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America's Car-Mart Reports Diluted Earnings Per Share Of $.68 On Revenue Of $123 Million; Debt To Equity Of 45.6% And Debt To Finance Receivables Of 25.6%

Stocks in this article: CRMT

BENTONVILLE, Ark., May 27, 2014 (GLOBE NEWSWIRE) -- America's Car-Mart, Inc. (Nasdaq:CRMT) today announced its operating results for its fiscal 2014 fourth quarter and full fiscal year ended April 30, 2014. The Company repurchased 1.3% of its outstanding shares during the quarter.

Highlights of fourth quarter operating results:

  • Net income of $6.3 million - $.68 per diluted share vs. $.92 per diluted share for prior year quarter
  • Revenues of $123 million compared to $126 million for the prior year quarter with same store revenue decrease of 7.1%
  • Retail unit sales decrease of 1.9% to 10,565 from 10,767 for the prior year quarter with 26.9 retail units sold per dealership per month down from 29.4 for prior year quarter
  • Average retail sales price decreased $178 to $9,785 or 1.8% from the prior year quarter and increased $46 or 0.5% sequentially
  • Net charge-offs as a percent of average finance receivables of 8.3%, up from 7.1% for prior year quarter
  • Provision for credit losses of 25.3% of sales vs. 22.6% for prior year quarter
  • Selling, General and Administrative Expenses at 17.9% of sales vs. 17.0% for prior year quarter
  • Opened four new dealerships during the quarter - dealership count now at 134
  • Active accounts base now almost 61,000
  • Reduced total debt during the quarter by $17.3 million resulting in year-end debt to equity of 45.6% and debt to finance receivables of 25.6% compared to debt to equity of 49.2% and debt to finance receivable of 27.4% at April 30, 2013
  • Allowance for credit losses at 23.5% of finance receivables at April 30, 2014, up from 21.5% at April 30, 2013

Highlights of full fiscal year operating results:

  • Net income of $21.1 million or $2.25 per diluted share ($2.76 per diluted share excluding a $4.9 million non-cash after-tax charge resulting from an increase to the allowance for credit losses made in the third quarter) vs. $3.36 per diluted share for prior year
  • Revenue increase of 5.3% to $489 million from $465 million for the prior year with same store revenue decrease of 0.8%
  • Retail unit sales increase of 4.5% to 42,551 from 40,737 for the prior year with a 0.5% increase in average retail sales price to $9,768 with 27.7 retail units sold per dealership per month down from 28.8 for prior year
  • Net Charge-offs as a percentage of average finance receivables of 28.2% compared to 25.2% for the prior year
  • Provision for credit losses of 27.4% of sales (25.7% excluding the effect of the increase in the allowance for credit losses made in the third quarter) vs. 23.1% for prior year
  • Opened ten new dealerships during the year
  • Strong cash flows supporting the increase in revenues and the $16 million increase in finance receivables, $7.1 million in net capital expenditures, and $12.8 million in common stock re-purchases, with a $2.5 million decrease in total debt

"Net charge-offs were higher in the fourth quarter than we have typically seen, and we have tried to take the necessary steps to improve in this most important area of the business. The bottom line is that too many of our customers did not successfully fulfill the requirements of their contracts. Our mission is to earn our customers' repeat business by providing quality vehicles, affordable payment terms and excellent service. To us success means that our customers have equity in their vehicle quickly and as a result own an asset at the end of the contract term. Unfortunately, in many cases competition does not share this same view of customer success and that market dynamic is certainly pushing up our default rates," said William H. ("Hank") Henderson, President and Chief Executive Officer of America's Car-Mart. "The higher charge-off levels led us to be more disciplined with the structures of our 4 th quarter deals and we are confident we will see improvement in customer success rates as a result. Holding a stronger line for better deal structures, however, contributed to the top line challenges we experienced as we did forego some sales opportunities to assure better success rates for our customers on these most recent sales. We intend to continue to push for better deal structures but at the same time remain aware of the necessary balance for the sales side of the equation. We remain committed to growing our business the right way by setting our customers up to succeed so that we will be in a position to earn their repeat business in the future."

"We opened ten new dealerships this year and have two more to be opened within the next thirty days; one each in Alabama and Tennessee. Our new dealerships are performing well and we are excited to be adding great new towns to our footprint. During the year we added almost 2,900 active accounts and are working hard to help make our new customers, and our existing customers, successful. We remain committed to continuing to grow our dealership count into the future, but given the current market dynamics we will be even more selective as we move forward. Being more selective, we will likely see new dealership openings for this upcoming year at less than our recent 10% rate; our targeted number of openings is eight dealerships for fiscal 2015," added Mr. Henderson.

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