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America's Car Mart (CRMT) Misses Q4 EPS by 2c

May 21, 2015 6:05 PM EDT

America's Car Mart (NASDAQ: CRMT) reported Q4 EPS of $0.81, $0.02 worse than the analyst estimate of $0.83. Revenue for the quarter came in at $138 million versus the consensus estimate of $134.81 million.

"As we expected, we saw a nice improvement at the top line for the quarter and are pleased to see the increase in sales productivity. Our general managers are doing a very nice job of executing our sales plan and are working hard to attract customers looking for good, basic and affordable transportation to go with Car-Mart's excellent service. We believe that we offer our local markets a better value by staying focused on customer success. Retail units sold was up 10.7% and same store revenue was up 7.5% when compared to the fourth quarter of fiscal 2014. Productivity, as reflected in the average retail units sold per month per store, increased from 26.9 to 28.1 for the quarter," said William H. ("Hank") Henderson, President and Chief Executive Officer of America's Car-Mart, Inc. (the "Company"). "As always, we are committed to growing our Company in a healthy manner with customer success being the priority. Competition remains tough, but we know that we can execute at a much higher level, specifically as related to our lot level collections efforts. We remain committed to continuing to grow the business in the face of increased competitive pressures which have been prevalent for the last few years. We believe that there is a significant number of good, hard-working folks who deserve the opportunity to succeed with Car-Mart, and we will continue to expand to meet this need."

"We now have 141 dealerships in ten states, an increase of seven from this time last year. We currently have seven new location projects in process. Our next dealership opening will be in June in Rolla, Missouri. We are very excited about our expansion plans as we will be adding a new state this year, Iowa. We have already secured a location in Burlington, Iowa and are currently looking at a few other prospects in the state. As always, we look forward to adding value to the markets we will serve. We are looking to pick up the pace of new lot openings in 2016 and the seven projects in process right now will certainly help," added Mr. Henderson. "We are pleased with the top line growth and remain convinced that we are moving the company in the right direction."

"The increased top line allowed us to see solid leveraging of our selling general and administrative expenses for the quarter, which decreased to 17.2% of sales from 17.9% for the fourth quarter of last year. As always, we will remain focused on ensuring that dollars we spend are spent wisely, keeping in mind the fact that we will need to continue to invest in our infrastructure to support a growing company in an industry that requires a high level of customer service and support. For the quarter, we saw net charge-offs decrease to 7.8% from 8.3%. While it was nice to see the decrease, we were disappointed that losses weren't even lower as we were very optimistic heading into the 4th quarter. As Hank mentioned, we can and must do much better job helping customers succeed as this is what our Company has been built on. Our mission is to earn repeat business and we can only do that if our customers are successful," said Jeff Williams, Chief Financial Officer of America's Car-Mart. "Because the competitive environment remains challenging, we must always be on the top of our game especially as related to collections. We are focused on the increase in our accounts over 30 days past due at the end of the quarter and the decrease in principal collected for the quarter. We are not happy with where we are in these two areas and are working hard to help our customers succeed."

"The debt to equity ratio was 44.8% and the debt to finance receivables ratio was 24.6% at the end of the quarter. We repurchased 121,025 shares of common stock during the quarter for $6.4 million at an average cost per share of $52.81, and since February 1, 2010, we have repurchased 3.7 million shares, or 31% of our Company, for $120.7 million at an average cost per share of $32.96. For the full fiscal year 2015, we opened seven new dealerships and had net capital expenditures of $4.2 million, added over 5,000 active accounts with receivables growth of $38.0 million and re-purchased $20.0 million of common stock with only a $5.7 million increase in total debt. We will remain focused on watching expenses and maximizing cash flows as we grow and we believe in the long-term value of the Company," added Mr. Williams. "We will always remain committed to striving to be the lowest cost provider on both the financing side of the business and the dealership side."

For earnings history and earnings-related data on America's Car Mart (CRMT) click here.



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