America's Car-Mart Reports First Quarter Earnings of $0.41 Per Share
Company Reaffirms Guidance For Full Fiscal Year
BENTONVILLE, Ark., Sept. 8 -- America's Car-Mart, Inc. today announced its operating results for the first fiscal quarter ended July 31, 2005.
Highlights of first quarter operating results: -- Revenue growth of 15% compared to the prior year quarter -- Diluted EPS the same as the prior year quarter -- Retail unit sales growth of 7% compared to the prior year quarter -- Same store sales growth of 10%
For the three months ended July 31, 2005, revenues increased 15% to $58.2 million, compared with $50.8 million in the same period of the prior fiscal year. Income for the quarter was virtually unchanged at $4.9 million, or $0.41 per diluted share, for both the current and prior year period. Retail unit sales increased 7% to 6,885 vehicles in the current quarter, compared to 6,461 vehicles in the same period last year.
"Overall, we were pleased with our performance in the first quarter," said T. J. ("Skip") Falgout, III, Chairman and Chief Executive Officer of America's Car Mart. "Although earnings per share were flat compared with the prior year quarter, we were expecting as much due to the strong results of our year-ago first quarter coupled with higher audit and Sarbanes-Oxley compliance costs in the most recent quarter. In fact, professional fees related primarily to our Fiscal 2005 audit and Sarbanes-Oxley compliance increased by about $500,000, or $.03 per share, over the first quarter of the prior year. Fortunately, we expect these fees to be substantially lower in the future."
"Revenue growth and same store sales growth of 15% and 10%, respectively, were also in line with our expectations, enabling us to add over $11 million in accounts receivable this past quarter," added Mr. Falgout. "However, credit losses were higher than we would have liked, with credit losses as a percentage of sales totaling 20.9%, versus 19.5% in the prior year quarter. This is in part a reflection of the percentage of dealerships that are relatively young (open less than six years). Newer and developing dealerships tend to have higher credit losses than mature dealerships, since the newer stores customarily have less experienced management and a customer base that is less seasoned. We are aggressively working with our new store managers to improve credit quality and collections."
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 (four 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. Currently, the Company 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 80 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 share and per share data)
% Change As a % of Sales
Three Months 2005 Three Months
Ended vs. Ended
July 31, 2004 July 31,
2005 2004 2005 2004
Operating Data:
Retail units sold 6,885 6,461 6.6%
Average number of
stores in operation 79.0 71.3 10.8
Average retail units
sold per store 87.2 90.6 (3.8)
Average retail
sales price $7,477 $7,036 6.3
Same store
revenue growth 10.3% 12.5%
Period End Data:
Stores open 80 72 11.1%
Accounts over 30 days
past due 4.7% 3.4%
Operating Statement:
Revenues:
Sales $53,596 $47,233 13.5% 100.0% 100.0%
Interest income 4,583 3,577 28.1 8.6 7.6
Total 58,179 50,810 14.5 108.6 107.6
Costs and expenses:
Cost of sales 29,261 25,242 15.9 54.6 53.4
Selling, general
and administrative 9,331 8,205 13.7 17.4 17.4
Provision for
credit losses 11,201 9,222 21.5 20.9 19.5
Interest expense 478 227 110.6 0.9 0.5
Depreciation and
amortization 148 92 60.9 0.3 0.2
Total 50,419 42,988 17.3 94.1 91.0
Income before
taxes 7,760 7,822 (0.8) 14.5 16.6
Provision for
income taxes 2,873 2,889 (0.6) 5.4 6.1
Net income $4,887 $4,933 (0.9)% 9.1 10.4
Earnings per share:
Basic $0.41 $0.42
Diluted $0.41 $0.41
Weighted average number
of shares outstanding:
Basic 11,845,236 11,664,267
Diluted 12,040,944 11,996,943
America's Car-Mart, Inc.
Consolidated Balance Sheet and Other Data
July 31, April 30,
2005 2005
Cash and cash equivalents $810,235 $459,177
Finance receivables, net $132,135,781 $123,098,966
Total assets $155,122,656 $143,668,258
Revolving credit facilities $29,291,211 $29,145,090
Stockholders' equity $108,169,423 $103,265,381
Shares outstanding 11,846,074 11,843,738
Finance receivables:
Principal balance $163,534,909 $152,350,210
Allowance for credit losses (31,399,128) (29,251,244)
Finance receivables, net $132,135,781 $123,098,966
Allowance as % of principal balance 19.20% 19.20%
Changes in allowance for credit losses:
Three Months Ended
July 31,
2005 2004
Balance at beginning of year $29,251,244 $25,035,967
Provision for credit losses 11,201,556 9,221,678
Charge-offs, net of collateral
recovered (9,053,672) (7,614,559)
Balance at end of period $31,399,128 $26,643,086