Shares up 15% for Arkansas-based America's Car-Mart

Graphs showing America’s Car-Mart Inc. fiscal fourth quarter information.
Graphs showing America’s Car-Mart Inc. fiscal fourth quarter information.

America's Car-Mart's fourth-quarter profit and revenue handily beat analysts estimates and Wall Street responded favorably, sending shares up nearly 15 percent in trading Tuesday.

The Bentonville company said its results for the quarter ended April 30 can be credited in part to better inventory control and improved collection rates. Jeff Williams, the used-car dealer's new president and chief executive officer, said he's proud of the company's progress.

The buy-here, pay-here used-car seller released its earnings report Monday after markets closed and hosted a conference call Tuesday morning. Shares closed at $62.65, up $7.95 in trading Tuesday on the Nasdaq. Shares have traded as low as $33.05 and as high as $64.60 over the past year.

In response to analysts' questions, Williams said Car-Mart continues to focus on recruitment and training of its general managers to operate its car lots. The company plans to open lots in Fayetteville; Bixby and Pryor, Okla.; and Montgomery, Ala., in the coming months. Car-Mart is closing an underperforming lot in Forrest City.

"Our bench is getting stronger," Williams said.

Car-Mart reported a profit of $10.2 million or $1.43 per share for its fiscal fourth quarter compared with $5.2 million or 66 cents per share a year ago. A consensus of four analysts predicted a profit of 98 cents per share for the period.

Revenue was $169.5 million for the fourth quarter, compared with $152.9 million a year ago. An average revenue estimate of three analysts called for revenue of $158.7 million.

Car-Mart earned $3.60 per share for the fiscal year excluding the benefit of the federal Tax Cuts and Jobs Act in December and a one-time retirement bonus for outgoing CEO Hank Henderson. Revenue was $612 million for the year, up more than 5 percent compared with $588 million for the previous fiscal year.

Car-Mart runs 139 dealerships in Alabama, Arkansas, Georgia, Indiana, Iowa, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas.

Vickie Judy, Car-Mart's new chief financial officer, said sales volume was up for the quarter, with 31.1 vehicles sold per store per month compared with 29.1 for the same quarter a year ago. The sale price per vehicle for the period, $10,992, was up $268 or 2.5 percent compared with last year. For the entire quarter, the company sold 13,082 vehicles, up nearly 8 percent from 12,126 for the year-ago quarter.

Net charge-offs stood at 7.5 percent for the quarter, down from 8.7 percent for the same quarter a year ago. Charge-offs are an indication of debt that is unlikely to be collected. Car-Mart's customers often do not have access to traditional vehicle financing because of poor credit or no credit history.

During the quarter Car-Mart repurchased 321,550 shares of its stock, about 4.6 percent of outstanding shares, for an average price of $48.86 -- an outlay of about $16 million. Over the past eight years, the company bought back 5.8 million shares or about 50 percent of its outstanding shares. Williams said moving forward, the company will continue to buy back shares when the timing seems right.

Business on 05/23/2018

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