Chairman and CEO T.J. Falgout, III to Step Down as Chief Executive
Officer BENTONVILLE, Ark., Sept. 6 /PRNewswire-FirstCall/ --
America's Car-Mart, Inc. (NASDAQ:CRMT) today announced its
operating results for the first fiscal quarter ended July 31, 2007.
Highlights of first quarter operating results: -- Net income of
$2.1 million ($.18 per diluted share) -- Provision for credit
losses of 21.8% of sales vs. 22.5% for the first fiscal quarter of
2007 (26.6% for fourth fiscal quarter of 2007 and 29.1% for full
year 2007) -- Accounts over 30 days past due down to 4.1% at July
31, 2007 from 5.6% at July 31, 2006 -- $7.2 million decrease in
debt for the quarter, down to $33.7 million. Debt to equity is 27%,
and debt to Finance Receivables is 19% at July 31, 2007 -- Revenue
decline of 5.6% -- Retail unit sales decrease of 14.9% For the
three months ended July 31, 2007, revenues decreased 5.6% to $58.7
million compared with $62.2 million in the same period of the prior
year. Income for the quarter was $2.1 million or $.18 per diluted
share, versus $4.2 million, or $0.35 per diluted share in the same
period last year. Retail unit sales were down 14.9%, with 5,847
vehicles in the current quarter, compared to 6,867 in the same
period last year. Same store revenue decreased 8.3% during the
quarter. Finance Receivables grew by $2.3 million during the
quarter or 1.3%, aided by sales of our new Payment Protection Plan
product. The allowance for credit losses is 22% of Finance
Receivables principal balance at July 31, 2007 compared to 19.2% at
July 31, 2006. This increased percentage equates to approximately
$5 million in additional reserve to cover future credit losses on a
net Receivable base $10 million less than at the end of the first
quarter of fiscal 2007. "Vehicle sales were moderate as we
continued to focus significant efforts on underwriting initiatives
to enhance the quality of our Finance Receivable portfolio," said
T.J. ("Skip") Falgout, III, Chairman and Chief Executive Officer of
America's Car-Mart. "We are very pleased with our credit losses and
collections efforts for the first quarter and believe that positive
results from our hard work provide proof that we are on the right
track. Also, our recent initiatives related to purchasing and sales
are beginning to have positive effects, and we expect sales volumes
to improve into the future." "Once again, credit losses,
collections and current receivables all improved as compared to the
first quarter of 2007 and as compared to recent quarters. Our
average percentage of Finance Receivables current was 81.7% for the
quarter compared to 79% for the first quarter of 2007," stated Mr.
Falgout. "We are very pleased with our strong cash flows from
operations which have allowed us to pay down our debt by $7.2
million during the quarter and $15.3 million from its high point at
the end of October 2006. We continue to be disciplined in requiring
higher down-payments at certain dealerships and shorter terms with
our loans to ensure we set the customer up for success. These
efforts have had a positive effect on our operating cash flows,
evidenced by the increase in our collections as a percentage of
average Finance Receivables. We will continue to focus on ensuring
that we earn an appropriate return on our invested capital on a
lot-by-lot basis and that we employ capital appropriately into the
future. In addition, we have made significant investments in our
infrastructure over the last two years and we believe we are now
positioned to leverage these costs to support higher sales and loan
volumes." "Our new Payment Protection Plan product has been very
well received by our customers and we expect to expand sales of
this product beyond the states of Arkansas and Alabama, the two
states where we sold this product in the first quarter." said
William H. ("Hank") Henderson, President of America's Car-Mart.
"Sales of this product to our new customers is in excess of 85%,
and we have also experienced great sales of this product to our
existing customers. This product will help our customers in
situations where their vehicle is stolen or totaled. This is
another example of Car-Mart being the leader in cultivating repeat
customers, the life-blood of our industry." "We are very proud of
our associates and their efforts during the past several months. We
are seeing positive results on the collections side of the business
and we anticipate the sales volumes to increase into the future as
we focus on better inventory, sales training and the continuation
of our pursuit of repeat customers. Additionally, we believe our
Payment Protection Plan will draw new customers to Car-Mart," said
Mr. Henderson. "We will continue to work hard at improving our lot
level operations and fully expect our financial results to follow
accordingly." In line with its succession plan, Mr. Falgout will
retire as Chief Executive Officer effective at the Company's annual
shareholders' meeting on October 16, 2007. Mr. Falgout, a major
shareholder, will remain as Chairman of the Board of Directors.
Effective October 16, 2007, upon Mr. Falgout's retirement as Chief
Executive Officer, Mr. Henderson has been elected and named Chief
Executive Officer. Mr. Henderson will also retain the title of
President, the position he has held with the Company since 2002.
"On behalf of the Board of Directors, I want to thank Skip for his
efforts and contributions to the growth and success of Car-Mart,
helping to guide the Company to become America's largest publicly
traded 'buy-here/pay-here' company," stated Mr. Henderson. "I look
forward to his future contributions, support and counsel as we
continue to move forward." "We are all excited about Hank assuming
the CEO title," stated Mr. Falgout. "Hank combines over 21 years of
experience at Car-Mart with strong vision and leadership skills, as
he has demonstrated these skills in transforming the Company into a
multi-state force in the 'buy-here/pay-here' segment of the
automotive industry." Conference Call Management will be holding a
conference call on Thursday, September 6, 2007 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 (800)
309-9490. International callers dial (706) 634-0104. Callers should
dial in approximately 10 minutes before the call begins. A
conference call replay will be available one hour following the
call for seven days and can be accessed by calling (800) 642-1687
(domestic) or (706) 645-9291 (international), conference call ID
#14914428 About America's Car-Mart America's Car-Mart operates 93
automotive dealerships in nine states and is the largest publicly
held automotive retailer in the United States focused exclusively
on the "Buy Here/Pay Here" segment of the used car market. 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 on America's Car-Mart, please visit
our website at http://www.car-mart.com/. Included herein are
forward-looking statements, including statements with respect to
projected revenues and earnings per share amounts. Such
forward-looking statements are based upon management's current
knowledge and assumptions. There are many factors that affect
management's view about future revenues and earnings. These factors
involve risks and uncertainties that could cause actual results to
differ materially from management's present view. These factors
include, without limitation, assumptions relating to unit sales,
average selling prices, credit losses, gross margins, operating
expenses, collection results, operational initiatives underway and
economic conditions, and other risk factors described under
"Forward-Looking Statements" of Item 1A of Part I of the Company's
Annual Report on Form 10-K for the fiscal year ended April 30, 2007
and its current and quarterly reports filed with or furnished to
the Securities and Exchange Commission. All forward-looking
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The Company does
not undertake any obligation to update forward-looking statements.
America's Car-Mart, Inc. Consolidated Results of Operations
(Operating Statement Dollars in Thousands) %Change As a % of Sales
Three Months Ended 2007 Three Months Ended July 31, vs. July 31,
2007 2006 2006 2007 2006 Operating Data: Retail units sold 5,847
6,867 (14.9)% Average number of stores in operation 92.0 86.7 6.1
Average retail units sold per store per month 21.2 26.3 (19.4)
Average retail sales price $8,407 $7,913 6.2 Same store revenue
growth -8.3 % 1.9 % Net charge-offs as a percent of average Finance
Receivables 6.4 % 6.1 % Collections as a percent of average Finance
Receivables 17.1 % 16.0 % Average percentage of Finance
Receivables-Current 81.7 % 79.0 % Average down-payment percentage
7.6 % 5.3 % Period End Data: Stores open 92 88 4.5 % Accounts over
30 days past due 4.1 % 5.6 % Finance Receivables, gross $180,801
$191,487 (5.6)% Operating Statement: Revenues: Sales $52,863
$56,338 (6.2)% 100.0 % 100.0 % Interest income 5,844 5,853 (0.2)
11.1 10.4 Total 58,707 62,191 (5.6) 111.1 110.4 Costs and expenses:
Cost of sales 31,538 31,336 0.6 59.7 55.6 Selling, general and
administrative 11,195 10,470 6.9 21.2 18.6 Provision for credit
losses 11,519 12,655 (9.0) 21.8 22.5 Interest expense 810 902
(10.2) 1.5 1.6 Depreciation and amortization 274 232 18.1 0.5 0.4
Total 55,336 55,595 (0.5) 104.7 98.7 Income before taxes 3,371
6,596 6.4 11.7 Provision for income taxes 1,230 2,441 2.3 4.3 Net
income $2,141 $4,155 4.0 7.4 Earnings per share: Basic $0.18 $0.35
Diluted $0.18 $0.35 Weighted average number of shares outstanding:
Basic 11,875,782 11,850,796 Diluted 11,967,690 11,983,528 America's
Car-Mart, Inc. Consolidated Balance Sheet and Other Data (Dollars
in Thousands) July 31, April 30, 2007 2007 Cash and cash
equivalents $238 $257 Finance receivables, net $141,488 $139,194
Total assets $174,272 $173,598 Total debt $33,676 $40,829
Stockholders' equity $126,140 $123,728 Shares outstanding
11,878,115 11,874,708 Finance receivables: Principal balance
$180,801 $178,519 Deferred Revenue - Payment Protection Plan
$(2,302) $ - Allowance for credit losses (39,313)(a) (39,325)(a)
Finance receivables, net of allowance & deferred revenue
$139,186 $139,194 Allowance as % of net principal balance 22.02 %
22.03 % (a) Represents the weighted average for Finance Receivables
generated by the Company (at 22.0%) and purchased Finance
Receivables. Changes in allowance for credit losses: Three Months
Ended July 31, 2007 2006 Balance at beginning of year $39,325
$35,864 Provision for credit losses 11,519 12,655 Net charge-offs
(11,493) (11,566) Change in allowance related to purchased accounts
(38) 236 Balance at end of period $39,313 $37,189 DATASOURCE:
America's Car-Mart, Inc. CONTACT: T.J. ("Skip") Falgout, III, CEO,
+1-972-717-3423, or Jeffrey A. Williams, CFO, +1-479-464-9944, both
of America's Car-Mart, Inc. Web site: http://www.car-mart.com/
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