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Americas Car-Mart, Inc. (NASDAQ: CRMT) today announced its operating results for the first quarter of fiscal year 2021.


GlobeNewswire Inc | Aug 17, 2020 04:19PM EDT

August 17, 2020

ROGERS, Ark., Aug. 17, 2020 (GLOBE NEWSWIRE) -- Americas Car-Mart, Inc. (NASDAQ: CRMT) today announced its operating results for the first quarter of fiscal year 2021.

Once again, results were strong, and our scoreboard is solid. We are certainly proud of the operating success; however, we do not celebrate the scoreboard. We look deeper at the quality of our daily work and how we can continue to improve and fulfill our obligation to serve significantly more customers into the future. While we are making good progress we maintain a sense of urgency to quickly improve in all areas, said Jeff Williams, President and CEO. We have a great team here at Americas Car-Martsharing a common goal of giving our customers peace of mind with their local transportation needs by keeping them on the road after the sale. How we conduct our business has a direct effect on the quality of life and the overall health of our communities, a responsibility we take to heart. Through the continuing challenges related to the pandemic and social unrest, we continue to focus on the health, safety, and growth of our associates and how we can add value in the communities we serve.

We have stepped up and will continue to make a positive difference by holding ourselves to a higher standard, always moving our expectations up as we move forward, added Mr. Williams. We have never been more certain of our purpose and our place in the world and will continue to make investments in our future with laser focus in the areas of recruiting, training and retention of great associates. These investments include our new Car-Mart University program, an enhanced customer experience with emphasis on digital channels via our Customer Care Team, and better inventory procurement as we leverage our scale and improve the quality and consistency of the vehicles we sell.

Our results were strong with top-line growth up over 9%, net charge-offs down significantly and nice leveraging of our selling, general and administrative costs. Our balance sheet is in great shape and will allow for us to be nimble as we see opportunities. We are very thankful to our associates for their hard-work, dedication, and commitment to each other and to our customers and our communities. Once, again, we have a great team and we will be intentional about making a positive difference in the world and growing our company in the right way, said Mr. Williams. We opened two new dealerships during the quarter and have two more in progress. We continue to grow our customer base from our existing dealerships and believe we have significant growth opportunities in towns we already serve. Additionally, we believe that we will have acquisition opportunities as we move forward. As always, our goal is to continue to grow at a rate at which we can support our customers at the highest levels. Our future is bright, and we are excited about our business as we look forward.

Our overall revenue increase was driven by a 12.2% increase in the average retail sales price combined with a $3.3 million increase in interest income. Our first quarter sales volumes were impactedby reduced inventory levels, especially at the lower price points, and lower customer traffic both as a result of the pandemic, although volumes improved as we moved through the quarter, said Vickie Judy, Chief Financial Officer. We were able to take advantage of recent efforts by rental car companies to reduce their fleets, allowing us to acquire some newer model, lower mileage vehicles at affordable prices for our customers. Net charge-offs for the quarter, as a percentage of average finance receivables, were down to 4.8%, positively impacted by the hard work of our associates to help customers through this pandemic and by the additional CARES Act enhanced unemployment payments. We saw leveraging with our selling, general, and administrative expenses as we took steps to reduce expenses early in the pandemic. All of our associates are back to work full time, and we will continue to invest to build and enhance our infrastructure to support a growing customer base.

Our cash balance is $50.6 million and our debt, net of cash, to finance receivable is 25.4%. During the quarter, we added $22.2 million in receivables, funded $2.9 million in net capital expenditures, and increased inventory by $19.8 million, with only a $7.7 million increase in debt, net of cash. Our balance sheet is strong, and our vision is clear as we push for market share increases by providing a great customer experience and earning repeat business, added Ms. Judy.

Conference Call

Management will be holding a conference call on Tuesday, August 18, 2020 at 11:00 a.m. Eastern Time to discuss first 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 #3239645.

About America's Car-Mart

Americas 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 Americas Car-Mart, including investor presentations, please visit our website at www.car-mart.com.

Americas Car-Mart was named to the Forbes Americas Best Mid-Size Employers list for two consecutive years in 2019 and 2018 and has sold nearly 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 Companys future objectives, plans and goals, as well as the Companys 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 Companys collection results, including but not limited to collections during income tax refund periods; -- seasonality; and -- the Companys business and growth strategies.

These forward-looking statements are based on the Companys 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 Companys 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 Companys business; -- the Companys 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; -- 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 Companys 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

% As a % of Sales Change Three Months Ended 2020 Three Months Ended July 31, vs. July 31, 2020 2019 2019 2020 2019Operating Data: Retail units sold 12,176 12,523 (2.8 ) % Average number of 148 144 2.8 stores in operationAverage retailunits sold per 27.4 29.0 (5.5 ) store per monthAverage retail $ 12,800 $ 11,410 12.2 sales priceGross profit per $ 5,579 $ 4,886 14.2 retail unitSame store revenue 5.5 % 3.3 % growthNet charge-offs asa percent of 4.8 % 5.4 % average financereceivablesCollections as apercent of average 13.0 % 13.5 % finance receivablesAverage percentageof finance 84.8 % 83.0 % receivables-current(excl. 1-2 day)Averagedown-payment 7.6 % 6.5 % percentage Period End Data: Stores open 150 145 3.4 % Accounts over 30 2.6 % 3.8 % days past dueActive customer 81,738 77,199 5.9 countFinance $ 643,335 $ 561,104 14.7 % receivables, gross Statements of Operations:Revenues: Sales $ 162,799 $ 150,074 8.5 % 100.0 % 100.0 %Interest income 25,112 21,804 15.2 15.4 14.5 Total 187,911 171,878 9.3 115.4 114.5 Costs and expenses: Cost of sales 94,874 88,885 6.7 58.3 59.2 Selling, general 28,757 28,671 0.3 17.7 19.1 and administrativeProvision for 36,084 31,475 14.6 22.2 21.0 credit lossesInterest expense 1,719 2,004 (14.2 ) 1.1 1.3 Depreciation and 938 967 (3.0 ) 0.6 0.6 amortizationLoss on disposal ofproperty and - 37 - - - equipmentTotal 162,372 152,039 6.8 99.7 101.3 Income before taxes 25,539 19,839 15.7 13.2 Provision for 5,975 4,328 3.7 2.9 income taxes Net income $ 19,564 $ 15,511 12.0 10.3 Dividends onsubsidiary $ (10 ) $ (10 ) preferred stock Net incomeattributable to $ 19,554 $ 15,501 common shareholders Earnings per share: Basic $ 2.95 $ 2.32 Diluted $ 2.83 $ 2.21 Weighted averagenumber of shares used incalculation:Basic 6,632,445 6,684,282 Diluted 6,915,596 7,016,752

July 31, April 30, July 31, 2020 2020 2019 Cash and cash equivalents $ 50,618 $ 59,560 $ 1,640 Finance receivables, net $ 482,528 $ 466,141 $ 431,610 Inventory $ 56,220 $ 36,414 $ 44,651 Total assets $ 698,988 $ 667,324 $ 548,779 Total debt $ 214,283 $ 215,568 $ 158,677 Treasury stock $ 246,911 $ 246,911 $ 235,617 Total equity $ 325,849 $ 302,759 $ 273,036 Shares outstanding 6,641,994 6,619,319 6,660,281 Finance receivables: Principal balance $ 643,335 $ 621,182 $ 561,104 Deferred revenue - (24,878 ) (24,480 ) (21,831 )payment protection planDeferred revenue - (11,637 ) (11,641 ) (10,727 )service contractAllowance for credit (160,807 ) (155,041 ) (129,494 )losses Finance receivables, netof allowance and deferred $ 446,013 $ 430,020 $ 399,052 revenue Allowance as % ofprincipal balance net of 26.5 % 26.5 % 24.5 %deferred revenue Changes in allowance for credit losses: Three months Ended July 31, 2020 2019 Balance at beginning of $ 155,041 $ 127,842 periodProvision for credit 36,084 31,475 lossesCharge-offs, net of (30,318 ) (29,823 ) collateral recoveredBalance at end of period $ 160,807 $ 129,494







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