EX-99.1 2 ex99-1.htm EXHIBIT 99.1 Exhibit 99.1
 
Exhibit 99.1
For Immediate Release     


AMERICA’S CAR-MART REPORTS FIRST QUARTER EARNINGS OF $.35 PER SHARE
COMPANY REVISES GUIDANCE FOR FULL FISCAL YEAR


Bentonville, Arkansas (September 7, 2006) - America’s Car-Mart, Inc. (NASDAQ NMS: CRMT) today announced its operating results for the first fiscal quarter ended July 31, 2006.

Highlights of first quarter operating results:

o
Revenue growth of 6.9%
o
Sales increase of 5.1%
o
Interest income increase of 27.7%
o
Income and diluted EPS decrease of 15%
o
Same store revenue growth of 1.9%
o
Increase in Finance Receivables during the quarter of 3.4%

For the three months ended July 31, 2006, revenues increased 6.9% to $62.2 million compared with $58.2 million in the same period of the prior year. Income for the quarter decreased 15% to $4.2 million or $0.35 per diluted share, versus $4.9 million, or $0.41 per diluted share in the same period last year. The Company incurred noncash compensation expense of approximately $220,000 related to stock based compensation under FAS 123R, which was adopted by the Company effective May 1, 2006. Retail unit sales were flat, with 6,867 vehicles in the current quarter, compared to 6,885 in the same period last year. Same store revenue increased 1.9% during the quarter. Finance Receivables grew by $6.2 million during the quarter or 3.4%.

“July vehicle sales were down substantially from last year’s levels as a result of the difficulties affecting our customer base and the extreme heat experienced in our regions,” said T. J. (“Skip”) Falgout, III, Chairman and Chief Executive Officer of America’s Car Mart. “We are adjusting the mix of our vehicles to draw more and better traffic to our dealerships, including not only more fuel efficient vehicles but also more SUV’s and pick-ups, which are now more affordable for our customers. Also, our recent initiatives on the purchasing side are having a positive effect on our ability to source quality inventory and, as a result, we have been able to increase our gross profit margins significantly, up from 43.2% in the preceding quarter to 44.4% in this quarter.”

“Our over-30-day accounts and credit losses are up over last year as our customers continue to struggle with high gas and utility costs,” stated Mr. Falgout. “We will continue to work patiently with our customers, as we know over the long term this is one of the ways that we have successfully built our strong, loyal customer base. At the same time, we have tightened our underwriting somewhat, the effect of which should be to reduce potential credit losses in the future.”

“During the quarter, we opened three new dealerships; Tuscaloosa, Alabama; Muscle Shoals, Alabama and Sedalia, Missouri,” said William H. (“Hank”) Henderson, President of America’s Car Mart. “In addition, we opened our 89th location in Cullman, Alabama in August, and our 90th location in Ponca City, Oklahoma opens in a few days. We also have three additional properties under contract for new dealership locations. Our new dealerships will be significant in terms of increasing our organic growth on top of our growth from existing locations.”

Fiscal 2007 Earnings Guidance

The Company currently expects diluted earnings per share to be in the $1.50 to $1.56 range for the year ended April 30, 2007. This is a downward revision from our previous guidance of $1.56 to $1.63 and is a reflection of the difficult economic issues currently affecting a large part of Car Mart’s customer base.
 
 
 

Conference Call

Management will be holding a conference call on Thursday, September 7, 2006 at 11:00 a.m. Eastern time to discuss second quarter results. A live audio of the conference call will be accessible to the public by calling (800) 309-9490. International callers dial (706) 634-0104. Callers should dial in approximately 10 minutes before the call begins.

A conference call replay will be available one hour following the call for seven days and can be accessed by calling (800) 642-1687 (domestic) or (706) 645-9291 (international), conference call ID #5614140.


About America's Car-Mart

America’s Car-Mart operates 89 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 www.car-mart.com.
 

Included herein are forward-looking statements, including statements with respect to projected revenues, earnings per share amounts and store openings. Such forward-looking statements are based upon management’s current knowledge and assumptions. There are many factors that affect management's view about future revenues, earnings and store openings. These factors involve risks and uncertainties that could cause actual results to differ materially from management's present view. These factors include, without limitation, assumptions relating to unit sales, average selling prices, credit losses, gross margins, operating expenses, collection results, available real estate and economic conditions, and other risk factors described under “Forward-Looking Statements” of Item 1 of Part I of the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2006 and its current and quarterly reports filed with or furnished to the Securities and Exchange Commission. All forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company does not undertake any obligation to update forward-looking statements.


_______________
Contacts:
T. J. (“Skip”) Falgout, III, CEO at (972) 717-3423
Jeffrey A. Williams, CFO at (479) 464-9944
or
J. Todd Atenhan, Investor Relations at (888) 917-5109
 
 
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America's Car-Mart, Inc.
Coinsolidated Results of Operations
(Operating Statement Dollars in Thousands, except per share data)
 
 

           
% Change
  
As a % of Sales  
  
   
Three Months Ended
  
2006
  
 Three Months Ended
  
   
 July 31,
  
vs.
  
July 31,  
  
   
2006
  
2005
  
2005
  
2006
  
 2005
  
Operating Data:
                                
Retail units sold
    
6,867
   
6,885
   
(0.3
)%
            
Average number of stores in operation
    
86.7
   
79.0
   
9.7
%
            
Average retail units sold per store
    
79
   
87.2
   
(9.4
)%
            
Average retail sales price
  
$
7,913
  
$
7,477
    
5.8
%
            
Same store revenue growth
    
1.9
%
  
10.3
%
                  
                                 
Period End Data:
                                
Stores open
    
88
   
80
   
10.0
%
            
Accounts over 30 days past due
    
5.6
%
  
4.7
%
                  
Finance Receivables, gross
  
$
191,487
  
$
163,535
    
17.1
%
            
                                 
Operating Statement:
                                
Revenues:
                                
Sales
  
$
56,338
  
$
53,596
    
5.1
%
  
100.0
%
  
100.0
%
Interest income
    
5,853
   
4,583
   
27.7
%
  
10.4
   
8.6
 
 Total
    
62,191
   
58,179
   
6.9
%
  
110.4
   
108.6
 
                                 
Costs and expenses:
                                
Cost of sales
    
31,336
   
29,261
   
7.1
%
  
55.6
   
54.6
 
Selling, general and administrative
    
10,470
   
9,331
   
12.2
%
  
18.6
   
17.4
 
Provision for credit losses
    
12,655
   
11,201
   
13.0
%
  
22.5
   
20.9
 
Interest expense
    
902
   
478
   
88.7
%
  
1.6
   
0.9
 
Depreciation and amortization
    
232
   
148
   
56.8
%
  
0.4
   
0.3
 
 Total
    
55,595
   
50,419
   
10.3
%
  
98.7
   
94.1
 
                                 
 Income before taxes
    
6,596
   
7,760
   
(15.0
)%
  
11.7
   
14.5
 
                                 
Provision for income taxes
    
2,441
   
2,873
   
(15.0
)%
  
4.3
   
5.4
 
                                 
 Net income
 
$
4,155
  
$
4,887
    
(15.0
)%
  
7.38
%
  
9.12
%
                                 
Earnings per share:
                                
Basic
  
$
0.35
  
$
0.41
                  
Diluted
  
$
0.35
  
$
0.41
                  
                               
Weighted average number of shares outstanding:
                                
Basic
    
11,850,796
   
11,845,236
                   
Diluted
    
11,983,528
   
12,040,944
                   
 
 
 
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America's Car-Mart, Inc.
Coinsolidated Balance Sheet and Other Data
 


   
July 31,
  
April 30,
  
   
2006
  
2006
  
           
Cash and cash equivalents
  
$
307,381
  
$
254,824
  
Finance receivables, net
  
$
154,298,159
  
$
149,379,024
  
Total assets
  
$
185,064,262
  
$
177,613,203
  
Total Debt
  
$
46,908,632
  
$
43,588,443
  
Stockholders' equity
  
$
123,346,736
  
$
119,251,431
  
Shares outstanding
    
11,838,024
   
11,848,024
 
               
               
               
               
               
               
Finance receivables:
              
Principal balance 
  
$
191,486,927
  
$
185,243,207
  
Allowance for credit losses 
    
(37,188,768
)
  
(35,864,183
)
               
 Finance receivables, net
  
$
154,298,159
  
$
149,379,024
  
               
               
Allowance as % of principal balance 
    
19.42
% (a)
  
19.36
% (a)
 
 
(a) Represents the weighted average for Finance Receivables generated by the Company (at 19.2%) and purchased Finance Receivables.
 
 


Changes in allowance for credit losses:
          
   
Three Months
  
   
Ended July 31,
  
   
2006
  
2005
  
Balance at beginning of period 
  
$
35,864,183
  
$
29,251,244
  
Provision for credit losses 
    
12,655,304
   
11,201,556
 
Charge-offs, net of collateral recovered 
    
(11,566,263
)
  
(9,053,672
)
Allowance related to purchased accounts 
    
235,544
   
-
 
               
 Balance at end of year
  
$
37,188,768
  
$
31,399,128
  
 
 
 
 
 
 
 
 
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