BENTONVILLE, Ark., Feb. 19, 2018 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (NASDAQ:CRMT) today announced its operating results for the third quarter of fiscal year 2018.
Highlights of third quarter operating results:
Highlights of nine-month operating results:
“We are pleased with what we would consider a good, solid quarter. Fundamentals across the board were good and the business continues to move in the right direction. We are especially pleased with our sales volume productivity improvement of 7.5%, and at the same time the significant improvement with our down-payment percentage, which can be attributed to our continuing efforts to strengthen our inventory management processes and our lot level sales execution efforts,” said Jeff Williams, Chief Executive Officer. “We believe that we are further differentiating our offering from the competition by continuing to focus on buying quality cars at appropriate prices and then managing the entire inventory cycle at a much higher level. We will continue to push for improvements in this critical area. Collections were up for the quarter, net charge-offs were down, and we saw a significant reduction in the percentage of accounts over 30 days past due. Again, this does not happen by accident and is the direct result of the dedication, focus and hard work of our associates who are passionate about helping our customers succeed. We are in a tough business, but it’s a business with great purpose and our associates are up to the challenge. We are proud of where we are and excited about our future.”
“We continue to invest in our General Manager Recruitment, Training and Advancement program. Our plan is to support our top performing General Managers with opportunities to serve significantly more customers, which may include additional dealerships under their management. At the same time, we will continue to train and support our less experienced General Managers while recruiting talented, passionate people into the Company,” said Mr. Williams. “We currently have several newer, less seasoned General Managers, and we are excited to support them and watch them grow into top performers over time.”
“We did open two new dealerships during the quarter – one in Centerton, Arkansas and one in Bowling Green, Kentucky, which are being managed by top performing, tenured General Managers. We are excited about these locations and the potential they represent. We did also close two underperforming dealerships during the quarter, both were smaller locations with limited potential and we believe our capital will be better utilized in other areas,” commented Mr. Williams.
“Selling, general, and administrative ('SG&A') expenses as a percentage of sales increased for the quarter as we continue to build an infrastructure to support a growing business. Most recently, our investments have been heavily focused on General Manager Recruitment, Training and Advancement, and Collections Support as well as improvements with our sales and marketing efforts,” said Vickie Judy, Chief Financial Officer. “SG&A during the third quarter was up due to the payment of $1.1 million ($0.10 per diluted share) as a retirement bonus to our retiring CEO, Hank Henderson, along with increased bonus and commission accruals because of the increased net income. Several of our associates are compensated based on net income and the benefit of the lower tax rates will result in increased pay for these hard-working associates. We were excited to see the increase in sales volume productivity, and we expect productivity will continue to improve as we move forward, which will allow us to leverage our expenses.”
“A decrease in provision for income taxes of $9.7 million was recorded primarily due to the enactment of the Tax Cuts and Jobs Act in December 2017. While the new federal statutory rate was not effective until January 1, 2018, we were required to revalue deferred taxes as of December 31, 2017 at the new federal statutory rate and adjust current net tax liabilities to a ‘blended’ base rate of 33% for fiscal 2018 as required by the Tax Act based on the number of days the new rates were in effect. Based on currently enacted federal and state statutory income tax rates, we believe our long-term effective tax rate will decrease from approximately 37% in past years to approximately 24% in fiscal 2019 and future years,” explained Ms. Judy.
“We repurchased 141,717 shares of common stock (2.0%) during the quarter at an average price of approximately $43.80. Since February 2010 we have repurchased 5.5 million shares (47%) at an average price of approximately $33. We plan to continue to repurchase shares opportunistically as we move forward. In the last nine months, we have added $31 million in receivables, repurchased $26 million of our common stock, funded $1.5 million in net capital expenditures, and increased inventory by $8 million to support higher sales levels with only a $30 million increase in debt. Our balance sheet is still very strong with debt to finance receivables ratio of 29.8% compared to 25% at this time last year,” added Ms. Judy. “Our cash-on-cash returns continue to be very strong, and we will endeavor to be the lowest cost operator in the industry 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 Tuesday, February 20, 2018 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 # 6788638.
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:
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:
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 | 2018 | Three Months Ended | |||||||||||||||
January 31, | vs. | January 31, | |||||||||||||||
2018 | 2017 | 2017 | 2018 | 2017 | |||||||||||||
Operating Data: | |||||||||||||||||
Retail units sold | 11,420 | 10,866 | 5.1 | % | |||||||||||||
Average number of stores in operation | 140 | 143 | (2.1 | ) | |||||||||||||
Average retail units sold per store per month | 27.2 | 25.3 | 7.5 | ||||||||||||||
Average retail sales price | $ | 10,662 | $ | 10,629 | 0.3 | ||||||||||||
Same store revenue growth | 7.1% | 1.1% | |||||||||||||||
Net charge-offs as a percent of average finance receivables | 7.4% | 7.8% | |||||||||||||||
Collections as a percent of average finance receivables | 12.5% | 12.4% | |||||||||||||||
Average percentage of finance receivables-current (excl. 1-2 day) | 80.4% | 79.5% | |||||||||||||||
Average down-payment percentage | 5.5% | 4.3% | |||||||||||||||
Period End Data: | |||||||||||||||||
Stores open | 140 | 143 | (2.1 | )% | |||||||||||||
Accounts over 30 days past due | 4.1% | 4.7% | |||||||||||||||
Finance receivables, gross | $ | 497,652 | $ | 475,354 | 4.7 | % | |||||||||||
Operating Statement: | |||||||||||||||||
Revenues: | |||||||||||||||||
Sales | $ | 128,166 | $ | 121,263 | 5.7 | % | 100.0 | % | 100.0 | % | |||||||
Interest income | 19,048 | 17,521 | 8.7 | 14.9 | 14.4 | ||||||||||||
Total | 147,214 | 138,784 | 6.1 | 114.9 | 114.4 | ||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of sales | 74,951 | 71,836 | 4.3 | 58.5 | 59.2 | ||||||||||||
Selling, general and administrative | 25,945 | 22,654 | 14.5 | 20.2 | 18.7 | ||||||||||||
Provision for credit losses | 37,872 | 37,645 | 0.6 | 29.5 | 31.0 | ||||||||||||
Interest expense | 1,482 | 1,060 | 39.8 | 1.2 | 0.9 | ||||||||||||
Depreciation and amortization | 1,057 | 1,059 | (0.2 | ) | 0.8 | 0.9 | |||||||||||
Loss on disposal of property and equipment | 84 | 7 | 1,100.0 | 0.1 | 0.0 | ||||||||||||
Total | 141,391 | 134,261 | 5.3 | 110.3 | 110.7 | ||||||||||||
Income before taxes | 5,823 | 4,523 | 4.5 | 3.7 | |||||||||||||
(Benefit) Provision for income taxes | (7,556 | ) | 1,687 | (5.9 | ) | 1.4 | |||||||||||
Net income | $ | 13,379 | $ | 2,836 | 10.4 | 2.3 | |||||||||||
Dividends on subsidiary preferred stock | $ | (10 | ) | $ | (10 | ) | |||||||||||
Net income attributable to common shareholders | $ | 13,369 | $ | 2,826 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 1.88 | $ | 0.36 | |||||||||||||
Diluted | $ | 1.82 | $ | 0.35 | |||||||||||||
Weighted average number of shares used in calculation: | |||||||||||||||||
Basic | 7,106,715 | 7,893,737 | |||||||||||||||
Diluted | 7,345,428 | 8,175,754 | |||||||||||||||
America's Car-Mart, Inc. | |||||||||||||||||
Consolidated Results of Operations | |||||||||||||||||
(Operating Statement Dollars in Thousands) | |||||||||||||||||
% Change | As a % of Sales | ||||||||||||||||
Nine Months Ended | 2018 | Nine Months Ended | |||||||||||||||
January 31, | vs. | January 31, | |||||||||||||||
2018 | 2017 | 2017 | 2018 | 2017 | |||||||||||||
Operating Data: | |||||||||||||||||
Retail units sold | 35,189 | 34,990 | 0.6 | % | |||||||||||||
Average number of stores in operation | 140 | 143 | (2.1 | ) | |||||||||||||
Average retail units sold per store per month | 27.9 | 27.2 | 2.6 | ||||||||||||||
Average retail sales price | $ | 10,487 | $ | 10,500 | (0.1 | ) | |||||||||||
Same store revenue growth | 3.3% | 4.2% | |||||||||||||||
Net charge-offs as a percent of average finance receivables | 21.2% | 21.8% | |||||||||||||||
Collections as a percent of average finance receivables | 37.2% | 37.9% | |||||||||||||||
Average percentage of finance receivables-current (excl. 1-2 day) | 80.5% | 80.0% | |||||||||||||||
Average down-payment percentage | 5.8% | 5.3% | |||||||||||||||
Period End Data: | |||||||||||||||||
Stores open | 140 | 143 | (2.1 | )% | |||||||||||||
Accounts over 30 days past due | 4.1% | 4.7% | |||||||||||||||
Finance receivables, gross | $ | 497,652 | $ | 475,354 | 4.7 | % | |||||||||||
Operating Statement: | |||||||||||||||||
Revenues: | |||||||||||||||||
Sales | $ | 386,867 | $ | 384,117 | 0.7 | % | 100.0 | % | 100.0 | % | |||||||
Interest income | 55,883 | 50,717 | 10.2 | 14.4 | 13.2 | ||||||||||||
Total | 442,750 | 434,834 | 1.8 | 114.4 | 113.2 | ||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of sales | 225,780 | 225,346 | 0.2 | 58.4 | 58.7 | ||||||||||||
Selling, general and administrative | 73,537 | 68,476 | 7.4 | 19.0 | 17.8 | ||||||||||||
Provision for credit losses | 110,778 | 110,467 | 0.3 | 28.6 | 28.8 | ||||||||||||
Interest expense | 3,978 | 3,040 | 30.9 | 1.0 | 0.8 | ||||||||||||
Depreciation and amortization | 3,244 | 3,235 | 0.3 | 0.8 | 0.8 | ||||||||||||
Loss on disposal of property and equipment | 188 | 406 | (53.7 | ) | 0.0 | 0.1 | |||||||||||
Total | 417,505 | 410,970 | 1.6 | 107.9 | 107.0 | ||||||||||||
Income before taxes | 25,245 | 23,864 | 6.5 | 6.2 | |||||||||||||
(Benefit) Provision for income taxes | (1,095 | ) | 8,901 | (0.3 | ) | 2.3 | |||||||||||
Net income | $ | 26,340 | $ | 14,963 | 6.8 | 3.9 | |||||||||||
Dividends on subsidiary preferred stock | $ | (30 | ) | $ | (30 | ) | |||||||||||
Net income attributable to common shareholders | $ | 26,310 | $ | 14,933 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 3.59 | $ | 1.89 | |||||||||||||
Diluted | $ | 3.48 | $ | 1.83 | |||||||||||||
Weighted average number of shares used in calculation: | |||||||||||||||||
Basic | 7,336,687 | 7,891,908 | |||||||||||||||
Diluted | 7,556,255 | 8,165,931 | |||||||||||||||
America's Car-Mart, Inc. | |||||||||
Consolidated Balance Sheet and Other Data | |||||||||
(Dollars in Thousands) | |||||||||
January 31, | April 30, | January 31, | |||||||
2018 | 2017 | 2017 | |||||||
Cash and cash equivalents | $ | 534 | $ | 434 | $ | 254 | |||
Finance receivables, net | $ | 380,384 | $ | 357,161 | $ | 363,536 | |||
Inventory | $ | 38,094 | $ | 30,129 | $ | 32,303 | |||
Total assets | $ | 455,848 | $ | 424,258 | $ | 434,651 | |||
Total debt | $ | 148,172 | $ | 117,944 | $ | 118,785 | |||
Treasury stock | $ | 188,319 | $ | 162,024 | $ | 149,710 | |||
Stockholders' equity | $ | 234,856 | $ | 233,008 | $ | 239,318 | |||
Shares outstanding | 7,056,179 | 7,608,471 | 7,921,954 | ||||||
Finance receivables: | |||||||||
Principal balance | $ | 497,652 | $ | 466,854 | $ | 475,354 | |||
Deferred revenue - payment protection plan | (18,908) | (18,472) | (18,158) | ||||||
Deferred revenue - service contract | (9,672) | (9,611) | (9,924) | ||||||
Allowance for credit losses | (117,268) | (109,693) | (111,818) | ||||||
Finance receivables, net of allowance and deferred revenue | $ | 351,804 | $ | 329,078 | $ | 335,454 | |||
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, | |||||||||
2018 | 2017 | ||||||||
Balance at beginning of period | $ | 109,693 | $ | 102,485 | |||||
Provision for credit losses | 110,778 | 110,467 | |||||||
Charge-offs, net of collateral recovered | (103,203) | (101,134) | |||||||
Balance at end of period | $ | 117,268 | $ | 111,818 | |||||
Contacts: Jeffrey A. Williams, President and CEO or Vickie D. Judy, CFO at (479) 464-9944
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