BENTONVILLE, Ark. — As more lenders are buying deeper into
subprime pools, buy-here, pay-here dealership chain America's Car-Mart managed
to post a 16-percent increase in the number of units sold during the third
quarter of its fiscal year.

Car-Mart turned an average of 29.2 units at each of its 118 stores
in operation during the third quarter, amassing a total of 10,403 retail sales.

The third-quarter production boosted Car-Mart's total
through the first nine months of its fiscal year to 29,270, representing a
7.3-percent gain above the year-ago figure.

"We are very pleased with our results for the quarter, and
especially so with the significant increases in sales," Car-Mart president and
chief executive officer William "Hank" Henderson said. "As we mentioned after
our second quarter, we had seen some increases in the amount of funding into
the subprime auto industry, which did create some increased competition that
put some pressure on our sales earlier in the year.

"In typical fashion, our general managers stepped up to the
challenge and delivered," Henderson continued. "Our focus remains solidly fixed
on driving the same mission we have for years: Striving to earn the repeat
business of our customers by providing quality vehicles, affordable payment
terms and excellent service.

"Our customers are looking for good, reliable and affordable
transportation along with the peace of mind that goes with dealing with America's
Car-Mart," he went on to say. "Our associates take great care of our customers
in an effort to earn their repeat business. This continued focus is allowing us
to excel even with increased competition on the subprime used-vehicle financing
side."

While Car-Mart's third-quarter sales surged higher, the
company's average retail sales price also increased, climbing $282 or 3 percent
above the previous quarter to come in at $9,797.

As a result, the company's total third-quarter net income
rose to $8.0 million based on revenue that climbed from $105 million to $118
million.

Car-Mart held more than 57,000 active accounts as of the
close of its third quarter on Jan. 31. The company's gross financial
receivables climbed 12.9 percent year-over-year, settling at $363.9 million.

Car-Mart's 30-day delinquency rate stood at 6.0 percent at
the close of the Q3, up from 4.7 a year earlier.

"We strongly believe that Car-Mart's local presence and face
to face relationships give us the ability to work with customers most
effectively," Henderson said. "We offer the best long-term choice for our
customers and we are dedicated to ensuring their success. We have over 57,000
active accounts and many more past customers who know what Car-Mart stands for
and the lengths we go to help them."

Chief financial officer Jeff Williams also touched on
Car-Mart's strategy as more lenders look to take on subprime buyers.

"As we discussed, in our efforts to retain our long-term
repeat customers, we did have to lengthen overall contract terms," Williams
said. "As anticipated, this has led to lower current collections, but the most
important measurement is net charge-offs which was flat for the quarter and
only up slightly for the nine month period.

"As expected, higher unit sales resulted in significant
leveraging at the selling, general and administrative line," he continued. "When
we look to the future we are convinced that the business model will continue to
support significant unit volume expansion. The overall gross profit percentage
was relatively flat with the prior year quarter and in line with our
expectations. All efforts at our dealerships are aimed at ensuring that we earn
repeat business from existing customers and at the same time attracting new
customers in need of good, basic affordable transportation and the great
Car-Mart service that goes with each sale."

Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.