America's Car-Mart Reports Diluted Earnings Per Share of $.79 on Revenue Increase of 11.4% to $123 Million
August 19 2013 - 5:06PM
America's Car-Mart, Inc. (Nasdaq:CRMT) today announced its
operating results for the first quarter of fiscal 2014.
Highlights of first quarter operating
results:
- Net income of $7.5 million - $.79 per diluted share vs. $.83
per diluted share for prior year quarter
- Revenues of $123 million compared to $110 million for the prior
year quarter with same store revenue increase of 5.6%
- Retail unit sales increase of 9% to 10,643 from 9,753 for the
prior year quarter with productivity increase to 28.4 retail units
sold per store per month from 28.3 for prior year quarter
- Average retail sales price increased $252 to $9,836 or 2.6%
from the prior year quarter and decreased $127 or 1.3%
sequentially
- Net Charge-offs as a percent of average finance receivables of
6.2%, up from 5.9% for prior year quarter
- Provision for credit losses of 24.3% of sales vs. 22.0% for
prior year quarter
- Selling, General and Administrative Expenses at 18.0% of sales
vs. 18.2% for prior year quarter
- Opened two new dealerships during the quarter -
dealership count now at 126
- Active accounts base now over 59,000
- Debt to equity of 47.3% and debt to finance receivables of
26.2%
- Allowance for credit losses at 21.5% of finance receivables at
July 31, 2013
- Strong cash flows supporting the significant increase in
revenues, the $16.5 million increase in finance receivables, $1.8
million in net capital expenditures and the $384,000 in common
stock repurchases (9,020 shares) with no increase in total
debt
"We are very pleased with our top line growth for the
quarter. Our General Managers continue to work hard at helping our
customers succeed and are meeting the challenges of the current
competitive environment head–on. We are determined to earn the
repeat business of our customers by doing everything we can to help
them purchase a quality vehicle with affordable payment terms and
excellent service," said William H. ("Hank") Henderson, President
and Chief Executive Officer of America's Car-Mart. "Even though our
revenues were up, we feel like we could have done even better as we
believe that increased funding to the sub-prime auto industry
continues to have a negative effect on our business especially on
the provision for credit losses line. We believe that many
companies that are competing for our customers on the funding side
are not focused on earning repeat business tied to customer
success. We believe that by helping our customers successfully
complete the terms of their contracts, which has always been and
will always be our primary focus, we will continue to fulfill our
vision of being the most respected buy-here-pay-here organization
in the country."
"We finished the quarter with 126 dealerships, an increase of 10
from this time last year. We have several new openings planned for
the next few months and we continue to expect to open a total of 12
for the fiscal year," added Mr. Henderson. "We sold 10,643
retail units during the quarter, a 9.1% increase. Same store
revenues were up a healthy 5.6% and the average retail units sold
per store per month increased for the quarter to 28.4. We remain
convinced that the business model will continue to support
significant unit volume expansion. We are excited about our future
and we will continue to fight to retain our better customers."
"Revenues, gross margin percentage and selling, general
and administrative expenses were all in line with our internal
expectations for the quarter. We were pleased with the top line
growth and sales volume productivity improvements in the face of a
challenging macroeconomic environment for our customer and
additional competitive pressures on the funding side," said Jeff
Williams, Chief Financial Officer of America's Car-Mart. "Our
provision for credit losses is certainly higher than we would like
but our expected cash on cash returns continue to be very
attractive even with the higher credit loss amounts. For
competitive reasons, we continued to lengthen our overall contract
terms during the quarter (to 29.5 months up from 28.1 at this time
last year and 29.3 for the 4th quarter of 2013) which contributed
to lower collections and a higher provision for credit losses. We
expect to continue our efforts to attract and retain better
customers through slightly longer terms and somewhat lower down
payments in this competitive environment.
"We believe it is prudent to maintain a very conservative
balance sheet, especially in the current operating environment. Our
debt to equity ratio was 47.3% and our debt to finance receivables
ratio was 26.2% at the end of the quarter. We repurchased 9,020
shares of common stock during the quarter and since February 1,
2010 we have repurchased 2.9 million shares, or almost 25% of our
Company. We believe in the long-term value of our company and plan
to invest in the repurchase program when favorable conditions are
present, but our first priority for capital allocation will
continue to be to support the healthy growth of the business,"
added Mr. Williams. "We will continue to stay focused on cash
returns and our future is bright."
Conference Call
Management will be holding a conference call on Tuesday, August
20, 2013 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 (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 # 27957294.
About America's Car-Mart
America's Car-Mart, Inc. (the "Company") operates 126 automotive
dealerships in ten 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 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; and
- 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.
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America's Car-Mart,
Inc. |
Consolidated Results of
Operations |
(Operating Statement Dollars in
Thousands) |
(unaudited) |
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% Change |
As a % of Sales |
|
Three Months Ended July
31, |
2013 vs. |
Three Months Ended July
31, |
|
2013 |
2012 |
2012 |
2013 |
2012 |
Operating Data: |
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Retail units sold |
10,643 |
9,753 |
9.1% |
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Average number of stores in
operation |
125 |
115 |
8.7 |
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Average retail units sold per
store per month |
28.4 |
28.3 |
0.4 |
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Average retail sales price |
$ 9,836 |
$ 9,584 |
2.6 |
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Same store revenue growth |
5.6% |
5.5% |
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Net charge-offs as a percent of
average Finance Receivables |
6.2% |
5.9% |
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Collections as a percent of
average Finance Receivables |
13.8% |
14.9% |
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Average percentage of Finance
Receivables-Current (excl. 1-2 day) |
80.5% |
81.5% |
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Average down-payment
percentage |
6.6% |
7.2% |
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Period End Data: |
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Stores open |
126 |
116 |
8.6% |
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Accounts over 30 days past
due |
5.4% |
4.0% |
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Finance Receivables, gross |
$ 379,920 |
$ 329,935 |
15.1% |
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Operating Statement: |
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Revenues: |
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Sales |
$ 109,149 |
$ 98,297 |
11.0% |
100.0% |
100.0% |
Interest
income |
13,395 |
11,703 |
14.5% |
12.3 |
11.9 |
Total |
122,544 |
110,000 |
11.4% |
112.3 |
111.9 |
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Costs and expenses: |
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Cost of sales |
62,789 |
56,185 |
11.8% |
57.5 |
57.2 |
Selling, general and
administrative |
19,647 |
17,856 |
10.0% |
18.0 |
18.2 |
Provision for credit
losses |
26,530 |
21,663 |
22.5% |
24.3 |
22.0 |
Interest expense |
790 |
653 |
21.0% |
0.7 |
0.7 |
Depreciation and
amortization |
777 |
662 |
17.4% |
0.7 |
0.7 |
Loss on Disposal of Property
and Equipment |
41 |
-- |
-- |
-- |
-- |
Total |
110,574 |
97,019 |
14.0% |
101.3 |
98.7 |
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Income before taxes |
11,970 |
12,981 |
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11.0 |
13.2 |
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Provision for income taxes |
4,429 |
4,863 |
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4.1 |
4.9 |
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Net income |
$ 7,541 |
$ 8,118 |
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6.9 |
8.3 |
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Dividends on subsidiary
preferred stock |
$ (10) |
$ (10) |
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Net income attributable to
common shareholders |
$ 7,531 |
$ 8,108 |
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Earnings per share: |
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Basic |
$ 0.83 |
$ 0.87 |
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Diluted |
$ 0.79 |
$ 0.83 |
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Weighted average number of shares
outstanding: |
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Basic |
9,020,228 |
9,304,743 |
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Diluted |
9,492,852 |
9,752,069 |
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America's Car-Mart,
Inc. |
Consolidated Balance
Sheets and Other Data |
(unaudited) |
(Dollars in Thousands) |
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July 31, 2013 |
April 30, 2013 |
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Cash and cash equivalents |
$ 288 |
$ 272 |
Finance receivables, net |
$ 301,112 |
$ 288,049 |
Inventory |
$ 31,722 |
$ 32,827 |
Total assets |
$ 368,910 |
$ 358,265 |
Total debt |
$ 99,497 |
$ 99,563 |
Treasury stock |
$ 94,931 |
$ 94,547 |
Stockholders' equity |
$ 210,179 |
$ 202,268 |
Shares outstanding |
9,017,929 |
9,023,290 |
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Finance receivables: |
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Principal balance |
$ 379,920 |
$ 363,394 |
Deferred revenue - payment
protection plan |
(13,371) |
(12,910) |
Allowance for credit
losses |
(78,808) |
(75,345) |
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Finance receivables, net of
allowance and deferred revenue |
$ 287,741 |
$ 275,139 |
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Allowance as % of principal
balance |
21.50% |
21.50% |
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Changes in allowance for credit
losses: |
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Three Months Ended July
31, |
|
2013 |
2012 |
Balance at beginning of
period |
$ 75,345 |
$ 65,831 |
Provision for credit
losses |
26,530 |
21,663 |
Charge-offs, net of collateral
recovered |
(23,067) |
(18,989) |
Balance at end of period |
$ 78,808 |
$ 68,505 |
CONTACT: William H. ("Hank") Henderson, CEO
(479) 464-9944
Jeffrey A. Williams, CFO
(479) 418-8021
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