America's Car-Mart Reports Diluted Earnings per Share of $.90 on Revenues of $146 Million and Announces Future CEO Transitio...
August 17 2017 - 5:00PM
America’s Car-Mart, Inc. (NASDAQ:CRMT) today announced its
operating results for the first quarter of fiscal year 2018.
Highlights of first quarter operating
results:
- Net earnings of $7.0 million – $.90 per diluted share vs. $.87
per diluted share for prior year quarter
- Revenues flat at $146 million, current quarter includes a $2.0
million increase in interest income and same store revenue increase
of 2.1%
- Increased sales volume productivity with 28.2 retail units sold
per store per month, up from 27.9 for the prior year quarter
- Average retail sales price decreased $7 to $10,386 or .1% from
the prior year quarter
- Gross profit margin percentage decreased to 41.4% from 41.8%
for the prior year quarter
- Collections as a percentage of average finance receivables
decreased to 12.4% from 13.0% for the prior year quarter. The
weighted average contract term increased to 32.6 months from 31.7
from the prior year quarter and remained essentially flat from the
fourth quarter of fiscal 2017
- Net Charge-offs as a percent of average finance receivables of
6.4%, up from 6.2% for prior year quarter
- Accounts over 30 days past due increased to 4.6% from 4.4% at
July 31, 2016
- Average percentage of finance receivables current improved
slightly to 81% from 80% at July 31, 2016
- Provision for credit losses of 26.6% of sales vs. 25.7% for
prior year quarter
- Selling, general and administrative expenses at 18.6% of sales
vs. 17.9% for prior year quarter
- Active accounts base approximately 68,800
- Debt to equity of 49.5% and debt to finance receivables of
24.3%
- Strong cash flows supporting the increase in revenues, the
$16.9 million increase in finance receivables, $609,000 increase in
inventory, $613,000 in net capital expenditures and $3.7 million in
common stock repurchases (102,843 shares) with a $298,000 decrease
in total debt
"We are pleased with our results for the
quarter, and are confident in the strength of the business model to
produce favorable results. We are seeing the positive results of
our efforts, and we are very excited about the future of our
business as we work to ensure that we add real value for customers
looking for good, basic affordable transportation with excellent
service after the sale," said William H. "Hank" Henderson, Chief
Executive Officer of America’s Car-Mart, Inc. "Customer
relationships have always been our primary focus. We are
improving every day in that category, and we are committed to
pushing our service levels even higher."
"There continues to be solid demand for the
service we offer, and we are certainly focused on growth. We added
one new dealership during the quarter, and we are working to
improve our bench strength of future managers to put us in a
position to add more dealerships in the future," said Mr.
Henderson. "We have many opportunities to improve results with our
existing dealerships, and that, in addition to growing the bench to
support new openings, remain our primary focus areas."
"I have been with the Company for over 30 years
now and could not be more proud of what we have built and the
position the Company is in to be able to continue to prosper into
the future. We have a great team in place and the time is right for
me to take a step back from the day-to-day operations," said Mr.
Henderson. "Effective December 31, 2017 I will be retiring as CEO,
and Jeff Williams, our President, will be assuming the CEO
role. Jeff has been with the Company for 12 years now and has
proven himself very capable of leading our efforts. I will be
moving from CEO to CEO Emeritus and Board Member, and will be
serving as an advisor to Jeff and Senior Management. I am
greatly looking forward to contributing in my new capacity, and I
am very excited about the future of our business and the
opportunities that lay before us."
"I too am very excited about our future and look
forward to helping the Company grow as we support our customers by
providing a higher level of service than competitive offerings,"
said Jeff Williams, President of America's Car-Mart, Inc. "We were
pleased to see the top line growth for the quarter, especially our
sales volume productivity which increased to 28.2 retail units sold
per store per month. Same store revenues were up a solid 2.1% as
many of our older, more mature, better performing dealerships saw
some nice gains for the quarter. We will continue to push for
productivity improvements for existing dealerships as we see
opportunities to take back some market share. The investments we
have made, most recently with General Manager Recruitment, Training
and Advancement as well as Collections Support, will help allow us
to confidently grow and leverage our costs over time."
“During the quarter, we re-purchased 102,843
shares of our common stock for approximately $3.7 million at an
average price of $36.41 per share. Since February 2010, we have
re-purchased 4.9 million shares (42% of the outstanding shares) for
$159.1 million at an average cost of $32.32. 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. During the quarter, we
increased Finance Receivables by almost $17 million and bought back
$3.7 million in common stock and at the same time paid down debt.
We ended the quarter with debt to equity of 49.5% and debt to
finance receivables of 24.3%. We are excited about our future, and
we are committed to our continued success.”
Conference Call
Management will be holding a conference call on
Friday, August 18, 2017 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
#67050322.
About America's Car-Mart
America’s Car-Mart, Inc. (the “Company”)
operates 140 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 |
|
2017 |
|
Three Months Ended |
|
|
|
|
|
|
|
July 31, |
|
vs. |
|
July 31, |
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
2016 |
|
2017 |
|
2016 |
Operating
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail units sold |
|
|
11,837 |
|
|
|
11,957 |
|
|
(1.0 |
) |
% |
|
|
|
|
|
|
|
Average number of stores in operation |
|
|
140 |
|
|
|
143 |
|
|
(2.1 |
) |
|
|
|
|
|
|
|
|
Average retail units sold per store per month |
|
|
28.2 |
|
|
|
27.9 |
|
|
1.1 |
|
|
|
|
|
|
|
|
|
Average retail sales price |
|
$ |
10,386 |
|
|
$ |
10,393 |
|
|
(0.1 |
) |
|
|
|
|
|
|
|
|
Same store revenue growth |
|
|
2.1% |
|
|
|
0.5% |
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs as a percent of average finance
receivables |
|
6.4% |
|
|
|
6.2% |
|
|
|
|
|
|
|
|
|
|
|
Collections as a percent of average finance receivables |
|
|
12.4% |
|
|
|
13.0% |
|
|
|
|
|
|
|
|
|
|
|
Average percentage of finance receivables-current (excl. 1-2
day) |
|
80.9% |
|
|
|
80.0% |
|
|
|
|
|
|
|
|
|
|
|
Average down-payment percentage |
|
|
6.2% |
|
|
|
6.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open |
|
|
140 |
|
|
|
143 |
|
|
(2.1 |
) |
% |
|
|
|
|
|
|
|
Accounts over 30 days past due |
|
|
4.6 |
% |
|
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
Finance receivables, gross |
|
$ |
483,719 |
|
|
$ |
460,570 |
|
|
5.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Statement: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
|
$ |
128,274 |
|
|
$ |
129,684 |
|
|
(1.1 |
) |
% |
|
100.0 |
% |
|
100.0 |
% |
|
|
Interest income |
|
|
18,144 |
|
|
|
16,156 |
|
|
12.3 |
|
|
|
14.1 |
|
|
12.5 |
|
|
|
|
|
Total |
|
|
146,418 |
|
|
|
145,840 |
|
|
0.4 |
|
|
|
114.1 |
|
|
112.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
75,206 |
|
|
|
75,513 |
|
|
(0.4 |
) |
|
|
58.6 |
|
|
58.2 |
|
|
|
Selling, general and administrative |
|
|
23,865 |
|
|
|
23,168 |
|
|
3.0 |
|
|
|
18.6 |
|
|
17.9 |
|
|
|
Provision for credit losses |
|
|
34,160 |
|
|
|
33,381 |
|
|
2.3 |
|
|
|
26.6 |
|
|
25.7 |
|
|
|
Interest expense |
|
|
1,172 |
|
|
|
944 |
|
|
24.2 |
|
|
|
0.9 |
|
|
0.7 |
|
|
|
Depreciation and amortization |
|
|
1,079 |
|
|
|
1,096 |
|
|
(1.6 |
) |
|
|
0.8 |
|
|
0.8 |
|
|
|
Loss on disposal of property and equipment |
|
|
47 |
|
|
|
400 |
|
|
(88.3 |
) |
|
|
0.0 |
|
|
0.3 |
|
|
|
|
|
Total |
|
|
135,529 |
|
|
|
134,502 |
|
|
0.8 |
|
|
|
105.7 |
|
|
103.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes |
|
|
10,889 |
|
|
|
11,338 |
|
|
|
|
|
8.5 |
|
|
8.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
3,897 |
|
|
|
4,229 |
|
|
|
|
|
3.0 |
|
|
3.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
6,992 |
|
|
$ |
7,109 |
|
|
|
|
|
5.5 |
|
|
5.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on subsidiary preferred stock |
|
$ |
(10 |
) |
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders |
|
$ |
6,982 |
|
|
$ |
7,099 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
0.92 |
|
|
$ |
0.89 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
$ |
0.90 |
|
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
7,548,846 |
|
|
|
7,948,925 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
7,768,310 |
|
|
|
8,185,077 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
America's Car-Mart, Inc. |
|
Consolidated Balance Sheet and Other
Data |
|
(Dollars in Thousands) |
|
|
|
|
|
|
|
July 31, |
|
April 30, |
|
July 31, |
|
|
|
|
|
|
2017 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
501 |
|
|
$ |
434 |
|
|
$ |
371 |
|
|
Finance
receivables, net |
|
$ |
369,986 |
|
|
$ |
357,161 |
|
|
$ |
352,548 |
|
|
Inventory |
|
|
$ |
30,738 |
|
|
$ |
30,129 |
|
|
$ |
33,824 |
|
|
Total
assets |
|
$ |
437,763 |
|
|
$ |
424,258 |
|
|
$ |
426,701 |
|
|
Total
debt |
|
$ |
117,646 |
|
|
$ |
117,944 |
|
|
$ |
117,534 |
|
|
Treasury
stock |
|
$ |
165,769 |
|
|
$ |
162,024 |
|
|
$ |
148,700 |
|
|
Stockholders' equity |
|
$ |
237,442 |
|
|
$ |
233,008 |
|
|
$ |
229,395 |
|
|
Shares
outstanding |
|
|
7,541,688 |
|
|
|
7,608,471 |
|
|
|
7,805,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
receivables: |
|
|
|
|
|
|
|
|
Principal
balance |
|
$ |
483,719 |
|
|
$ |
466,854 |
|
|
$ |
460,570 |
|
|
|
Deferred
revenue - payment protection plan |
|
(18,888 |
) |
|
|
(18,472 |
) |
|
|
(18,116 |
) |
|
|
Deferred
revenue - service contract |
|
(9,901 |
) |
|
|
(9,611 |
) |
|
|
(10,369 |
) |
|
|
Allowance
for credit losses |
|
(113,733 |
) |
|
|
(109,693 |
) |
|
|
(108,022 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Finance
receivables, net of allowance and deferred revenue |
$ |
341,197 |
|
|
$ |
329,078 |
|
|
$ |
324,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
as % of principal balance net of deferred revenue |
|
25.0 |
% |
|
|
25.0 |
% |
|
|
25.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in
allowance for credit losses: |
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
|
|
|
|
|
July 31, |
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
Balance at
beginning of period |
$ |
109,693 |
|
|
$ |
102,485 |
|
|
|
|
|
Provision
for credit losses |
|
34,160 |
|
|
|
33,381 |
|
|
|
|
|
Charge-offs, net of collateral recovered |
|
(30,120 |
) |
|
|
(27,844 |
) |
|
|
|
|
|
Balance at
end of period |
$ |
113,733 |
|
|
$ |
108,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contacts:
William H. (“Hank”) Henderson, CEO or Jeffrey A. Williams, President at (479) 464-9944
Americas Car Mart (NASDAQ:CRMT)
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