U.S. markets closed

America's Car-Mart Reports Diluted Earnings per Share of $1.83 on Revenues of $187 Million

BENTONVILLE, Ark., Feb. 19, 2020 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (CRMT) today announced its operating results for the third quarter of fiscal year 2020.

Highlights of third quarter operating results:

  • Net earnings of $12.7 million, or $1.83 per diluted share vs. net earnings of $10.9 million, or $1.55 per diluted share for prior year quarter
  • Revenues of $187 million compared to $161 million for the prior year quarter; current quarter includes same store revenue increase of 15.1%
  • Sales volume productivity of 30.6 retail units sold per store per month, up from 27.9 for the prior year quarter
  • Interest income increased 10.5%, or $2.2 million, with a 10.4% increase in average finance receivables
  • Gross profit dollars increased $7.7 million, or 13.2%, to $65.7 million, and gross profit dollars per retail unit sold increased by $85, or 1.7%, to $4,938
  • Selling, general and administrative expenses at 18.6% of sales compared to 18.9% for the prior year quarter and at 61.9% of total revenues less cost of sales and provision for credit losses compared to 60.5% for the prior year quarter
  • Net Charge-offs as a percent of average finance receivables decreased to 5.9%, compared to 6.2% for the prior year quarter.  Collections as a percent of average finance receivables remained flat at 13.2%.
  • Provision for credit losses of 24.6% of sales vs. 25.4% for prior year quarter
  • $1.1 million in common stock repurchases at an average price of approximately $91 per share (12,384 shares)

“We are pleased to report solid top line growth with revenues up 15.9% and same store revenues up 15.1%. The continuous investments in our business are showing up in the numbers. We are striving for market share gains in the towns we serve as we firmly believe that customers’ lives are better when they are part of the Car-Mart family. The revenue increases we are experiencing are the direct result of improving operational execution in the field, starting with inventory management. To pick up market share in this very competitive environment, we will continue to focus on quality vehicles and a broad selection, as customers have many choices. Competition is intense but we are up to the challenge. Consumers are increasingly choosing America’s Car-Mart because we deliver service, convenience and peace of mind with their local transportation needs. We ‘Keep Customers on the Road’ and improve their lives. We are seeing benefits from our investments in digital marketing and brand reputation directed at the Customer Experience. We will continue to push for innovative ways to differentiate our offering from the competition and add real value,” said Jeff Williams, President and Chief Executive Officer.  “While we know that we have a lot of work left to do we are pleased with our efforts and the great work of our associates who are dedicated to helping our customers succeed. We will continue investing in our associates and providing them with outstanding growth opportunities within our company. Our training programs, including field sales training, continue to improve and we are optimistic about our future.”   

“As we have said, we believe that most all of our dealerships, under the direction of our talented General Managers, can support a higher number of customers over time.  We have significant growth opportunities by leveraging our current footprint. The top-line growth we are experiencing supports this view,” said Jeff Williams. “We are close to completing our acquisition of Taylor Motors.  We had hoped that it would have closed in January, but it’s taking a little longer than expected to obtain the necessary licenses in a new state for us. We plan to open our Cabot, Arkansas dealership in the 4th quarter, which will give us six new dealerships for fiscal year 2020. New dealership openings are an important part of our growth plans and we will continue to add locations at a rate that matches our ability to support this high touch business. We also have locations in Edmond, Oklahoma, Chattanooga, Tennessee and Norman, Oklahoma in process for this upcoming fiscal year.”

“We were happy to see some of our investments paying off with same store revenue growth of 15.1% and the addition of over 5,100 customers to the Car-Mart family in the last twelve months,” said Vickie Judy, Chief Financial Officer.  “We have increased our investment in inventory almost $6 million in the past 3 months to ensure that we have the quality and selection of vehicles to meet our customer’s needs during the upcoming tax refund season. The increased inventory combined with our commitment to our associates and infrastructure to support the customer experience after the sale is having a positive impact on the top line and customer success in terms of lower net charge-offs as a percentage of average receivables (5.9% compared to prior year quarter of 6.2%).  While we continue to invest to support a growing customer base, we did leverage overall selling, general, and administrative expenses as it decreased to 18.6% of sales, compared to 18.9% for the prior year quarter.  This quarter includes $930,000 of stock compensation, compared to $576,000 in the prior year quarter.  The current quarter also includes an income tax benefit related to share-based compensation of $922,000, or $0.13 per diluted share, compared to $41,000, or $0.01 per diluted share, for the prior year quarter.”     

“We repurchased 12,384 shares of our common stock during the quarter at an average price of approximately $91 for a total of $1.1 million. Since February 2010, we have repurchased 6.4 million shares (54.4% of our outstanding shares at January 31, 2010) at an average price of approximately $38. We plan to continue to repurchase shares opportunistically as we move forward.  During the nine-month period ended January 31, 2020, we added $64.2 million in receivables, repurchased $15.8 million of our common stock, funded $3.2 million in net capital expenditures, and increased inventory by $16.5 million, a total of $99.7 million, with only a $31.3 million increase in debt. We will continue to remain focused on cash-on-cash returns and maintaining a strong balance sheet.  At January 31, 2020, our debt to equity ratio was 63.2% and debt to finance receivables ratio was 30.3%,” added Ms. Judy.

Conference Call

Management will be holding a conference call on Thursday, February 20, 2020 at 11:00 a.m. Eastern Time to discuss quarterly 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 #1298033.

About America's Car-Mart

America’s Car-Mart, Inc. operates 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 smaller cities throughout the South-Central United States selling quality used vehicles and providing financing for substantially all of its customers.  For more information about America’s Car-Mart, including investor presentations, please visit our website at www.car-mart.com.

America’s Car-Mart, Inc. was named to the Forbes America’s Best Mid-Size Employers list in 2019 for the second consecutive year and has sold over 650,000 vehicles since fiscal year 2000.

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 dealership revenue growth;
  • future revenue growth;
  • receivables growth as related to revenue growth;
  • gross profit per retail unit sold;
  • interest rates;
  • future credit losses;
  • the Company’s collection results, including but not limited to collections during income tax refund periods
  • seasonality; and
  • completion of pending acquisitions.

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 contracts effectively;
  • competition;
  • dependence on existing management;
  • ability to attract, develop and retain qualified general managers;
  • availability of quality vehicles at prices that will be affordable to customers;
  • changes in consumer finance laws or regulations, including but not limited to rules and regulations that have recently been enacted or could be enacted by federal and state governments
  • 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; and
  • the possibility that the acquisition does not close when expected or at all because required conditions to closing are not received or satisfied on a timely basis or at all.

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.

____________________________
Contacts: Jeffrey A. Williams, President and CEO (479) 464-9944 or Vickie D. Judy, CFO (479) 464-9944

 



                    % Change   As a % of Sales  
           
Three Months Ended
  2020   Three Months Ended
 
            January 31,   vs.   January 31,
 
              2020       2019     2019   2020   2019  
Operating Data:                            
  Retail units sold     13,314       11,963     11.3 %                
  Average number of stores in operation     145       143     1.4                  
  Average retail units sold per store per month     30.6       27.9     9.7                  
  Average retail sales price   $ 11,750     $ 11,146     5.4                  
  Gross profit per retail unit   $ 4,938     $ 4,854     1.7                  
  Same store revenue growth     15.1 %     8.5 %                    
  Net charge-offs as a percent of average finance receivables   5.9 %     6.2 %                    
  Collections as a percent of average finance receivables   13.2 %     13.2 %                    
  Average percentage of finance receivables-current (excl. 1-2 day)   82.8 %     83.0 %                    
  Average down-payment percentage     5.4 %     5.5 %                    
                                     
Period End Data:                            
  Stores open     145       143     1.4 %                
  Accounts over 30 days past due     3.6 %     3.2 %                    
  Active customer count     80,250       75,101     6.9 %                
  Finance receivables, gross   $ 607,537     $ 542,893     11.9 %                
                                     
Operating Statement:                            
  Revenues:                            
    Sales   $ 163,253     $ 139,803     16.8 %     100.0 %   100.0 %  
    Interest income     23,481       21,251     10.5       14.4     15.2      
        Total     186,734       161,054     15.9       114.4     115.2      
                                     
  Costs and expenses:                            
    Cost of sales     97,504       81,740     19.3       59.7     58.5      
    Selling, general and administrative     30,331       26,488     14.5       18.6     18.9      
    Provision for credit losses     40,233       35,555     13.2       24.6     25.4      
    Interest expense     2,024       2,110     (4.1 )     1.2     1.5      
    Depreciation and amortization     975       985     (1.0 )     0.6     0.7      
    (Gain) on disposal of property and equipment     -       (100 )   (100.0 )     -     (0.1 )    
        Total     171,067       146,778     16.5       104.8     105.0      
                                     
        Income before taxes     15,667       14,276           9.6     10.2      
                                     
  Provision for income taxes     2,981       3,381           1.8     2.4      
                                     
        Net income   $ 12,686     $ 10,895           7.8     7.8      
                                     
  Dividends on subsidiary preferred stock   $ (10 )   $ (10 )                    
                                     
        Net income attributable to common shareholders $ 12,676     $ 10,885                      
                                     
Earnings per share:                            
  Basic
  $ 1.92     $ 1.61                      
  Diluted   $ 1.83     $ 1.55                      
                                     
Weighted average number of shares used in calculation:                          
  Basic
    6,597,643       6,751,026                      
  Diluted     6,940,124       7,003,389                      
                                     



                    % Change   As a % of Sales    
            Nine Months Ended
  2020   Nine Months Ended
   
            January 31,   vs.   January 31,
   
              2020       2019     2019   2020   2019    
Operating Data:                              
  Retail units sold     39,600       37,163     6.6 %                  
  Average number of stores in operation     145       141     2.8                    
  Average retail units sold per store per month     30.3       29.3     3.4                    
  Average retail sales price   $ 11,587     $ 11,062     4.7                    
  Gross profit per retail unit   $ 4,921     $ 4,818     2.1                    
  Same store revenue growth     9.8 %     10.5 %                      
  Net charge-offs as a percent of average finance receivables   17.5 %     19.2 %                      
  Collections as a percent of average finance receivables   40.0 %     39.2 %                      
  Average percentage of finance receivables-current (excl. 1-2 day)   83.1 %     82.0 %                      
  Average down-payment percentage     5.9 %     5.8 %                      
                                       
Period End Data:                              
  Stores open     145       143     1.4 %                  
  Accounts over 30 days past due     3.6 %     3.2 %                      
  Active customer count     80,250       75,101     6.9 %                  
  Finance receivables, gross   $ 607,537     $ 542,893     11.9 %                  
                                       
Operating Statement:                              
  Revenues:                              
    Sales   $ 481,070     $ 430,315     11.8 %     100.0 %   100.0 %  
    Interest income     67,852       61,925     9.6       14.1     14.4      
        Total     548,922       492,240     11.5       114.1     114.4      
                                       
  Costs and expenses:                              
    Cost of sales     286,215       251,274     13.9       59.5     58.4      
    Selling, general and administrative     87,298       79,068     10.4       18.1     18.4      
    Provision for credit losses     112,885       111,619     1.1       23.5     25.9      
    Interest expense     6,109       5,895     3.6       1.3     1.4      
    Depreciation and amortization     2,913       2,949     (1.2 )     0.6     0.7      
    (Gain) loss on disposal of property and equipment     39       (88 )   (144.3 )     -     -      
        Total     495,459       450,717     9.9       103.0     104.7      
                                       
        Income before taxes     53,463       41,523           11.1     9.6      
                                       
  Provision for income taxes     11,379       8,464           2.4     2.0      
                                       
        Net income   $ 42,084     $ 33,059           8.7     7.7      
                                       
  Dividends on subsidiary preferred stock   $ (30 )   $ (30 )                      
                                       
        Net income attributable to common shareholders $ 42,054     $ 33,029                        
                                       
Earnings per share:                              
  Basic
  $ 6.34     $ 4.82                        
  Diluted   $ 6.03     $ 4.66                        
                                       
Weighted average number of shares used in calculation:                            
  Basic
    6,634,496       6,846,707                        
  Diluted     6,969,848       7,087,430                        
                                       



                 
        January 31,   April 30,   January 31,
        2020   2019   2019
                 
Cash and cash equivalents   $ 2,083     $ 1,752     $ 1,624  
Finance receivables, net   $ 467,255     $ 415,486     $ 414,913  
Inventory   $ 54,026     $ 37,483     $ 38,822  
Total assets   $ 597,893     $ 492,542     $ 493,555  
Total debt   $ 184,300     $ 152,918     $ 170,737  
Treasury stock   $ 246,725     $ 230,902     $ 228,412  
Total equity   $ 291,770     $ 260,510     $ 245,677  
Shares outstanding     6,610,116       6,699,421       6,685,013  
                 
                 
                 
Finance receivables:            
  Principal balance   $ 607,537     $ 543,328     $ 542,893  
  Deferred revenue - payment protection plan   (23,566 )     (21,367 )     (20,748 )
  Deferred revenue - service contract   (11,392 )     (10,592 )     (10,224 )
  Allowance for credit losses   (140,282 )     (127,842 )     (127,980 )
                 
  Finance receivables, net of allowance and deferred revenue $ 432,297     $ 383,527     $ 383,941  
                 
                 
  Allowance as % of principal balance net of deferred revenue   24.5 %     25.0 %     25.0 %
                 
                 
Changes in allowance for credit losses:          
        Nine Months Ended  
        January 31,    
        2020   2019    
  Balance at beginning of period $ 127,842     $ 117,821      
  Provision for credit losses   112,885       111,619      
  Charge-offs, net of collateral recovered   (100,445 )     (101,460 )    
    Balance at end of period $ 140,282     $ 127,980