Former Deltic Timber boss Ray Dillon joins Car-Mart’s board of directors

by Jeff Della Rosa (JDellaRosa@nwabj.com) 127 views 

America’s Car-Mart shareholders elected Ray Dillon to replace Kenny Gunderman on the board of directors for the Bentonville-based buy here, pay here used car dealership. Dillon’s term on the board runs until the shareholders meeting in 2018.

On Wednesday (Aug. 2), Car-Mart executives wrapped up the annual shareholders meeting in about 12 minutes at the company’s corporate office. Dillon, who’s one of seven directors on the board, is chairman of the Little Rock branch board of directors for the St. Louis Federal Reserve Bank and was president, CEO and director of Deltic Timber Corp., from July 2003 until his retirement in October 2016. He’s worked more than 40 years in the paper and forest products industry.

Gunderman had served on the board since July 2014. The following members were reelected to the board: Daniel Englander, CEO William “Hank” Henderson, Eddie Hight, Robert Smith, chairman Jim von Gremp and President Jeff Williams.

Shareholders also approved the advisory vote on executive compensation, the frequency of the vote to come once a year and Grant Thornton LLP as the independent accountant for fiscal 2018. As of June 9, the company had 7.56 million shares of common stock, and stockholders of 7.35 million shares, or 97.2% of the company’s stock, voted by proxy or in person at the meeting.

Car-Mart is expected to report first-quarter earnings for fiscal 2018 on Aug. 16. Consensus of analysts expect earnings to rise to 91 cents per share in the quarter that ended July 31, from 87 cents in the same period last year. Revenue is projected to rise 2.5% to $149.52 million, from $145.86 million.

Shares of Car-Mart (NASDAQ: CRMT) closed Wednesday at $38.25, down $1.15. In the past 52 weeks, the stock price has traded between $47.75 and $30.20.

U.S. auto sales declined 7% in July to 1.42 million vehicles, according to equity analysts for Jefferies. The seasonally adjusted annual rate of sales declined 6% to 16.7 million vehicles in July, “its worst month so far in 2017.”

When asked about how the decline in new car sales has impacted Car-Mart, Henderson said more financing has been available on the used car side of new car dealerships in the past few years.

“That’s definitely put a squeeze,” he said. “A lot of our bigger stores that had the real high volume sales the past few years have gotten a real squeeze, but recently in the latter part of this past year, we’re starting to see those come back.”

Cars have continued to lose market share to SUVs and crossovers at 37.1%, according to Jefferies. “Mix and transaction prices continued to improve, with Kelley Blue Book reporting average transaction values up 1.7% to $34,700.”

In July, General Motors sales volume fell 15.5%, Ford volume declined 7.4% and Fiat Chrysler Automobiles (FCA) sales were down 10.5%. Toyota saw volume rise 3.7%, Honda was down 1.2% and Nissan fell 3.2%. Volkswagen rose 2.5%, BMW fell 14.8% and Mercedes-Benz volume decreased 9.8%. Average incentives rose 13% or by $409. Vehicle inventory for General Motors is 104 days, Ford inventory is 77 days and FCA is at 74 days.

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