America's Car-Mart Reports 15% Increase in Diluted Earnings Per Share to $.84 on Revenue Increase of 12.9% to $119 Million
February 18 2013 - 7:04PM
America's Car-Mart, Inc. (Nasdaq:CRMT) today announced its
operating results for its third fiscal quarter ended January 31,
2013. During the quarter the Company repurchased 62,160 shares of
its common stock for $2.58 million. Since February 1, 2010, the
Company has invested approximately $88 million to repurchase 24.7%
of its outstanding shares under its stock repurchase program.
Highlights of third quarter operating
results:
- Net income of $8.0 million - $.84 per diluted share vs. $.73
per diluted share for prior year quarter
- Revenues of $119 million compared to $105 million for the prior
year quarter with same store revenue increase of 8.8%
- Retail unit sales increase of 16% to 10,403 from 8,965 for the
prior year quarter with productivity increase of 9.2% to 29.4
retail units sold per store per month from 26.9 for prior year
quarter
- Average retail sales price decreased $125 or 1.3% from the
prior year quarter but increased $282, or 3% sequentially
- Net Charge-offs as a percent of average Finance Receivables of
5.7%, flat with prior year quarter
- Selling, General and Administrative Expenses at 17.7% of sales
vs. 18.3% for prior year quarter
- Opened three new dealerships during the quarter -
dealership count now at 120
- Active accounts base now over 57,000
- Debt to equity of 56.6% and debt to finance receivables of
30%
- Allowance for credit losses at 21.5% of finance receivables at
January 31, 2013 and at April 30, 2012
Highlights of nine month operating results:
- Net income of $23.4 million or $2.43 per diluted share vs.
$2.28 per diluted share for prior year period (6.6% increase in
diluted earnings per share)
- Revenue increase of 7.1% to $339 million from $317 million for
the prior year period with same store revenue growth of 2.8%
- Retail unit sales increase of 7.3% to 29,970 from 27,933 for
the prior year period
- Strong cash flows supporting the significant increase in
revenues and the $47 million increase in Finance Receivables, the
$8.6 million increase in inventory to support higher sales levels,
$3.2 million in net capital expenditures, and $17.2 million in
common stock re-purchases with a $31 million increase in total
debt
- Provision for credit losses of 23.3% of sales vs. 21.8% for
prior year period, net charge-offs as a percent of average Finance
Receivables up slightly to 18.1% compared to 17.7% for prior year
period
"We are very pleased with our results for the quarter, and
especially so with the significant increases in sales. As we
mentioned after our second quarter, we had seen some increases in
the amount of funding into the sub-prime auto industry which did
create some increased competition that put some pressure on our
sales earlier in the year. In typical fashion, our General
Managers stepped up to the challenge and delivered. Our focus
remains solidly fixed on driving the same mission we have for
years; Striving to earn the repeat business of our customers by
providing quality vehicles, affordable payment terms, and excellent
service. Our customers are looking for good, reliable and
affordable transportation along with the peace of mind that goes
with dealing with America's Car-Mart. Our associates take great
care of our customers in an effort to earn their repeat
business. This continued focus is allowing us to excel even
with increased competition on the sub-prime used vehicle financing
side," said William H. ("Hank") Henderson, President and Chief
Executive Officer of America's Car-Mart. "We strongly believe that
Car-Mart's local presence and face to face relationships give us
the ability to work with customers most effectively. We offer
the best long-term choice for our customers and we are dedicated to
ensuring their success. We have over 57,000 active accounts and
many more past customers who know what Car-Mart stands for and the
lengths we go to help them. We are excited about our new
locations. We just opened our first dealership in the state of
Georgia, and are looking forward to continuing to expand into new
markets."
"As Hank mentioned, we are very pleased with our top line growth
and our increase in per dealership sales volumes. Our lot managers
have really focused on our repeat customers and retention efforts
in the face of some increased competition. The same store revenue
increase of 8.8% was solid and the performance of our older, more
mature dealerships improved significantly from the prior quarter.
As we discussed, in our efforts to retain our long-term repeat
customers, we did have to lengthen overall contract terms. As
anticipated, this has led to lower current collections, but the
most important measurement is net charge-offs which was flat for
the quarter and only up slightly for the nine month period," said
Jeff Williams, Chief Financial Officer of America's Car-Mart. "As
expected, higher unit sales resulted in significant leveraging at
the selling, general and administrative line. When we look to the
future we are convinced that the business model will continue to
support significant unit volume expansion. The overall gross profit
percentage was relatively flat with the prior year quarter and in
line with our expectations. All efforts at our dealerships are
aimed at ensuring that we earn repeat business from existing
customers and at the same time attracting new customers in need of
good, basic affordable transportation and the great Car-Mart
service that goes with each sale."
"The Company repurchased 62,160 shares of its common stock
during the third quarter. Since February 1, 2010, we have
repurchased 2,890,851 shares, or 24.7% of our Company. We believe
in the long-term value of our company and we plan to invest in the
repurchase program when favorable conditions are present. Our first
priority for capital allocation will continue to be to support the
healthy growth of the business. Our debt to equity ratio was
56.6% and our debt to finance receivables ratio was 30% 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,
February 19, 2013 at 11:00 a.m. Eastern Time to discuss third
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 # 97628926.
About America's Car-Mart
America's Car-Mart, Inc. (the "Company") operates 120 automotive
dealerships in ten 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 |
2013 |
Three Months Ended |
|
|
January 31, |
vs. |
January 31, |
|
|
2013 |
2012 |
2012 |
2013 |
2012 |
Operating Data: |
|
|
|
|
|
Retail units sold |
10,403 |
8,965 |
16.0% |
|
|
Average number of stores in
operation |
118 |
111 |
6.3 |
|
|
Average retail units sold per
store per month |
29.4 |
26.9 |
9.2 |
|
|
Average retail sales price |
$ 9,797 |
$ 9,922 |
(1.3) |
|
|
Same store revenue growth |
8.8% |
7.9% |
|
|
|
Net charge-offs as a percent
of average Finance Receivables |
5.7% |
5.7% |
|
|
|
Collections as a percent of
average Finance Receivables |
13.4% |
14.8% |
|
|
|
Average percentage of Finance
Receivables-Current (excl. 1-2 day) |
80.5% |
80.0% |
|
|
|
Average down-payment
percentage |
3.9% |
4.3% |
|
|
|
|
|
|
|
|
|
Period End Data: |
|
|
|
|
|
Stores open |
120 |
111 |
8.1% |
|
|
Accounts over 30 days past
due |
6.0% |
4.7% |
|
|
|
Finance Receivables, gross |
$ 363,918 |
$ 322,353 |
12.9% |
|
|
|
|
|
|
|
|
Operating Statement: |
|
|
|
|
|
Revenues: |
|
|
|
|
|
Sales |
$ 106,215 |
$ 93,957 |
13.0% |
100.0% |
100.0% |
Interest income |
12,707 |
11,408 |
11.4 |
12.0 |
12.1 |
Total |
118,922 |
105,365 |
12.9 |
112.0 |
112.1 |
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Cost of sales |
60,941 |
54,298 |
12.2 |
57.4 |
57.8 |
Selling, general and
administrative |
18,775 |
17,175 |
9.3 |
17.7 |
18.3 |
Provision for credit
losses |
25,189 |
20,899 |
20.5 |
23.7 |
22.2 |
Interest expense |
795 |
659 |
20.6 |
0.7 |
0.7 |
Depreciation and
amortization |
712 |
594 |
19.9 |
0.7 |
0.6 |
Total |
106,412 |
93,625 |
13.7 |
100.2 |
99.6 |
|
|
|
|
|
|
Income before taxes |
12,510 |
11,740 |
|
11.8 |
12.5 |
|
|
|
|
|
|
Provision for income taxes |
4,530 |
4,436 |
|
4.3 |
4.7 |
|
|
|
|
|
|
Net income |
$ 7,980 |
$ 7,304 |
|
7.5 |
7.8 |
|
|
|
|
|
|
Dividends on subsidiary preferred
stock |
$ (10) |
$ (10) |
|
|
|
|
|
|
|
|
|
Net income attributable to
common shareholders |
$ 7,970 |
$ 7,294 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
Basic |
$ 0.88 |
$ 0.76 |
|
|
|
Diluted |
$ 0.84 |
$ 0.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding: |
|
|
|
|
|
Basic |
9,017,613 |
9,610,125 |
|
|
|
Diluted |
9,451,473 |
9,998,290 |
|
|
|
|
America's Car-Mart,
Inc. |
Consolidated Results of
Operations |
(Operating Statement Dollars in
Thousands) |
|
|
|
|
|
|
|
|
|
% Change |
As a % of Sales |
|
Nine Months Ended |
2013 |
Nine Months Ended |
|
January 31, |
vs |
January 31, |
|
|
2013 |
2012 |
2012 |
2013 |
2012 |
Operating Data: |
|
|
|
|
|
Retail units sold |
29,970 |
27,933 |
7.3% |
|
|
Average number of stores in
operation |
116 |
109 |
6.4 |
|
|
Average retail units sold per
store per month |
28.7 |
28.5 |
0.8 |
|
|
Average retail sales price |
$ 9,635 |
$ 9,636 |
(0.0) |
|
|
Same store revenue growth |
2.8% |
8.3% |
|
|
|
Net charge-offs as a percent of
average Finance Receivables |
18.1% |
17.7% |
|
|
|
Collections as a percent of
average Finance Receivables |
42.8% |
46.3% |
|
|
|
Average percentage of Finance
Receivables-Current (excl. 1-2 day) |
81.5% |
81.1% |
|
|
|
Average down-payment
percentage |
5.8% |
6.2% |
|
|
|
|
|
|
|
|
|
Period End Data: |
|
|
|
|
|
Stores open |
120 |
111 |
8.1% |
|
|
Accounts over 30 days past
due |
6.0% |
4.7% |
|
|
|
Finance Receivables, gross |
$ 363,918 |
$ 322,353 |
12.9% |
|
|
|
|
|
|
|
|
Operating Statement: |
|
|
|
|
|
Revenues: |
|
|
|
|
|
Sales |
$ 302,706 |
$ 284,409 |
6.4% |
100.0% |
100.0% |
Interest income |
36,435 |
32,287 |
12.8 |
12.0 |
11.4 |
Total |
339,141 |
316,696 |
7.1 |
112.0 |
111.4 |
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Cost of sales |
173,330 |
163,667 |
5.9 |
57.3 |
57.5 |
Selling, general and
administrative |
53,982 |
50,094 |
7.8 |
17.8 |
17.6 |
Provision for credit
losses |
70,499 |
62,056 |
13.6 |
23.3 |
21.8 |
Interest expense |
2,156 |
1,676 |
28.6 |
0.7 |
0.6 |
Depreciation and
amortization |
2,070 |
1,697 |
22.0 |
0.7 |
0.6 |
Total |
302,037 |
279,190 |
8.2 |
99.8 |
98.2 |
|
|
|
|
|
|
Income before taxes |
37,104 |
37,506 |
|
12.3 |
13.2 |
|
|
|
|
|
|
Provision for income taxes |
13,728 |
14,160 |
|
4.5 |
5.0 |
|
|
|
|
|
|
Net income |
$ 23,376 |
$ 23,346 |
|
7.7 |
8.2 |
|
|
|
|
|
|
Dividends on subsidiary preferred
stock |
$ (30) |
$ (30) |
|
|
|
|
|
|
|
|
|
Net income attributable to
common shareholders |
$ 23,346 |
$ 23,316 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
Basic |
$ 2.55 |
$ 2.36 |
|
|
|
Diluted |
$ 2.43 |
$ 2.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding: |
|
|
|
|
|
Basic |
9,142,296 |
9,886,100 |
|
|
|
Diluted |
9,593,854 |
10,219,796 |
|
|
|
|
America's Car-Mart,
Inc. |
Consolidated Balance
Sheet and Other Data |
(Dollars in
Thousands) |
|
|
|
|
January 31, |
April 30, |
|
2013 |
2012 |
|
|
|
Cash and cash equivalents |
$ 865 |
$ 276 |
Finance receivables, net |
$ 288,352 |
$ 251,103 |
Inventory |
$ 35,868 |
$ 27,242 |
Total assets |
$ 360,064 |
$ 310,940 |
Total debt |
$ 109,274 |
$ 77,900 |
Treasury stock |
$ 94,490 |
$ 77,242 |
Stockholders' equity |
$ 193,002 |
$ 184,473 |
Shares outstanding |
9,013,774 |
9,378,346 |
|
|
|
|
|
|
|
|
|
Finance receivables: |
|
|
Principal balance |
$ 363,918 |
$ 316,934 |
Deferred revenue - payment
protection plan |
$ (12,359) |
(10,745) |
Allowance for credit
losses |
(75,566) |
(65,831) |
|
|
|
Finance receivables, net of
allowance & deferred revenue |
$ 275,993 |
$ 240,358 |
|
|
|
|
|
|
Allowance as % of net principal
balance |
21.5% |
21.5% |
|
|
|
|
|
|
|
|
|
Changes in allowance for credit losses: |
|
|
|
Nine Months Ended |
|
January 31, |
|
2013 |
2012 |
Balance at beginning of
year |
$ 65,831 |
$ 60,173 |
Provision for credit
losses |
70,499 |
62,056 |
Net charge-offs |
(60,764) |
(53,521) |
|
|
|
Balance at end of period |
$ 75,566 |
$ 68,708 |
CONTACT: William H. ("Hank") Henderson, CEO
(479) 464-9944
Jeffrey A. Williams, CFO
(479) 418-8021
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