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America's Car-Mart Reports Diluted Earnings per Share of $2.85 on Record Revenues of $228 Million

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America's Car-Mart, Inc.
·13 min read
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ROGERS, Ark., Feb. 16, 2021 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (NASDAQ: CRMT) today announced its operating results for the third quarter of fiscal year 2021.

“Our results reflect the power of our business model which, at its core, is based on giving our customers ‘peace of mind’ by ‘keeping them on the road.’ What we do is unique, and our customers recognize and appreciate our passionate approach in providing an outstanding customer experience before, during and after the vehicle sale to help them succeed. As we move forward, we believe more consumers will see the benefits of being part of the Car-Mart Family,” said Jeff Williams, President and CEO. “We are proud of our work, but we believe we are in the early stages of our transformation from a collections company to more of a sales company that is very good at collections. When you combine our community-based bricks and mortar structure with a growing digital presence, for which we are investing significant resources, we are very optimistic about our place in the world and the advantages we will continue to leverage as we move forward.”

“During the quarter, we saw a strong increase in the top line with solid volume productivity improvement. Even with our increasing investments in our infrastructure to support a much larger customer base, we saw nice leveraging of our cost structure. Also, our credit results once again showed significant improvement over prior year quarters,” added Mr. Williams. “We will continue to make significant investments in key areas as we fulfill our vision – to be America’s best auto sales and finance company in the eyes of our associates and customers while improving the communities we serve. We believe that we are seeing some initial benefits from the various initiatives we have been working on and we will continue to push to get better. Our on-going investments will not only keep us relevant but will put us in the position of being a market leader focused on recruiting, training, and retaining great associates, inventory procurement and delivering great customer experience.”

“Foundational to these efforts is a significant investment and upgrade to our information technology platform. We have recently begun the implementation of Microsoft Dynamics 365, a full Enterprise Resource Planning product. An important part of this project will be the Customer Relationship Management module which will allow us to better manage the entire customer relationship journey and to exceed expectations from the consumer viewpoint with heavy emphasis on digital,” added Mr. Williams. “We will continue to increase our investment in the corporate Customer Experience team as we build out an infrastructure to support a larger customer base at the highest levels.”

“We believe we have an obligation to serve significantly more customers over time as customers’ lives and the communities we serve are better because we are there. We are so proud of our team and excited for the opportunities we have in front of us,” said Mr. Williams. “Our balance sheet, which is strong as the result of years of disciplined focus on cash flows, gives us a distinct competitive advantage as we move to pick up market share in areas we already serve, add new dealership locations and look for additional acquisition opportunities. Lastly, we have over 2,000 associates, over 85,000 customers and thousands of vendor partners, and together we have a responsibility to positively contribute to making the world a better place. We take that responsibility very seriously.”

“Revenue increases were driven by a 16.5% increase in the average retail sales price and a 5.6% increase in units sold. We were pleased to see our productivity, the average retail units sold per store per month, improve by 2.0% for the quarter. Productivity increased although we continue to see a tight supply of vehicles at lower price points. We are working diligently in our procurement efforts to provide a quality assortment of vehicles to meet consumer demand,” said Vickie Judy, Chief Financial Officer. “Net charge-offs for the quarter, as a percentage of average finance receivables, were down to 4.9% compared to 5.9% in the prior year quarter, as we continue to work to keep customers on the road and in their vehicles. Although credit results have improved over the nine months since the pandemic began, there is still much uncertainty and as such we have left the allowance at 26.5% of finance receivables, net of deferred revenue. Our investments in our associates and the business are paying off as we had some nice leveraging in our selling, general and administrative expenses decreasing to 16.7% of sales compared to 18.6% in the prior year quarter.”

“Our debt, net of cash, to finance receivables is 27.7%, compared to 30% at the end of the 3rd quarter of fiscal 2020, just prior to the onset of the pandemic. During the quarter, we added $51.7 million in receivables, increased inventory by $1.1 million, funded $2.0 million in net capital expenditures, and repurchased $3.7 million of our common stock, a total of $58.5 million, with only a $12.3 million increase in debt, net of cash. In the last 12 months, we added $137.0 million in receivables, increased inventory by $14.5 million, repurchased $10.0 million of our common stock, and funded $9.3 million in capital expenditures, a total of $170.8 million, with only a $24.1 million increase in debt, net of cash,” added Ms. Judy.

Conference Call

Management will be holding a conference call on Wednesday, February 17, 2021 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 #8139134.

About America’s Car-Mart

America’s Car-Mart, Inc. operates automotive dealerships in twelve 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.

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 may 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;

  • technological investments and initiatives; and

  • the Company’s business, operating and growth strategies.

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:

  • business and economic disruptions and uncertainty resulting from the ongoing COVID-19 pandemic and efforts to mitigate the financial impact and health risks associated with the pandemic.

  • 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;

  • the adoption and implementation of any future economic stimulus legislation or other government assistance programs for consumers or businesses as a result of the COVID-19 pandemic;

  • 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;

  • ability to keep pace with technological advances and changes in consumer behavior affecting our business;

  • security breaches, cyber-attacks, or fraudulent activity; and

  • the ability to successfully identify, complete and integrate new acquisitions.

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

2021

Three Months Ended

January 31,

vs.

January 31,

2021

2020

2020

2021

2020

Operating Data:

Retail units sold

14,053

13,314

5.6

%

Average number of stores in operation

150

145

3.4

Average retail units sold per store per month

31.2

30.6

2.0

Average retail sales price

$

13,688

$

11,750

16.5

Gross profit per retail unit

$

5,774

$

4,938

16.9

Same store revenue growth

16.9

%

15.1

%

Net charge-offs as a percent of average finance receivables

4.9

%

5.9

%

Collections as a percent of average finance receivables

12.1

%

13.2

%

Average percentage of finance receivables-current (excl. 1-2 day)

84.3

%

82.8

%

Average down-payment percentage

5.5

%

5.4

%

Period End Data:

Stores open

151

145

4.1

%

Accounts over 30 days past due

2.8

%

3.6

%

Active customer count

85,807

80,250

6.9

%

Finance receivables, gross

$

744,521

$

607,537

22.5

%

Operating Statement:

Revenues:

Sales

$

199,957

$

163,253

22.5

%

100.0

%

100.0

%

Interest income

28,303

23,481

20.5

14.2

14.4

Total

228,260

186,734

22.2

114.2

114.4

Costs and expenses:

Cost of sales

118,816

97,504

21.9

59.4

59.7

Selling, general and administrative

33,423

30,331

10.2

16.7

18.6

Provision for credit losses

47,639

40,233

18.4

23.8

24.6

Interest expense

1,705

2,024

(15.8

)

0.9

1.2

Depreciation and amortization

906

975

(7.1

)

0.5

0.6

Loss (gain) on disposal of property and equipment

22

-

100.0

-

-

Total

202,511

171,067

18.4

101.3

104.8

Income before taxes

25,749

15,667

12.9

9.6

Provision for income taxes

5,867

2,981

2.9

1.8

Net income

$

19,882

$

12,686

9.9

7.8

Dividends on subsidiary preferred stock

$

(10

)

$

(10

)

Net income attributable to common shareholders

$

19,872

$

12,676

Earnings per share:

Basic

$

3.00

$

1.92

Diluted

$

2.85

$

1.83

Weighted average number of shares used in calculation:

Basic

6,634,125

6,597,643

Diluted

6,966,188

6,940,124



% Change

As a % of Sales

Nine Months Ended

2021

Nine Months Ended

January 31,

vs.

January 31,

2021

2020

2020

2021

2020

Operating Data:

Retail units sold

40,251

39,600

1.6

%

Average number of stores in operation

150

145

3.4

Average retail units sold per store per month

29.8

30.3

(1.7

)

Average retail sales price

$

13,307

$

11,587

14.8

Gross profit per retail unit

$

5,691

$

4,921

15.7

Same store revenue growth

12.1

%

9.8

%

Net charge-offs as a percent of average finance receivables

14.5

%

17.5

%

Collections as a percent of average finance receivables

38.0

%

40.0

%

Average percentage of finance receivables-current (excl. 1-2 day)

84.6

%

83.1

%

Average down-payment percentage

6.4

%

5.9

%

Period End Data:

Stores open

151

145

4.1

%

Accounts over 30 days past due

2.8

%

3.6

%

Active customer count

85,807

80,250

6.9

%

Finance receivables, gross

$

744,521

$

607,537

22.5

%

Operating Statement:

Revenues:

Sales

$

559,440

$

481,070

16.3

%

100.0

%

100.0

%

Interest income

80,091

67,852

18.0

14.3

14.1

Total

639,531

548,922

16.5

114.3

114.1

Costs and expenses:

Cost of sales

330,380

286,215

15.4

59.1

59.5

Selling, general and administrative

94,716

87,298

8.5

16.9

18.1

Provision for credit losses

127,585

112,885

13.0

22.8

23.5

Interest expense

5,082

6,109

(16.8

)

0.9

1.3

Depreciation and amortization

2,772

2,913

(4.8

)

0.5

0.6

Loss (gain) on disposal of property and equipment

(42

)

39

(207.7

)

-

-

Total

560,493

495,459

13.1

100.2

103.0

Income before taxes

79,038

53,463

14.1

11.1

Provision for income taxes

18,396

11,379

3.3

2.4

Net income

$

60,642

$

42,084

10.8

8.7

Dividends on subsidiary preferred stock

$

(30

)

$

(30

)

Net income attributable to common shareholders

$

60,612

$

42,054

Earnings per share:

Basic

$

9.14

$

6.34

Diluted

$

8.73

$

6.03

Weighted average number of shares used in calculation:

Basic

6,631,450

6,634,496

Diluted

6,939,164

6,969,848



January 31,

April 30,

January 31,

2021

2020

2020

Cash and cash equivalents

$

4,161

$

59,560

$

2,083

Finance receivables, net

$

558,941

$

466,141

$

467,255

Inventory

$

68,554

$

36,414

$

54,026

Total assets

$

741,937

$

667,324

$

597,893

Total debt

$

210,478

$

215,568

$

184,300

Treasury stock

$

256,731

$

246,911

$

246,725

Total equity

$

363,274

$

302,759

$

291,770

Shares outstanding

6,615,688

6,619,319

6,610,116

Finance receivables:

Principal balance

$

744,521

$

621,182

$

607,537

Deferred revenue - payment protection plan

(28,786

)

(24,480

)

(23,566

)

Deferred revenue - service contract

(15,431

)

(11,641

)

(11,392

)

Allowance for credit losses

(185,580

)

(155,041

)

(140,282

)

Finance receivables, net of allowance and deferred revenue

$

514,724

$

430,020

$

432,297

Allowance as % of principal balance net of deferred revenue

26.5

%

26.5

%

24.5

%

Changes in allowance for credit losses:

Nine Months Ended

January 31,

2021

2020

Balance at beginning of period

$

155,041

$

127,842

Provision for credit losses

127,585

112,885

Charge-offs, net of collateral recovered

(97,046

)

(100,445

)

Balance at end of period

$

185,580

$

140,282