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America's Car-Mart Reports Diluted Earnings per Share of $.16 (Reflects a $4.9 Million, or $.52 per Diluted Share, Non-Cash After-Tax Charge Resulting From an Increase to the Allowance for Credit Losses) on Revenue Increase of 3.1% to $123 Million

(February 18, 2014)

BENTONVILLE, Ark., Feb. 18, 2014 (GLOBE NEWSWIRE) -- America's Car-Mart, Inc. (Nasdaq:CRMT) today announced its operating results for the third quarter of fiscal 2014.



Highlights of third quarter operating results:




  • Net income of $1.5 million - $.16 per diluted share ($.68 per diluted share excluding a $4.9 million non-cash after-tax charge resulting from an increase to the allowance for credit losses) vs. $.84 per diluted share for prior year quarter


  • Revenues of $123 million compared to $119 million for the prior year quarter with same store revenue decrease of 2.8%


  • Retail unit sales increase of 3.2% to 10,735 from 10,403 for the prior year quarter with 27.7 retail units sold per dealership per month down from 29.4 for prior year quarter


  • Average retail sales price decreased $58 to $9,739 or 0.6% from the prior year quarter and increased $29 or 0.3% sequentially


  • Net charge-offs as a percent of average finance receivables of 6.7%, up from 5.7% for prior year quarter


  • Delinquencies over 30 days at 5.8% of finance receivables vs. 6.0% for the prior year


  • Provision for credit losses of 33.9% of sales (26.8% excluding the effect of the increase in the allowance for credit losses) vs. 23.7% for prior year quarter


  • Selling, General and Administrative Expenses at 18.1% of sales vs. 17.7% for prior year quarter


  • Opened two new dealerships since the end of the 2nd quarter, our newest dealership opened in Troy, AL this week - dealership count now at 131


  • Active accounts base now over 62,000


  • Repurchased 200,000 shares (2.2%) of common stock during the quarter


  • Debt to equity of 54.3% and debt to finance receivables of 28.5%


  • Allowance for credit losses at 23.5% of finance receivables at January 31, 2014, up from 21.5%



Highlights of nine month operating results:



  • Net income of $14.8 million or $1.56 per diluted share ($2.08 per diluted share excluding a $4.9 million non-cash after-tax charge resulting from an increase to the allowance for credit losses) vs. $2.43 per diluted share for prior year period


  • Revenue increase of 8.1% to $367 million from $339 million for the prior year period with same store revenue growth of 1.8%


  • Retail unit sales increase of 6.7% to 31,986 from 29,970 for the prior year period


  • Net Charge-offs as a percentage of average finance receivables of 19.8% compared to 18.1% for the prior year


  • Provision for credit losses of 28.2% of sales (25.8% excluding the effect of the increase in the allowance for credit losses) vs. 23.3% for prior year period


  • Strong cash flows supporting the significant increase in revenues, the $37.3 million increase in finance receivables, $5.5 million in net capital expenditures and the $8.7 million in common stock repurchases (212,620 shares, or 2.4%) with only a $14.8 million increase in total debt



"Despite the pressure we are feeling in the current competitive environment, we are continuing to see some good growth. We remain committed to growing our business the right way with the realization that so long as the competition does not share our same focus on customer success, our results could continue to be affected somewhat. There are a lot of good people who are currently signing up on financial arrangements with our competitors for what we believe are impractical terms that are not in their long-term best interest. We will continue to do our very best to set our customers up to succeed so that we will be in a position to earn their repeat business in the future. Anything short of our customers successfully completing the terms of their individual contracts is not acceptable to us and not in line with how we believe this business should operate. Unfortunately, the current environment is contributing to higher levels of charge-offs and we will continue to work hard to reverse these trends," said William H. ("Hank") Henderson, President and Chief Executive Officer of America's Car-Mart.




"We have opened seven new dealerships this year and have four more projects underway that we expect to open between now and the end of our fiscal year. Our new dealerships are performing well and we are excited to be adding great new towns to our footprint. We have added almost 4,400 active accounts and are working hard to make these new customers, and our existing customers, fans for life of America's Car-Mart," added Mr. Henderson.



"Excluding the effect of the increase in the allowance for credit losses, we earned $.68 per diluted share for the quarter. While this is certainly below where we had hoped to be, the decrease can be attributed to the continuing intense competitive environment that we are facing on the funding side coupled with the fact that our customers continue to be under significant pressure due to the persistent negative macro-economic environment. We know we can do better, but the business model is certainly being stress tested by forces outside of our control. We are working hard to continue to grow in a healthy manner so that we are in a good position if conditions change in our favor," said Jeff Williams, Chief Financial Officer of America's Car-Mart. "Because of the stubbornly high net charge-off levels, and our expectation that tough conditions will continue at least over the short-term to mid-term, it was necessary for us to increase our allowance for credit losses to 23.5% from 21.5%. The last time we adjusted our allowance was in April 2012 when we reduced the percentage to 21.5% from 22.0%. Prior to April 2012 the last time an adjustment was made to the allowance was in October 2006 when it was increased to 22% from 19.2%. This non-cash charge will not in any way affect our efforts to help our customers succeed, and our cash on cash returns continue to be very attractive even with higher charge-off levels. We are focused on maximizing efficiencies on the operating expense side of the business and are committed to always being the lowest cost operator."



"Our debt to equity was 54.3% and our debt to finance receivables was 28.5% at the end of the quarter. We are committed to maintaining a conservative balance sheet," added Mr. Williams. "We repurchased 200,000 shares of our common stock during the quarter or about 2.2% of the outstanding shares. Since February 1, 2010 we have repurchased 3.1 million shares or 27% of the company. We will continue to stay focused on cash on cash returns and aggressive expense management. We believe in the long-term value of our company and will continue to invest in the repurchase program when we believe favorable conditions exist. Our first priority for capital allocation will continue to be to support the healthy growth of the business."



Conference Call



Management will be holding a conference call on Wednesday, February 19, 2014 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 one hour following the call for thirty days and can be accessed by calling (855) 859-2056 (domestic) or (404) 537-3406 (international), conference call ID # 59350030.



About America's Car-Mart



America's Car-Mart, Inc. (the "Company") operates 131 automotive dealerships in ten 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.



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

2014

Three Months Ended

 

January 31,

vs.

January 31,

 

2014

2013

2013

2014

2013

Operating Data:

 

 

 

 

 

Retail units sold

 10,735

 10,403

 3.2%

 

 

Average number of stores in operation

 129

 118

 9.3

 

 

Average retail units sold per store per month

 27.7

 29.4

 (5.8)

 

 

Average retail sales price

 $ 9,739

 $ 9,797

 (0.6)

 

 

Same store revenue growth

(2.8)%

8.8%

 

 

 

Net charge-offs as a percent of average Finance Receivables

6.7%

5.7%

 

 

 

Collections as a percent of average Finance Receivables

13.3%

13.4%

 

 

 

Average percentage of Finance Receivables-Current (excl. 1-2 day)

79.3%

80.5%

 

 

 

Average down-payment percentage

4.0%

3.9%

 

 

 

 

 

 

 

 

 

Period End Data:

 

 

 

 

 

Stores open

 130

 120

 8.3%

 

 

Accounts over 30 days past due

5.8%

6.0%

 

 

 

Finance Receivables, gross

 $ 400,651

 $ 363,918

 10.1%

 

 

 

 

 

 

 

 

Operating Statement:

 

 

 

 

 

Revenues:

 

 

 

 

 

Sales

 $ 108,400

 $ 106,215

 2.1%

 100.0%

 100.0%

Interest income

 14,188

 12,707

 11.7

 13.1

 12.0

Total

 122,588

 118,922

 3.1

 113.1

 112.0

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of sales

 62,092

 60,941

 1.9

 57.3

 57.4

Selling, general and administrative

 19,650

 18,775

 4.7

 18.1

 17.7

Provision for credit losses

 36,776

 25,189

 46.0

 33.9

 23.7

Interest expense

 779

 795

 (2.0)

 0.7

 0.7

Depreciation and amortization

 835

 712

 17.3

 0.8

 0.7

Loss on Disposal of Property and Equipment

 37

 -- 

 -- 

 -- 

 -- 

Total

 120,169

 106,412

 12.9

 110.9

 100.2

 

 

 

 

 

 

Income before taxes

 2,419

 12,510

 

 2.2

 11.8

 

 

 

 

 

 

Provision for income taxes

 949

 4,530

 

 0.9

 4.3

 

 

 

 

 

 

Net income

 $ 1,470

 $ 7,980

 

 1.4

 7.5

 

 

 

 

 

 

Dividends on subsidiary preferred stock 

 $ (10)

 $ (10)

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

 $ 1,460

 $ 7,970

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

Basic

 $ 0.16

 $ 0.88

 

 

 

Diluted

 $ 0.16

 $ 0.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

Basic

 8,917,826

 9,017,613

 

 

 

Diluted

 9,370,635

 9,451,473

 

 

 

























































































































































































































































































































































































































































 

 

 

 

 

 

America's Car-Mart, Inc. 

Consolidated Results of Operations 

(Operating Statement Dollars in Thousands)

 

 

 

% Change

As a % of Sales

 

Nine Months Ended

2014

Nine Months Ended

 

 January 31,

vs.

 January 31,

 

2014

2013

2013

2014

2013

Operating Data:

 

 

 

 

 

Retail units sold

 31,986

 29,970

 6.7%

 

 

Average number of stores in operation

 127

 116

 9.5

 

 

Average retail units sold per store per month

 28.0

 28.7

 (2.4)

 

 

Average retail sales price

 $ 9,762

 $ 9,635

 1.3

 

 

Same store revenue growth

1.8%

2.8%

 

 

 

Net charge-offs as a percent of average Finance Receivables

19.8%

18.1%

 

 

 

Collections as a percent of average Finance Receivables

40.5%

42.8%

 

 

 

Average percentage of Finance Receivables-Current (excl. 1-2 day)

80.5%

81.5%

 

 

 

Average down-payment percentage

5.6%

5.8%

 

 

 

 

 

 

 

 

 

Period End Data:

 

 

 

 

 

Stores open

 130

 120

 8.3%

 

 

Accounts over 30 days past due

5.8%

6.0%

 

 

 

Finance Receivables, gross

 $ 400,651

 $ 363,918

 10.1%

 

 

 

 

 

 

 

 

Operating Statement:

 

 

 

 

 

Revenues:

 

 

 

 

 

Sales

 $ 325,314

 $ 302,706

 7.5%

 100.0%

 100.0%

Interest income

 41,249

 36,435

 13.2

 12.7

 12.0

Total

 366,563

 339,141

 8.1

 112.7

 112.0

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of sales

 187,537

 173,330

 8.2

 57.6

 57.3

Selling, general and administrative

 59,045

 53,982

 9.4

 18.2

 17.8

Provision for credit losses

 91,602

 70,499

 29.9

 28.2

 23.3

Interest expense

 2,291

 2,156

 6.3

 0.7

 0.7

Depreciation and amortization

 2,407

 2,070

 16.3

 0.7

 0.7

Loss on Disposal of Property and Equipment

 76

 -- 

 -- 

 -- 

 -- 

Total

 342,958

 302,037

 13.5

 105.4

 99.8

 

 

 

 

 

 

Income before taxes

 23,605

 37,104

 

 7.3

 12.3

 

 

 

 

 

 

Provision for income taxes

 8,789

 13,728

 

 2.7

 4.5

 

 

 

 

 

 

Net income

 $ 14,816

 $ 23,376

 

 4.6

 7.7

 

 

 

 

 

 

Dividends on subsidiary preferred stock 

 $ (30)

 $ (30)

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

 $ 14,786

 $ 23,346

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

Basic

 $ 1.65

 $ 2.55

 

 

 

Diluted

 $ 1.56

 $ 2.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

Basic

 8,984,958

 9,142,296

 

 

 

Diluted

 9,449,380

 9,593,854

 

 

 



























































































































































































 

 

 

America's Car-Mart, Inc.

Consolidated Balance Sheet and Other Data

(Dollars in Thousands)

 

January 31, 

April 30,

 

2014

2013

 

 

 

Cash and cash equivalents

 $ 256

 $ 272

Finance receivables, net

 $ 309,709

 $ 288,049

Inventory

 $ 34,242

 $ 32,827

Total assets

 $ 382,831

 $ 358,265

Total debt

 $ 114,339

 $ 99,563

Treasury stock

 $ 103,286

 $ 94,547

Stockholders' equity

 $ 210,453

 $ 202,268

Shares outstanding

 8,845,320

 9,023,290

 

 

 

 

 

 

 

 

 

Finance receivables:

 

 

Principal balance

 $ 400,651

 $ 363,394

Deferred revenue - payment protection plan

 (13,664)

 (12,910)

Allowance for credit losses

 (90,942)

 (75,345)

 

 

 

Finance receivables, net of allowance and deferred revenue

 $ 296,045

 $ 275,139

 

 

 

 

 

 

Allowance as % of principal balance

23.50%

21.50%

 

 

 

 

 

 

 

 

 

Changes in allowance for credit losses:

 

 

 

Nine Months

 

Ended January 31, 

 

2014

2013

Balance at beginning of period

 $ 75,345

 $ 65,831

Provision for credit losses

 91,602

 70,499

Charge-offs, net of collateral recovered

 (76,005)

 (60,764)

Balance at end of period

 $ 90,942

 $ 75,566

CONTACT: William H. ("Hank") Henderson, CEO at (479) 464-9944 or
Jeffrey A. Williams, CFO at (479) 418-8021



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