"Buy-Here Pay-Here" Car-Mart Reports Earnings Up 20%
Company Reaffirms EPS Guidance of $2.06 for Fiscal 2004 and Announces Opening Of Two New Dealerships
BENTONVILLE, Ark., Dec. 10 -- America's Car-Mart, Inc. today announced its operating results for the second fiscal quarter and six months ended October 31, 2003. The Company's results are segmented into continuing and discontinued operations.
Highlights of second quarter operating results (continuing operations): -- Revenue growth of 13% over the prior year quarter -- Income growth of 23% over the prior year quarter -- Diluted EPS growth of 20% over the prior year quarter -- Retail unit sales growth of 10% over the prior year quarter
For the three months ended October 31, 2003, revenues from continuing operations increased 13% to $43.3 million, compared with $38.3 million in the same period of the prior fiscal year. Income from continuing operations for the quarter increased 23% to $3.8 million, or $0.48 per diluted share, versus $3.1 million, or $0.40 per diluted share, in the same period last year. Retail unit sales increased 10% to 6,096 vehicles in the current quarter, compared to 5,536 vehicles in the same period last year.
Highlights of six month operating results (continuing operations): -- Revenue growth of 16% over the prior year period -- Income growth of 25% over the prior year period -- Diluted EPS growth of 24% over the prior year period -- Retail unit sales growth of 13% over the prior year period
For the six months ended October 31, 2003, revenues from continuing operations increased 16% to $86.6 million, compared with $74.4 million in the same period of the prior fiscal year. Income from continuing operations for the first six months of FY2004 increased 25% to $8.2 million, or $1.03 per diluted share, versus $6.5 million, or $0.83 per diluted share, in the same period last year. Retail unit sales increased 13% to 12,162 vehicles in the current period, compared to 10,809 vehicles in the same period last year.
"We are pleased to report solid operating results for the fiscal second quarter, which is historically a seasonally difficult quarter," stated T. J. ("Skip") Falgout, III, America's Car-Mart's Chief Executive Officer. "Our growth in income from continuing operations of 23% and 25% for the first three and six months, respectively, is evidence of our ability to maintain high levels of profitability as we continue to grow the Company. Since the beginning of the year, we have increased net finance receivables by approximately $8 million while holding debt constant, a testament to our ability to finance most or all of our growth out of internally generated funds. Our quarter-ending debt to equity ratio was .33 to 1.0, down from .39 to 1.0 at fiscal year end."
"Our second fiscal quarter is historically our most difficult period for credit losses and this year was no exception," commented William H. ("Hank") Henderson, America's Car-Mart's President. "While our credit losses this quarter were at the high end of our historical range, we feel we have made some progress during the quarter. We increased the training of our collection staff and made substantial progress at reducing turnover. We have also shifted more of the collection responsibility to our area operations managers and regional vice presidents. Separately, we are pleased to report that our newest dealership in Paris, Texas has opened, and we expect to open our Nacogdoches, Texas dealership in the next ten days bringing our dealership count to 68."
Effective November 30, 2003, the Company amended to its $39.5 million revolving credit facility with Bank of Oklahoma and certain other banks. The amendment extends the maturity date of the facility by two years to April 30, 2006, and reduces the interest rate charged on borrowed funds by 50 basis points to Prime.
Fiscal 2004 Earnings Guidance
The Company has reaffirmed its fiscal year 2004 earnings estimate from continuing operations. Accordingly, the Company projects that it will earn $2.06 per diluted share from continuing operations in FY2004 as follows:
Period Period Ending Diluted EPS
1st Quarter 7-31-03 $ .55 (actual)
2nd Quarter 10-31-03 .48 (actual)
3rd Quarter 1-31-04 .47 (projected)
4th Quarter 4-30-04 .56 (projected)
Fiscal 2004 4-30-04 $ 2.06 (projected)
About America's Car-Mart
America's Car-Mart operates 67 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 .
America's Car-Mart, Inc.
Consolidated Results of Operations
(in thousands, except operating, period end and share data)
% Change As a % of Sales
Six Months Ended 2003 Six Months Ended
October 31, vs October 31,
2003 2002 2002 2003 2002
Operating Data:
Retail units sold 12,162 10,809 12.5%
Average number of stores
in operation 65.7 59.7 10.1
Average retail units sold
per store per month 30.9 30.2 2.2
Average retail sales
price $6,393 $6,249 2.3
Same store revenue growth 11.5% 14.0%
Period End Data:
Stores open 65 62 4.8%
Accounts 30 days
or more past due 5.2% 3.9%
Revenues:
Sales $80,517 $69,747 15.4% 100.0% 100.0%
Interest income 6,108 4,628 32.0 7.6 6.6
Total 86,625 74,375 16.5 107.6 106.6
Costs and expenses:
Cost of sales 42,132 36,816 14.4 52.3 52.8
Selling, general and
administrative 14,436 13,187 9.5 17.9 18.9
Provision for credit
losses 16,282 12,794 27.3 20.2 18.3
Interest expense 620 1,005 (38.3) 0.8 1.4
Depreciation and
amortization 160 136 17.6 0.2 0.2
Total 73,630 63,938 15.2 91.4 91.7
Income from
continuing operations
before taxes 12,995 10,437 24.5 16.1 15.0
Provision for income taxes 4,801 3,900 23.1 6.0 5.6
Income from continuing
operations 8,194 6,537 25.3 10.2 9.4
Discontinued operations:
Income from discontinued
operations, net of taxes
and minority interests 165 375
Loss on sale of discontinued
operation, net of tax 131
Income from discontinued
operations 165 506
Net income $8,359 $7,043 18.7%
Basic earnings per share:
Continuing operations $1.11 $0.94 18.2%
Discontinued operations 0.02 0.07
Total $1.13 $1.01
Diluted earnings per share:
Continuing operations $1.03 $0.83 24.4%
Discontinued operations 0.02 0.06
Total $1.05 $0.89
Weighted average number of
shares outstanding:
Basic 7,403,666 6,982,659
Diluted 7,930,054 7,872,863
America's Car-Mart, Inc.
Consolidated Results of Operations
(in thousands, except operating, period end and share data)
% Change As a % of Sales
Three Months Ended 2003 Three Months Ended
October 31, vs October 31,
2003 2002 2002 2003 2002
Operating Data:
Retail units sold 6,096 5,536 10.1%
Average number of
stores in operation 65.7 61.7 6.5
Average retail units sold
per store per month 30.9 29.9 3.4
Average retail sales
price $6,350 $6,279 1.1
Same store revenue growth 11.1% 14.2%
Period End Data:
Stores open 65 62 4.8%
Accounts 30 days or more
past due 5.2% 3.9%
Revenues:
Sales $40,197 $35,926 11.9% 100.0% 100.0%
Interest income 3,118 2,352 32.6 7.8 6.5
Total 43,315 38,278 13.2 107.8 106.5
Costs and expenses:
Cost of sales 21,196 19,066 11.2 52.7 53.1
Selling, general and
administrative 7,129 6,632 7.5 17.7 18.5
Provision for credit
losses 8,561 7,192 19.0 21.3 20.0
Interest expense 305 469 (35.0) 0.8 1.3
Depreciation and
amortization 78 71 9.9 0.2 0.2
Total 37,269 33,430 11.5 92.7 93.1
Income from
continuing operations
before taxes 6,046 4,848 24.7 15.0 13.5
Provision for income taxes 2,231 1,748 27.6 5.6 4.9
Income from continuing
operations 3,815 3,100 23.1 9.5 8.6
Discontinued operations:
Income from discontinued
operations, net of taxes
and minority interests
Gain on sale of discontinued
operation, net of tax 256
Income from discontinued
operations --- 256
Net income $3,815 $3,356 13.7%
Basic earnings per share:
Continuing operations $0.51 $0.44 14.6%
Discontinued operations --- 0.04
Total $0.51 $0.48
Diluted earnings per share:
Continuing operations $0.48 $0.40 20.9%
Discontinued operations --- 0.03
Total $0.48 $0.43
Weighted average number
of shares outstanding:
Basic 7,512,401 6,997,169
Diluted 7,950,608 7,808,712
America's Car-Mart, Inc.
Consolidated Balance Sheet and Other Data
October 31, April 30,
2003 2003
Cash and cash equivalents $ 1,563,163 $ 783,786
Finance receivables, net $ 99,282,011 $ 91,358,935
Total assets $111,958,276 $101,840,582
Revolving credit facility $ 25,744,656 $ 25,968,220
Stockholders' equity $ 77,056,487 $ 65,960,873
Shares outstanding 7,596,318 7,207,963
Book value per share $ 10.14 $ 9.15
Finance receivables:
Principal balance $122,043,036 $111,754,030
Allowance for credit losses (22,761,025) (20,395,095)
Finance receivables, net $ 99,282,011 $ 91,358,935
Allowance as % of principal balance 18.65% 18.25%
Changes in allowance for credit losses:
Six Months Ended
October 31,
2003 2002
Balance at beginning of year $20,395,095 $17,042,609
Provision for credit losses 16,281,659 12,793,997
Net charge-offs (13,915,729) (10,702,303)
Balance at end of period $22,761,025 $19,134,303