America's Car-Mart Reports Fourth Quarter Earnings
Company Issues EPS Guidance for Fiscal 2006
BENTONVILLE, Ark., July 6 -- America's Car-Mart, Inc. today announced its operating results for the fourth fiscal quarter and year ended April 30, 2005. The Company's results are segmented into continuing and discontinued operations.
All share and per share data in this press release have been adjusted to retroactively reflect a three-for-two common stock split effected in the form of a stock dividend in April 2005.
Highlights of fourth quarter operating results (continuing operations): * Revenue growth of 16% over the prior year quarter. * Income decrease of 7% from the prior year quarter. * Diluted EPS decrease of 7% from the prior year quarter. * Retail unit sales growth of 7% over the prior year quarter.
For the three months ended April 30, 2005, revenues increased 16% to $55.2 million, compared with $47.7 million in the same period of the prior fiscal year. Income for the quarter decreased 7% to $4.3 million, or $0.36 per diluted share, versus $4.6 million, or $0.39 per diluted share, in the same period last year. Retail unit sales increased 7% to 6,638 vehicles in the current quarter, compared to 6,183 vehicles in the same period last year. Same store revenue growth was 12.6% in the fourth quarter, compared to 7.8% in the same period last year.
The Company attributes the quarterly decrease in earnings to external Sarbanes-Oxley compliance related costs of $.7 million (pretax) incurred in the fourth quarter of the current fiscal year with no such costs in the same period of the prior year.
Highlights of fiscal year 2005 operating results (continuing operations): * Revenue growth of 16% over the prior year. * Income growth of 15% over the prior year. * Diluted EPS growth of 14% over the prior year. * Retail unit sales growth of 5% over the prior year.
For the year ended April 30, 2005, revenues from continuing operations increased 16% to $204.8 million, compared with $176.2 million in the same period of the prior fiscal year. Income from continuing operations in FY 2005 increased 15% to $18.0 million, or $1.49 per diluted share, versus $15.6 million, or $1.31 per diluted share, in the prior fiscal year. Retail unit sales increased 5% to 25,399 vehicles in FY 2005, compared to 24,281 vehicles in FY 2004. Same store revenue growth was 11.8% for FY 2005, compared to 9.8% for FY 2004.
"We are pleased with our annual revenue growth of 16% and earnings per share growth of 14% over last fiscal year, as well as our same store revenue growth of 11.8% versus 9.8% last year," commented T. J. Falgout, III, Chairman and Chief Executive Officer of America's Car Mart. "However, the considerable additional external costs of Sarbanes-Oxley Section 404 compliance hit us particularly hard in the fourth quarter, with expenses of over $700,000. If it wasn't for these Sarbanes-Oxley expenses, our year-over-year EPS growth would have been comparable to our rate of revenue growth."
"Unit sales increased in the fourth quarter over 7%, getting us closer to our historical average growth rate of 10 - 12%," said William H. Henderson, President of America's Car Mart. "We are substantially increasing our inventory, both on the lot and at our stockpile locations. Also, with our new stores coming on line earlier this year, as well as several expansions of existing dealerships, we expect unit sales to increase at a faster pace than last year."
Fiscal 2006 Earnings Guidance
The Company anticipates that its revenues will grow from 10% to 14% in fiscal 2006, which reflects the planned addition of eight new stores (three of which have already been opened) and revenue growth at existing stores. Diluted earnings per share are expected to increase at a rate comparable to revenue growth. The Company's first quarter comparison of FY 2006 to FY 2005 will be a challenge in view of last year's strong first quarter results and the Company's expectation of additional Sarbanes-Oxley compliance related expenses that will fall into the first quarter of FY 2006. Accordingly, the Company presently expects diluted earnings per share to be in the $1.63 to $1.70 range for the year ended April 30, 2006.
About America's Car-Mart
America's Car-Mart operates 79 automotive dealerships in eight 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 http://www.car-mart.com/ .
America's Car-Mart, Inc.
Consolidated Results of Operations
(Operating Statement Dollars in Thousands, except per share data)
% Change As a % of Sales
Three Months Ended 2005 Three Months Ended
April 30, vs. April 30,
2005 2004 2004 2005 2004
Operating Data:
Retail units sold 6,638 6,183 7.4%
Average number of
stores in operation 76.0 69.3 9.7
Average retail units
sold per store 87 89 (2.1)
Average retail sales
price $7,400 $6,928 6.8
Same store revenue
growth 12.6% 7.8%
Period End Data:
Stores open 76 70 8.6%
Accounts over 30 days
past due 3.0% 3.0%
Operating Statement:
Revenues:
Sales $51,239 $44,429 15.3% 100.0% 100.0%
Interest income 4,005 3,277 22.2 7.8 7.4
Total 55,244 47,706 15.8 107.8 107.4
Costs and expenses:
Cost of sales 27,945 23,496 18.9 54.5 52.9
Selling, general
and administrative 9,534 7,848 21.5 18.6 17.7
Provision for
credit losses 10,438 8,720 19.7 20.4 19.6
Interest expense 367 199 84.4 0.7 0.4
Depreciation and
amortization 118 90 31.1 0.2 0.2
Total 48,402 40,353 19.9 94.5 90.8
Income from
continuing
operations
before taxes 6,842 7,353 (6.9) 13.4 16.6
Provision for income
taxes 2,523 2,718 (7.2) 4.9 6.1
Income from
continuing
operations 4,319 4,635 (6.8) 8.4 10.4
Discontinued operations:
Income from
discontinued
operations,
after taxes
Net income $4,319 $4,635 (6.8)%
Basic earnings per share:
Continuing operations $0.37 $0.40 (8.4)%
Discontinued operations --- ---
Total $0.37 $0.40
Diluted earnings per share:
Continuing operations $0.36 $0.39 (7.2)%
Discontinued operations --- ---
Total $0.36 $0.39
Weighted average number
of shares outstanding:
Basic 11,822,525 11,619,995
Diluted 12,048,278 12,005,292
America's Car-Mart, Inc.
Consolidated Results of Operations
(Operating Statement Dollars in Thousands, except per share data)
% Change As a % of Sales
Year Ended 2005 Year Ended
April 30, vs. April 30,
2005 2004 2004 2005 2004
Operating Data:
Retail units sold 25,399 24,281 4.6%
Average number of
stores in operation 74.5 67.0 11.2
Average retail units
sold per store 341 362 (5.9)
Average retail
sales price $7,163 $6,506 10.1
Same store revenue
growth 11.8% 9.8%
Period End Data:
Stores open 76 70 8.6%
Accounts over
30 days past due 3.0% 3.0%
Operating Statement:
Revenues:
Sales $189,343 $163,589 15.7% 100.0% 100.0%
Interest income 15,445 12,595 22.6 8.2 7.7
Total 204,788 176,184 16.2 108.2 107.7
Costs and expenses:
Cost of sales 101,770 85,510 19.0 53.7 52.3
Selling, general and
administrative 34,789 29,671 17.2 18.4 18.1
Provision for credit
losses 38,094 34,767 9.6 20.1 21.3
Interest expense 1,226 1,114 10.1 0.6 0.7
Depreciation and
amortization 425 321 32.4 0.2 0.2
Total 176,304 151,383 16.5 93.1 92.5
Income from
continuing
operations
before taxes 28,484 24,801 14.9 15.0 15.2
Provision for income
taxes 10,508 9,162 14.7 5.5 5.6
Income from continuing
operations 17,976 15,639 14.9 9.5 9.6
Discontinued operations:
Income from discontinued
operations, after taxes 165
Net income $17,976 $15,804 13.7%
Basic earnings per share:
Continuing operations $1.53 $1.38 10.8%
Discontinued operations --- 0.02
Total $1.53 $1.40
Diluted earnings per share:
Continuing operations $1.49 $1.31 14.2%
Discontinued operations --- 0.01
Total $1.49 $1.32
Weighted average number
of shares outstanding:
Basic 11,737,398 11,318,946
Diluted 12,026,745 11,945,139
America's Car-Mart, Inc.
Consolidated Balance Sheet and Other Data
April 30, April 30,
2005 2004
Cash and cash equivalents $459,177 $1,128,349
Finance receivables, net $123,098,966 $103,683,660
Total assets $143,668,258 $117,241,451
Revolving credit facility $29,145,090 $22,534,120
Stockholders' equity $103,265,381 $84,577,476
Shares outstanding 11,843,738 11,636,762
Finance receivables:
Principal balance $152,350,210 $128,719,627
Allowance for credit losses (29,251,244) (25,035,967)
Finance receivables, net $123,098,966 $103,683,660
Allowance as % of principal
balance 19.20% 19.45%
Changes in allowance for
credit losses:
Year Ended
April 30,
2005 2004
Balance at beginning of year $25,035,967 $20,395,095
Provision for credit losses 38,093,729 34,766,496
Charge-offs, net of collateral
recovered (33,878,452) (30,125,624)
Balance at end of year $29,251,244 $25,035,967