America's Car-Mart Reports Loss per Share of ($.06) on Revenues of $133 Million (Results Reflect a $3 Million, or $.34 per Di...
November 19 2015 - 6:17PM
America's Car-Mart, Inc. (NASDAQ:CRMT) today announced its
operating results for the second quarter of fiscal 2016.
Highlights of second quarter operating
results:
- Net loss of $0.5 million – ($.06) per share (earnings of $.29
per diluted share excluding a $3 million non-cash after-tax charge
resulting from an increase to the allowance for credit losses) vs.
$.83 per diluted share for prior year quarter
- Revenues of $133 million compared to $134 million for the prior
year quarter with same store revenue decrease of 3.4%
- Retail unit sales decrease of 10% to 10,881 from 12,084 for the
prior year quarter with decreased productivity at 25.3 retail units
sold per store per month, down from 29.6 for the prior year
quarter
- Average retail sales price increased $757 to $10,247 or 8% from
the prior year quarter (increased $282 or 2.8% sequentially)
- Gross profit margin percentage decreased to 39.2% from 42.9%
for the prior year quarter due primarily to higher repair costs and
higher wholesale volumes and losses
- Collections as a percentage of average finance receivables
decreased to 13.7% from 14.1% for the prior year quarter as the
weighted average contract term increased to 30.6 months
- Net Charge-offs as a percent of average finance receivables of
7.8%, up from 7.0% for prior year quarter
- Accounts over 30 days past due decreased to 3.5% from 4.4% at
October 31, 2014
- Average percentage of finance receivables current improved to
82.5% from 80.5%
- Provision for credit losses of 32.4% of sales (28.3% excluding
increase to allowance for credit losses) vs. 26.3% for prior year
quarter
- Selling, general and administrative expenses at 18.9% of sales
vs. 17.3% for prior year quarter
- Opened three new dealerships during the quarter and one after
October 31 - dealership count now at 146
- Active accounts base approximately 65,300
- Debt to equity of 45.3% and debt to finance receivables of
24.4% (down from 24.6% at July 31, 2015 and April 30, 2015)
- Allowance for credit losses at 25% of finance receivables, net
of deferred revenue at October 31, 2015 (up from 23.8% at July 31,
2015)
Highlights of six month operating results:
- Net income of $4.1 million - $.46 per diluted share (earnings
of $.81 per diluted share excluding a $3 million non-cash after-tax
charge resulting from an increase to the allowance for credit
losses) vs. $1.62 per diluted share for prior year
period
- Revenues of $276 million compared to $261 million for the prior
year period with same store revenue increase of 2.4%
- Retail unit sales decrease of 1.9% to 23,125 from 23,566 for
the prior year period with productivity at 27.0 retail units sold
per store per month, down from 28.9 for the prior year period
- Net Charge-offs as a percent of average finance receivables of
15.6%, up from 13.4% for prior year period
- Provision for credit losses of 29.9% of sales (28% excluding
increase to allowance for credit losses) vs. 25.4% for prior year
period
- Strong cash flows supporting the increase in revenues, the
$10.3 million increase in finance receivables, $2.9 million in net
capital expenditures and the $4.0 million in common stock
repurchases (89,658 shares) with a $1.7 million increase in total
debt
"The quarter started out relatively solid as we had a decent
August even though credit losses were continuing to be higher than
expected, based on the lower delinquency levels, and we were
working through some inventory issues. Sales softened in September
and October, which can be attributed in part to the fact that we
instituted some additional underwriting reviews and made
adjustments and improvements to inventory that we believed were
necessary for the longer term. Operational inconsistencies among
dealerships continue to negatively affect results, as significant
time, effort and expense during the quarter were directed at
improving inventory management. Some of that effort, unfortunately,
was at the expense of sales volumes," said William H. ("Hank")
Henderson, President and Chief Executive Office of America's
Car-Mart, Inc. (the "Company"). "The competitive landscape remains
intense, and we have to get much better and more consistent
operationally. If we are to earn the repeat business of our
customers, we have to ensure we are putting them in the very best
vehicles at the very best price. Credit losses for the quarter were
certainly higher than anticipated and relate in part to the quality
of our inventory as well as the competitive environment. We believe
that we can positively affect losses by improving the quality of
our vehicles and also continue to be proactive with our customers
in working with them when they encounter challenges
financially."
"While the quarter was not where we would have liked for it to
be, we are committed to our mission of earning the repeat business
of our customers by providing quality vehicles, affordable payment
terms, and excellent service," added Mr. Henderson. "We believe
that communities benefit when they have a Car-Mart, and we will
continue to look to grow our footprint. Our first order of business
at this time, however, is to address our current operational
challenges. Our inventory continues to improve, and we expect sales
volumes to pick back up as we move forward."
"As we have discussed in recent quarters, we have spent several
years now investing heavily in creating an infrastructure that will
support a larger customer base and give us an advantage over the
competition in providing a superior service to our customers. We
are at a point where these investments are in place and functioning
well," said Jeff Williams, Chief Financial Officer of America's
Car-Mart, Inc. "The infrastructure investments we have made will
pay off as we buy good vehicles at good prices, sell them to good
hard-working people who have the desire and the ability to pay, and
then provide outstanding service after the sale, which is so
important to our customer base. Our cash on cash returns are
attractive, and we must ensure that we improve sales productivity
and lot level execution consistently across our dealerships. We are
committed to making that happen."
"Our debt to equity ratio is 45.3% and our debt to receivable
ratio is 24.4%, down from 24.6% at the two previous quarter ends.
We re-purchased 43,658 shares for $1.7 million for an average cost
of $38.43 during the quarter, and since February 10, 2010, we have
repurchased 3.8 million shares, or 32% of our Company, for $125
million at an average cost of $33.24," added Mr. Williams. "As
always, we are focused on cash flows and growing value over the
long-term. Since April 30, 2015, we have repurchased $4 million in
common stock, incurred $2.9 million in capital expenditures and
grown finance receivables by $10.3 million with only a $1.7 million
increase in debt. We actually paid down $1 million in debt during
the second quarter."
Conference Call
Management will be holding a conference call on Friday, November
20, 2015 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 #76319041.
About America's Car-Mart
America's Car-Mart, Inc. (the "Company") operates 146 automotive
dealerships in eleven 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) |
|
|
|
|
|
|
|
|
|
% Change |
As a % of Sales |
|
Three Months
Ended |
2015 |
Three Months Ended |
|
October 31, |
vs. |
October 31, |
|
2015 |
2014 |
2014 |
2015 |
2014 |
Operating Data: |
|
|
|
|
|
Retail units sold |
10,881 |
12,084 |
(10.0)% |
|
|
Average number of stores in
operation |
144 |
136 |
5.5 |
|
|
Average retail units sold per
store per month |
25.3 |
29.6 |
(14.5) |
|
|
Average retail sales price |
$ 10,247 |
$ 9,490 |
8.0 |
|
|
Same store revenue growth |
(3.4)% |
5.4% |
|
|
|
Net charge-offs as a percent
of average finance receivables |
7.8% |
7.0% |
|
|
|
Collections as a percent of
average finance receivables |
13.7% |
14.1% |
|
|
|
Average percentage of finance
receivables-current (excl. 1-2 day) |
82.5% |
80.5% |
|
|
|
Average down-payment
percentage |
6.4% |
6.7% |
|
|
|
|
|
|
|
|
|
Period End Data: |
|
|
|
|
|
Stores open |
145 |
136 |
6.6% |
|
|
Accounts over 30 days past
due |
3.5% |
4.4% |
|
|
|
Finance receivables, gross |
$ 427,663 |
$ 411,500 |
3.9% |
|
|
|
|
|
|
|
|
Operating Statement: |
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|
|
|
|
Revenues: |
|
|
|
|
|
Sales |
$ 117,670 |
$ 119,435 |
(1.5)% |
100.0% |
100.0% |
Interest income |
15,334 |
14,399 |
6.5 |
13.0 |
12.1 |
Total |
133,004 |
133,834 |
(0.6) |
113.0 |
112.1 |
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Cost of sales |
71,596 |
68,156 |
5.0 |
60.8 |
57.1 |
Selling, general and
administrative |
22,239 |
20,655 |
7.7 |
18.9 |
17.3 |
Provision for credit
losses |
38,094 |
31,371 |
21.4 |
32.4 |
26.3 |
Interest expense |
792 |
721 |
9.8 |
0.7 |
0.6 |
Depreciation and
amortization |
1,038 |
929 |
11.7 |
0.9 |
0.8 |
Loss on disposal of property
and equipment |
19 |
20 |
(5.0) |
0 |
0 |
Total |
133,778 |
121,852 |
9.8 |
113.7 |
102.0 |
|
|
|
|
|
|
Income before taxes |
(774) |
11,982 |
|
(0.7) |
10.0 |
|
|
|
|
|
|
Provision for income taxes |
(289) |
4,463 |
|
(0.2) |
3.7 |
|
|
|
|
|
|
Net income |
$ (485) |
$ 7,519 |
|
(0.4) |
6.3 |
|
|
|
|
|
|
Dividends on subsidiary
preferred stock |
$ (10) |
$ (10) |
|
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|
|
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|
|
|
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Net income attributable to
common shareholders |
$ (495) |
$ 7,509 |
|
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Earnings per share: |
|
|
|
|
|
Basic |
$ (0.06) |
$ 0.87 |
|
|
|
Diluted |
$ (0.06) |
$ 0.83 |
|
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|
|
|
|
|
|
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|
|
|
|
|
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Weighted average number of shares used in
calculation: |
|
|
|
|
|
Basic |
8,471,918 |
8,604,003 |
|
|
|
Diluted |
8,471,918 |
9,022,437 |
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America's Car-Mart,
Inc. Consolidated Results of Operations (Operating
Statement Dollars in Thousands) |
|
|
|
|
|
|
|
|
|
% Change |
As a % of Sales |
|
Six Months Ended |
2015 |
Six Months Ended |
|
October 31, |
vs. |
October 31, |
|
2015 |
2014 |
2014 |
2015 |
2014 |
Operating Data: |
|
|
|
|
|
Retail units sold |
23,125 |
23,566 |
(1.9)% |
|
|
Average number of stores in
operation |
143 |
136 |
5.1 |
|
|
Average retail units sold per
store per month |
27.0 |
28.9 |
(6.6) |
|
|
Average retail sales price |
$ 10,098 |
$ 9,477 |
6.6 |
|
|
Same store revenue growth |
2.4% |
1.7% |
|
|
|
Net charge-offs as a percent of
average finance receivables |
15.6% |
13.4% |
|
|
|
Collections as a percent of
average finance receivables |
27.7% |
28.2% |
|
|
|
Average percentage of finance
receivables-current (excl. 1-2 day) |
81.8% |
81.0% |
|
|
|
Average down-payment
percentage |
6.5% |
6.8% |
|
|
|
|
|
|
|
|
|
Period End Data: |
|
|
|
|
|
Stores open |
145 |
136 |
6.6% |
|
|
Accounts over 30 days past
due |
3.5% |
4.4% |
|
|
|
Finance receivables, gross |
$ 427,663 |
$ 411,500 |
3.9% |
|
|
|
|
|
|
|
|
Operating Statement: |
|
|
|
|
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Revenues: |
|
|
|
|
|
Sales |
$ 245,265 |
$ 232,894 |
5.3% |
100.0% |
100.0% |
Interest income |
30,428 |
28,316 |
7.5 |
12.4 |
12.2 |
Total |
275,693 |
261,210 |
5.5 |
112.4 |
112.2 |
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Cost of sales |
146,682 |
133,627 |
9.8 |
59.8 |
57.4 |
Selling, general and
administrative |
45,363 |
41,475 |
9.4 |
18.5 |
17.8 |
Provision for credit
losses |
73,439 |
59,247 |
24.0 |
29.9 |
25.4 |
Interest expense |
1,552 |
1,396 |
11.2 |
0.6 |
0.6 |
Depreciation and
amortization |
2,048 |
1,847 |
10.9 |
0.8 |
0.8 |
Loss on disposal of property
and equipment |
19 |
20 |
(5.0) |
-- |
-- |
Total |
269,103 |
237,612 |
13.3 |
109.7 |
102.0 |
|
|
|
|
|
|
Income before taxes |
6,590 |
23,598 |
|
2.7 |
10.1 |
|
|
|
|
|
|
Provision for income taxes |
2,458 |
8,819 |
|
1.0 |
3.8 |
|
|
|
|
|
|
Net income |
$ 4,132 |
$ 14,779 |
|
1.7 |
6.3 |
|
|
|
|
|
|
Dividends on subsidiary
preferred stock |
$ (20) |
$ (20) |
|
|
|
|
|
|
|
|
|
Net income attributable to
common shareholders |
$ 4,112 |
$ 14,759 |
|
|
|
|
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|
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Earnings per share: |
|
|
|
|
|
Basic |
$ 0.48 |
$ 1.70 |
|
|
|
Diluted |
$ 0.46 |
$ 1.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding: |
|
|
|
|
|
Basic |
8,492,679 |
8,660,173 |
|
|
|
Diluted |
8,853,621 |
9,082,750 |
|
|
|
|
|
|
America's Car-Mart,
Inc. Consolidated Balance Sheet and Other Data (Dollars in
Thousands) |
|
|
|
|
October 31, |
April 30, |
|
2015 |
2015 |
|
|
|
Cash and cash equivalents |
$ 1,386 |
$ 790 |
Finance receivables, net |
$ 327,229 |
$ 324,144 |
Inventory |
$ 34,253 |
$ 34,267 |
Total assets |
$ 403,414 |
$ 400,361 |
Total debt |
$ 104,424 |
$ 102,685 |
Treasury stock |
$ 131,310 |
$ 127,321 |
Stockholders' equity |
$ 230,709 |
$ 229,132 |
Shares outstanding |
8,458,966 |
8,529,223 |
|
|
|
|
|
|
|
|
|
Finance receivables: |
|
|
Principal balance |
$ 427,663 |
$ 417,368 |
Deferred revenue - payment
protection plan |
(16,061) |
(15,652) |
Deferred revenue - service
contract |
(9,865) |
(9,584) |
Allowance for credit
losses |
(100,434) |
(93,224) |
|
|
|
Finance receivables, net of
allowance and deferred revenue |
$ 301,303 |
$ 298,908 |
|
|
|
|
|
|
Allowance as % of principal
balance net of deferred revenue |
25.0% |
23.8% |
|
|
|
|
|
|
Changes in allowance for credit losses: |
|
|
|
Six Months |
|
Ended October 31, |
|
2015 |
2014 |
Balance at beginning of
period |
$ 93,224 |
$ 86,033 |
Provision for credit
losses |
73,439 |
59,247 |
Charge-offs, net of collateral
recovered |
(66,229) |
(52,820) |
Balance at end of period |
$ 100,434 |
$ 92,460 |
CONTACT: William H. ("Hank") Henderson, CEO
at (479) 464-9944
or
Jeffrey A. Williams, CFO
at (479) 418-8021
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