America's Car-Mart Reports Fourth Quarter Earnings
Company Issues EPS Guidance for Fiscal 2007
BENTONVILLE, Ark., July 6 -- America's Car-Mart, Inc. today announced its operating results for the fourth fiscal quarter and year ended April 30, 2006.
Highlights of fourth quarter operating results: * Revenue growth of 13% over the prior year quarter. * Income increase of 5.4% from the prior year quarter. * Diluted EPS increase of 5.6% from the prior year quarter. * Retail unit sales growth of 6.9% over the prior year quarter. * Same store revenue growth of 8.3% * Increase in Finance Receivables during the quarter of 5.3%
For the three months ended April 30, 2006, revenues increased 13% to $62.5 million, compared with $55.2 million in the same period of the prior fiscal year. Income for the quarter increased 5.4% to $4.6 million, or $0.38 per diluted share, versus $4.3 million, or $0.36 per diluted share, in the same period last year. Retail unit sales increased 6.9% to 7,096 vehicles in the current quarter, compared to 6,638 vehicles in the same period last year. Same store revenue growth was 8.3% in the fourth quarter, compared to 12.6% in the same period last year. Finance Receivables grew by $9.3 million, or 5.3%.
Highlights of fiscal year 2006 operating results: * Revenue growth of 14.4% over the prior year. * Income decrease of 7.1% from the prior year. * Diluted EPS decrease of 6.7% from the prior year. * Retail unit sales growth of 7.9% over the prior year. * Same store revenue growth of 9.8% * Increase in Finance Receivables during the year of 21.6%
For the year ended April 30, 2006, revenues increased 14.4% to $234.2 million, compared with $204.8 for the prior fiscal year. Income decreased 7.1% to $16.7 million, or $1.39 per diluted share, versus $18.0 million, or $1.49 per diluted share, for the prior fiscal year. Retail unit sales increased 7.9% to 27,415 vehicles in FY 2006, compared to 25,399 vehicles in FY 2005. Same store revenue growth was 9.8% for FY 2006, compared to 11.8% for FY 2005. Finance Receivables grew by $32.9 million, or 21.6%, with a year-end balance of $185.2 million.
"We are pleased with our annual revenue growth of 14.4% as well as our same store revenue growth of 9.8%. We are also pleased with our 4th quarter credit losses which came in at 19.6% vs. 20.4% in the 4th quarter of 2005. The net charge-offs for the 3rd and 4th quarters, as a percentage of beginning of quarter accounts receivable, were lower than each of the previous 13 quarters," commented T. J. ("Skip") Falgout, III, Chairman and Chief Executive Officer of America's Car Mart. "However, our gross profit percentage decreased by 2.0% for the year, most of which can be attributed to an increase in the cost of vehicles, as well as higher expenses associated with preparing vehicles for sale. We are beginning to see some improvement in this area by modifying our purchasing to capitalize on our size and multi-regional presence to acquire adequate inventory at reasonable prices while, at the same time, instituting additional controls and oversight to reduce vehicle repair and reconditioning expenses."
"We expect our unit sales to grow at a faster rate than last year, which was just under 8%, as we continue to see positive results from our recent dealership expansion projects and new store growth," said William H. ("Hank") Henderson, President of America's Car Mart. "Our newly opened lots, including our two acquisitions, in Lexington, Kentucky and in Tuscaloosa, Alabama, are coming along nicely. We have already opened three new lots since May 1, and six more are in process."
Fiscal 2007 Earnings Guidance
The Company anticipates that its revenues will grow from 10% to 14% in fiscal 2007, which reflects the planned addition of twelve new stores and revenue growth at existing stores. The Company presently expects diluted earnings per share to be in the range of $1.56 to $1.63, representing an increase of 12% to 17% for the year ended April 30, 2007.
About America's Car-Mart
America's Car-Mart operates 88 automotive dealerships in nine 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, expect per share data)
% Change As a % of Sales
Three Months Ended 2006 Three Months Ended
April 30, vs. April 30,
2006 2005 2005 2006 2005
Operating Data:
Retail units sold 7,096 6,638 6.9%
Average number of
stores in operation 84.7 76.0 11.4%
Average retail units
sold per store 84 87 (3.4)%
Average retail sales
price $7,701 $7,400 4.1%
Same store revenue
growth 8.3% 12.6%
Period End Data:
Stores open 85 76 11.8%
Accounts over 30
days past due 3.7% 3.0%
Finance Receivables,
gross $185,243 $152,350 21.6%
Operating Statement:
Revenues:
Sales $57,105 $51,239 11.4% 100.0% 100.0%
Interest income 5,346 4,005 33.5% 9.4 7.8
Total 62,451 55,244 13.0% 109.4 107.8
Costs and expenses:
Cost of sales 32,422 27,945 16.0% 56.8 54.5
Selling, general
and administrative 10,567 9,534 10.8% 18.5 18.6
Provision for credit
losses 11,214 10,438 7.4% 19.6 20.4
Interest expense 723 367 97.0% 1.3 0.7
Depreciation and
amortization 279 118 136.4% 0.5 0.2
Total 55,205 48,402 14.1% 96.7 94.5
Income before
taxes 7,246 6,842 5.9% 12.7 13.4
Provision for income
taxes 2,693 2,523 6.7% 4.7 4.9
Net income $4,553 $4,319 5.4% 8.0 8.4
Earnings per share:
Basic $0.38 $0.37
Diluted $0.38 $0.36
Weighted average
number of shares
outstanding:
Basic 11,846,063 11,822,525
Diluted 11,991,375 12,048,278
America's Car-Mart, Inc.
Consolidated Results of Operations
(Operating Statement Dollars in Thousands, expect per share data)
% Change As a % of Sales
Year Ended 2006 Year Ended
April 30, vs. April 30,
2006 2005 2005 2006 2005
Operating Data:
Retail units sold 27,415 25,399 7.9%
Average number of
stores in operation 81.5 74.5 9.4%
Average retail units
sold per store 336 341 (1.5)%
Average retail sales
price $7,494 $7,163 4.6%
Same store revenue
growth 9.8% 11.8%
Period End Data:
Stores open 85 76 11.8%
Accounts over 30 days
past due 3.7% 3.0%
Finance Receivables,
gross $185,243 $152,350 21.6%
Operating Statement:
Revenues:
Sales $214,482 $189,343 13.3% 100.0% 100.0%
Interest income 19,725 15,445 27.7% 9.2 8.2
Total 234,207 204,788 14.4% 109.2 108.2
Costs and expenses:
Cost of sales 119,433 101,770 17.4% 55.7 53.7
Selling, general
and administrative 39,261 34,789 12.9% 18.3 18.4
Provision for credit
losses 45,810 38,094 20.3% 21.4 20.1
Interest expense 2,458 1,226 100.5% 1.1 0.6
Depreciation and
amortization 724 425 70.4% 0.3 0.2
Total 207,686 176,304 17.8% 96.8 93.1
Income before
taxes 26,521 28,484 (6.9)% 12.4 15.0
Provision for income
taxes 9,816 10,508 (6.6)% 4.6 5.6
Net Income $16,705 $17,976 (7.1)% 7.8 9.5
Earnings per share:
Basic $1.41 $1.53
Diluted $1.39 $1.49
Weighted average
number of shares
outstanding:
Basic 11,852,804 11,737,398
Diluted 12,018,541 12,026,745
America's Car-Mart, Inc.
Consolidated Balance Sheet and Other Data
April 30, April 30,
2006 2005
Cash and cash equivalents $254,824 $459,177
Finance receivables, net $149,379,024 $123,098,966
Total assets $177,613,203 $143,668,258
Revolving credit facility $43,588,443 $29,145,090
Stockholders' equity $119,251,431 $103,265,381
Shares outstanding 11,848,024 11,843,738
Finance receivables:
Principal balance $185,243,207 $152,350,210
Allowance for credit losses (35,864,183) (29,251,244)
Finance receivables, net $149,379,024 $123,098,966
Allowance as % of principal balance 19.36%(a) 19.20%
(a) Represents the weighted average for Finance Receivables generated
by the Company (at 19.2%) and Finance Receivables purchased from
Dan's Auto Sales in Lexington, KY.
Changes in allowance for credit
losses:
Year Ended
April 30,
2006 2005
Balance at beginning of year $29,251,244 $25,035,967
Provision for credit losses 45,810,496 38,093,729
Charge-offs, net of collateral
recovered (39,724,293) (33,878,452)
Allowance related to purchased
accounts 526,736 ---
Balance at end of year $35,864,183 $29,251,244