America's Car-Mart Reports Diluted Earnings Per Share of $.76 on Revenues of $110 Million, 1.3% of Outstanding Shares Repurchas
November 19 2012 - 6:02PM
America's Car-Mart, Inc. (Nasdaq:CRMT) today announced its
operating results for its second fiscal quarter ended October 31,
2012. Since February 1, 2010, the Company has invested
approximately $85 million to repurchase 24.2% of its outstanding
shares under its stock repurchase program.
Highlights of second quarter operating
results:
- Net income of $7.3 million - $.76 per diluted share vs. $.77
per diluted share for prior year quarter
- Revenues of $110 million compared to $111 million for the prior
year quarter with same store revenue decrease of 4.8%
- Retail unit sales decrease of 1.1% to 9,814 from 9,919 for the
prior year quarter
- Average retail sales price decreased $42, or 0.4% from the
prior year quarter and $69, or 0.7% sequentially
- Opened the Company's 117th dealership - in Oxford,
Mississippi
- Repurchased 119,308 shares of common stock during the quarter
(1.3% of the Company) for $5.25 million
- Active accounts base now over 55,500
- Debt to equity of 48.8% and debt to finance receivables of
26.9%
- Allowance for credit losses at 21.5% of finance receivables at
October 31, 2012 and at April 30, 2012
Highlights of six month operating results:
- Net income of $15.4 million or $1.59 per diluted share vs.
$1.55 per diluted share for prior year period (2.6% increase in
diluted earnings per share)
- Revenue increase of 4.2% to $220.2 million from $211.3 million
for the prior year period with same store revenue growth of
0.1%
- Retail unit sales increase of 3.2% to 19,567 from 18,968 for
the prior year period
- Strong cash flows supporting the increase in revenues and the
$22 million increase in Finance Receivables, $2.0 million in net
capital expenditures, and $14.7 million in common stock
re-purchases with only a $13.4 million increase in total debt
- Provision for credit losses of 23.1% of sales vs. 21.6% for
prior year period
"While we are facing some near-term revenue challenges, we are
convinced that the direction we are going will provide significant
profitable long-term opportunities for America's Car-Mart. We are
confident that our business model is strong and our growth
opportunities are outstanding. The amount of funding for the
sub-prime auto industry has increased recently and appears to have
had somewhat of a negative effect on our overall revenues during
the 2nd quarter, especially in some of our older, more established
markets," said William H. ("Hank") Henderson, President and Chief
Executive Officer of America's Car-Mart. "This is not the first
time we have seen this situation over our 31 year history and we
are making adjustments to help retain our better repeat customers
who now may have a few more options than they have had in the
recent past. We believe that Car-Mart's local presence and face to
face relationships give us the ability to work with customers far
more effectively than subprime finance companies. We offer the best
long-term choice for our customers and we will work tirelessly to
earn their repeat business by providing quality vehicles,
affordable payment terms and excellent service. We have over 55,000
active accounts and many more past customers who know what Car-Mart
stands for and the lengths we go to help them succeed. We are
committed to fighting to keep our best customers and we look
forward to a bright future. In addition to serving our existing
markets, we believe that there has never been a better time for
Car-Mart to be adding new locations to serve an ever expanding
customer base."
"Even though we are seeing some near-term challenges, especially
as related to revenues, there are certainly several bright spots
with our financial performance for the quarter. Our performance has
been positively impacted by our share repurchase program (we now
have less than 9.1 million shares outstanding), higher interest
income on our portfolio and an overall higher gross profit
percentage as we continue to work hard on managing expenses. Lower
unit sales combined with the fact that we have seen three
consecutive sequential quarter decreases in our average retail
sales price has had somewhat of a negative short-term effect on
gross margin dollars, selling, general and administrative expense
leveraging and overall credit losses as a percentage of sales.
However, we believe that over the long-term, lower selling prices
increase affordability and resulting customer success," said Jeff
Williams, Chief Financial Officer of America's Car-Mart. "The
current macroeconomic environment continues to be challenging and
all of our efforts will be aimed at creating value over the
long-term. When we look to the future we are convinced that the
business model will support significant volume expansion. Our
efforts will be aimed at attracting new customers as well as
earning repeat business from our very best existing and previous
customers."
"The Company repurchased 119,308 shares of its common stock
during the second quarter (1.3%). Since February 1, 2010 we have
repurchased 2,828,691 shares, or 24.2% of our Company. As we have
said, we believe in the long-term value of our company and we plan
to invest in the repurchase program when favorable conditions are
present. Potential future changes to the structuring of customer
contracts could have the effect of reducing the level of capital
allocated to our stock repurchase program when compared to levels
in recent history. Such changes could result in offering somewhat
longer overall contract terms as we have been extremely aggressive
over the last several years in efforts to keep our terms short. As
we have said in the past, our primary focus will be on the healthy
growth of our base business. Our debt to equity ratio was 48.8% and
our debt to finance receivables ratio was 26.9% at the end of the
quarter," added Mr. Williams. "Our balance sheet is very healthy
and by staying focused on cash returns our future is bright."
Conference Call
Management will be holding a conference call on Tuesday November
20, 2012 at 11:00 a.m. Eastern Time to discuss second 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
one hour following the call for thirty days and can be accessed by
calling (855) 859-2056 (domestic) or (404) 537-3406
(international), conference call ID #65051451.
About America's Car-Mart
America's Car-Mart, Inc. (the "Company") operates 117 automotive
dealerships in nine states and is the largest publicly held
automotive retailer 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;
- the Company's business 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:
- 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 |
2012 |
Three Months Ended |
|
October 31, |
vs. |
October 31, |
|
2012 |
2011 |
2011 |
2012 |
2011 |
Operating Data: |
|
|
|
|
|
Retail units sold |
9,814 |
9,919 |
(1.1)% |
|
|
Average number of stores in
operation |
116 |
109 |
6.4 |
|
|
Average retail units sold per store per
month |
28.2 |
30.3 |
(6.9) |
|
|
Average retail sales price |
$ 9,515 |
$ 9,557 |
(0.4) |
|
|
Same store revenue growth |
-4.8% |
13.7% |
|
|
|
Net charge-offs as a percent
of average Finance Receivables |
6.5% |
6.5% |
|
|
|
Collections as a percent of average
Finance Receivables |
14.5% |
15.7% |
|
|
|
Average percentage of Finance
Receivables-Current (excl. 1-2 day) |
82.4% |
82.4% |
|
|
|
Average down-payment percentage |
6.4% |
6.8% |
|
|
|
|
|
|
|
|
|
Period End Data: |
|
|
|
|
|
Stores open |
117 |
111 |
5.4% |
|
|
Accounts over 30 days past due |
4.3% |
3.9% |
|
|
|
Finance Receivables, gross |
$ 339,248 |
$ 309,453 |
9.6% |
|
|
|
|
|
|
|
|
Operating Statement: |
|
|
|
|
|
Revenues: |
|
|
|
|
|
Sales |
$ 98,194 |
$ 100,128 |
(1.9)% |
100.0% |
100.0% |
Interest income |
12,025 |
10,679 |
12.6 |
12.2 |
10.7 |
Total |
110,219 |
110,807 |
(0.5) |
112.2 |
110.7 |
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Cost of sales |
56,204 |
57,807 |
(2.8) |
57.2 |
57.7 |
Selling, general and administrative |
17,351 |
16,721 |
3.8 |
17.7 |
16.7 |
Provision for credit losses |
23,647 |
22,623 |
4.5 |
24.1 |
22.6 |
Interest expense |
708 |
575 |
23.1 |
0.7 |
0.6 |
Depreciation and amortization |
696 |
565 |
23.2 |
0.7 |
0.6 |
Total |
98,606 |
98,291 |
0.3 |
100.4 |
98.2 |
|
|
|
|
|
|
Income before taxes |
11,613 |
12,516 |
|
11.8 |
12.5 |
|
|
|
|
|
|
Provision for income taxes |
4,335 |
4,756 |
|
4.4 |
4.7 |
|
|
|
|
|
|
Net income |
$ 7,278 |
$ 7,760 |
|
7.4 |
7.8 |
|
|
|
|
|
|
Dividends on subsidiary preferred
stock |
$ (10) |
$ (10) |
|
|
|
|
|
|
|
|
|
Net income attributable to common
shareholders |
$ 7,268 |
$ 7,750 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
Basic |
$ 0.80 |
$ 0.79 |
|
|
|
Diluted |
$ 0.76 |
$ 0.77 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding: |
|
|
|
|
|
Basic |
9,105,921 |
9,776,817 |
|
|
|
Diluted |
9,579,409 |
10,081,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
America's
Car-Mart, Inc. |
Consolidated Results of Operations |
(Operating
Statement Dollars in Thousands) |
|
|
|
|
% Change |
As a % of Sales |
|
Six Months Ended |
2012 |
Six Months Ended |
|
October 31, |
vs. |
October 31, |
|
2012 |
2011 |
2011 |
2012 |
2011 |
Operating Data: |
|
|
|
|
|
Retail units sold |
19,567 |
18,968 |
3.2% |
|
|
Average number of stores in
operation |
115 |
108 |
6.5 |
|
|
Average retail units sold per store per
month |
28.4 |
29.3 |
(3.1) |
|
|
Average retail sales price |
$ 9,549 |
$ 9,502 |
0.5 |
|
|
Same store revenue growth |
0.1% |
8.5% |
|
|
|
Net charge-offs as a percent of average
Finance Receivables |
12.4% |
12.0% |
|
|
|
Collections as a percent of average
Finance Receivables |
29.4% |
31.6% |
|
|
|
Average percentage of Finance
Receivables-Current (excl. 1-2 day) |
82.0% |
81.6% |
|
|
|
Average down-payment percentage |
6.8% |
7.1% |
|
|
|
|
|
|
|
|
|
Period End Data: |
|
|
|
|
|
Stores open |
117 |
111 |
5.4% |
|
|
Accounts over 30 days past due |
4.3% |
3.9% |
|
|
|
Finance Receivables, gross |
$ 339,248 |
$ 309,453 |
9.6% |
|
|
|
|
|
|
|
|
Operating Statement: |
|
|
|
|
|
Revenues: |
|
|
|
|
|
Sales |
$ 196,491 |
$ 190,452 |
3.2% |
100.0% |
100.0% |
Interest income |
23,728 |
20,879 |
13.6 |
12.1 |
11.0 |
Total |
220,219 |
211,331 |
4.2 |
112.1 |
111.0 |
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Cost of sales |
112,389 |
109,369 |
2.8 |
57.2 |
57.4 |
Selling, general and administrative |
35,207 |
32,918 |
7.0 |
17.9 |
17.3 |
Provision for credit losses |
45,310 |
41,157 |
10.1 |
23.1 |
21.6 |
Interest expense |
1,361 |
1,018 |
33.7 |
0.7 |
0.5 |
Depreciation and amortization |
1,358 |
1,103 |
23.1 |
0.7 |
0.6 |
Total |
195,625 |
185,565 |
5.4 |
99.6 |
97.4 |
|
|
|
|
|
|
Income before taxes |
24,594 |
25,766 |
|
12.5 |
13.5 |
|
|
|
|
|
|
Provision for income taxes |
9,198 |
9,725 |
|
4.7 |
5.1 |
|
|
|
|
|
|
Net income |
$ 15,396 |
$ 16,041 |
|
7.8 |
8.4 |
|
|
|
|
|
|
Dividends on subsidiary preferred
stock |
$ (20) |
$ (20) |
|
|
|
|
|
|
|
|
|
Net income attributable to common
shareholders |
$ 15,376 |
$ 16,021 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
Basic |
$ 1.67 |
$ 1.60 |
|
|
|
Diluted |
$ 1.59 |
$ 1.55 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding: |
|
|
|
|
|
Basic |
9,205,332 |
10,024,088 |
|
|
|
Diluted |
9,665,739 |
10,330,549 |
|
|
|
|
|
America's Car-Mart,
Inc. |
Consolidated Balance
Sheet and Other Data |
(Dollars in
Thousands) |
|
|
|
|
October 31, |
April 30, |
|
2012 |
2012 |
|
|
|
Cash and cash equivalents |
$ 400 |
$ 276 |
Finance receivables, net |
$ 268,811 |
$ 251,103 |
Total assets |
$ 329,858 |
$ 310,940 |
Total debt |
$ 91,256 |
$ 77,900 |
Treasury stock |
$ 91,909 |
$ 77,242 |
Stockholders' equity |
$ 187,112 |
$ 184,473 |
Shares outstanding |
9,070,289 |
9,378,346 |
|
|
|
|
|
|
Finance receivables: |
|
|
Principal balance |
$ 339,248 |
$ 316,934 |
Deferred Revenue - payment protection
plan |
(11,544) |
(10,745) |
Allowance for credit losses |
(70,437) |
(65,831) |
|
|
|
Finance receivables, net of allowance
& deferred revenue |
$ 257,267 |
$ 240,358 |
|
|
|
|
|
|
Allowance as % of net principal
balance |
21.5% |
21.5% |
|
|
|
|
|
|
Changes in allowance for credit losses: |
|
|
|
Six Months Ended |
|
October 31, |
|
2012 |
2011 |
Balance at beginning of year |
$ 65,831 |
$ 60,173 |
Provision for credit losses |
45,310 |
41,157 |
Net charge-offs |
(40,704) |
(35,399) |
|
|
|
Balance at end of period |
$ 70,437 |
$ 65,931 |
CONTACT: William H. ("Hank") Henderson, CEO at (479) 464-9944
or Jeffrey A. Williams, CFO at (479) 418-8021
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