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 | 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.
