Hank Henderson, CEO of America's Car-Mart, said he will step down as the company's top officer at the end of the year -- and the company reported first-quarter results that barely missed analysts' estimates for profit and revenue.
Henderson, who has been with the Bentonville-based used-car dealer for 30 years and served as CEO for the past decade, said the time is right to step away from the company's day-to-day operations. He leaves his post on Dec. 31 and will continue to serve as CEO emeritus, as a member of the company's board of directors and as an adviser to the company's senior management.
Company President Jeff Williams will step in to fill the CEO post. Williams has been with the company for 12 years and recently served as the company's chief financial officer until his promotion to president in March 2016.
The news came late Thursday when the company announced its first-quarter fiscal 2018 earnings. The company hosted a conference call Friday morning.
On that call with analysts, Henderson credited the hard work of the company's employees and their tireless efforts through both good and challenging times, with his success as Car-Mart's CEO.
"It has been an incredible and fantastic experience," Henderson said. The company did not respond to several attempts to obtain Henderson's age.
Shares of the company moved up in trading Friday, closing at $38.25, up $1.35, or nearly 4 percent, in trading on the Nasdaq. Shares have traded as high as $38.60 and as low as $33.05 over the past year.
The buy-here, pay-here used-car dealer reported profit of $7 million, or 90 cents per share, for the quarter ending July 31, compared with $7.1 million, or 87 cents a share, for the same period a year ago. The average of estimates of five analysts predicted earnings of 91 cents per share for the quarter.
Revenue was $146.4 million for the first quarter compared with $145.8 million for the same period last year. An average revenue estimate of four analysts came in at $149.5 million.
Bob Williams, senior vice president and managing director of Simmons First Investment Group Inc. in Little Rock, said changes in leadership in companies are inevitable and it was clear that Jeff Williams has been groomed to take over the company's top post. He added Henderson isn't intending to just going away and that he'll be available as a resource even if he's not in the office every day.
According to filings with the SEC earlier this month, Henderson owns 87,190 shares in the company. At market close Friday, the shares were valued at more than $3.3 million.
In response to email questions, Martin Thoma, a principal at Little Rock-based Thoma Thoma, a brand leadership firm, and author of Branding Like the Big Boys, said a CEO spokesman like Henderson has worked well for Car-Mart but it can be a double-edged sword when it comes time for that high-profile figure to leave.
America's Car-Mart television commercials feature Henderson as the company's spokesman. He ends the spots with the catchphrase "Drive easy."
"Without this CEO as the brand spokesperson, America's Car-Mart will clearly have to shift gears with its branding," Thoma said. "It might be the opportunity to further elaborate their positioning statement of 'Drive Easy' and explain in greater detail to customers and prospective customers how that makes them the best choice for the next car in their driveway."
America's Car-Mart runs 140 dealerships in Alabama, Arkansas, Georgia, Indiana, Iowa, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas.
Car-Mart's customers often do not have access to traditional vehicle financing because of poor credit or no credit history. In recent years, Car-Mart has seen increased competition for its customer base from traditional car dealers who are offering newer vehicles with extended loan terms to those with poor credit.
In the company's 2018 fiscal first quarter, it saw an increase in sales volume with 28.2 vehicles sold per store per month compared with 27.9 for the first quarter in fiscal 2017. The sale price per vehicle for the period, $10,386, is a 0.1 percent decline from the sale price per vehicle of $10,393 for the first quarter of 2017.
Net charge-offs stood at 6.4 percent for the first quarter, up from 6.2 percent for the same quarter a year ago. Charge-offs are an indication of debt that is unlikely to be collected.
Jeff Williams said the company's same-store sales revenue, or sales in stores open at least a year, saw an increase of 2.1 percent for the period. He said the company has closed or is in the process of closing eight stores over the past year.
He said the company is continuing to work on it's recruitment, training and support of its lot managers as part of its long-term strategy to grow sales and increase sales and customer retention.
He noted that the company continues to repurchase its stock. During the first quarter it repurchased 102,842 shares valued at about $3.7 million. Since early 2010 the company had bought back 42 percent of outstanding shares.
Business on 08/19/2017