America's Car-Mart Reports Diluted Earnings per Share of $3.05 on Record Revenues of $223 Million
November 16 2020 - 5:00PM
America’s Car-Mart, Inc. (NASDAQ: CRMT) today announced its
operating results for the second quarter of fiscal year 2021.
“Our disciplined execution and ongoing focus are
propelling the business forward at an accelerating pace. At the
same time, significant investments in key areas are laying the
groundwork for future growth. Notwithstanding the tight used
vehicle market - especially at the lower price points - we
generated a meaningful increase in revenues. The market we serve is
large and fragmented, and consumer expectations and shopping
preferences are changing. We have a healthy paranoia about change
and are committed to re-inventing the business in order to adapt
and prepare us for long-term market leadership,” said Jeff
Williams, President and CEO. “Our business continues to both
generate cash and increased borrowing capacity while maintaining a
conservative balance sheet, enabling us to think big about our
place in the world."
“We continue to make significant investments in
the areas of customer experience, inventory procurement and
recruiting and training. Improvements in these key areas will drive
increased traffic and productivity. Corresponding technology and
systems upgrades support these initiatives and provide a foundation
for future growth. For example, the centralization of certain
functions dovetails with the advantages of our localized branch
structure; the ability to make key customer decisions locally is
important to our success,” added Mr. Williams. “We are aggressively
addressing changes in consumer buying preferences by building an
efficient, seamless, digital and customer-friendly sales process
that compares favorably with alternatives. Further, as our
infrastructure strengthens, we will aggressively market our lower
total cost of ownership advantage. Also, we will heavily promote
the more intangible but very real advantages that consumers realize
when they are part of the Car-Mart family. We are committed to
giving our customers ‘Peace of Mind’ by ‘Keeping Them on the Road.’
We take the stress out of one area of our customers’ lives and
believe strongly that we have an obligation to serve significantly
more customers over time.”
“Our offering is unique, and we believe that our
existing dealerships have significant room to grow. We will
prioritize the allocation of capital with an eye to gaining market
share in the areas we currently serve. We have opened two new
dealerships this fiscal year and currently have two more in process
- Edmond and Norman, Oklahoma. We are proud to be growing while
simultaneously building an infrastructure that will support a much
larger business. This is possible largely because of the commitment
of our associates and the power of our business model,” said Mr.
Williams. “There is real consumer enthusiasm for our offering
driven by a superior proposition, local presence, and genuine
commitment to customers. Coupled with the advantages of our captive
lending arrangement and relentless focus on costs, we believe that
our future is very bright.”
“Our overall revenue increase was driven by a
15.3% increase in the average retail sales price combined with a
$4.1 million increase in interest income. Our second quarter sales
volumes were impacted by the continued tight supply of vehicles at
lower price points resulting in a lack of an affordable alternative
for some of our customers. This impacted our productivity per
dealership,” said Vickie Judy, Chief Financial Officer. “Net
charge-offs for the quarter, as a percentage of average finance
receivables, were down to 4.7%. Our selling, general, and
administrative expenses returned to pre-pandemic levels, reflecting
our commitment to have a strong infrastructure to support a growing
customer base. We did have some nice leveraging of these expenses
at 16.5% of sales compared to 16.9% for the prior year comparable
quarter.”
“Our cash balance is $19.5 million and our debt,
net of cash, to finance receivable is 28%. During the quarter, we
added $49.4 million in receivables, increased inventory by $11.2
million, funded $2.2 million in net capital expenditures, and
repurchased $6.1 million of our common stock, a total of $68.9
million utilizing $31.1 million of cash and no increase in debt. We
will continue to stay focused on a strong balance sheet and cash
flows while ensuring we are investing with an eye for the future,”
added Ms. Judy.
Conference Call
Management will be holding a conference call on
Tuesday, November 17, 2020 at 11:00 a.m. Eastern Time to discuss
quarterly 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 #4393992.
About America's Car-Mart
America’s Car-Mart, Inc. operates automotive
dealerships in twelve 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 for two consecutive years in 2019 and 2018
and has sold over 700,000 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 may 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;
- seasonality; and
- the Company’s business, operating 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:
- business and economic disruptions and uncertainty resulting
from the COVID-19 pandemic and efforts to mitigate the financial
impact and health risks associated with the pandemic;
- 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;
- 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;
- ability to keep pace with technological advances and changes in
consumer behavior affecting our
business;
- security breaches, cyber-attacks, or fraudulent activity;
and
- the ability to successfully identify, complete and integrate
new acquisitions.
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 |
|
2020 |
|
Three Months
Ended |
|
October 31, |
|
vs. |
|
October 31, |
|
|
2020 |
|
|
|
2019 |
|
|
2019 |
|
2020 |
|
2019 |
Operating
Data: |
|
|
|
|
|
|
|
|
|
|
|
Retail units sold |
|
14,022 |
|
|
|
13,763 |
|
|
1.9 |
% |
|
|
|
|
|
|
Average number of stores in operation |
|
150 |
|
|
|
145 |
|
|
3.4 |
|
|
|
|
|
|
|
Average retail units sold per store per month |
|
31.2 |
|
|
|
31.6 |
|
|
(1.3 |
) |
|
|
|
|
|
|
Average retail sales price |
$ |
13,365 |
|
|
$ |
11,589 |
|
|
15.3 |
|
|
|
|
|
|
|
Gross profit per retail unit |
$ |
5,705 |
|
|
$ |
4,935 |
|
|
15.6 |
|
|
|
|
|
|
|
Same store revenue growth |
|
12.8 |
% |
|
|
12.2 |
% |
|
|
|
|
|
|
|
|
Net charge-offs as a percent of average finance receivables |
|
4.7 |
% |
|
|
6.1 |
% |
|
|
|
|
|
|
|
|
Collections as a percent of average finance receivables |
|
12.9 |
% |
|
|
13.3 |
% |
|
|
|
|
|
|
|
|
Average percentage of finance receivables-current (excl. 1-2
day) |
|
84.8 |
% |
|
|
83.5 |
% |
|
|
|
|
|
|
|
|
Average down-payment percentage |
|
6.4 |
% |
|
|
6.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End
Data: |
|
|
|
|
|
|
|
|
|
|
|
Stores open |
|
150 |
|
|
|
145 |
|
|
3.4 |
% |
|
|
|
|
|
|
Accounts over 30 days past due |
|
2.5 |
% |
|
|
3.5 |
% |
|
|
|
|
|
|
|
|
Active customer count |
|
83,945 |
|
|
|
78,910 |
|
|
6.4 |
% |
|
|
|
|
|
|
Finance receivables, gross |
$ |
692,775 |
|
|
$ |
587,087 |
|
|
18.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Statement: |
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
196,684 |
|
|
$ |
167,743 |
|
|
17.3 |
% |
|
100.0 |
% |
|
100.0 |
% |
Interest income |
|
26,676 |
|
|
|
22,567 |
|
|
18.2 |
|
|
13.6 |
|
|
13.5 |
|
Total |
|
223,360 |
|
|
|
190,310 |
|
|
17.4 |
|
|
113.6 |
|
|
113.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
116,690 |
|
|
|
99,826 |
|
|
16.9 |
|
|
59.3 |
|
|
59.5 |
|
Selling, general and administrative |
|
32,536 |
|
|
|
28,296 |
|
|
15.0 |
|
|
16.5 |
|
|
16.9 |
|
Provision for credit losses |
|
43,862 |
|
|
|
41,177 |
|
|
6.5 |
|
|
22.3 |
|
|
24.5 |
|
Interest expense |
|
1,658 |
|
|
|
2,081 |
|
|
(20.3 |
) |
|
0.8 |
|
|
1.2 |
|
Depreciation and amortization |
|
928 |
|
|
|
971 |
|
|
(4.4 |
) |
|
0.5 |
|
|
0.6 |
|
Loss (gain) on disposal of property and equipment |
|
(64 |
) |
|
|
2 |
|
|
(3,300.0 |
) |
|
- |
|
|
- |
|
Total |
|
195,610 |
|
|
|
172,353 |
|
|
13.5 |
|
|
99.5 |
|
|
102.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes |
|
27,750 |
|
|
|
17,957 |
|
|
|
|
14.1 |
|
|
10.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
6,554 |
|
|
|
4,070 |
|
|
|
|
3.3 |
|
|
2.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
21,196 |
|
|
$ |
13,887 |
|
|
|
|
10.8 |
|
|
8.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on
subsidiary preferred stock |
$ |
(10 |
) |
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders |
$ |
21,186 |
|
|
$ |
13,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
3.20 |
|
|
$ |
2.10 |
|
|
|
|
|
|
|
|
|
Diluted |
$ |
3.05 |
|
|
$ |
2.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in calculation: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
6,627,780 |
|
|
|
6,621,562 |
|
|
|
|
|
|
|
|
|
Diluted |
|
6,935,707 |
|
|
|
6,952,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change |
|
As a % of Sales |
|
Six Months
Ended |
|
2020 |
|
Six Months
Ended |
|
October 31, |
|
vs. |
|
October 31, |
|
|
2020 |
|
|
|
2019 |
|
|
2019 |
|
2020 |
|
2019 |
Operating
Data: |
|
|
|
|
|
|
|
|
|
|
|
Retail units sold |
|
26,198 |
|
|
|
26,286 |
|
|
(0.3 |
)% |
|
|
|
|
|
|
Average number of stores in operation |
|
150 |
|
|
|
145 |
|
|
3.4 |
|
|
|
|
|
|
|
Average retail units sold per store per month |
|
29.1 |
|
|
|
30.2 |
|
|
(3.6 |
) |
|
|
|
|
|
|
Average retail sales price |
$ |
13,102 |
|
|
$ |
11,504 |
|
|
13.9 |
|
|
|
|
|
|
|
Gross profit per retail unit |
$ |
5,646 |
|
|
$ |
4,912 |
|
|
14.9 |
|
|
|
|
|
|
|
Same store revenue growth |
|
9.5 |
% |
|
|
7.6 |
% |
|
|
|
|
|
|
|
|
Net charge-offs as a percent of average finance receivables |
|
9.6 |
% |
|
|
11.5 |
% |
|
|
|
|
|
|
|
|
Collections as a percent of average finance receivables |
|
25.9 |
% |
|
|
26.8 |
% |
|
|
|
|
|
|
|
|
Average percentage of finance receivables-current (excl. 1-2
day) |
|
84.8 |
% |
|
|
83.3 |
% |
|
|
|
|
|
|
|
|
Average down-payment percentage |
|
6.9 |
% |
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End
Data: |
|
|
|
|
|
|
|
|
|
|
|
Stores open |
|
150 |
|
|
|
145 |
|
|
3.4 |
% |
|
|
|
|
|
|
Accounts over 30 days past due |
|
2.5 |
% |
|
|
3.5 |
% |
|
|
|
|
|
|
|
|
Active customer count |
|
83,945 |
|
|
|
78,910 |
|
|
6.4 |
% |
|
|
|
|
|
|
Finance receivables, gross |
$ |
692,775 |
|
|
$ |
587,087 |
|
|
18.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Statement: |
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
359,483 |
|
|
$ |
317,817 |
|
|
13.1 |
% |
|
100.0 |
% |
|
100.0 |
% |
Interest income |
|
51,788 |
|
|
|
44,371 |
|
|
16.7 |
|
|
14.4 |
|
|
14.0 |
|
Total |
|
411,271 |
|
|
|
362,188 |
|
|
13.6 |
|
|
114.4 |
|
|
114.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
211,564 |
|
|
|
188,711 |
|
|
12.1 |
|
|
58.9 |
|
|
59.4 |
|
Selling, general and administrative |
|
61,293 |
|
|
|
56,967 |
|
|
7.6 |
|
|
17.1 |
|
|
17.9 |
|
Provision for credit losses |
|
79,946 |
|
|
|
72,652 |
|
|
10.0 |
|
|
22.2 |
|
|
22.9 |
|
Interest expense |
|
3,377 |
|
|
|
4,085 |
|
|
(17.3 |
) |
|
0.9 |
|
|
1.3 |
|
Depreciation and amortization |
|
1,866 |
|
|
|
1,938 |
|
|
(3.7 |
) |
|
0.5 |
|
|
0.6 |
|
Loss (gain) on disposal of property and equipment |
|
(64 |
) |
|
|
39 |
|
|
(264.1 |
) |
|
- |
|
|
- |
|
Total |
|
357,982 |
|
|
|
324,392 |
|
|
10.4 |
|
|
99.6 |
|
|
102.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes |
|
53,289 |
|
|
|
37,796 |
|
|
|
|
14.8 |
|
|
11.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
12,529 |
|
|
|
8,398 |
|
|
|
|
3.5 |
|
|
2.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
40,760 |
|
|
$ |
29,398 |
|
|
|
|
11.3 |
|
|
9.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on subsidiary preferred stock |
$ |
(20 |
) |
|
$ |
(20 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders |
$ |
40,740 |
|
|
$ |
29,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
6.14 |
|
|
$ |
4.42 |
|
|
|
|
|
|
|
|
|
Diluted |
$ |
5.88 |
|
|
$ |
4.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in calculation: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
6,630,112 |
|
|
|
6,652,922 |
|
|
|
|
|
|
|
|
|
Diluted |
|
6,925,651 |
|
|
|
6,984,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, |
|
April 30, |
|
October 31, |
|
|
2020 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
19,533 |
|
|
$ |
59,560 |
|
|
$ |
2,474 |
|
Finance receivables, net |
$ |
519,810 |
|
|
$ |
466,141 |
|
|
$ |
451,606 |
|
Inventory |
$ |
67,428 |
|
|
$ |
36,414 |
|
|
$ |
48,103 |
|
Total assets |
$ |
716,344 |
|
|
$ |
667,324 |
|
|
$ |
575,367 |
|
Total debt |
$ |
213,523 |
|
|
$ |
215,568 |
|
|
$ |
176,970 |
|
Treasury stock |
$ |
252,991 |
|
|
$ |
246,911 |
|
|
$ |
245,598 |
|
Total equity |
$ |
343,631 |
|
|
$ |
302,759 |
|
|
$ |
278,359 |
|
Shares outstanding |
|
6,602,148 |
|
|
|
6,619,319 |
|
|
|
6,566,321 |
|
|
|
|
|
|
|
Finance receivables: |
|
|
|
|
|
Principal balance |
$ |
692,775 |
|
|
$ |
621,182 |
|
|
$ |
587,087 |
|
Deferred revenue - payment protection plan |
|
(26,840 |
) |
|
|
(24,480 |
) |
|
|
(22,836 |
) |
Deferred revenue - service contract |
|
(13,236 |
) |
|
|
(11,641 |
) |
|
|
(11,265 |
) |
Allowance for credit losses |
|
(172,965 |
) |
|
|
(155,041 |
) |
|
|
(135,481 |
) |
|
|
|
|
|
|
Finance receivables, net of allowance and deferred revenue |
$ |
479,734 |
|
|
$ |
430,020 |
|
|
$ |
417,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance as % of principal balance net of deferred revenue |
|
26.5 |
% |
|
|
26.5 |
% |
|
|
24.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Changes in allowance for
credit losses: |
|
|
|
|
|
|
Six months Ended |
|
|
|
October 31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
Balance at beginning of period |
$ |
155,041 |
|
|
$ |
127,842 |
|
|
|
Provision for credit losses |
|
79,946 |
|
|
|
72,652 |
|
|
|
Charge-offs, net of collateral recovered |
|
(62,022 |
) |
|
|
(65,013 |
) |
|
|
Balance at end of period |
$ |
172,965 |
|
|
$ |
135,481 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Car Mart (NASDAQ:CRMT)
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