Earnings Buzz: America’s Car-Mart (NASDAQ:CRMT)

America’s Car-Mart (NASDAQ:CRMT) dwindled -0.18% to trade at $ 87.31 in the recent trading session and its total traded volume was 38609 shares versus to an average volume of 124.58K. The company has market cap of $594.80M. The stock has negative monthly performance of -11.97% while its yearly performance remained 39.62%.

America’s Car-Mart (NASDAQ:CRMT) reported its operating results for the fourth quarter of fiscal year 2019.

Highlights of fourth quarter operating results:

Income before taxes of $18.3 million vs. $13.7 million for prior year quarter

Net earnings of $14.6 million, or $2.07 per diluted share vs. net earnings of $10.2 million, or $1.43 per diluted share for prior year quarter

Additional income tax benefit of $434,000 ($0.06 per diluted share) related to share-based compensation, vs. $944,000 ($0.13 per diluted share) for prior year quarter

Revenues of $177 million compared to $169 million for the prior year quarter, current quarter includes a $1.9 million increase in interest income and same store revenue increase of 2.9%

Average retail sales price increased $383 to $11,305 or 3.5% from the prior year quarter (up 1.4% sequentially)

Gross profit margin percentage remained relatively flat at 40.7%

Collections as a percentage of average finance receivables increased to 16.0% from 15.8% for the prior year quarter

The weighted average contract term decreased to 32.1 from 32.5 for the prior year quarter

Net Charge-offs as a percentage of average finance receivables of 6.4%, down from 7.5% for prior year quarter

Accounts over 30 days past due decreased to 2.9% from 3.5% at April 30, 2018

Average percentage of finance receivables current was 80.9%, down from 82.2% at April 30, 2018

Provision for credit losses of 22.2% of sales vs. 25.4% for prior year quarter

Selling, general and administrative expenses at 18.0% of sales vs. 16.9% for prior year quarter (current period includes $823,000 of stock compensation for performance-based stock options that are expected to vest as a result of the improved net income performance)

Active accounts base approximately 75,600, an increase of approximately 4,500 from April 30, 2018

Debt to equity of 58.7% and debt to finance receivables of 28.1% (66.1% and 30.4% at April 30, 2018)

Strong cash flows supporting the $435,000 increase in finance receivables, $987,000 in net capital expenditures, and $2.5 million in common stock repurchases (31,472 shares) with a $17.8 million decrease in total debt

Highlights of twelve-month operating results:

Income before taxes of $59.9 million vs $38.9 million for prior year

Net income of $47.6 million or $6.73 per diluted share vs. net income of $36.5 million or $4.90 per diluted share for prior year (diluted earnings per share for prior year includes $1.40 for the effect of the enactment of the Tax Act in December 2017 and $(0.10) for a one-time retirement bonus paid to retiring CEO)

Additional income tax benefit related to share-based compensation of $1,961,000 ($0.28 per diluted share) compared to $1,721,000 ($0.23 per diluted share) for the prior year period

Revenues of $669 million compared to $612 million for the prior year with same store revenue increase of 8.4%

Retail unit sales increase of 4.1% to 50,257 from 48,271 for the prior year with improved productivity at 29.5 retail units sold per store per month, up from 28.7 for the prior year period

Net Charge-offs as a percent of average finance receivables of 25.7%, down from 28.8% for prior year

Provision for credit losses of 25.0% of sales vs. 27.7% of sales for prior year

Strong cash flows supporting the $41.9 million increase in finance receivables, $3.9 million increase in inventory, $4.0 million in net capital expenditures and $26.6 million in common stock repurchases (378,627 shares) with only a $0.6 million increase in total debt

“We are proud of the progress being made and we will push hard every day to continuously raise the bar on our own expectations. The enthusiasm around our purpose has never been stronger as we have an obligation to serve more customers by growing at a solid, healthy pace. We are committed to staying laser focused on our operational non-negotiables and bringing Customer Experience to a level that cannot be matched in the markets we serve. We are deeply passionate about customer and associate success and we believe that we can be the best company in America at providing transportation solutions to credit challenged customers. As the result of deep reflection on where we are as a company and where we want to go, key Car-Mart leaders have recently developed our new Vision Statement which captures our ‘Why’, the real purpose in our work. Our Vision- ‘To be America’s best auto sales and finance company in the eyes of our associates and customers while improving the communities we serve.’  I am honored to be part of such a great team and to play a role in this very special effort that we have committed our lives to,” said Jeff Williams, President and Chief Executive Officer. “Our diligence is showing up in the numbers as our return on average assets and return on average equity for the year were 10.0% and 19.4%, respectively. Additionally, as we think about value creation for the year, we grew net finance receivables by $31.9 million, re-purchased $26.6 million of our common stock, invested $3.9 million in additional inventory to support our top line growth and funded $4.0 million in long-term capital expenditures (a total of $66.4 million), all with basically no increase in debt. We will stay focused on cash flows and operational efficiencies within our model as these disciplines give us distinct advantages in our markets.”

The stock demonstrated a negative move of -11.03% in previous 5 days graph. Its quarterly performance remained in the green with the percentage of 1.79%, while its year to date performance showed that the stock jumped overall 20.73% The 52 week range of the stock was $60.55 – 104.05.

The Company has an insider ownership of 3.10% and institutional ownership remained 77.60%. Its return on investment (ROI) for the last 12 month was 8.90% and its return on equity (ROE) of 18.00% for the last 12 months while return on assets (ROA) is at 9.00%.

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