America’s Car-Mart, Inc. (NASDAQ: CRMT) today announced its
operating results for the first quarter of fiscal year 2020.
Highlights of first quarter operating
results:
- Net earnings of $15.5 million, or $2.21 per diluted share vs.
net earnings of $10.9 million, or $1.53 per diluted share for prior
year quarter
- Revenues of $172 million compared to $164 million for the prior
year quarter; current quarter includes a $1.9 million increase in
interest income and same store revenue increase of 3.3%
- Interest income increased 9.5% with an 8.1% increase in average
finance receivables
- Gross profit dollars increased $1.3 million, or 2.1%, to $61.2
million, and gross profit dollars per retail unit sold increased by
$104, or 2.2%, to $4,886
- Net Charge-offs as a percent of average finance receivables
decreased to 5.4%, compared to 6.4% for the prior year quarter
- Allowance for credit losses reduced from 25% to 24.5% of
finance receivables, net of deferred revenue, resulting in a $2.6
million decrease in the provision for credit losses (1.7% of
sales), a $2.0 million after-tax benefit ($0.29 per diluted
share)
- Provision for credit losses of 21.0% of sales vs. 26.1% for
prior year quarter
- Strong cash flows supporting the increase in revenues, the
$17.8 million increase in finance receivables, $7.2 million
increase in inventory, $1.0 million in net capital expenditures and
$4.7 million in common stock repurchases (55,507 shares) with a
$5.8 million increase in total debt
“We are pleased to report another solid quarter.
We are off to a great start for the fiscal year and we are excited
about our positive momentum and the impact we are making in the
lives of our customers and associates. The investments we have made
and will continue to make focus primarily on recruiting, training
and retention of associates with emphasis on the General Manager
position and are allowing us to grow the business and to
significantly improve our credit results. As always, we invest in
our business for the long-term and we are proud of our progress,”
said Jeff Williams, President and Chief Executive Officer of
America’s Car-Mart, Inc. “For the quarter, we added almost 1,600
customers, and our top line was up about 5% over the prior year
quarter. We are optimistic that on-going improvements and changes
being made to our field sales efforts and with our inventory,
together with our increased digital focus, will lead to sales
volume improvements into the future.”
“We are pleased to see both gross profit dollars
per unit sold increase and interest income as a percentage of
average finance receivables improve, which is related to our
improved collections and credit results. More customers are being
successful which is reflected in our net charge-offs being down
significantly for the quarter. We continue to focus on buying
better cars and improving deal structures and the execution of
collections practices,” said Mr. Williams. “Additionally, our
efforts to improve the customer experience is having a significant
positive effect on credit results and we expect to continue to see
benefits from this effort. We know that the quality of the vehicle
is the most important factor related to customer experience and we
must always prioritize ‘Keeping our Customers on the Road.’
“We opened new dealerships in Bryant, Arkansas
and Conway, Arkansas during the quarter. We are planning to add a
few more locations this year and will provide details as we move
forward. We will add additional locations in the future at a rate
that matches our ability to support customers and associates at the
highest levels,” said Mr. Williams. “Our primary focus in the near
term is to continue to grow customer count at existing dealerships
with an emphasis on our higher performing General Managers to
leverage their talents while making the communities we serve
better.”
“Although our retail unit volumes were basically
flat, we did see solid revenue growth with the 3.6% increase in the
average sales price as we look to provide a high-quality vehicle
for our customers, combined with a $1.9 million increase in
interest income,” said Vickie Judy, Chief Financial Officer.
“We were very proud of the continued improvement in our credit
results and the fact that we have more customers being successful
and staying in their vehicles. As a result of the improvement
in our net charge-offs as a percentage of average receivables (5.4%
compared to prior year quarter of 6.4%) and the quality of our
portfolio, we reduced the allowance for credit losses from 25% to
24.5%, resulting in a $2.6 million decrease in the allowance for
credit losses as of July 31, 2019. Our overall selling,
general, and administrative expenses increased $2.3 million, almost
entirely related to salaries and benefits as we continue to invest
in our people. We will continue to focus on developing great
associates and an infrastructure to support a growing customer base
at the highest level of customer service. We also recognized
an additional income tax benefit related to share-based
compensation of $276,000, or $0.04 per diluted share, compared to
$943,000, or $0.13 per diluted share, for the prior year
quarter.”
“We repurchased 55,507 shares of our common
stock during the quarter at an average price of approximately
$84.94 for a total of $4.7 million. Since February 2010, we have
repurchased 6.2 million shares (53.3% of out outstanding shares at
January 31, 2010) at an average price of approximately $37. We plan
to continue to repurchase shares opportunistically as we move
forward. During the quarter, we added $17.8 million in
receivables, repurchased $4.7 million of our common stock, funded
$1.0 million in net capital expenditures, and increased inventory
by $7.2 million, with only a $5.8 million increase in debt. Our
balance sheet is very strong, with a debt to finance receivables
ratio of 28.3% and a debt to equity ratio of 58.1%,” added Ms.
Judy.
Conference Call
Management will be holding a conference call on
Friday, August 16, 2019 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 two hours following the
call for thirty days and can be accessed by calling (855) 859-2056
(domestic) or (404) 537-3406 (international), conference call ID
#8260815.
About America's Car-Mart
America’s Car-Mart operates 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
smaller cities throughout the South-Central United States selling
quality used vehicles and providing financing for substantially all
of its customers. For more information about America’s
Car-Mart, including investor presentations, please visit our
website at www.car-mart.com.
Car-Mart was named to the Forbes America’s Best
Mid-Size Employers list in 2019 for the second consecutive year and
has sold nearly 650,000 vehicles since fiscal year 2000.
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 dealership revenue growth;
- future revenue growth;
- receivables growth as related to revenue growth;
- gross profit per retail unit sold;
- interest rates;
- future credit losses;
- the Company’s collection results, including but not limited to
collections during income tax refund periods; and
- seasonality.
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 contracts
effectively;
- competition;
- dependence on existing management;
- ability to attract, develop and retain qualified general
managers;
- availability of quality vehicles at prices that will be
affordable to customers;
- changes in consumer finance laws or regulations, including but
not limited to rules and regulations that have recently been
enacted or could be enacted by federal and state governments;
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.
____________________________Contacts:
Jeffrey A. Williams, President and CEO (479) 464-9944 or
Vickie D. Judy, CFO (479) 464-9944
|
|
|
|
|
|
|
|
|
|
|
% Change |
|
As a % of Sales |
|
|
|
|
|
Three Months Ended |
|
2019 |
|
Three Months Ended |
|
|
|
|
|
July 31, |
|
vs. |
|
July 31, |
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
2018 |
|
2019 |
|
2018 |
Operating
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail units
sold |
|
12,523 |
|
|
|
12,533 |
|
|
(0.1 |
)% |
|
|
|
|
|
|
|
Average number of stores in operation |
|
144 |
|
|
|
140 |
|
|
2.9 |
|
|
|
|
|
|
|
|
Average retail units sold per store per month |
|
29.0 |
|
|
|
29.8 |
|
|
(2.7 |
) |
|
|
|
|
|
|
|
Average retail sales price |
$ |
11,410 |
|
|
$ |
11,015 |
|
|
3.6 |
|
|
|
|
|
|
|
|
Gross profit per retail unit |
$ |
4,886 |
|
|
$ |
4,782 |
|
|
2.2 |
|
|
|
|
|
|
|
|
Same store revenue growth |
|
3.3 |
% |
|
|
12.1 |
% |
|
|
|
|
|
|
|
|
|
Net charge-offs as a percent of average finance
receivables |
|
5.4 |
% |
|
|
6.4 |
% |
|
|
|
|
|
|
|
|
|
Collections as a percent of average finance receivables |
|
13.5 |
% |
|
|
13.1 |
% |
|
|
|
|
|
|
|
|
|
Average percentage of finance receivables-current (excl. 1-2
day) |
|
83.0 |
% |
|
|
81.9 |
% |
|
|
|
|
|
|
|
|
|
Average down-payment percentage |
|
6.5 |
% |
|
|
6.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
Stores open |
|
145 |
|
|
|
140 |
|
|
3.6 |
% |
|
|
|
|
|
|
|
Accounts over 30 days past due |
|
3.8 |
% |
|
|
3.5 |
% |
|
|
|
|
|
|
|
|
|
Active customer count |
|
77,199 |
|
|
|
72,858 |
|
|
6.0 |
|
|
|
|
|
|
|
|
Finance
receivables, gross |
$ |
561,104 |
|
|
$ |
520,820 |
|
|
7.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements
of Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
150,074 |
|
|
$ |
144,101 |
|
|
4.1 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
|
Interest
income |
|
21,804 |
|
|
|
19,914 |
|
|
9.5 |
|
|
14.5 |
|
|
13.8 |
|
|
|
|
|
Total |
|
171,878 |
|
|
|
164,015 |
|
|
4.8 |
|
|
114.5 |
|
|
113.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
88,885 |
|
|
|
84,168 |
|
|
5.6 |
|
|
59.2 |
|
|
58.4 |
|
|
|
Selling, general and administrative |
|
28,671 |
|
|
|
26,382 |
|
|
8.7 |
|
|
19.1 |
|
|
18.3 |
|
|
|
Provision for
credit losses |
|
31,475 |
|
|
|
37,543 |
|
|
(16.2 |
) |
|
21.0 |
|
|
26.1 |
|
|
|
Interest
expense |
|
2,004 |
|
|
|
1,804 |
|
|
11.1 |
|
|
1.3 |
|
|
1.3 |
|
|
|
Depreciation and amortization |
|
967 |
|
|
|
985 |
|
|
(1.8 |
) |
|
0.6 |
|
|
0.7 |
|
|
|
Loss on disposal of property and equipment |
|
37 |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
Total |
|
152,039 |
|
|
|
150,882 |
|
|
0.8 |
|
|
101.3 |
|
|
104.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes |
|
19,839 |
|
|
|
13,133 |
|
|
|
|
13.2 |
|
|
9.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
4,328 |
|
|
|
2,249 |
|
|
|
|
2.9 |
|
|
1.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
15,511 |
|
|
$ |
10,884 |
|
|
|
|
10.3 |
|
|
7.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on
subsidiary preferred stock |
$ |
(10 |
) |
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common shareholders |
$ |
15,501 |
|
|
$ |
10,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.32 |
|
|
$ |
1.57 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
$ |
2.21 |
|
|
$ |
1.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
6,684,282 |
|
|
|
6,924,035 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
7,016,752 |
|
|
|
7,126,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 31, |
|
April 30, |
|
July 31, |
|
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
1,640 |
|
|
$ |
1,752 |
|
|
$ |
841 |
|
Finance
receivables, net |
$ |
431,610 |
|
|
$ |
415,486 |
|
|
$ |
398,373 |
|
Inventory |
$ |
44,651 |
|
|
$ |
37,483 |
|
|
$ |
37,512 |
|
Total assets |
$ |
548,779 |
|
|
$ |
492,542 |
|
|
$ |
472,502 |
|
Total debt |
$ |
158,677 |
|
|
$ |
152,918 |
|
|
$ |
155,135 |
|
Treasury
stock |
$ |
235,617 |
|
|
$ |
230,902 |
|
|
$ |
211,702 |
|
Total equity |
$ |
273,036 |
|
|
$ |
260,510 |
|
|
$ |
237,867 |
|
Shares
outstanding |
|
6,660,281 |
|
|
|
6,699,421 |
|
|
|
6,865,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
receivables: |
|
|
|
|
|
|
Principal
balance |
$ |
561,104 |
|
|
$ |
543,328 |
|
|
$ |
520,820 |
|
|
Deferred revenue -
payment protection plan |
|
(21,831 |
) |
|
|
(21,367 |
) |
|
|
(20,429 |
) |
|
Deferred revenue -
service contract |
|
(10,727 |
) |
|
|
(10,592 |
) |
|
|
(10,605 |
) |
|
Allowance for
credit losses |
|
(129,494 |
) |
|
|
(127,842 |
) |
|
|
(122,447 |
) |
|
|
|
|
|
|
|
|
|
Finance
receivables, net of allowance and deferred revenue |
$ |
399,052 |
|
|
$ |
383,527 |
|
|
$ |
367,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance as % of
principal balance net of deferred revenue |
|
24.5 |
% |
|
|
25.0 |
% |
|
|
25.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in
allowance for credit losses: |
|
|
|
|
|
|
|
|
Three months Ended |
|
|
|
|
|
July 31, |
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
Balance at
beginning of period |
$ |
127,842 |
|
|
$ |
117,821 |
|
|
|
|
Provision for
credit losses |
|
31,475 |
|
|
|
37,543 |
|
|
|
|
Charge-offs, net
of collateral recovered |
|
(29,823 |
) |
|
|
(32,917 |
) |
|
|
|
|
Balance at end of period |
$ |
129,494 |
|
|
$ |
122,447 |
|
|
|
|
|
|
|
|
|
|
|
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