America's Car-Mart Reports Third Quarter Earnings from Continuing Operations of $0.42 Per Share Vs. Forecast of $0.39; Company Reaffirms EPS Guidance for Fourth Quarter
BENTONVILLE, Ark.--March 6, 2003--America's Car-Mart, Inc. today announced its operating results for the third fiscal quarter and nine months ended January 31, 2003. The Company's results are segmented into continuing and discontinued operations.Highlights of third quarter operating results (continuing operations, excluding a charge in prior fiscal period):
| -- | Revenue growth of 24% over the prior year quarter |
| -- | Income growth of 48% over the prior year quarter |
| -- | EPS growth of 36% over the prior year quarter |
| -- | Retail unit sales growth of 18% over the prior year quarter |
For the three months ended January 31, 2003, revenues from continuing operations increased 24% to $38.3 million, compared with $30.9 million in the same period of the prior fiscal year. Income from continuing operations for the quarter increased 48% to $3.3 million, or $0.42 per diluted share, versus $2.2 million, or $0.31 per diluted share, in the same period last year, excluding a $2.0 million after tax charge in the prior fiscal year. Retail unit sales increased 18% to 5,321 vehicles in the current quarter, compared to 4,527 vehicles in the same period last year.
Highlights of nine month operating results (continuing operations, excluding charges in prior fiscal period):
-- Revenue growth of 21% over the prior year period
-- Income growth of 53% over the prior year period
-- EPS growth of 37% over the prior year period
-- Retail unit sales growth of 18% over the prior year period
For the nine months ended January 31, 2003, revenues from continuing operations increased 21% to $112.7 million, compared with $93.2 million in the same period of the prior fiscal year. Income from continuing operations for the first nine months of FY2003 increased 53% to $9.8 million, or $1.25 per diluted share, versus $6.4 million, or $0.91 per diluted share in the same period last year, excluding $6.4 million of after tax charges in the prior fiscal period. Retail unit sales increased 18% to 16,130 vehicles in the current period, compared to 13,642 vehicles in the same period last year.
"Although the fiscal third quarter is typically a difficult quarter, we are pleased with our stronger than expected operating results," commented T.J. ("Skip") Falgout, III, Chief Executive Officer of America's Car-Mart. "Car-Mart's credit losses as a percentage of sales were significantly lower this quarter compared with the year ago quarter, at 18.5% versus 20.5% in the third quarter of fiscal 2002. Additionally, we have continued our strong top and bottom line growth, while at the same time keeping our leverage low. Presently, debt as a percentage of finance receivable principal balances is around 27%, and our debt-to-equity ratio is less than .5 to 1."
"Our renewed focus on credit policies and procedures has helped improve credit losses over the year ago quarter," stated Hank Henderson, President of America's Car-Mart. "Also, we believe that the contributions of our regional, district, and account managers, through their emphasis on proper training and oversight of our collection personnel, has had, and will continue to have, a positive impact on improving our collection efficiency and reducing our credit losses."
Fiscal 2003 Earnings Guidance
The Company has adjusted its fiscal year 2003 earnings estimate from continuing operations to reflect higher than expected earnings in the third quarter and has reaffirmed its outlook for the remainder of the fiscal year. Accordingly, the Company projects that it will earn $1.72 per diluted share from continuing operations in FY2003 as follows:
1st quarter: $0.43 (actual)
2nd quarter: $0.40 (actual)
3rd quarter: $0.42 (actual)
4th quarter: $0.47 (projected)
-----
Fiscal 2003: $1.72
=====
Conference Call
Management will be holding a conference call on Thursday, March 6, 2003 at 11:00 a.m. Eastern time to discuss third quarter results. To participate, please dial 800-540-8619. Callers should dial in approximately 10 minutes before the call begins. The conference call can also be accessed on www.vcall.com.
A conference call replay will be available two hours following the call for seven days and can be accessed by calling: 800-642-1687 or 706-645-9291, conference ID# 8721802.
About America's Car-Mart
America's Car-Mart operates 63 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 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. 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 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 Nine Months Ended
January 31, January 31,
--------------------- ---------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Operating data:
Retail units sold 5,321 4,527 16,130 13,642
Average number of
stores in operation 62.0 52.7 60.5 51.7
Average retail units
sold per store per
month 28.6 28.6 29.6 29.3
Average retail sales
price $6,506 $6,089 $6,334 $6,077
Same store revenue
growth 17.1% 11.2% 15.0% 14.3%
Accounts 30 days or
more past due (at
period end) 5.2% 4.3% 5.2% 4.3%
Revenues:
Sales $35,730 $28,655 $105,477 $86,122
Interest income 2,569 2,266 7,197 7,105
---------- ---------- ---------- ----------
Total 38,299 30,921 112,674 93,227
---------- ---------- ---------- ----------
Costs and expenses:
Cost of sales 19,012 14,506 55,828 45,549
Selling, general and
administrative 7,012 5,867 20,198 16,042
Provision for credit
losses 6,621 5,887 19,415 17,510
Interest expense 361 657 1,367 2,438
Depreciation and
amortization 74 52 210 210
Stock option based
compensation 2,290 2,290
Restructuring charge 2,732
Write-down of
investments and
equipment 3,928
---------- ---------- ---------- ----------
Total 33,080 29,259 97,018 90,699
---------- ---------- ---------- ----------
Income from
continuing
operations
before taxes and
minority
interests 5,219 1,662 15,656 2,528
Provision for income taxes 1,935 1,293 5,835 2,070
Minority interests 138 418
---------- ---------- ---------- ----------
Income from
continuing
operations 3,284 231 9,821 40
Discontinued operations:
Income (loss) from
discontinued
operations,
net of taxes and
minority interests 307 375 (13,275)
Gain on sale of
discontinued
operation, net of tax 131
---------- ---------- ---------- ----------
Income (loss) from
discontinued
operations - 307 506 (13,275)
---------- ---------- ---------- ----------
Net income (loss) $3,284 $538 $10,327 $(13,235)
========== ========== ========== ==========
Basic earnings (loss) per
share:
Continuing operations $0.47 $0.03 $1.41 $0.01
Discontinued operations - 0.05 0.07 (1.96)
---------- ---------- ---------- ----------
Total $0.47 $0.08 $1.48 $(1.95)
========== ========== ========== ==========
Diluted earnings (loss)
per share:
Continuing operations $0.42 $0.03 $1.25 $0.01
Discontinued operations - 0.04 0.07 (1.89)
---------- ---------- ---------- ----------
Total $0.42 $0.08 $1.32 $(1.88)
========== ========== ========== ==========
Weighted average number of
shares outstanding:
Basic 6,996,036 6,747,458 6,987,118 6,782,439
Diluted 7,794,090 7,149,145 7,846,605 7,032,625
America's Car-Mart, Inc.
Continuing Operating Results by Segment
(in thousands)
For the Three Months Ended
January 31, 2003
--------------------------------------------
Car-Mart Corporate Eliminations Consolidated
-------- --------- ------------ ------------
Revenues:
Sales $35,730 $35,730
Interest income 2,561 $168 $(160) 2,569
-------- --------- ------------ ------------
Total 38,291 168 (160) 38,299
-------- --------- ------------ ------------
Costs and expenses:
Cost of sales 19,012 19,012
Selling, general and
administrative 6,596 416 7,012
Provision for credit
losses 6,621 6,621
Interest expense 517 4 (160) 361
Depreciation and
amortization 53 21 74
-------- --------- ------------ ------------
Total 32,799 441 (160) 33,080
-------- --------- ------------ ------------
Income (loss) before
taxes
and minority
interests $5,492 $(273) $- $5,219
======== ========= ============ ============
For the Three Months Ended
January 31, 2002
--------------------------------------------
Car-Mart Corporate Eliminations Consolidated
-------- --------- ------------ ------------
Revenues:
Sales $28,655 $28,655
Interest income 2,157 $189 $(80) 2,266
-------- --------- ------------ ------------
Total 30,812 189 (80) 30,921
-------- --------- ------------ ------------
Costs and expenses:
Cost of sales 14,506 14,506
Selling, general and
administrative 5,090 777 5,867
Provision for credit
losses 5,887 5,887
Interest expense 558 179 (80) 657
Depreciation and
amortization 35 17 52
Stock option based
compensation 2,290 2,290
-------- --------- ------------ ------------
Total 26,076 3,263 (80) 29,259
-------- --------- ------------ ------------
Income (loss) before
taxes
and minority
interests $4,736 $(3,074) $- $1,662
======== ========= ============ ============
America's Car-Mart, Inc.
Continuing Operating Results by Segment
(in thousands)
For the Nine Months Ended January 31, 2003
---------------------------------------------
Car-Mart Corporate Eliminations Consolidated
--------- --------- ------------ ------------
Revenues:
Sales $105,477 $105,477
Interest income 7,120 $362 $(285) 7,197
--------- --------- ------------ ------------
Total 112,597 362 (285) 112,674
--------- --------- ------------ ------------
Costs and expenses:
Cost of sales 55,828 55,828
Selling, general and
administrative 18,523 1,675 20,198
Provision for credit
losses 19,415 19,415
Interest expense 1,506 146 (285) 1,367
Depreciation and
amortization 149 61 210
--------- --------- ------------ ------------
Total 95,421 1,882 (285) 97,018
--------- --------- ------------ ------------
Income (loss) before
taxes
and minority
interests $17,176 $(1,520) $- $15,656
========= ========= ============ ============
For the Nine Months Ended January 31, 2002
---------------------------------------------
Car-Mart Corporate Eliminations Consolidated
--------- --------- ------------ ------------
Revenues:
Sales $86,122 $86,122
Interest income 6,658 $705 $(258) 7,105
--------- --------- ------------ ------------
Total 92,780 705 (258) 93,227
--------- --------- ------------ ------------
Costs and expenses:
Cost of sales 45,549 45,549
Selling, general and
administrative 13,811 2,231 16,042
Provision for credit
losses 17,410 100 17,510
Interest expense 2,074 622 (258) 2,438
Depreciation and
amortization 105 105 210
Stock option based
compensation 2,290 2,290
Restructuring charge 2,732 2,732
Write-down of
investments and
equipment 3,928 3,928
--------- --------- ------------ ------------
Total 78,949 12,008 (258) 90,699
--------- --------- ------------ ------------
Income (loss) before
taxes
and minority
interests $13,831 $(11,303) $- $2,528
========= ========= ============ ============
America's Car-Mart, Inc.
Car-Mart Results Only
(dollars in thousands)
As a % of Sales
% Change ---------------
---------- Three Months
Three Months Ended 2003 Ended
January 31, vs January 31,
2003 2002 2002 2003 2002
---------- -------- --------- ---------------
Revenues:
Sales $35,730 $28,655 24.7 % 100.0 % 100.0 %
Interest income 2,561 2,157 18.7 7.2 7.5
---------- -------- ---------------
Total 38,291 30,812 24.3 107.2 107.5
---------- -------- ---------------
Costs and expenses:
Cost of sales 19,012 14,506 31.1 53.2 50.6
Selling, general and
administrative 6,596 5,090 29.6 18.5 17.8
Provision for credit
losses 6,621 5,887 12.5 18.5 20.5
Interest expense 517 558 (7.3) 1.4 2.0
Depreciation and
amortization 53 35 51.4 0.2 0.1
---------- -------- ---------------
Total 32,799 26,076 25.8 91.8 91.0
---------- -------- ---------------
Pretax income $5,492 $4,736 16.0 15.4 16.5
========== ======== ===============
As a % of Sales
% Change ---------------
---------- Nine Months
Nine Months Ended 2003 Ended
January 31, vs January 31,
2003 2002 2002 2003 2002
---------- -------- --------- ---------------
Revenues:
Sales $105,477 $86,122 22.5 % 100.0 % 100.0 %
Interest income 7,120 6,658 6.9 6.8 7.7
---------- -------- ---------------
Total 112,597 92,780 21.4 106.8 107.7
---------- -------- ---------------
Costs and expenses:
Cost of sales 55,828 45,549 22.6 52.9 52.9
Selling, general and
administrative 18,523 13,811 34.1 17.6 16.0
Provision for credit
losses 19,415 17,410 11.5 18.4 20.2
Interest expense 1,506 2,074 (27.4) 1.4 2.4
Depreciation and
amortization 149 105 41.9 0.2 0.1
---------- -------- ---------------
Total 95,421 78,949 20.9 90.5 91.6
---------- -------- ---------------
Pretax income $17,176 $13,831 24.2 16.3 16.1
========== ======== ===============
America's Car-Mart, Inc.
Consolidated Balance Sheet and Other Data
January 31, April 30,
2003 2002
------------- -------------
Cash and cash equivalents $595,561 $1,229,920
Finance receivables, net $87,418,869 $75,079,603
Total assets $97,999,258 $128,142,362
Credit facility and other debt $28,589,595 $39,791,957
Stockholders' equity $61,995,769 $52,813,187
Shares outstanding 7,004,444 6,944,325
Book value per share $8.85 $7.61
Stores open at period end 63 55
Finance receivables:
Principal balance $106,934,396 $92,122,212
Allowance for credit losses (19,515,527) (17,042,609)
------------- -------------
Finance receivables, net $87,418,869 $75,079,603
============= =============
Allowance as % of principal
balance 18.25% 18.50%
============= =============
Changes in allowance for credit
losses:
Nine Months Ended
January 31,
2003 2002
------------- -------------
Balance at beginning of period $17,042,609 $14,066,782
Provision for credit losses 19,415,277 17,409,684
Net charge offs (16,942,359) (15,141,513)
------------- -------------
Balance at end of period $19,515,527 $16,334,953
============= =============