America's Car-Mart Reports Diluted Earnings per Share of $3.05 on Record Revenues of $223 Million

ROGERS, Ark., Nov. 16, 2020 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (NASDAQ: CRMT) today announced its operating results for the second quarter of fiscal year 2021.

“Our disciplined execution and ongoing focus are propelling the business forward at an accelerating pace. At the same time, significant investments in key areas are laying the groundwork for future growth. Notwithstanding the tight used vehicle market - especially at the lower price points - we generated a meaningful increase in revenues. The market we serve is large and fragmented, and consumer expectations and shopping preferences are changing. We have a healthy paranoia about change and are committed to re-inventing the business in order to adapt and prepare us for long-term market leadership,” said Jeff Williams, President and CEO. “Our business continues to both generate cash and increased borrowing capacity while maintaining a conservative balance sheet, enabling us to think big about our place in the world."

“We continue to make significant investments in the areas of customer experience, inventory procurement and recruiting and training. Improvements in these key areas will drive increased traffic and productivity. Corresponding technology and systems upgrades support these initiatives and provide a foundation for future growth. For example, the centralization of certain functions dovetails with the advantages of our localized branch structure; the ability to make key customer decisions locally is important to our success,” added Mr. Williams. “We are aggressively addressing changes in consumer buying preferences by building an efficient, seamless, digital and customer-friendly sales process that compares favorably with alternatives. Further, as our infrastructure strengthens, we will aggressively market our lower total cost of ownership advantage. Also, we will heavily promote the more intangible but very real advantages that consumers realize when they are part of the Car-Mart family. We are committed to giving our customers ‘Peace of Mind’ by ‘Keeping Them on the Road.’ We take the stress out of one area of our customers’ lives and believe strongly that we have an obligation to serve significantly more customers over time.”

“Our offering is unique, and we believe that our existing dealerships have significant room to grow. We will prioritize the allocation of capital with an eye to gaining market share in the areas we currently serve. We have opened two new dealerships this fiscal year and currently have two more in process - Edmond and Norman, Oklahoma. We are proud to be growing while simultaneously building an infrastructure that will support a much larger business. This is possible largely because of the commitment of our associates and the power of our business model,” said Mr. Williams. “There is real consumer enthusiasm for our offering driven by a superior proposition, local presence, and genuine commitment to customers. Coupled with the advantages of our captive lending arrangement and relentless focus on costs, we believe that our future is very bright.”

“Our overall revenue increase was driven by a 15.3% increase in the average retail sales price combined with a $4.1 million increase in interest income. Our second quarter sales volumes were impacted by the continued tight supply of vehicles at lower price points resulting in a lack of an affordable alternative for some of our customers. This impacted our productivity per dealership,” said Vickie Judy, Chief Financial Officer. “Net charge-offs for the quarter, as a percentage of average finance receivables, were down to 4.7%. Our selling, general, and administrative expenses returned to pre-pandemic levels, reflecting our commitment to have a strong infrastructure to support a growing customer base. We did have some nice leveraging of these expenses at 16.5% of sales compared to 16.9% for the prior year comparable quarter.”

“Our cash balance is $19.5 million and our debt, net of cash, to finance receivable is 28%. During the quarter, we added $49.4 million in receivables, increased inventory by $11.2 million, funded $2.2 million in net capital expenditures, and repurchased $6.1 million of our common stock, a total of $68.9 million utilizing $31.1 million of cash and no increase in debt. We will continue to stay focused on a strong balance sheet and cash flows while ensuring we are investing with an eye for the future,” added Ms. Judy.

Conference Call

Management will be holding a conference call on Tuesday, November 17, 2020 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 #4393992.

About America's Car-Mart

America’s Car-Mart, Inc. operates automotive dealerships in twelve 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 smaller cities throughout the South-Central United States selling quality used vehicles and providing financing for substantially all of its customers. For more information about America’s Car-Mart, including investor presentations, please visit our website at www.car-mart.com.

Car-Mart was named to the Forbes America’s Best Mid-Size Employers list for two consecutive years in 2019 and 2018 and has sold over 700,000 vehicles since fiscal year 2000.

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 may include, but are not limited to:

  • new dealership openings;
  • performance of new dealerships;
  • same dealership revenue growth;
  • future revenue growth;
  • receivables growth as related to revenue growth;
  • gross profit per retail unit sold;
  • interest rates;
  • future credit losses;
  • the Company’s collection results, including but not limited to collections during income tax refund periods;
  • seasonality; and
  • the Company’s business, operating 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:

  • business and economic disruptions and uncertainty resulting from the COVID-19 pandemic and efforts to mitigate the financial impact and health risks associated with the pandemic;
  • 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;
  • the availability of credit facilities to support the Company’s business;
  • the Company’s ability to underwrite and collect its contracts effectively;
  • competition;
  • dependence on existing management;
  • ability to attract, develop and retain qualified general managers;
  • availability of quality vehicles at prices that will be affordable to customers;
  • changes in consumer finance laws or regulations, including but not limited to rules and regulations that have recently been enacted or could be enacted by federal and state governments;
  • ability to keep pace with technological advances and changes in consumer behavior affecting our business;                
  • security breaches, cyber-attacks, or fraudulent activity; and
  • the ability to successfully identify, complete and integrate new acquisitions.

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) 464-9944 or Vickie D. Judy, CFO (479) 464-9944

     % Change As a % of Sales
 Three Months Ended 2020 Three Months Ended
 October 31, vs. October 31,
  2020   2019  2019 2020 2019
Operating Data:           
Retail units sold 14,022   13,763  1.9%      
Average number of stores in operation 150   145  3.4       
Average retail units sold per store per month 31.2   31.6  (1.3)      
Average retail sales price$13,365  $11,589  15.3       
Gross profit per retail unit$5,705  $4,935  15.6       
Same store revenue growth 12.8%  12.2%        
Net charge-offs as a percent of average finance receivables 4.7%  6.1%        
Collections as a percent of average finance receivables 12.9%  13.3%        
Average percentage of finance receivables-current (excl. 1-2 day) 84.8%  83.5%        
Average down-payment percentage 6.4%  6.0%        
            
Period End Data:           
Stores open 150   145  3.4%      
Accounts over 30 days past due 2.5%  3.5%        
Active customer count 83,945   78,910  6.4%      
Finance receivables, gross$692,775  $587,087  18.0%      
            
Operating Statement:           
Revenues:           
Sales$196,684  $167,743  17.3% 100.0% 100.0%
Interest income 26,676   22,567  18.2  13.6  13.5 
Total 223,360   190,310  17.4  113.6  113.5 
            
Costs and expenses:           
Cost of sales 116,690   99,826  16.9  59.3  59.5 
Selling, general and administrative 32,536   28,296  15.0  16.5  16.9 
Provision for credit losses 43,862   41,177  6.5  22.3  24.5 
Interest expense 1,658   2,081  (20.3) 0.8  1.2 
Depreciation and amortization 928   971  (4.4) 0.5  0.6 
Loss (gain) on disposal of property and equipment (64)  2  (3,300.0) -  - 
Total 195,610   172,353  13.5  99.5  102.7 
            
Income before taxes 27,750   17,957    14.1  10.7 
            
Provision for income taxes 6,554   4,070    3.3  2.4 
            
Net income$21,196  $13,887    10.8  8.3 
            
Dividends on subsidiary preferred stock$(10) $(10)        
            
Net income attributable to common shareholders$21,186  $13,877         
            
Earnings per share:           
Basic$3.20  $2.10         
Diluted$3.05  $2.00         
            
Weighted average number of shares used in calculation:           
Basic 6,627,780   6,621,562         
Diluted 6,935,707   6,952,667         
            



     % Change As a % of Sales
 Six Months Ended
 2020 Six Months Ended
 October 31, vs. October 31,
  2020   2019  2019 2020 2019
Operating Data:           
Retail units sold 26,198   26,286  (0.3)%      
Average number of stores in operation 150   145  3.4       
Average retail units sold per store per month 29.1   30.2  (3.6)      
Average retail sales price$13,102  $11,504  13.9       
Gross profit per retail unit$5,646  $4,912  14.9       
Same store revenue growth 9.5%  7.6%        
Net charge-offs as a percent of average finance receivables 9.6%  11.5%        
Collections as a percent of average finance receivables 25.9%  26.8%        
Average percentage of finance receivables-current (excl. 1-2 day) 84.8%  83.3%        
Average down-payment percentage 6.9%  6.2%        
            
Period End Data:           
Stores open 150   145  3.4%      
Accounts over 30 days past due 2.5%  3.5%        
Active customer count 83,945   78,910  6.4%      
Finance receivables, gross$692,775  $587,087  18.0%      
            
Operating Statement:           
Revenues:           
Sales$359,483  $317,817  13.1% 100.0% 100.0%
Interest income 51,788   44,371  16.7  14.4  14.0 
Total 411,271   362,188  13.6  114.4  114.0 
            
Costs and expenses:           
Cost of sales 211,564   188,711  12.1  58.9  59.4 
Selling, general and administrative 61,293   56,967  7.6  17.1  17.9 
Provision for credit losses 79,946   72,652  10.0  22.2  22.9 
Interest expense 3,377   4,085  (17.3) 0.9  1.3 
Depreciation and amortization 1,866   1,938  (3.7) 0.5  0.6 
Loss (gain) on disposal of property and equipment (64)  39  (264.1) -  - 
Total 357,982   324,392  10.4  99.6  102.1 
            
Income before taxes 53,289   37,796    14.8  11.9 
            
Provision for income taxes 12,529   8,398    3.5  2.6 
            
Net income$40,760  $29,398    11.3  9.2 
            
Dividends on subsidiary preferred stock$(20) $(20)        
            
Net income attributable to common shareholders$40,740  $29,378         
            
Earnings per share:           
Basic$6.14  $4.42         
Diluted$5.88  $4.21         
            
Weighted average number of shares used in calculation:           
Basic 6,630,112   6,652,922         
Diluted 6,925,651   6,984,709         
            


 October 31, April 30, October 31,
  2020   2020   2019 
      
Cash and cash equivalents$19,533  $59,560  $2,474 
Finance receivables, net$519,810  $466,141  $451,606 
Inventory$67,428  $36,414  $48,103 
Total assets$716,344  $667,324  $575,367 
Total debt$213,523  $215,568  $176,970 
Treasury stock$252,991  $246,911  $245,598 
Total equity$343,631  $302,759  $278,359 
Shares outstanding 6,602,148   6,619,319   6,566,321 
      
Finance receivables:     
Principal balance$692,775  $621,182  $587,087 
Deferred revenue - payment protection plan (26,840)  (24,480)  (22,836)
Deferred revenue - service contract (13,236)  (11,641)  (11,265)
Allowance for credit losses (172,965)  (155,041)  (135,481)
      
Finance receivables, net of allowance and deferred revenue$479,734  $430,020  $417,505 
      
      
Allowance as % of principal balance net of deferred revenue 26.5%  26.5%  24.5%
      
      
Changes in allowance for credit losses:     
 Six months Ended  
 October 31,  
  2020   2019   
Balance at beginning of period$155,041  $127,842   
Provision for credit losses 79,946   72,652   
Charge-offs, net of collateral recovered (62,022)  (65,013)  
Balance at end of period$172,965  $135,481   
          

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