losses of 25.7% of sales vs. 27.7% for
prior year quarter
- Selling, general and administrative expenses at 17.9% of sales
vs. 18.1% for prior year quarter
- Active accounts base approximately 66,900, an increase of 1,900
from April 30, 2016
- Debt to equity of 51.2% and debt to finance receivables of
25.5% (up from 24.7% at April 30, 2016)
- Allowance for credit losses at 25% of finance receivables, net
of deferred revenue at July 31, 2016 (up from 23.8% at July 31,
2015)
- Strong cash flows supporting the increase in revenues, the
$23.3 million increase in finance receivables, $3.9 million
increase in inventory, $523,000 in net capital expenditures and the
$7.2 million in common stock repurchases (273,092 shares) with a
$9.6 million increase in total debt
“We are certainly happy to see the improved
bottom line and are very appreciative of the efforts of all of our
associates as they work tirelessly to help our customers succeed.
Also, it was nice to see growth at the top line and positive
same store sales for the quarter. Our top line growth when
excluding the effect of the four dealerships closed in fiscal 2016
was 3.2%, which is moving in the right direction for this
environment as competition continues to be intense. We continue to
expect, at some point, that competition will rationalize to a
degree which will give us an opportunity to increase sales volume
productivity especially at our older more mature dealerships,” said
William H. (“Hank”) Henderson, Chief Executive Officer of America’s
Car-Mart, Inc. (the “Company”). “There is tremendous demand for
what we offer the market, as evidenced by the increase of about
1,900 active accounts during the quarter. We are excited to have
the opportunity to earn the repeat business of all 66,900 active
customers by providing quality vehicles, affordable payment terms
and excellent service. We believe that our face-to-face
relationships with our customers and our passion for excellent
service sets us apart and provides us a unique opportunity in the
market as we move forward with our growth plans.”
“While the results for the quarter were good, we
know that we still have many significant opportunities for
improvements for all 143 existing dealerships,” added Mr.
Henderson. “We will continue to make that our number one
priority. However, new dealership openings are also a very
important component of our future plans and we do continue to
expect to resume our openings at a more historical rate at some
point in the future.”
“We are pushing hard to improve execution and
lot level blocking and tackling, which is showing up in our
results. Our gross profit margin percentage improved to 41.8% from
38.7% for the fourth quarter of 2016, and our net-charge-offs
improved to 6.2% from 7.8% for the first quarter of 2016 and from
9.0% for the fourth quarter of 2016. These improvements are the
direct result of intense focus on the overall quality and
consistency of our inventory management and our collections
practices. These efforts are being driven by our General Managers
and their Area Operations Managers who continue to make solid
strides with individual dealerships,” said Jeff Williams, President
of America’s Car-Mart, Inc. “We are proud of the progress being
made, but we know that we still have a lot of work to do and that
the work never ends. We are excited about the direction so far in
these two critically important areas of the business and we are
committed to getting better as we move forward.”
“During the quarter, we re-purchased 273,092
shares (3.4% of the outstanding shares) of our common stock for
$7.2 million at an average price of $26.23 per share. Since
February 2010, we have re-purchased 4.4 million shares (38% of the
outstanding shares) for $142 million at an average cost of $32.09.
We plan to continue to invest in stock re-purchases
opportunistically as we move forward,” added Mr. Williams. “We will
continue to focus on cash flows and maintaining a healthy balance
sheet. We ended the quarter with debt to equity of 51.2% and
debt to finance receivables of 25.5%. During the quarter, we
increased financed receivables by $23.3 million, increased
inventory by $3.9 million, re-purchased $7.2 million of common
stock and had $523,000 in net capital expenditures, all with a $9.6
million increase in total
debt.”
Conference Call
Management will be holding a conference call on
Friday, August 19, 2016 at 11:00 a.m. Eastern Time to discuss first
quarter results. A live audio of the conference call will be
accessible to the public by calling (877) 776-4031.
International callers dial (631) 291-4132. Callers should
dial in approximately 10 minutes before the call begins. A
conference call replay will be available two hours following the
call for thirty days and can be accessed by calling (855) 859-2056
(domestic) or (404) 537-3406 (international), conference call ID
#60323786.
About America's Car-Mart
America’s Car-Mart, Inc. (the “Company”)
operates 143 automotive dealerships in eleven states and is one of
the largest publicly held automotive retailers in the United States
focused exclusively on the “Integrated Auto Sales and Finance”
segment of the used car market. The Company emphasizes
superior customer service and the building of strong personal
relationships with its customers. The Company operates its
dealerships primarily in small cities throughout the South-Central
United States selling quality used vehicles and providing financing
for substantially all of its customers. For more information,
including investor presentations, on America’s Car-Mart, please
visit our website at www.car-mart.com.
This press release contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements address
the Company’s future objectives, plans and goals, as well as the
Company’s intent, beliefs and current expectations regarding future
operating performance and can generally be identified by words such
as “may,” “will,” “should,” “could, “believe,” “expect,”
“anticipate,” “intend,” “plan,” “foresee,” and other similar words
or phrases. Specific events addressed by these
forward-looking statements include, but are not limited to:
- new dealership openings;
- performance of new dealerships;
- same store revenue growth;
- future overall revenue growth;
- the Company’s collection results, including but not limited to
collections during income tax refund periods;
- repurchases of the Company’s common stock; and
- the Company’s business and growth strategies and plans.
These forward-looking statements are based on the Company’s
current estimates and assumptions and involve various risks and
uncertainties. As a result, you are cautioned that these
forward-looking statements are not guarantees of future
performance, and that actual results could differ materially from
those projected in these forward-looking statements. Factors
that may cause actual results to differ materially from the
Company’s projections include, but are not limited to:
- the availability of credit facilities to support the Company’s
business;
- the Company’s ability to underwrite and collect its accounts
effectively, including but not limited to collections during income
tax refund periods;
- competition;
- dependence on existing management;
- availability of quality vehicles at prices that will be
affordable to customers;
- changes in financing laws or regulations; and
- general economic conditions in the markets in which the Company
operates, including but not limited to fluctuations in gas prices,
grocery prices and employment levels.
Additionally, risks and uncertainties that may affect future
results include those described from time to time in the Company’s
SEC filings. The Company undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. You are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the dates on which they are made.
|
America's Car-Mart, Inc. |
Consolidated Results of
Operations |
(Operating Statement Dollars in Thousands) |
|
|
|
|
|
|
|
|
|
|
|
% Change |
|
|
As a % of Sales |
|
|
|
|
|
|
Three Months Ended |
|
2016 |
|
|
Three Months Ended |
|
|
|
|
|
|
July 31, |
|
vs. |
|
|
July 31, |
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
2015 |
|
|
2016 |
|
2015 |
Operating
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail units sold |
|
|
11,957 |
|
|
|
12,244 |
|
|
|
(2.3 |
)% |
|
|
|
|
|
|
|
|
Average number of stores in operation |
|
|
143 |
|
|
|
141 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
Average retail units sold per store per month |
|
|
27.9 |
|
|
|
28.9 |
|
|
|
(3.5 |
) |
|
|
|
|
|
|
|
|
Average retail sales price |
|
$ |
10,393 |
|
|
$ |
9,965 |
|
|
|
4.3 |
|
|
|
|
|
|
|
|
|
Same store revenue growth |
|
|
0.5 |
% |
|
|
8.9 |
% |
|
|
|
|
|
|
|
|
|
|
Net charge-offs as a percent of average finance
receivables |
|
|
6.2 |
% |
|
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
Collections as a percent of average finance receivables |
|
|
13.0 |
% |
|
|
14.0 |
% |
|
|
|
|
|
|
|
|
|
|
Average percentage of finance receivables-current (excl. 1-2
day) |
|
80.0 |
% |
|
|
81.0 |
% |
|
|
|
|
|
|
|
|
|
|
Average down-payment percentage |
|
|
6.0 |
% |
|
|
6.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open |
|
|
143 |
|
|
|
142 |
|
|
|
0.7 |
% |
|
|
|
|
|
|
|
|
Accounts over 30 days past due |
|
|
4.4 |
% |
|
|
3.8 |
% |
|
|
|
|
|
|
|
|
|
|
Finance receivables, gross |
|
$ |
460,570 |
|
|
$ |
427,881 |
|
|
|
7.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Statement: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
|
$ |
129,684 |
|
|
$ |
127,595 |
|
|
|
1.6 |
% |
|
|
100.0 |
% |
|
100.0 |
% |
|
|
Interest income |
|
|
16,156 |
|
|
|
15,095 |
|
|
|
7.0 |
|
|
|
12.5 |
|
|
11.8 |
|
|
|
|
|
Total |
|
|
145,840 |
|
|
|
142,690 |
|
|
|
2.2 |
|
|
|
112.5 |
|
|
111.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
75,513 |
|
|
|
75,087 |
|
|
|
0.6 |
|
|
|
58.2 |
|
|
58.8 |
|
|
|
Selling, general and administrative |
|
|
23,168 |
|
|
|
23,125 |
|
|
|
0.2 |
|
|
|
17.9 |
|
|
18.1 |
|
|
|
Provision for credit losses |
|
|
33,381 |
|
|
|
35,345 |
|
|
|
(5.6 |
) |
|
|
25.7 |
|
|
27.7 |
|
|
|
Interest expense |
|
|
944 |
|
|
|
760 |
|
|
|
24.2 |
|
|
|
0.7 |
|
|
0.6 |
|
|
|
Depreciation and amortization |
|
|
1,096 |
|
|
|
1,010 |
|
|
|
8.5 |
|
|
|
0.8 |
|
|
0.8 |
|
|
|
Loss on disposal of property and equipment |
|
|
400 |
|
|
|
- |
|
|
|
100.0 |
|
|
|
0.3 |
|
|
- |
|
|
|
|
|
Total |
|
|
134,502 |
|
|
|
135,327 |
|
|
|
(0.6 |
) |
|
|
103.7 |
|
|
106.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before taxes |
|
|
11,338 |
|
|
|
7,363 |
|
|
|
|
|
8.7 |
|
|
5.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
4,229 |
|
|
|
2,747 |
|
|
|
|
|
3.3 |
|
|
2.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
7,109 |
|
|
$ |
4,616 |
|
|
|
|
|
5.5 |
|
|
3.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on subsidiary preferred stock |
|
$ |
(10 |
) |
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income attributable to common shareholders |
|
$ |
7,099 |
|
|
$ |
4,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
0.89 |
|
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
$ |
0.87 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
7,948,925 |
|
|
|
8,513,440 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
8,185,077 |
|
|
|
8,909,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
America's Car-Mart, Inc. |
|
Consolidated Balance Sheet and Other
Data |
|
(Dollars in Thousands) |
|
|
|
|
|
|
|
|
July 31, |
|
April 30, |
|
|
|
|
|
|
|
2016 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
371 |
|
|
$ |
602 |
|
|
|
Finance
receivables, net |
|
$ |
352,548 |
|
|
$ |
334,793 |
|
|
|
Inventory |
|
|
$ |
33,824 |
|
|
$ |
29,879 |
|
|
|
Total
assets |
|
$ |
426,701 |
|
|
$ |
406,296 |
|
|
|
Total
debt |
|
$ |
117,534 |
|
|
$ |
107,902 |
|
|
|
Treasury
stock |
|
$ |
148,700 |
|
|
$ |
141,535 |
|
|
|
Stockholders' equity |
|
$ |
229,395 |
|
|
$ |
228,817 |
|
|
|
Shares
outstanding |
|
|
7,805,947 |
|
|
|
8,073,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
receivables: |
|
|
|
|
|
|
|
Principal
balance |
|
$ |
460,570 |
|
|
$ |
437,278 |
|
|
|
|
Deferred
revenue - payment protection plan |
|
(18,116 |
) |
|
|
(17,305 |
) |
|
|
|
Deferred
revenue - service contract |
|
(10,369 |
) |
|
|
(10,034 |
) |
|
|
|
Allowance
for credit losses |
|
(108,022 |
) |
|
|
(102,485 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Finance
receivables, net of allowance and deferred revenue |
$ |
324,063 |
|
|
$ |
307,454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
as % of principal balance net of deferred revenue |
|
25.0 |
% |
|
|
25.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in
allowance for credit losses: |
|
|
|
|
|
|
|
|
|
Three months |
|
|
|
|
|
|
ended July 31, |
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
Balance at
beginning of period |
$ |
102,485 |
|
|
$ |
93,224 |
|
|
|
|
Provision
for credit losses |
|
33,381 |
|
|
|
35,345 |
|
|
|
|
Charge-offs, net of collateral recovered |
|
(27,844 |
) |
|
|
(32,987 |
) |
|
|
|
|
Balance at
end of period |
$ |
108,022 |
|
|
$ |
95,582 |
|
|
|
|
|
|
|
|
|
|
|
Contacts:
William H. (“Hank”) Henderson, CEO
or
Jeffrey A. Williams, President
at (479) 464-9944
Americas Car Mart (NASDAQ:CRMT)
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