America's Car-Mart Reports Diluted Earnings per Share of $1.35 on Record Revenues of $196 Million

BENTONVILLE, Ark., May 21, 2020 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (NASDAQ: CRMT) today announced its operating results for the fourth quarter and the full fiscal year 2020. The fourth quarter results include an $11.7 million pretax charge to increase the allowance for credit losses due to the COVID-19 pandemic.

“As we push through the COVID-19 pandemic, our financial position and operating results reflect the quality and power of our Car-Mart business model. We are a ground-level operator and were able to turn on a dime to keep our dealerships open in accordance with all state and local orders so that we could continue serving the essential needs of our communities throughout the crisis,” said Jeff Williams, President and CEO.

“To better serve our customers, as well as for their health and safety, we quickly launched curbside and home delivery processes. We also increased our digital efforts, which included expanding communications channels with our customers to ensure they know how much we care about them individually.

“In our nearly 40 years of business, we have weathered many storms, but through them all, we were steadfast in our focus on the customer experience – ‘Keeping our Customers on the Road and giving them Peace of Mind.’ Our commitment to our customers has never been stronger, and during these challenging times, we moved even closer to our customers and united together as a family. We are a small-town character lender and really stepped up and walked the walk by truly living out our company’s mission, vision, and values in our daily work.

“Our company has most certainly prioritized the safety and well-being of our associates and customers during the pandemic.  We will continue to be diligent and aggressive in educating ourselves and our team members on ways to help prevent or reduce the risk of exposure to the virus,” added Mr. Williams.

“Words can’t express how proud I am of our associates, and how our team continues to rise to the occasion in the face of maybe the greatest healthcare crisis and most certainly the largest financial disruption in the history of our country. The fact that we deeply understand our company’s purpose is carrying us through this crisis and will set a firm foundation for us to continue our path of serving more customers with great vehicles and excellent customer service.  Thank you to our Car-Mart associates for taking care of each other and our customers, and for improving the communities in which we do business. I am grateful for the hard work, dedication, and compassion of our associates. Their caring and compassion is making a real difference in the lives of so many good people facing increased financial and personal challenges in these trying times. I am in awe of the great people we have in this company and I am humbled to be part of the team,” said Mr. Williams.

“We will keep investing in our business, including recruiting, training, and retention of quality associates. We will be diligent in improving our operations, with significant emphasis on our vehicle inventory. And we will put a laser focus on delivering an exceptional customer experience. That is why we believe our company’s future is very bright. We expect disruptions in the consumer credit markets and in vehicle supply channels to present positive opportunities for our business and we intend to be ready to leverage our position moving forward.  As we have said, we believe that most of our dealerships can serve 1,000 or more customers over time and we have significant opportunities to gain market share from our existing locations,” added Mr. Williams. “In addition, new lot openings and strategic acquisitions are expected to be part of our plan as we move forward. The market we serve is large and our growth will be at a rate that aligns with our ability to serve our customers after the sale at the highest level of service.”

“We have taken several steps to ensure financial flexibility during this unprecedented time,” said Vickie Judy, Chief Financial Officer.  “We took a $30 million draw on our revolving credit facility and significantly reduced expenses during the last half of the quarter, including part-time and hourly payroll as well as other non-associate related expenses.  As a result of these efforts, our cash balance is at $59.6 million and our debt, net of cash, to finance receivables is 25.1%, compared to 27.8% for the prior year-end.  We have also taken advantage of deferring the employer share of social security payroll taxes as permitted under the CARES Act. Although we reduced hours for certain associates, we are happy to say these measures have allowed us to maintain workforce engagement with no disruption to associate benefits.  Total SG&A spend increased $2.3 million compared to the prior year quarter, primarily due to payroll costs for additional associate count as well as continued investments in pay, benefits and training.” 

“For the safety of our customers and associates, we suspended certain collection activities, including personal visits and repossession efforts, for a period of time during the pandemic.  This resulted in a lower amount of net charge-offs as a percent of average finance receivables for the quarter.  However, COVID-19 has impacted our customers and resulted in increased past-due amounts as a percentage of receivables, resulting in uncertainty of how customers pay and react in this new environment.  As a result, we have increased our allowance for credit losses from 24.5% to 26.5% resulting in an $11.7 million pre-tax charge to the provision in the fourth quarter,” added Ms. Judy. “As Jeff mentioned, we are very focused on working with our customers to keep them in their vehicle and on the road.”

“Our strong balance sheet and the agility and determination that our associates demonstrated during these unprecedented times position us to provide a great customer experience and capture market share as we move forward.  For the year ended April 30, 2020, we added $77.9 million in receivables, repurchased $16.0 million of our common stock, and funded $5.5 million in net capital expenditures, a total of $99.4 million, with only a $4.8 million increase in debt net of cash. We will continue to remain focused on cash-on-cash returns and maintaining a strong balance sheet.” added Ms. Judy.

Conference Call

Management will be holding a conference call on Friday, May 22, 2020 at 11:00 a.m. Eastern Time to discuss quarterly results.  A live audio of the conference call will be accessible to the public by calling [phone].  International callers dial [phone].  Callers should dial in approximately 10 minutes before the call begins.  A conference call replay will be available two hours following the call for thirty days and can be accessed by calling [phone] (domestic) or [phone] (international), conference call ID #4983797.

About America's Car-Mart

America’s Car-Mart, Inc. operates automotive dealerships in twelve states and is one of the largest publicly-held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market.  The Company emphasizes superior customer service and the building of strong personal relationships with its customers. The Company operates its dealerships primarily in smaller cities throughout the South-Central United States selling quality used vehicles and providing financing for substantially all of its customers.  For more information about America’s Car-Mart, including investor presentations, please visit our website at www.car-mart.com.

America’s Car-Mart, Inc. was named to the Forbes America’s Best Mid-Size Employers list in 2019 for the second consecutive year and has sold over 690,000 vehicles since fiscal year 2000.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements address the Company’s future objectives, plans and goals, as well as the Company’s intent, beliefs and current expectations regarding future operating performance and can generally be identified by words such as “may,” “will,” “should,” “could, “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” and other similar words or phrases.  Specific events addressed by these forward-looking statements include, but are not limited to:

• new dealership openings;
• performance of new dealerships;
• same dealership revenue growth;
• future revenue growth;
• receivables growth as related to revenue growth;
• gross profit per retail unit sold;
• interest rates;
• future credit losses;
• the Company’s collection results, including but not limited to collections during income tax refund periods;
• seasonality; and
• the Company’s business and growth strategies.

These forward-looking statements are based on the Company’s current estimates and assumptions and involve various risks and uncertainties.  As a result, you are cautioned that these forward-looking statements are not guarantees of future performance, and that actual results could differ materially from those projected in these forward-looking statements.  Factors that may cause actual results to differ materially from the Company’s projections include, but are not limited to:

• business and economic disruptions and uncertainty resulting from the COVID-19 pandemic and efforts to mitigate the financial impact and health risks associated with the pandemic;
• general economic conditions in the markets in which the Company operates, including but not limited to fluctuations in gas prices, grocery prices and employment levels;
• the availability of credit facilities to support the Company’s business;
• the Company’s ability to underwrite and collect its contracts effectively;
• competition;
• dependence on existing management;
• ability to attract, develop and retain qualified general managers;
• availability of quality vehicles at prices that will be affordable to customers;
• changes in consumer finance laws or regulations, including but not limited to rules and regulations that have recently been enacted or could be enacted by federal and state governments;
• security breaches, cyber-attacks, or fraudulent activity; and
• the ability to successfully identify, complete and integrate new acquisitions.

Additionally, risks and uncertainties that may affect future results include those described from time to time in the Company’s SEC filings. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

____________________________
Contacts: Jeffrey A. Williams, President and CEO [phone] or Vickie D. Judy, CFO [phone]

														% Change				As a % of Sales
						Three Months Ended								2020				Three Months Ended
						April 30,								vs.				April 30,
							2020				2019			2019				2020			2019
Operating Data:
	Retail units sold						13,314				13,094			1.7		%
	Average number of stores in operation						147				144			2.1
	Average retail units sold per store per month						30.2				30.3			(0.3	)
	Average retail sales price					$	12,408			$	11,305			9.8
	Gross profit per retail unit					$	5,232			$	4,855			7.8
	Same store revenue growth						8.6	%			2.9	%
	Net charge-offs as a percent of  average finance receivables						5.6	%			6.4	%
	Collections as a percent of average finance receivables						15.0	%			16.0	%
	Average percentage of finance receivables-current (excl. 1-2 day)						79.6	%			80.9	%
	Average down-payment percentage						7.8	%			8.2	%
Period End Data:
	Stores open						148				144			2.8		%
	Accounts over 30 days past due						6.2	%			2.9	%
	Active customer count						80,669				75,609			6.7		%
	Finance receivables, gross					$	621,182			$	543,328			14.3		%
Operating Statement:
	Revenues:
		Sales				$	171,922			$	156,193			10.1		%		100.0	%		100.0	%
		Interest income					23,767				20,689			14.9				13.8			13.2
				Total			195,689				176,882			10.6				113.8			113.2
	Costs and expenses:
		Cost of sales					102,260				92,624			10.4				59.5			59.3
		Selling, general and administrative					30,464				28,181			8.1				17.7			18.0
		Provision for credit losses					49,361				34,744			42.1				28.7			22.2
		Interest expense					1,943				1,988			(2.3	)			1.1			1.3
		Depreciation and amortization					926				1,020			(9.2	)			0.5			0.7
		Gain on disposal of property and equipment					(153	)			(3	)		5,000.0				-			-
				Total			184,801				158,554			16.6				107.5			101.5
				Income before taxes			10,888				18,328							6.3			11.7
	Provision for income taxes						1,629				3,763							0.9			2.4
				Net income		$	9,259			$	14,565							5.4			9.3
	Dividends on subsidiary preferred stock					$	(10	)		$	(10	)
				Net income attributable to common shareholders		$	9,249			$	14,555
Earnings per share:
	Basic					$	1.40			$	2.17
	Diluted					$	1.35			$	2.07
Weighted average number of shares used in calculation:
	Basic						6,616,305				6,699,772
	Diluted						6,872,769				7,021,160

														% Change				As a % of Sales
						Years Ended								2020				Years Ended
						April 30,								vs.				April 30,
							2020				2019			2019				2020			2019
Operating Data:
	Retail units sold						52,914				50,257			5.3		%
	Average number of stores in operation						146				142			2.8
	Average retail units sold per store per month						30.2				29.5			2.4
	Average retail sales price					$	11,793			$	11,125			6.0
	Gross profit per retail unit					$	4,999			$	4,827			3.6
	Same store revenue growth						9.3	%			8.4	%
	Net charge-offs as a percent of  average finance receivables						23.1	%			25.7	%
	Collections as a percent of average finance receivables						55.1	%			55.3	%
	Average percentage of finance receivables-current (excl. 1-2 day)						82.2	%			81.7	%
	Average down-payment percentage						6.4	%			6.5	%
Period End Data:
	Stores open						148				144			2.8		%
	Accounts over 30 days past due						6.2	%			2.9	%
	Active customer count						80,669				75,609			6.7		%
	Finance receivables, gross					$	621,182			$	543,328			14.3		%
Operating Statement:
	Revenues:
		Sales				$	652,992			$	586,508			11.3		%		100.0	%		100.0	%
		Interest income					91,619				82,614			10.9				14.0			14.1
				Total			744,611				669,122			11.3				114.0			114.1
	Costs and expenses:
		Cost of sales					388,475				343,898			13.0				59.5			58.6
		Selling, general and administrative					117,762				107,249			9.8				18.0			18.3
		Provision for credit losses					162,246				146,363			10.9				24.8			25.0
		Interest expense					8,052				7,883			2.1				1.2			1.3
		Depreciation and amortization					3,839				3,969			(3.3	)			0.6			0.7
		Gain on disposal of property and equipment					(114	)			(91	)		25.3				-			-
				Total			680,260				609,271			11.7				104.2			103.9
				Income before taxes			64,351				59,851							9.9			10.2
	Provision for income taxes						13,008				12,226							2.0			2.1
				Net income		$	51,343			$	47,625							7.9			8.1
	Dividends on subsidiary preferred stock					$	(40	)		$	(40	)
				Net income attributable to common shareholders		$	51,303			$	47,585
Earnings per share:
	Basic					$	7.74			$	6.99
	Diluted					$	7.39			$	6.73
Weighted average number of shares used in calculation:
	Basic						6,630,023				6,810,879
	Diluted						6,945,652				7,071,768

				April 30,				April 30,				April 30,
					2020				2019				2018
Cash and cash equivalents				$	59,560			$	1,752			$	1,022
Finance receivables, net				$	466,141			$	415,486			$	383,617
Inventory				$	36,414			$	37,483			$	33,610
Total assets				$	667,324			$	492,542			$	455,584
Total debt				$	215,568			$	152,918			$	152,367
Treasury stock				$	246,911			$	230,902			$	204,325
Total equity				$	302,759			$	260,510			$	230,535
Shares outstanding					6,619,319				6,699,421				6,849,161
Finance receivables:
	Principal balance			$	621,182			$	543,328			$	501,438
	Deferred revenue - payment protection plan				(24,480	)			(21,367	)			(19,823	)
	Deferred revenue - service contract				(11,641	)			(10,592	)			(10,332	)
	Allowance for credit losses				(155,041	)			(127,842	)			(117,821	)
	Finance receivables, net of allowance and deferred revenue			$	430,020			$	383,527			$	353,462
	Allowance as % of principal balance net of deferred revenue				26.5	%			25.0	%			25.0	%
Changes in allowance for credit losses:
				Three Months Ended								Years Ended
				April 30,								April 30,
					2020				2019				2020				2019
	Balance at beginning of period			$	140,282			$	127,980			$	127,842			$	117,821
	Provision for credit losses				49,361				34,744				162,246				146,363
	Charge-offs, net of collateral recovered				(34,602	)			(34,882	)			(135,047	)			(136,342	)
		Balance at end of period		$	155,041			$	127,842			$	155,041			$	127,842