• America's Car-Mart Reports Diluted Earnings per Share of $4.01 on Record Revenues of $352 Million

    Source: Nasdaq GlobeNewswire / 23 May 2022 17:40:00   America/New_York

    ROGERS, Ark., May 23, 2022 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (NASDAQ: CRMT) today announced its operating results for the fourth quarter and full fiscal year 2022.

    “Revenue grew 26% to $352 million, including a 39% increase in interest income to $42 million, for the fourth quarter of fiscal 2022 compared to the prior year quarter. The average sales price increased 24% to $17,860 and unit sales volume dropped 1%. Our sales volume productivity of 35.6 units sold per dealership per month for the quarter was strong and, in the last 20+ years, second only to the prior year’s fourth quarter of 36.5,” said Jeff Williams, President and CEO. “We are increasing market share while facing challenges stemming from ongoing supply and demand imbalances in the used car market, inflation, and declining consumer confidence. We expect to see additional productivity improvements as we leverage our investments and competitive strengths.”

    “Collections and credit results for both the quarter and the full year were strong. For the quarter, net charge-offs were 5.6%, well below the prior five-year and ten-year averages of 6.6% and 7.2%, respectively. For the full fiscal year, net charge-offs were 20.2% compared to five-year and ten-year averages of 25.5% and 26.5%, respectively. Collections per account per month for the quarter were up 5% to $586 over the prior year quarter and up 20% sequentially. When considering the effects of prior year stimulus payments and the current year term increase, our collections were up significantly during the quarter,” said Mr. Williams. “While credit results will likely continue to normalize, we believe that net charge-off levels in the future will be closer to the lower end of our historical ranges. We anticipate that even with longer term contracts, our cash-on-cash returns will be attractive when measured by our historical results.”

    “As previously communicated, we are continuing to invest in key areas of the business including Recruiting, Training and Retention, Inventory Procurement/Management, Customer Experience and Digital/Information Technology. Our most important opportunity is sourcing affordable, mechanically sound vehicles at sufficient quantities to support the high consumer demand for our offering. Our investments should enable dealerships to support an average of 1,000 or more active customers per dealership – currently, our dealerships average 618 customers each. This growth will be achieved primarily by improving sales volume productivity. At fiscal year-end, eleven individual dealerships had more than 1,000 active customers each,” added Mr. Williams. “Over the last five years we have grown our customer count by an average of 7.3% per year, or 42%, while we have grown our store count by just 10%. If we experience that same growth rate over the next five years, we could be supporting over 135,000 customers; 150,000 customers in less than seven years. We have an obligation to serve more customers as we improve lives and reduce the stress of car ownership by keeping our customers on the road. While our primary focus is leveraging our existing dealership base, we anticipate acquisitions and new lot openings will also likely contribute materially to our future growth.”

    “Rising interest rates and high overall inflation levels characterize the current operating environment. Because of its flexibility, historically, our business has performed well through both recessions and expansions, inflation and deflation, and when used car prices are both high and low. A conservative financial structure and disciplined focus on cash flows enable us to manage through a variety of environments, including higher interest rates and inflation, and provide us with significant competitive advantages. Our lower interest rate relative to competitors provides a benefit to our marketing efforts yet still affords us room to increase rates should conditions merit,” said Mr. Williams. “We are mindful that inflation is a headwind for all of our customers; fortunately, significant increases in compensation for lower wage earners provide some offset. Our best weapon against inflationary operating cost pressures is a combination of higher volumes and greater efficiency. We believe that we would be selling a significantly greater number of vehicles if we had sufficient availability at lower price points.”

    “At the end of April, we completed our inaugural $400 million non-recourse note offering and asset-backed securitization, secured at a 70% advance rate. We used the net proceeds of the offering to pay down our existing $600 million revolving line of credit,” added Mr. Williams. “The asset-backed securities market both diversifies our funding and facilitates our growth by accessing a substantially larger pool of institutional credit. This market has provided a level of stability and consistency in times of economic stress which can provide us with the additional resources to grow our business at a healthy rate, in-line with the demand for our offering. In addition, our weighted average cost of capital can be lower as a function of a more efficient overall capital structure. A strong balance sheet can be both a wall against uncertainty and a weapon – total outstanding debt, net of cash, is 36.1% of receivables. Our financial structure and focus on cash flows provides the flexibility to both invest in our business and repurchase shares.”
      
    “We are pleased with our progress and the results given the current difficult operating environment with fourth quarter net income of $26.7 million, and diluted earnings per share of $4.01. The fourth quarter fiscal 2021 diluted earnings per share of $6.19 included an $11.5 million after-tax decrease to the allowance for credit losses or $1.65 diluted earnings per share increase. We also had nice leveraging of SG&A costs as a percentage of sales for both the quarter (at 13.2% compared to 14.5% for the comparable prior year quarter) and full fiscal year (at 14.7% compared to 16.2% for the prior year). This is especially impressive considering the increased costs in the current inflationary environment for most of our expenses, but especially the wage pressures,” said Vickie Judy, CFO. “We are investing in and building for our future to support a growing number of associates and customers.”

    “We repurchased 92,000 shares of our common stock during the quarter at an average price of approximately $89 for a total of $8.2 million. Since February 2010, we have repurchased 6.8 million shares (57.9% of our outstanding shares on January 31, 2010) at an average price of approximately $42. During fiscal 2022, we grew finance receivables by $292 million, increased inventory by $33 million, repurchased $35 million of our common stock and funded $21 million in capital expenditures, all while holding our debt, net of cash, to 36.1% of receivables.” added Ms. Judy. “At April 30, 2022, approximately 90% of our debt was securitized non-recourse debt.”

    Conference Call and Investor Presentation

    Management will be holding a conference call on Tuesday, May 24, 2022, 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, conference ID #6579153. 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 #6579153.

    About America's Car-Mart

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

    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:

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

    • 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;
    • business and economic disruptions and uncertainty that may result from any future outbreak or adverse developments with the COVID-19 pandemic and any efforts to mitigate the financial impact and health risks associated with such developments;
    • the expiration of existing economic stimulus measures or other government assistance programs implemented in response to the COVID-19 pandemic or the adoption of further such stimulus measures or assistance programs;
    • the availability of credit facilities and access to capital on terms acceptable to us 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 in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2021, and those described from time to time in the Company’s other 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 



    America's Car-Mart, Inc.  
    Consolidated Results of Operations  
    (Dollars in thousands)  
                       
                       
              % Change   As a % of Sales
           Three Months Ended  2022   Three Months Ended
           April 30, vs.   April 30,   
           2022   2021  2021 2022 2021 
    Operating Data:              
     Retail units sold  16,426   16,555  (0.8)%       
     Average number of stores in operation 154   151  2.0         
     Average retail units sold per store per month 35.6   36.5  (2.5)        
     Average retail sales price $17,860  $14,387  24.1         
     Total gross profit per retail unit sold$6,887  $6,032  14.2         
     Same store revenue growth  24.2%  37.6%          
     Net charge-offs as a percent of average finance receivables 5.6%  4.8%          
     Total collected (principal, interest and late fees)$166,604  $145,863  14.2         
     Average total collected per active customer per month$586  $560  4.6         
     Average percentage of finance receivables-current (excl. 1-2 day) 82.7%  85.3%          
     Average down-payment percentage 7.0%  8.7%          
                       
    Period End Data:              
     Stores open  154   151  2.0 %       
     Accounts over 30 days past due 3.0%  2.6%          
     Active customer count  95,107   88,092  8.0         
     Finance receivables, gross $1,101,497  $809,538  36.1         
     Weighted average total contract term 42.9   37.3  15.0 %       
                       
    Statements of Operations:              
     Revenues:              
      Sales $309,570  $248,625  24.5 % 100.0% 100.0%
      Interest income  42,267   30,454  38.8   13.7  12.2  
        Total  351,837   279,079  26.1   113.7  112.2  
                       
     Costs and expenses:              
      Cost of sales  196,452   148,773  32.0   63.5  59.8  
      Selling, general and administrative 40,990   36,139  13.4   13.2  14.5  
      Provision for credit losses  75,305   36,077  108.7   24.3  14.5  
      Interest expense  3,480   1,738  100.2   1.1  0.7  
      Depreciation and amortization 1,210   947  27.8   0.4  0.4  
      Loss on disposal of property and equipment 61   2  -
       -  -  
        Total  317,498   223,676  41.9   102.6  90.0  
                       
        Income before taxes  34,339   55,403     11.1  22.3  
                       
     Provision for income taxes  7,662   11,906     2.5  4.8  
                       
        Net income $26,677  $43,497     8.6  17.5  
                       
     Dividends on subsidiary preferred stock$(10) $(10)          
                       
        Net income attributable to common shareholders$26,667  $43,487           
                       
     Earnings per share:              
      Basic $4.16  $6.57           
      Diluted $4.01  $6.19           
                       
                       
     Weighted average number of shares used in calculation:             
      Basic  6,414,229   6,620,372           
      Diluted  6,649,964   7,028,537           
                       



    America's Car-Mart, Inc.  
    Consolidated Results of Operations  
    (Dollars in thousands)  
                       
                       
              % Change As a % of Sales 
           Years Ended 2022   Years Ended 
           April 30, vs.   April 30,   
           2022   2021  2021 2022 2021 
    Operating Data:              
     Retail units sold  60,595   56,806  6.7%       
     Average number of stores in operation 152   150  1.3        
     Average retail units sold per store per month 33.2   31.6  5.1        
     Average retail sales price $16,649  $13,621  22.2        
     Total gross profit per retail unit sold$6,550  $5,790  13.1        
     Same store revenue growth  30.5%  18.7%          
     Net charge-offs as a percent of average finance receivables 20.2%  19.3%          
     Total collected (principal, interest and late fees)$569,648  $480,799  18.5        
     Average total collected per active customer per month$513  $478  7.3        
     Average percentage of finance receivables-current (excl. 1-2 day) 82.2%  84.8%          
     Average down-payment percentage 6.4%  7.1%          
                       
    Period End Data:              
     Stores open  154   151  2.0%       
     Accounts over 30 days past due 3.0%  2.6%          
     Active customer count  95,107   88,092  8.0        
     Finance receivables, gross $1,101,497  $809,538  36.1        
     Weighted average total contract term 42.9   37.3  15.0%       
                       
    Statements of Operations:              
    (Dollars in thousands)              
     Revenues:              
      Sales $1,060,512  $808,065  31.2% 100.0% 100.0%
      Interest income  151,853   110,545  37.4  14.3  13.7  
        Total  1,212,365   918,610  32.0  114.3  113.7  
                       
     Costs and expenses:              
      Cost of sales  663,631   479,153  38.5  62.6  59.3  
      Selling, general and administrative 156,130   130,855  19.3  14.7  16.2  
      Provision for credit losses  257,101   163,662  57.1  24.2  20.3  
      Interest expense  10,919   6,820  60.1  1.0  0.8  
      Depreciation and amortization 4,033   3,719  8.4  0.4  0.5  
      Loss (gain) on disposal of property and equipment 149   (40) -  -  -  
        Total  1,091,963   784,169  39.3  103.0  97.0  
                       
        Income before taxes  120,402   134,441     11.4  16.6  
                       
     Provision for income taxes  27,095   30,302     2.6  3.7  
                       
        Net income $93,307  $104,139     8.8  12.9  
                       
     Dividends on subsidiary preferred stock$(40) $(40)          
                       
        Net income attributable to common shareholders$93,267  $104,099           
                       
     Earnings per share:              
      Basic $14.33  $15.70           
      Diluted $13.67  $14.95           
                       
                       
     Weighted average number of shares used in calculation:             
      Basic  6,509,673   6,628,749           
      Diluted  6,823,481   6,961,575           
                       



    America's Car-Mart, Inc.
    Condensed Consolidated Balance Sheet and Other Data
    (Dollars in thousands)
             
             
        April 30, April 30, April 30,
         2022   2021   2020 
             
    Cash and cash equivalents $6,916  $2,893  $59,560 
    Restricted cash from collections on auto finance receivables$35,671  $-  $- 
    Finance receivables, net $854,290  $625,119  $466,141 
    Inventory $115,302  $82,263  $36,414 
    Total assets $1,145,312  $822,159  $667,324 
    Revolving lines of credit $44,670  $225,924  $215,568 
    Non-recourse notes payable $395,986  $-  $- 
    Treasury stock $292,225  $257,527  $246,911 
    Total equity $469,366  $406,496  $302,759 
    Shares outstanding  6,371,977   6,625,885   6,619,319 
    Book value per outstanding share$73.72  $61.41  $45.80 
             
             
    Finance receivables:      
     Principal balance $1,101,497  $809,537  $621,182 
     Deferred revenue - accident protection plan (43,936)  (32,704)  (24,480)
     Deferred revenue - service contract (48,555)  (24,106)  (11,641)
     Allowance for credit losses (247,207)  (184,418)  (155,041)
             
     Finance receivables, net of allowance and deferred revenue$761,799  $568,309  $430,020 
             
             
     Allowance as % of principal balance net of deferred revenue 24.5%  24.5%  26.5%
             
             
             
    Changes in allowance for credit losses:     
         Years Ended  
         April 30,  
         2022   2021   
     Balance at beginning of period$184,418  $155,041   
     Provision for credit losses  257,101   163,662   
     Charge-offs, net of collateral recovered (194,312)  (134,285)  
      Balance at end of period$247,207  $184,418   
             



    America's Car-Mart, Inc. 
    Condensed Consolidated Statements of Cash Flows 
    (Dollars in thousands) 
    (Unaudited) 
            
         Years Ended 
         April 30, 
         2022   2021  
            
    Operating activities:     
     Net income $93,307  $104,139  
     Provision for credit losses  257,101   163,662  
     Losses on claims for accident protection plan 21,871   18,954  
     Depreciation and amortization 4,033   3,719  
     Finance receivable originations (1,009,859)  (762,716) 
     Finance receivable collections 417,796   370,254  
     Inventory  50,881   5,019  
     Deferred accident protection plan revenue 11,232   8,224  
     Deferred service contract revenue 24,449   12,465  
     Income taxes, net  6,446   3,337  
     Other  8,458   19,131  
      Net cash used in operating activities (114,285)  (53,812) 
            
    Investing activities:     
     Purchase of investments  (1,343)  -  
     Purchase of property and equipment and other (20,900)  (8,258) 
      Net cash used in investing activities (22,243)  (8,258) 
            
    Financing activities:     
     Change in revolving credit facility, net and notes payable (179,929)  10,247  
     Change in non-recourse notes payable 399,994   -  
     Change in cash overdrafts  (1,802)  1,802  
     Debt issuance costs  (6,108)  (282) 
     Purchase of common stock (34,698)  (10,616) 
     Dividend payments  (40)  (40) 
     Exercise of stock options and issuance of common stock (1,195)  4,292  
      Net cash provided by financing activities 176,222   5,403  
            
    Increase (decrease) in cash $39,694  $(56,667) 
            

      


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