Car-Mart’s 2Q Sales, Revenue and Income All Rise
BENTONVILLE, Ark. — With an active customer base now above 52,000 accounts and double-digit climbs in sales and revenue, America's Car-Mart saw its second-quarter net income per diluted share soar 37.5 percent higher year-over-year.
The company recently reported its second-quarter net income came in at $7.8 million or 77 cents per diluted share. A year earlier, it was $6.2 million or 56 cents per diluted share, producing that 37.5 percent climb.
Fueling the income jump was Car-Mart's 20.7 percent revenue spike. The company indicated its second-quarter revenue increases to $110.8 million from $91.8 million same store revenue grew 13.7 percent.
Car-Mart discovered its second-quarter retail unit sales jumped 17.6 percent to 9,919 units from 8,431 units for the prior year quarter.
Average retail units sold per store per month increased to 30.3 from 28.4
Officials explained strong cash flows supported the significant increase in revenues and the $15.1 million increase in finance receivables, $1.3 million in net capital expenditures, and $15.3 million in common stock re-purchases with only a $19.0 million increase in total debt
In three other elements of its second-quarter performance, the company noted:
—Debt to equity settled at 42.8 percent, and debt to finance receivables stood at 24.7 percent.
—Allowance for credit losses remained unchanged at 22.0 percent of finance receivables.
—Provision for credit losses came in at 22.6 percent of sales versus 22.7 percent for prior-year quarter
Highlights of Six-Month Operating Results
In continuing its financial update, Car-Mart offered a summary of its performance halfway through its current fiscal year. The readings as of Oct. 31 included:
—Net income of $16.0 million ($1.55 per diluted share) versus $14.2 million ($1.25 per diluted share) for prior-year period, which computed into a 24-percent increase in diluted earnings per share.
—Revenue increased 15.3 percent to $211.3 million from $183.3 million for the prior year period with same-store revenue growth of 8.5 percent.
—Retail unit sales climbed 12.2 percent to 18,968 units from 16,912 units for the prior-year period. Average retail units sold per store per month increased to 29.3 from 28.5
—Strong cash flows supported the significant increase in revenues and the $27.0 million increase in finance receivables, $2.0 million in net capital expenditures and $26.4 million in common stock re-purchases with only a $28.9 million increase in total debt
—Provision for credit losses came in at 21.6 percent of sales.
—Down payments ticked up to 7.1 percent from 7.0 percent for the prior-year period.
Stock Buyback Program
Car-Mart also recapped that it repurchased 515,642 shares of its common stock during the quarter, representing 5.1 percent of outstanding shares.
Last Thursday, the company's board of directors once again re-authorized the repurchase of up to 1 million shares of its common stock under the common stock repurchase program, which was last amended and approved on May 26.
Since Feb. 1, 2010, the company has repurchased 2,184,908 shares (18.6 percent) of its common stock under this program.
Growth Plans
When discussing Car-Mar's performance, president and chief executive officer William "Hank" Henderson began with, "We are very proud of our results for the quarter and the hard work and dedication of our associates.
"We continue to focus all of our efforts on increasing customer success by providing quality vehicles, affordable payment terms and excellent service," Henderson continued.
"Our strength is our ability to individually work with our customers to help them succeed and our lot managers continue to raise the bar in this critical area of the business," he went on to say. "Needless to say, we are excited about our future and the opportunities to expand our great products and services to new communities."
After Henderson shared some philosophical points, Car-Mart chief financial officer Jeff Williams expanded on reasons why the company watched its key financial metric improve year-over-year.
"Once again, our financial performance was solid for the quarter," Williams insisted. "We saw an improvement in credit losses and impressive leveraging at the selling, general and administrative line as lot level productivity improved resulting from our 20.7-percent increase in revenues. The 13.7-percent increase in same-store revenues was outstanding and reflects our commitment to providing customers a superior experience that sets us apart from the competition in the areas we serve.
"It is an exciting time to be part of a company that is performing so well and has so much more room for growth," Williams continued. "Our success results from our dedication to earning repeat business one customer at a time."
Williams wrapped up the company's second-quarter report by revisiting Car-Mart's stock repurchase program, as well as shedding light on its expansion plans.
"The company repurchased 515,642 shares or 5.1 percent of its common stock during the second quarter. Since Feb. 1, 2010 we have repurchased 2,184,908 shares or 18.6 percent of our company," Williams reiterated.
"We have opened five new dealerships so far this fiscal year and we plan to open five more between now and the end of the fiscal year, April 30," he shared.
"Additionally, beyond fiscal 2012, our plans continue to be to open new dealerships at an approximate 10-percent annual rate into the future," Williams projected. "Our focus on cash flows and customer equity is allowing us to re-purchase shares and, at the same time, add customers at new and existing dealerships at a solid, controlled pace."