America's Car-Mart, Inc. Reports FY2002 Earnings From Continuing Operations -- Excluding Non-Recurring Charges -- of $1.33 Per Share vs. Forecast of $1.27
IRVING, Texas--June 24, 2002--America's Car-Mart, Inc. today announced its operating results for the fourth quarter and fiscal year ended April 30, 2002. The Company's results are segmented into continuing and discontinued operations.
Highlights of fourth quarter operating results (continuing operations, excluding a non-recurring charge):
| -- | Revenue growth of 17% over the prior year quarter |
| -- | Income growth of 37% over the prior year quarter |
| -- | EPS growth of 33% over the prior year quarter |
| -- | Retail unit sales growth of 17% over the prior year quarter |
| -- | Increased gross margins to 46.4% vs. 45.0% in the year ago quarter |
For the three months ended April 30, 2002, revenues from continuing operations increased 17% to $34.7 million, compared with $29.8 million in the fourth quarter of FY2001. Excluding a non-recurring charge, income from continuing operations for the quarter increased 37% to $3.2 million, or $0.41 per diluted share (based upon 7,647,475 weighted average shares outstanding), versus $2.3 million, or $0.31 per diluted share, in the same period last year. Retail unit sales totaled 5,016 vehicles in the fourth quarter of FY2002, an increase of 17% over fourth quarter FY2001 sales of 4,305 vehicles.
Including a non-recurring charge and income from discontinued operations, net loss for the most recent quarter totaled $1.1 million, or $(0.16) per diluted share, compared with net income of $0.7 million, or $0.09 per diluted share, in the same period last year. The non-recurring charge pertains to a $4.3 million non-cash after tax charge related to stock option based compensation (see explanation below).
Highlights of FY2002 operating results (continuing operations, excluding non-recurring charges):
| -- | Revenue growth of 20% over the prior year |
| -- | Income growth of 29% over the prior year |
| -- | EPS growth of 45% over the prior year |
| -- | Retail unit sales growth of 19% over the prior year |
| -- | Increased gross margins to 46.9% vs. 45.4% in the prior year |
For the fiscal year ended April 30, 2002, revenues from continuing operations increased 20% to $127.9 million, compared with $106.8 million in FY2001. Excluding non-recurring charges, income from continuing operations for the year increased 29% to $9.5 million, or $1.33 per diluted share (based upon 7,186,009 weighted average shares outstanding), versus $7.4 million, or $0.92 per diluted share in the same period last year. Retail unit sales totaled 18,658 vehicles in FY2002, an increase of 19% over sales in FY2001 of 15,659 vehicles.
Including non-recurring charges and a loss from discontinued operations, net loss for FY2002 totaled $14.3 million, or $(2.11) per diluted share, versus net income of $6.0 million, or $0.74 per diluted share, in the prior fiscal year. The non-recurring charges consist of (i) a $6.3 million non-cash after tax charge related to stock option based compensation (see explanation below), (ii) a $2.5 million after-tax charge to write-down certain investments and equipment purchased in a prior fiscal year, and (iii) a $1.8 million after-tax charge related to the relocation of the Company's corporate offices and severance pay.
During the year-end closing process, the Company determined that stock options outstanding under its 1997 Stock Option Plan ("97 Plan") should be accounted for as "variable" options rather than "fixed" options since the 97 Plan contains a "cashless" exercise feature. A cashless exercise feature allows option holders to use the "in-the-money" value of the option as payment for a portion or all of the exercise price of the option. Under variable option accounting, changes in the market value of the Company's common stock generally result in charges or credits to stock-based compensation. In order to avoid future stock-based compensation charges or credits (which can result in volatile earnings fluctuations), in the first quarter of fiscal 2003 (which began May 1, 2002) the Company rescinded the cashless exercise provision of its 97 Plan that resulted in the variable option accounting treatment in its financial statements. The Company plans to amend its third quarter Form 10-Q to reflect a $2.0 million non-cash after tax charge related to stock-based compensation during that period. Other periods did not have significant stock-based compensation charges or credits. These non-recurring non-cash stock-based compensation charges do not affect total stockholders' equity.
"We are extremely pleased to report stronger than expected fourth quarter operating results and the best year in Car-Mart's 21-year history," commented T.J. ("Skip") Falgout, Chief Executive Officer of America's Car-Mart. "Our Car-Mart subsidiary reported another record year of revenues and earnings, bringing its compounded annual growth rate in revenues and earnings over the past seven years to 19.6% and 21.7%, respectively," continued Falgout. "Car-Mart also met its expansion target for the year by opening eight new dealerships, which, along with two more opened in May, brings the total number of Car-Mart dealerships to 57. In addition, we expect to sell our last remaining non-core subsidiary, Concorde Acceptance Corporation, in the next few weeks for about $5 million cash, including the repayment of debt."
"With an emphasis over the past two quarters on improving collections, our fourth quarter credit losses fell to the low end of our historical credit loss range," stated Hank Henderson, President of America's Car-Mart. "On the revenue side, we continue to benefit from sales growth at virtually every Car-Mart store, particularly our younger stores that are maturing faster than anticipated."
Fiscal 2003 Earnings Guidance
In light of the better than expected fourth quarter results and improving credit loss trends, the Company has increased its fiscal year 2003 earnings estimate from continuing operations from $1.50 per diluted share to $1.58 per diluted share as follows:
1st quarter: $0.38
2nd quarter: $0.36
3rd quarter: $0.38
4th quarter: $0.46
-----
Fiscal 2003: $1.58
=====
About America's Car-Mart
America's Car-Mart, formerly Crown Group, Inc., operates 57 automotive dealerships in seven states and is the largest publicly held automotive retailer in the United States focused exclusively on the "Buy Here/Pay Here" segment of the used car market. The Company operates its dealerships primarily in small cities and rural locations throughout the South-Central United States, selling quality used vehicles and providing financing for substantially all of its customers. The Company also owns an 80% interest in Concorde Acceptance Corporation, a prime and sub-prime mortgage lender which is held for sale and is included in discontinued operations.
Included herein are forward-looking statements, including statements with respect to projected earnings per share amounts and the expected closing date of the sale of the Company's 80% interest in Concorde Acceptance Corporation. There are many factors that affect management's view about future earnings. These factors involve risks and uncertainties that could cause actual results to differ materially from management's present view. These factors include, without limitation, assumptions relating to unit sales, credit losses, gross margins, operating expenses and economic conditions, and other risk factors described under "Forward-looking Information" of Item 2 of Part I of the Company's Quarterly Report on Form 10-Q for the quarter ended January 31, 2002. All forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company does not undertake any obligation to update forward-looking statements.
America's Car-Mart, Inc.
Consolidated Results of Operations
(in thousands, except unit, lot and share data)
Three Months Ended
April 30,
-----------------------
2002 2001
----------- -----------
Retail units sold 5,016 4,305
Average number of lots in operation 55.0 46.3
Average retail units sold per lot per month 30.4 31.0
Revenues:
Sales $ 32,520 $ 27,344
Interest income 2,176 2,434
----------- -----------
34,696 29,778
----------- -----------
Costs and expenses:
Cost of sales 17,416 15,044
Selling, general and administrative 6,284 4,690
Provision for credit losses 5,626 5,039
Interest expense 583 931
Depreciation and amortization 74 89
Stock option based compensation 5,039
Restructuring charge
Write-down of investments and equipment
----------- -----------
35,022 25,793
----------- -----------
Income (loss) from continuing operations
before taxes and minority interests (326) 3,985
Provision for income taxes 720 1,596
Minority interests 131 83
----------- -----------
Income (loss) from continuing operations (1,177) 2,306
Discontinued operations:
Income (loss) from discontinued operations,
net of taxes and minority interests 106 (1,656)
----------- -----------
Gain on sale of discontinued operation,
net of tax
----------- -----------
Income (loss) from discontinued
operations 106 (1,656)
----------- -----------
Net income (loss) $ (1,071) $ 650
=========== ===========
Basic earnings (loss) per share:
Continuing operations $ (0.17) $ 0.32
Discontinued operations 0.01 (0.23)
----------- -----------
Total $ (0.16) $ 0.09
=========== ===========
Diluted earnings (loss) per share:
Continuing operations $ (0.17) $ 0.31
Discontinued operations 0.01 (0.22)
----------- -----------
Total $ (0.16) $ 0.09
=========== ===========
Weighted average number of shares outstanding:
Basic 6,835,843 7,203,979
Diluted 6,835,843 7,397,547
Fiscal Year Ended
April 30,
-----------------------
2002 2001
----------- -----------
Retail units sold 18,658 15,659
Average number of lots in operation 52.5 44.6
Average retail units sold per lot per month 29.6 29.3
Revenues:
Sales $ 118,642 $ 97,848
Interest income 9,282 8,906
----------- -----------
127,924 106,754
----------- -----------
Costs and expenses:
Cost of sales 62,965 53,412
Selling, general and administrative 22,326 18,734
Provision for credit losses 23,136 17,215
Interest expense 3,022 4,015
Depreciation and amortization 284 487
Stock option based compensation 7,329
Restructuring charge 2,732
Write-down of investments and equipment 3,928
----------- -----------
125,722 93,863
----------- -----------
Income (loss) from continuing operations
before taxes and minority interests 2,202 12,891
Provision for income taxes 2,789 5,217
Minority interests 549 313
----------- -----------
Income (loss) from continuing operations (1,136) 7,361
Discontinued operations:
Income (loss) from discontinued operations,
net of taxes and minority interests (13,170) (1,401)
Gain on sale of discontinued operation,
net of tax 3
----------- -----------
Income (loss) from discontinued
operations (13,170) (1,398)
----------- -----------
Net income (loss) $ (14,306) $ 5,963
=========== ===========
Basic earnings (loss) per share:
Continuing operations $ (0.17) $ 0.96
Discontinued operations (1.94) (0.19)
----------- -----------
Total $ (2.11) $ 0.77
=========== ===========
Diluted earnings (loss) per share:
Continuing operations $ (0.17) $ 0.92
Discontinued operations (1.94) (0.18)
----------- -----------
Total $ (2.11) $ 0.74
=========== ===========
Weighted average number of shares outstanding:
Basic 6,795,461 7,697,239
Diluted 6,795,461 8,015,834
America's Car-Mart, Inc.
Continuing Operating Results by Segment
(in thousands)
For the Three Months Ended April 30, 2002
--------------------------------------------------
Car-Mart Corporate Eliminations Consolidated
Revenues:
Sales $ 32,520 $ 32,520
Interest income 2,117 $ 133 $ (74) 2,176
------------ ------------ ------------ ------------
34,637 133 (74) 34,696
------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales 17,416 17,416
Selling, general and
administrative 5,543 741 6,284
Provision for
credit losses 5,626 5,626
Interest expense 490 167 (74) 583
Depreciation and
amortization 57 17 74
Stock option based
compensation 5,039 5,039
Restructuring
charge --
Write-down of
investments and
equipment --
------------ ------------ ------------ ------------
29,132 5,964 (74) 35,022
------------ ------------ ------------ ------------
Income (loss) from
continuing operations before
taxes and minority
interests 5,505 (5,831) -- (326)
Provision (benefit)
for income taxes 1,785 (1,065) 720
Minority interests 131 131
------------ ------------ ------------ ------------
Income (loss)
from continuing
operations $ 3,720 $ (4,766) $ (131) $ (1,177)
============ ============ ============ ============
For the Three Months Ended April 30, 2001
--------------------------------------------------
Car-Mart Corporate Eliminations Consolidated
Revenues:
Sales $ 27,344 $ 27,344
Interest income 2,203 $ 335 $ (104) 2,434
------------ ------------ ------------ ------------
29,547 335 (104) 29,778
------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales 15,044 15,044
Selling, general
and administrative 4,023 667 4,690
Provision for
credit losses 5,039 5,039
Interest expense 796 239 (104) 931
Depreciation and
amortization 26 63 89
Stock option based
compensation --
Restructuring
charge --
Write-down of
investments and
equipment --
------------ ------------ ------------ ------------
24,928 969 (104) 25,793
------------ ------------ ------------ ------------
Income (loss) from
continuing operations before
taxes and minority
interests 4,619 (634) -- 3,985
Provision (benefit)
for income taxes 1,811 (215) 1,596
Minority interests 83 83
------------ ------------ ------------ ------------
Income (loss) from
continuing
operations $ 2,808 $ (419) $ (83) $ 2,306
============ ============ ============ ============
America's Car-Mart, Inc.
Continuing Operating Results by Segment
(in thousands)
For the Year Ended April 30, 2002
---------------------------------------------------
Car-Mart Corporate Eliminations Consolidated
------------ ------------ ------------ ------------
Revenues:
Sales $ 118,642 $ 118,642
Interest income 8,775 $ 838 $ (331) 9,282
------------ ------------ ------------ ------------
127,417 838 (331) 127,924
------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales 62,965 62,965
Selling, general
and
administrative 19,354 2,972 22,326
Provision for
credit losses 23,036 100 23,136
Interest expense 2,564 789 (331) 3,022
Depreciation and
amortization 162 122 284
Stock option based
compensation 7,329 7,329
Restructuring
charge 2,732 2,732
Write-down of
investments
and equipment 3,928 3,928
------------ ------------ ------------ ------------
108,081 17,972 (331) 125,722
------------ ------------ ------------ ------------
Income (loss) from
continuing
operations before
taxes and
minority interests 19,336 (17,134) -- 2,202
Provision (benefit)
for income taxes 7,210 (4,421) 2,789
Minority interests 549 549
------------ ------------ ------------ ------------
Income (loss) from
continuing
operations $ 12,126 $ (12,713) $ (549) $ (1,136)
============ ============ ============ ============
For the Year Ended April 30, 2001
---------------------------------------------------
Car-Mart Corporate Eliminations Consolidated
------------ ------------ ------------ ------------
Revenues:
Sales $ 97,848 $ 97,848
Interest income 7,858 $ 1,524 $ (476) 8,906
------------ ------------ ------------ ------------
105,706 1,524 (476) 106,754
------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales 53,412 53,412
Selling, general
and
administrative 14,950 3,784 18,734
Provision for
credit losses 17,215 17,215
Interest expense 3,613 878 (476) 4,015
Depreciation and
amortization 141 346 487
Stock option based
compensation --
Restructuring
charge --
Write-down of
investments
and equipment --
------------ ------------ ------------ ------------
89,331 5,008 (476) 93,863
------------ ------------ ------------ ------------
Income (loss) from
continuing
operations before
taxes and
minority interests 16,375 (3,484) -- 12,891
Provision (benefit)
for income taxes 6,401 (1,184) 5,217
Minority interests 313 313
------------ ------------ ------------ ------------
Income (loss) from
continuing
operations $ 9,974 $ (2,300) $ (313) $ 7,361
============ ============ ============ ============
America's Car-Mart, Inc.
Consolidated Balance Sheet Data
April 30, 2002
--------------
Cash and cash equivalents $ 1,229,920
Finance receivables, net $ 75,079,603
Total assets $ 128,023,310
Stockholders' equity $ 51,813,187
Shares outstanding 6,944,325
Book value per share $ 7.46