America's Car-Mart, Inc. Reports Increased First Quarter Earnings from Continuing Operations
BENTONVILLE, Ark.--Sept. 10, 2002--America's Car-Mart, Inc. today announced its operating results for the first quarter (ended July 31, 2002) of its fiscal 2003 year. The Company's results are segmented into continuing and discontinued operations.
Highlights of first quarter operating results (continuing operations):
| -- | Revenue growth of 18% over the prior year quarter |
| -- | Income growth of 55% over the prior year quarter |
| -- | EPS growth of 54% over the prior year quarter |
| -- | Retail unit sales growth of 19% over the prior year quarter |
| -- | Gross margin increased to 47.5% vs. 46.6% in the prior year quarter |
| -- | Credit losses as a percentage of sales decreased to 16.6% vs. 19.5% in the prior year quarter |
For the three months ended July 31, 2002, revenues from continuing operations increased 18% to $36.1 million, compared to $30.5 million in the same period of the prior fiscal year. Income from continuing operations for the current quarter increased 55% to $3.4 million, or $0.43 per diluted share, versus $2.0 million, or $0.28 per diluted share, in the same period last year. Including discontinued operations, net income for the current quarter totaled $3.7 million, or $0.46 per diluted share, compared to $1.2 million, or $0.17 per diluted share, in the same period last year. Retail unit sales increased 19% to 5,273 vehicles in the current quarter compared to 4,429 vehicles in the same period last year.
"We are very pleased to report a better than expected first quarter performance, resulting from strong sales and lower credit losses throughout our dealerships," commented T.J. ("Skip") Falgout, Chief Executive Officer of America's Car-Mart. "In fact, as a percentage of sales, first quarter credit losses were the lowest of any quarter in the past two years," continued Falgout. "Also, we completed the sale of our last remaining non-core subsidiary during the first quarter, the proceeds from which were used to reduce debt. With total debt of about $33 million at quarter end, our debt to equity ratio is less than 0.6 to 1.0, which is well below most other auto retailers."
"We are very pleased with the decrease in credit losses as a percentage of sales in the first quarter," stated Hank Henderson, President of America's Car-Mart. "Historically, our first and fourth fiscal quarters have the lowest credit losses, with our middle quarters being on the higher end," added Henderson. "The improvement over the prior year is principally the result of increasing the size of our staff at the dealership level and adding several new management positions at Car-Mart's general office. These new managers will help us manage our growth in the months and years to come. We also had a busy quarter opening new dealerships, with four new stores added during the period. In August, we added two more, and later in the year we plan to open another two stores for a total of eight for the year."
Fiscal 2003 Earnings Guidance
In light of the better than expected first quarter results and improving credit loss trends, the Company has increased its fiscal year 2003 earnings estimate from continuing operations from $1.58 per diluted share to $1.67 per diluted share as follows:
1st quarter: $0.43 (actual)
2nd quarter: $0.38 (projected)
3rd quarter: $0.39 (projected)
4th quarter: $0.47 (projected)
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Fiscal 2003: $1.67
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This projected earnings figure represents a 26% increase over fiscal 2002 earnings per diluted share from continuing operations, excluding non-recurring charges, of $1.33.
Conference Call
Management will be holding a conference call on Tuesday, September 10, 2002 at 11:00 a.m. Eastern time to discuss first quarter results. To participate, please dial 888-318-6429 or 334-260-0508 (international), code: crmt. Callers should dial in approximately 10 minutes before the call begins.
About America's Car-Mart
America's Car-Mart operates 61 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. For more information on America's Car-Mart, please visit our website at www.car-mart.com.
Included herein are forward-looking statements, including statements with respect to projected earnings per share amounts and the opening of new stores. There are many factors that affect management's view about future earnings and store openings. 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, economic conditions, leasing or purchasing store facilities, obtaining appropriate permits and licenses and other risk factors described under "Forward-Looking Statements" of Item 1 of Part I of the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 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 operating and share data)
Three Months Ended
July 31,
---------------------
2002 2001
---------- ----------
Operating data:
Retail units sold 5,273 4,429
Average number of stores in operation 57.7 50.3
Average retail units sold per store per month 30.5 29.4
Average retail sales price $6,213 $6,129
Same store revenue growth 14.5% 16.3%
Accounts 30 days or more past due (at period
end) 4.4% 4.0%
Revenues:
Sales $33,821 $28,124
Interest income 2,276 2,415
---------- ----------
36,097 30,539
---------- ----------
Costs and expenses:
Cost of sales 17,750 15,010
Selling, general and administrative 6,555 5,009
Provision for credit losses 5,602 5,497
Interest expense 536 935
Depreciation and amortization 65 86
Write-down of equipment - 400
---------- ----------
30,508 26,937
---------- ----------
Income from continuing operations
before taxes and minority interests 5,589 3,602
Provision for income taxes 2,152 1,485
Minority interests - 154
---------- ----------
Income from continuing operations 3,437 1,963
Discontinued operations:
Income (loss) from discontinued operations,
net of taxes and minority interests 375 (769)
Loss on sale of discontinued operation, net of
tax (125) -
---------- ----------
Income (loss) from discontinued operations 250 (769)
---------- ----------
Net income $3,687 $1,194
========== ==========
Basic earnings (loss) per share:
Continuing operations $0.49 $0.29
Discontinued operations 0.04 (0.11)
---------- ----------
Total $0.53 $0.17
========== ==========
Diluted earnings (loss) per share:
Continuing operations $0.43 $0.28
Discontinued operations 0.03 (0.11)
---------- ----------
Total $0.46 $0.17
========== ==========
Weighted average number of shares outstanding:
Basic 6,968,149 6,868,541
Diluted 7,937,009 7,038,749
America's Car-Mart, Inc.
Continuing Operating Results by Segment
(in thousands)
For the Three Months Ended July 31, 2002
--------------------------------------------
Car-Mart Corporate Eliminations Consolidated
-------- --------- ------------ ------------
Revenues:
Sales $33,821 $33,821
Interest income 2,216 $120 $(60) 2,276
-------- --------- ------------ ------------
36,037 120 (60) 36,097
-------- --------- ------------ ------------
Costs and expenses:
Cost of sales 17,750 17,750
Selling, general and
administrative 5,915 640 6,555
Provision for credit
losses 5,602 5,602
Interest expense 486 110 (60) 536
Depreciation and
amortization 46 19 65
-------- --------- ------------ ------------
29,799 769 (60) 30,508
-------- --------- ------------ ------------
Income (loss) from
continuing operations
before taxes and
minority interests $6,238 $(649) $- $5,589
======== ========= ============ ============
For the Three Months Ended July 31, 2001
--------------------------------------------
Car-Mart Corporate Eliminations Consolidated
-------- --------- ------------ ------------
Revenues:
Sales $28,124 $28,124
Interest income 2,233 $276 $(94) 2,415
-------- --------- ------------ ------------
30,357 276 (94) 30,539
-------- --------- ------------ ------------
Costs and expenses:
Cost of sales 15,010 15,010
Selling, general and
administrative 4,097 912 5,009
Provision for credit
losses 5,497 5,497
Interest expense 784 245 (94) 935
Depreciation and
amortization 34 52 86
Write-down of equipment 400 400
-------- --------- ------------ ------------
25,422 1,609 (94) 26,937
-------- --------- ------------ ------------
Income (loss) from
continuing operations
before taxes and
minority interests $4,935 $(1,333) $- $3,602
======== ========= ============ ============
America's Car-Mart, Inc.
Consolidated Balance Sheet Data
July 31,
2002
------------
Cash and cash equivalents $1,041,361
Finance receivables, net $80,335,459
Total assets $99,700,704
Stockholders' equity $56,344,045
Shares outstanding 7,031,544
Book value per share $8.01