BENTONVILLE, Ark., March 4, 2008 (PRIME NEWSWIRE) -- America's Car-Mart, Inc. (Nasdaq:CRMT) today announced its operating results for the third fiscal quarter ended January 31, 2008.
Highlights of third quarter operating results:
* Net income of $3.4 million or $.28 per diluted share vs. a net loss of $50,000, or ($.00) per diluted share for the third fiscal quarter of 2007 * Overall revenue growth of 19.9% with same store revenue growth of 18.7% * Retail unit sales increase of 17.1% * Collections as a percentage of average finance receivables of 16.6% compared to 16.2% for prior year * Provision for credit losses of 23.4% of sales vs. 30.6% for the third fiscal quarter of 2007 * Accounts over 30 days past due down to 3.7% at January 31, 2008 (historical average for end of 3rd quarter has been approximately 4.5%) * Finance receivables increase of $7.9 million or 4.2% for the quarter to $198 million * Debt to equity of 30.7% and debt to finance receivables of 20.5%
For the three months ended January 31, 2008, revenues increased 19.9% to $71.1 million compared with $59.3 million in the same period of the prior year. Income for the quarter was $3.4 million or $.28 per diluted share, versus a net loss of $50,000, or ($.00) per diluted share in the same period last year. Included in the current quarter results is a $596,000 pre-tax non-cash charge related to stock based compensation ($.03 after tax per diluted share) and a $373,000 charge related to the closure of the Wichita, Kansas location ($.02 after tax per diluted share). Exclusive of the above charges the Company earned $.33 per diluted share for the quarter. The results for the prior year quarter included an $89,000 pre-tax non-cash charge for stock based compensation. Retail unit sales were up 17.1%, with 7,031 vehicles in the current quarter, compared to 6,002 in the same period last year. Same store revenue increased 18.7% during the quarter. Finance receivables grew by $7.9 million or 4.2% to $198 million as the result of higher vehicle sales volumes and prices. The allowance for credit losses is 22% of finance receivables principal balance at January 31, 2008 and 2007.
Highlights of nine month operating results:
* Net income of $9.0 million or $.75 per diluted share vs. $2.2 million or $.18 per diluted share for the prior year * Overall revenue growth of 9.4% with same store revenue growth of 7.3% * Retail unit sales increase of 2.6% * Collections as a percentage of average finance receivables of 50.4% compared to 48.2% for prior year * Provision for credit losses of 22.8% of sales compared to 29.9% for the prior year * Finance receivables increase of $19.3 million or 10.8% to $198 million
Along with our significantly improved GAAP earnings the Company has also generated strong cash flows from operations which were used to:
* Repurchase 186,967 shares of stock (approximately 1.5%) for $2.2 million * Increase finance receivables by $19.3 million * Fund over $2 million in capital expenditures (most of which related to upgrades of existing locations) * Decrease total debt by $333,000
For the nine months ended January 31, 2008, revenues increased 9.4% to $198.1 million, compared with $181.0 million in the same period of the prior fiscal year. Income for the first nine months of fiscal 2008 was $9.0 million ($.75 per diluted share) compared to $2.2 million ($.18 per diluted share) for the same period in the prior year. The prior year results included a non-cash, pre-tax increase in the allowance for loan losses of $5.3 million at October 31, 2006. Retail unit sales increased 2.6% to 19,792 vehicles in the current period, compared to 19,282 vehicles in the same period last year.
"Retail unit sales were up strongly during the quarter on a store base that was not much larger than a year ago (94 to 90). As we have previously indicated, one of our major goals this year was to increase the profitability of our current stores prior to accelerating our new dealership openings," said William H. ("Hank") Henderson, Chief Executive Officer of America's Car Mart. "We are making substantial progress towards achieving that goal, as our existing dealerships have significantly increased their sales volumes, but at the same time have adhered to our disciplined underwriting guidelines, including higher down payments at certain dealerships and shorter loan terms. In addition, we have been able to source a good mix of quality vehicles to attract new customers and retain a high percentage of our existing customers. The Payment Protection Plan continues to be a real winner for us and a great product for our current, new and repeat customers. Our higher sales levels and continued improvement in credit losses (average percentage of finance receivables current was 82.3% for the quarter compared to 80% for the prior period, and net charge-offs as a percentage of average finance receivables at 6.9% compared to 9.2% for the prior period) are good indicators of our progress."
"We saw strong sales volumes throughout the peak tax refund season, and that momentum has continued," added Mr. Henderson. "Even though we did a high volume of refund anticipation sales during the quarter, our down payments for the nine-month period were 6.5% compared to 5.5% last year, a significant improvement. With this large number of deferred down payment transactions, we are expecting, and have already begun to see, increases in fourth quarter collections and further reductions in our delinquencies as our customers apply their tax refunds to their deferred down payments and outstanding balances. Also, we expect the Economic Stimulus Act of 2008 to provide our current and potential new customers with additional funds beginning in early May which should have a positive effect on our sales volumes and collections. We continue to focus on economic profit at the unit and dealership level, and we expect our positive results will continue."
"We are extremely proud of our strong cash flows from operations and our strong balance sheet," said T. J. ("Skip") Falgout, III, Chairman of the Board of America's Car Mart. "While staying focused on our basic business model, we have strategically improved the structure of our financing transactions; and, as a result, during the nine-month period, we have grown finance receivables by over $19 million, repurchased $2.2 million of stock (186,967 shares, all during the third quarter), had over $2 million in capital expenditures and, at the same time, have seen our debt levels decrease during the year. We will continue to take steps to increase our cash flows from operations and further strengthen our balance sheet at a time when so many of our competitors are experiencing difficulties in today's credit environment."
Conference Call
Management will be holding a conference call on Tuesday, March 4, 2008 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 (800) 309-9490. International callers dial (706) 634-0104. Callers should dial in approximately 10 minutes before the call begins.
A conference call replay will be available one hour following the call for seven days and can be accessed by calling (800) 642-1687 (domestic) or (706) 645-9291 (international), conference call ID #25372956.
About America's Car-Mart
America's Car-Mart operates 94 automotive dealerships in eight states and is the largest publicly held automotive retailer in the United States focused exclusively on the "Buy Here/Pay Here" segment of the used car market. 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 on America's Car-Mart, please visit our website at www.car-mart.com.
Included herein are forward-looking statements, including statements with respect to projected revenues and earnings per share amounts. Such forward-looking statements are based upon management's current knowledge and assumptions. There are many factors that affect management's view about future revenues and earnings. These factors involve risks and uncertainties that could cause actual results to differ materially from management's present view. These factors include, without limitation, assumptions relating to unit sales, average selling prices, credit losses, gross margins, operating expenses, collection results, operational initiatives underway and economic conditions, and other risk factors described under "Forward-Looking Statements" of Item 1A of Part I of the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2007 and its current and quarterly reports filed with or furnished to the Securities and Exchange Commission. All forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company does not undertake any obligation to update forward-looking statements.
America's Car-Mart, Inc.
Consolidated Results of Operations
(Operating Statement Dollars in Thousands)
As a % of
% Sales
Change --------------
------ Three Months
Three Months Ended 2008 Ended
January 31, vs. January 31,
2008 2007 2007 2008 2007
---------- ---------- ------ ------ ------
Operating Data:
Retail units sold 7,031 6,002 17.1%
Average number of
stores in operation 94.0 90.0 4.4
Average retail units
sold per store per
month 24.9 22.2 12.2
Average retail sales
price $ 8,801 $ 8,293 6.1
Same store revenue
growth 18.7% -5.3%
Net charge-offs as a
percent of average
Finance Receivables 6.9% 9.2%
Collections as a
percent of average
Finance Receivables 16.6% 16.2%
Average percentage of
Finance Receivables-
Current (excl. 1-2
day) 82.3% 80.0%
Average down-payment
percentage 5.2% 5.2%
Period End Data:
Stores open 94 91 3.3%
Accounts over 30 days
past due 3.7% 3.8%
Finance Receivables,
gross $ 197,848 $ 185,144 6.9%
Operating Statement:
Revenues:
Sales $ 64,877 $ 53,376 21.5% 100.0% 100.0%
Interest income 6,262 5,932 5.6 9.7 11.1
---------- ---------- ------ ------
Total 71,139 59,308 19.9 109.7 111.1
---------- ---------- ------ ------
Costs and expenses:
Cost of sales 36,874 31,289 17.8 56.8 58.6
Selling, general and
administrative 12,443 10,489 18.6 19.2 19.7
Provision for credit
losses 15,197 16,342 (7.0) 23.4 30.6
Interest expense 760 1,027 (26.0) 1.2 1.9
Depreciation and
amortization 296 254 16.5 0.5 0.5
Loss on Lot Closure 373 -- 0.6 --
---------- ---------- ------ ------
Total 65,943 59,401 11.0 101.6 111.3
---------- ---------- ------ ------
Income (loss) before
taxes 5,196 (93) 8.0 (0.2)
Provision (benefit)
for income taxes 1,818 (43) 2.8 (0.1)
---------- ---------- ------ ------
Net income (loss) $ 3,378 $ (50) 5.2 (0.1)
========== ========== ====== ======
Earnings (loss) per
share:
Basic $ 0.29 $ (0.00)
Diluted $ 0.28 $ (0.00)
Weighted average number
of shares outstanding:
Basic 11,850,841 11,852,875
Diluted 11,921,694 11,852,875
America's Car-Mart, Inc.
Consolidated Results of Operations
(Operating Statement Dollars in Thousands)
As a % of
% Sales
Change -------------
------ Nine Months
Nine Months Ended 2008 Ended
January 31, vs. January 31,
2008 2007 2007 2008 2007
---------- ---------- ------ ----- -----
Operating Data:
Retail units sold 19,792 19,282 2.6%
Average number of
stores in operation 93.0 89.0 4.5
Average retail units
sold per store per
month 23.6 24.1 (2.1)
Average retail sales
price $ 8,578 $ 8,046 6.6
Same store revenue
growth 7.3% -0.5%
Net charge-offs as a
percent of average
Finance Receivables 20.1% 23.1%
Collections as a
percent of average
Finance Receivables 50.4% 48.2%
Average percentage of
Finance Receivables-
Current (excl. 1-2
day) 82.4% 78.7%
Average down-payment
percentage 6.5% 5.5%
Period End Data:
Stores open 94 91 3.3%
Accounts over 30 days
past due 3.7% 3.8%
Finance Receivables,
gross $ 197,848 $ 185,144 6.9%
Operating Statement:
Revenues:
Sales $ 179,968 $ 163,383 10.2% 100.0% 100.0%
Interest income 18,121 17,655 2.6 10.1 10.8
---------- ---------- ------ ------
Total 198,089 181,038 9.4 110.1 110.8
---------- ---------- ------ ------
Costs and expenses:
Cost of sales 104,440 93,765 11.4 58.0 57.4
Selling, general and
administrative 35,268 31,405 12.3 19.6 19.2
Provision for credit
losses 40,948 48,846(a) (16.2) 22.8 29.9
Interest expense 2,390 2,855 (16.3) 1.3 1.7
Depreciation and
amortization 848 725 17.0 0.5 0.4
Loss on Lot Closure 373 0.2
---------- ---------- ------ ------
Total 184,267 177,596 3.8 102.4 108.7
---------- ---------- ------ ------
Income before taxes 13,822 3,442 7.7 2.1
Provision for income
taxes 4,837 1,265 2.7 0.8
---------- ---------- ------ ------
Net income $ 8,985 $ 2,177 5.0 1.3
========== ========== ====== ======
Earnings per share:
Basic $ 0.76 $ 0.18
Diluted $ 0.75 $ 0.18
Weighted average number
of shares outstanding:
Basic 11,868,310 11,849,257
Diluted 11,950,353 11,958,615
(a) The fiscal 2007 amount includes a non-cash charge of $5,271,000
related to an increase in the allowance for credit losses to 22%
from 19.2% at October 31, 2006.
America's Car-Mart, Inc.
Consolidated Balance Sheets and Other Data
January 31, April 30,
2008 2007
----------- -----------
Cash and cash equivalents $ 183 $ 257
Finance receivables, net $ 155,191 $ 139,194
Total assets $ 195,140 $ 173,598
Total debt $ 40,496 $ 40,829
Stockholders' equity $ 131,875 $ 123,728
Shares outstanding 11,752,993 11,874,708
Finance receivables:
Principal balance $ 197,848 $ 178,519
Deferred Revenue - Payment Protection
Plan $ (4,114) $ --
Allowance for credit losses (42,657) (39,325)
----------- -----------
Finance receivables, net of allowance
and deferred revenue $ 151,077 $ 139,194
=========== ===========
Allowance as % of principal balance 22.02%(a) 22.03%(a)
=========== ===========
(a) Represents the weighted average for Finance Receivables generated
by the Company (at 22.0%) and purchased Finance Receivables.
Changes in allowance for credit losses:
Nine Months
Ended January 31,
2008 2007
----------- -----------
Balance at beginning of period $ 39,325 $ 35,864
Provision for credit losses 40,948 48,846
Charge-offs, net of collateral
recovered (37,391) (43,804)
Allowance related to purchased/sold
accounts (225) 204
----------- -----------
Balance at end of year $ 42,657 $ 41,110
=========== ===========