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CST: 13/11/2019 16:39:44   

America's Car-Mart Reports Diluted Earnings per Share of $1.55 on Revenues of $161 Million

266 Days ago

BENTONVILLE, Ark., Feb. 19, 2019 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (NASDAQ: CRMT) today announced its operating results for the third quarter of fiscal year 2019.

Highlights of third quarter operating results:

  • Income before taxes of $14.3 million vs. $5.8 million for prior year quarter
  • Net earnings of $10.9 million, or $1.55 per diluted share vs. net earnings of $13.4 million, or $1.82 per diluted share for prior year quarter (diluted earnings per share for prior year quarter includes $1.32 for the effect of the enactment of the Tax Cuts and Jobs Act (“Tax Act”) in December 2017 and $(.10) for a one-time retirement bonus paid to retiring CEO)
  • Revenues of $161 million compared to $147 million for the prior year quarter; current quarter includes a $2.2 million increase in interest income and same store revenue increase of 8.5%
  • Increased sales volume productivity with 27.9 retail units sold per store per month, up from 27.2 for the prior year quarter  
  • Average retail sales price increased $484, or 4.5% from the prior year quarter to $11,146  
  • Gross profit margin percentage remained consistent at 41.5%
  • Collections as a percentage of average finance receivables increased to 13.2% from 12.5% for the prior year quarter.  The weighted average contract term decreased to 32.0 months from 32.4 months at the prior year quarter-end and decreased from 32.1 months at the end of the second quarter of 2019
  • Net Charge-offs as a percent of average finance receivables decreased to 6.2% from 7.4% for the prior year quarter
  • Accounts over 30 days past due decreased to 3.2% from 4.1% at January 31, 2018
  • Average percentage of finance receivables current increased to 83.0% from 80.4% at January 31, 2018
  • Provision for credit losses of 25.4% of sales vs. 29.5% for prior year quarter  
  • Selling, general and administrative expenses at 18.9% of sales vs. 20.2% for prior year quarter (19.4% excluding the one-time retirement bonus paid to retiring CEO)
  • Active accounts base over 75,000, an increase of almost 4,000 from April 30, 2018
  • Debt to equity of 69.5% and debt to finance receivables of 31.4%
  • Strong cash flows supporting the $7.1 million increase in finance receivables, $1.5 million in net capital expenditures and $10.2 million in common stock repurchases (141,500 shares) with a $5.9 million increase in total debt

Highlights of nine-month operating results:

  • Income before taxes of $41.5 million vs $25.2 million for prior year period
  • Net income of $33.0 million or $4.66 per diluted share vs. net income of $26.3 million or $3.48 per diluted share for prior year period (diluted earnings per share for prior year period includes $1.28 for the effect of the enactment of the Tax Act in December 2017 and $(.10) for a one-time retirement bonus paid to retiring CEO)
  • Income tax benefit related to share-based compensation of $1.5 million ($.22 per diluted share) compared to $777,000 ($.10 per diluted share) for the prior year period
  • Revenues of $492 million compared to $443 million for the prior year period; current period includes a $6.0 million increase in interest income and same store revenue increase of 10.5%
  • Retail unit sales increase of 5.6% to 37,163 from 35,189 for the prior year period with improved productivity at 29.3 retail units sold per store per month, up from 27.9 for the prior year period
  • Net Charge-offs as a percent of average finance receivables of 19.2%, down from 21.2% for prior year period
  • Provision for credit losses of 25.9% of sales vs. 28.6% of sales for prior year period 
  • Strong cash flows supporting the $41.5 million increase in finance receivables, $5.2 million increase in inventory, $3.0 million in net capital expenditures and $24.1 million in common stock repurchases (347,155 shares) with an $18.4 million increase in total debt

“We had a good quarter as we continue to see across the board improvements resulting from our focus on the Company’s Non-Negotiables related to inventory, facilities and associates, collections practices and expense management. There is real purpose in our work as we move forward with our efforts to be a great company in the eyes of our associates, customers and shareholders while improving lives in communities we serve. We believe that communities are better when served by America's Car-Mart. We have an obligation to grow our customer count at a rate that is in line with our ability to support associates and customers at the very highest levels. There is tremendous demand for our service, and we will continue to make significant investments in our people especially in our General Manager Recruitment, Training and Advancement Program,” said Jeff Williams, President and Chief Executive Officer. "Our productivity improvements have been made possible because of the investments we’ve made and it’s nice to see us leverage those investments so quickly. We are very excited about our future, and we will continue to invest in the key areas of the business. Our most important Non-Negotiable is related to how our blocking and tackling efforts are impacting customer relations and customer experience. Improving the customer experience at various touch points, without sacrificing basic daily discipline, is emerging as our top opportunity, and we are in a unique position to really move the needle in this important area."   

“We currently have four new dealership openings in process. These dealerships will be in Conway, Arkansas, Bryant, Arkansas, Chattanooga, Tennessee and Tyler, Texas,” said Mr. Williams. “Three of these dealerships will be managed by top-performing General Managers as we expand the number of locations and customers served to leverage their talents. Tyler, Texas is a re-opening and will be managed individually by an experienced General Manager. We are optimistic about these locations and excited to get started in these communities.”

“It is nice to see all of our key financial metrics continue to improve. Sales volume productivity is up 2.6% with same store revenues up over 8%, net charge-offs are down 120 basis points, collections are up 70 basis points, and the quarter-end delinquency percentage is down significantly. The financial results follow the operational improvements that Jeff mentioned. The fact that we were able to continue to invest in the key areas of the business and at the same time see some leveraging with our expenses is indicative of our commitment to grow in a healthy manner," said Vickie Judy, Chief Financial Officer. “We are all working very hard to make this company great and to take advantage of the opportunities that are in front of us as we help associates and customers succeed."

“We repurchased 141,500 shares of our common stock during the quarter at an average price of $72.20 for a total of $10.2 million. Since February 2010 we have repurchased 6.1 million shares at an average price of approximately $36. We plan to continue to repurchase shares opportunistically as we move forward. During the first nine months of the fiscal year, we have added over $41.5 million in receivables, repurchased $24.1 million of our common stock, funded $3.0 million in net capital expenditures, and increased inventory by $5.2 million to support higher sales levels with only a $18.4 million increase in debt. Our balance sheet is very strong with a debt to finance receivables ratio of 31.4%,” added Ms. Judy. “We will continue to focus on strong cash-on-cash returns while being mindful of the continuing infrastructure investment needs in the key areas of the business.”  

Conference Call

Management will be holding a conference call on Wednesday, February 20, 2019 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 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 #4196898.

About America's Car-Mart

America’s Car-Mart, Inc. (the “Company”) operates 143 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 and plans.

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.

____________________________
Contacts:              Jeffrey A. Williams, President and CEO (479) 418-8021 or Vickie D. Judy, CFO (479) 418-8081

                       
                % Change    As a % of Sales 
            Three Months Ended   2019   Three Months Ended 
            January 31,   vs.   January 31, 
            2019   2018   2018   2019   2018
Operating Data:                          
  Retail units sold   11,963   11,420   4.8 %            
  Average number of stores in operation   143   140   2.1              
  Average retail units sold per store per month   27.9   27.2   2.6              
  Average retail sales price   $ 11,146   $   10,662   4.5              
  Same store revenue growth   8.5%   7.1%                  
  Net charge-offs as a percent of average finance receivables 6.2%   7.4%                  
  Collections as a percent of average finance receivables   13.2%   12.5%                  
  Average percentage of finance receivables-current (excl. 1-2 day) 83.0%   80.4%                  
  Average down-payment percentage   5.5%   5.5%                  
                                   
Period End Data:                          
  Stores open   143   140   2.1 %            
  Accounts over 30 days past due   3.2%   4.1%                  
  Finance receivables, gross   $   542,893   $   497,652   9.1 %            
                                   
Operating Statement:                          
  Revenues:                          
    Sales     $   139,803   $   128,166   9.1 %   100.0 %   100.0 %
    Interest income   21,251   19,048   11.6     15.2     14.9  
        Total   161,054   147,214   9.4     115.2     114.9  
                                   
  Costs and expenses:                          
    Cost of sales   81,740   74,951   9.1     58.5     58.5  
    Selling, general and administrative   26,488   25,945   2.1     18.9     20.2  
    Provision for credit losses   35,555   37,872   (6.1)     25.4     29.5  
    Interest expense   2,110   1,482   42.4     1.5     1.2  
    Depreciation and amortization   985   1,057   (6.8)     0.7     0.8  
    (Gain) loss on disposal of property and equipment   (100)   84   (219.0)     (0.1)     0.1  
        Total   146,778   141,391   3.8     105.0     110.3  
                                   
        Income before taxes   14,276   5,823         10.2     4.5  
                                   
  (Benefit) provision for income taxes   3,381   (7,556)         2.4     (5.9)  
                                   
        Net income   $   10,895   $   13,379         7.8     10.4  
                                   
  Dividends on subsidiary preferred stock   $   (10)   $   (10)                  
                                   
        Net income attributable to common shareholders   $   10,885   $   13,369                  
                                   
Earnings per share:                          
  Basic     $   1.61   $   1.88                  
  Diluted     $   1.55   $   1.82                  
                                   
                                   
Weighted average number of shares used in calculation:                          
  Basic     6,751,026   7,106,715                  
  Diluted     7,003,389   7,345,428                  
                                   

 

                    % Change   As a % of Sales
            Nine Months Ended   2019   Nine Months Ended
            January 31,   vs.   January 31,
            2019   2018   2018   2019   2018
Operating Data:                          
  Retail units sold   37,163   35,189   5.6 %            
  Average number of stores in operation   141   140   0.7              
  Average retail units sold per store per month   29.3   27.9   5.0              
  Average retail sales price   $   11,062   $   10,487   5.5              
  Same store revenue growth   10.5%   3.3%                  
  Net charge-offs as a percent of average finance receivables 19.2%   21.2%                  
  Collections as a percent of average finance receivables   39.2%   37.2%                  
  Average percentage of finance receivables-current (excl. 1-2 day) 82.0%   80.5%                  
  Average down-payment percentage   5.8%   5.8%                  
                                   
Period End Data:                          
  Stores open   143   140   2.1 %            
  Accounts over 30 days past due   3.2%   4.1%                  
  Finance receivables, gross   $   542,893   $   497,652   9.1 %            
                                   
Operating Statement:                          
  Revenues:                          
    Sales     $   430,315   $   386,867   11.2 %   100.0 %   100.0 %
    Interest income   61,925   55,883   10.8     14.4     14.4  
        Total   492,240   442,750   11.2     114.4     114.4  
                                   
  Costs and expenses:                          
    Cost of sales   251,274   225,780   11.3     58.4     58.4  
    Selling, general and administrative   79,068   73,537   7.5     18.4     19.0  
    Provision for credit losses   111,619   110,778   0.8     25.9     28.6  
    Interest expense   5,895   3,978   48.2     1.4     1.0  
    Depreciation and amortization   2,949   3,244   (9.1)     0.7     0.8  
    (Gain) loss on disposal of property and equipment   (88)   188   (146.8)     -     -  
        Total   450,717   417,505   8.0     104.7     107.9  
                                   
        Income before taxes   41,523   25,245         9.6     6.5  
                                   
  (Benefit) provision for income taxes   8,464   (1,095)         2.0     (0.3)  
                                   
        Net income   $   33,059   $   26,340         7.7     6.8  
                                   
  Dividends on subsidiary preferred stock   $   (30)   $   (30)                  
                                   
        Net income attributable to common shareholders   $   33,029   $   26,310                  
                                   
Earnings per share:                          
  Basic     $   4.82   $   3.59                  
  Diluted     $   4.66   $   3.48                  
                                   
                                   
Weighted average number of shares used in calculation:                          
  Basic     6,846,707   7,336,687                  
  Diluted     7,087,430   7,556,255                  
                                   


      January 31,   April 30,   January 31,
      2019   2018   2018
               
Cash and cash equivalents $   1,624   $   1,022   $   534
Finance receivables, net $   414,913   $   383,617   $   380,384
Inventory   $   38,822   $   33,610   $   38,094
Total assets $   493,555   $   455,584   $   455,848
Total debt $   170,737   $   152,367   $   148,172
Treasury stock $   228,412   $   204,325   $   188,319
Total equity $   245,677   $   230,535   $   234,856
Shares outstanding   6,685,013     6,849,161     7,056,179
               
               
               
Finance receivables:          
  Principal balance $   542,893   $   501,438   $   497,652
  Deferred revenue - payment protection plan   (20,748)     (19,823)     (18,908)
  Deferred revenue - service contract   (10,224)     (10,332)     (9,672)
  Allowance for credit losses   (127,980)     (117,821)     (117,268)
               
  Finance receivables, net of allowance and deferred revenue $   383,941   $   353,462   $   351,804
               
               
  Allowance as % of principal balance net of deferred revenue 25.0%   25.0%   25.0%
               
               
               
Changes in allowance for credit losses:          
       Nine Months Ended     
       January 31,     
      2019   2018    
  Balance at beginning of period $   117,821   $   109,693    
  Provision for credit losses   111,619     110,778    
  Charge-offs, net of collateral recovered   (101,460)     (103,203)    
    Balance at end of period $   127,980   $   117,268    
               

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