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America's Car-Mart Reports Diluted Earnings per Share of $.66 (including a $.06 charge for lot closings) on Revenues of $153 Million

Company Release - 5/22/2017 5:10 PM ET

BENTONVILLE, Ark., May 22, 2017 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (NASDAQ:CRMT) today announced its operating results for the fourth quarter and full fiscal year 2017.

Highlights of fourth quarter operating results:

  • Net earnings of $5.2 million – $.66 per diluted share ($.72 per diluted share excluding a $500,000 non-cash after-tax charge resulting from costs associated with lot closings) vs. $.40 per diluted share for prior year quarter
  • Revenues of $153 million compared to $155 million for the prior year quarter including a $1.6 million increase in interest income and same store revenue increase of 1.3%
  • Increased sales volume productivity with 29.1 retail units sold per store per month, up from 28.2 for the prior year quarter  
  • Average retail sales price increased $13 to $10,654 or .1% from the prior year quarter (increased $25 or .2% sequentially)
  • Gross profit margin percentage increased to 41.5% from 38.7% for the prior year quarter
  • Collections as a percentage of average finance receivables decreased to 15.6% from 16.8% for the prior year quarter.  The weighted average contract term increased to 32.5 months from 31.6.
  • Net Charge-offs as a percent of average finance receivables of 8.7%, down from 9.0% for prior year quarter
  • Accounts over 30 days past due increased to 3.6% from 3.0% at April 30, 2016
  • Average percentage of finance receivables current improved slightly to 81% from 80.5% at April 30, 2016
  • Provision for credit losses of 28.4% of sales vs. 27.4% for prior year quarter  
  • Selling, general and administrative expenses at 17.2% of sales vs. 16.7% for prior year quarter
  • Active accounts base approximately 66,800
  • Debt to equity of 50.6% and debt to finance receivables of 25.3%
  • Allowance for credit losses at 25% of finance receivables, net of deferred revenue at April 30, 2017
  • Repurchased 365,364 shares of common stock for $12.3 million at an average cost of $33.70 per share

Highlights of full fiscal year operating results:

  • Net income of $20.2 million - $2.49 per diluted share vs. $1.33 per diluted share for the prior year
  • Revenues of $588 million compared to $568 million for the prior year including a $6.3 million increase in interest income and same store revenue increase of 3.5%
  • Retail unit sales increase of 1.4% to 47,116 from 46,483 for the prior year with productivity at 27.7 retail units sold per store per month, up from 26.7 for the prior year
  • Net Charge-offs as a percent of average finance receivables of 30.5%, down from 31.3% for prior year
  • Provision for credit losses of 28.7% of sales vs. 28.5% of sales (27.6% excluding second quarter increase to allowance for credit losses) for the prior year
  • Strong cash flows supporting the increase in revenues, the $29.6 million increase in finance receivables, $1.6 million in net capital expenditures, and $20.5 million in common stock repurchases (666,202 shares) with a $10 million increase in total debt

“We are pleased with the direction the Company is moving, and we are excited about our future. The competitive environment has been difficult the last few years, but we are seeing some positive indicators. We believe we are well positioned to continue to show improvements as we grow,” said William H. (“Hank”) Henderson, CEO. “By always focusing on our core values- Integrity, Respect, Compassion and Excellence, we will ensure that our customer relationships are strong and we fully expect success rates will improve. We will continue to push for operational improvements, and we are very appreciative of the efforts of our associates as we strive to earn the repeat business of our customers by providing quality vehicles, affordable payment terms and excellent service.”

“We are in the process of closing our Jefferson City, Missouri dealership to allocate resources to locations with better long-term potential. At the same time, we are in the process of opening a new dealership in Siloam Springs, Arkansas to take advantage of market opportunities,” said Mr. Henderson. “We continue to believe that every small town could use a Car-Mart and our investments in our General Managers will allow us to begin to open more new dealerships in the future.”

“We are encouraged by the increase in sales volume productivity and the same store revenue growth for the quarter. There is tremendous demand for the service we provide to our market and it is nice to see our hard work paying off with the productivity improvements. We remain committed to improving operations with increased investments in the recruitment, training and advancement of our General Managers as well as additional investments in the collections support area. Also, we are pleased to see the continuing improvements with our inventory management which resulted in a 280 basis point increase in our gross profit percentage. We are very appreciative of the efforts of our associates as they push to help our customers succeed by delivering great customer service,” said Jeff Williams, President of America’s Car-Mart, Inc. “Net Charge-Offs were down by 30 basis points as we did a nice job of adjusting to the delays with income tax refunds during the quarter. We are improving the relationships with our customers, but we know we can do much better and we will continue to prioritize our efforts in this area of the business.”        

“During the quarter, we re-purchased 365,364 shares of our common stock for approximately $12.3 million at an average price of $33.70 per share. Since February 2010, we have re-purchased 4.8 million shares (41% of the outstanding shares) for $155.3 million at an average cost of $32.23. We plan to continue to invest in stock re-purchases opportunistically as we move forward,” added Mr. Williams. “We will continue to focus on cash flows and maintaining a healthy balance sheet.  We ended the quarter with debt to equity of 50.6% and debt to finance receivables of 25.3%. We are excited about our future, and we will always put everything we have into making Car-Mart great.”

Conference Call

Management will be holding a conference call on Tuesday, May 23, 2017 at 11:00 a.m. Eastern Time to discuss fourth 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 #18425557.

About America's Car-Mart

America’s Car-Mart, Inc. (the “Company”) operates 140 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.

 
America's Car-Mart, Inc.
Consolidated Results of Operations
(Operating Statement Dollars in Thousands)
 
          % Change As a % of Sales
      Three Months Ended 2017 Three Months Ended
      April 30, vs. April 30,
       2017   2016  2016 2017 2016
Operating Data:             
 Retail units sold  12,126   12,345  (1.8)%      
 Average number of stores in operation  139   146  (4.8)       
 Average retail units sold per store per month  29.1   28.2  3.2        
 Average retail sales price $10,654  $10,641  0.1        
 Same store revenue growth  1.3%  7.8%         
 Net charge-offs as a percent of  average finance receivables  8.7%  9.0%         
 Collections as a percent of average finance receivables  15.6%  16.8%         
 Average percentage of finance receivables-current (excl. 1-2 day)  81.0%  80.5%         
 Average down-payment percentage  7.9%  8.4%         
                  
Period End Data:             
 Stores open  140   143  (2.1)%      
 Accounts over 30 days past due  3.6%  3.0%         
 Finance receivables, gross $466,854  $437,278  6.8 %      
                  
Operating Statement:             
 Revenues:             
  Sales  $136,032  $139,461  (2.5)% 100.0% 100.0%
  Interest income  16,885   15,288  10.4   12.4  11.0 
    Total  152,917   154,749  (1.2)  112.4  111.0 
                  
 Costs and expenses:             
  Cost of sales  79,581   85,501  (6.9)  58.5  61.3 
  Selling, general and administrative  23,464   23,310  0.7   17.2  16.7 
  Provision for credit losses  38,630   38,172  1.2   28.4  27.4 
  Interest expense  1,029   923  11.5   0.8  0.7 
  Depreciation and amortization  1,037   1,152  (10.0)  0.8  0.8 
  Loss on disposal of property and equipment  798   323  147.1   0.6  0.2 
    Total  144,539   149,381  (3.2)  106.3  107.1 
                  
    Income before taxes  8,378   5,368     6.2  3.8 
                  
 Provision for income taxes  3,136   2,005     2.3  1.4 
                  
    Net income $5,242  $3,363     3.9  2.4 
                  
 Dividends on subsidiary preferred stock $(10) $(10)         
                  
    Net income attributable to common shareholders $5,232  $3,353          
                  
Earnings per share:             
 Basic  $0.68  $0.41          
 Diluted  $0.66  $0.40          
                  
                  
Weighted average number of shares used in calculation:             
 Basic   7,737,420   8,123,456          
 Diluted   7,941,504   8,335,751          
                  


America's Car-Mart, Inc.
Consolidated Results of Operations
(Operating Statement Dollars in Thousands)
 
          % Change As a % of Sales
      Years Ended
 2017 Years Ended
      April 30,
 vs. April 30,
       2017   2016  2016 2017 2016
Operating Data:             
 Retail units sold  47,116   46,483  1.4 %      
 Average number of stores in operation  142   145  (2.1)       
 Average retail units sold per store per month  27.7   26.7  3.7        
 Average retail sales price $10,540  $10,361  1.7        
 Same store revenue growth  3.5%  2.7%         
 Net charge-offs as a percent of average finance receivables  30.5%  31.3%         
 Collections as a percent of average finance receivables  53.6%  57.5%         
 Average percentage of finance receivables-current (excl. 1-2 day)  80.2%  81.4%         
 Average down-payment percentage  6.0%  6.7%         
                  
Period End Data:             
 Stores open  140   143  (2.1)%      
 Accounts over 30 days past due  3.6%  3.0%         
 Finance receivables, gross $466,854  $437,278  6.8 %      
                  
Operating Statement:             
 Revenues:             
  Sales  $520,149  $506,517  2.7 % 100.0% 100.0%
  Interest income  67,602   61,389  10.1   13.0  12.1 
    Total  587,751   567,906  3.5   113.0  112.1 
                  
 Costs and expenses:             
  Cost of sales  304,927   304,886  0.0   58.6  60.2 
  Selling, general and administrative  91,940   92,242  (0.3)  17.7  18.2 
  Provision for credit losses  149,097   144,397  3.3   28.7  28.5 
  Interest expense  4,069   3,306  23.1   0.8  0.7 
  Depreciation and amortization  4,272   4,208  1.5   0.8  0.8 
  Loss on disposal of property and equipment  1,204   369  226.3   0.2  0.1 
    Total  555,509   549,408  1.1   106.8  108.5 
                  
    Income before taxes  32,242   18,498     6.2  3.7 
                  
 Provision for income taxes  12,037   6,902     2.3  1.4 
                  
    Net income $20,205  $11,596     3.9  2.3 
                  
 Dividends on subsidiary preferred stock $(40) $(40)         
                  
    Net income attributable to common shareholders $20,165  $11,556          
                  
Earnings per share:             
 Basic  $2.57  $1.38          
 Diluted  $2.49  $1.33          
                  
                  
Weighted average number of shares outstanding:             
 Basic   7,854,238   8,370,478          
 Diluted   8,110,777   8,666,031          
                  


America's Car-Mart, Inc. 
Consolidated Balance Sheet and Other Data 
(Dollars in Thousands)  
  
    April 30, April 30, April 30, 
     2017   2016   2015  
          
Cash and cash equivalents $434  $602  $790  
Finance receivables, net $357,161  $334,793  $324,144  
Inventory  $30,129  $29,879  $34,267  
Total assets $424,258  $406,296  $400,361  
Total debt $117,944  $107,902  $102,685  
Treasury stock $162,024  $141,535  $127,321  
Stockholders' equity $233,008  $228,817  $229,132  
Shares outstanding  7,608,471   8,073,820   8,529,223  
          
          
          
Finance receivables:       
 Principal balance $466,854  $437,278  $417,368  
 Deferred revenue - payment protection plan (18,472)  (17,305)  (15,652) 
 Deferred revenue - service contract (9,611)  (10,034)  (9,584) 
 Allowance for credit losses (109,693)  (102,485)  (93,224) 
          
 Finance receivables, net of allowance and deferred revenue$329,078  $307,454  $298,908  
          
          
 Allowance as % of principal balance net of deferred revenue 25.0%  25.0%  23.8% 
          
          
          
Changes in allowance for credit losses:      
    Years Ended   
    April 30,   
     2017   2016    
 Balance at beginning of period$102,485  $93,224    
 Provision for credit losses 149,097   144,397    
 Charge-offs, net of collateral recovered (141,889)  (135,136)   
  Balance at end of period$109,693  $102,485    
          


Contacts:
William H. (“Hank”) Henderson, CEO or Jeffrey A. Williams, President at (479) 464-9944

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Source: America's Car-Mart Inc.