Car-Mart quarterly income up 3.97%

Bentonville-based America’s Car-Mart Inc. blew past analyst estimates to earn $8.282 million in the second quarter, up 3.97% compared to the 2010 quarter, company officials reported Thursday (Aug. 18).

The earnings report marked the final quarterly report among the 15 publicly held companies based in Arkansas. All 15 reported positive net income for the second quarter.

Car-Mart’s per share earnings of 81 cents was well above the 75 cents that was the consensus of analyst estimates, and was the byproduct of $100.524 million in revenue for the quarter. The quarterly revenue was up 9.91% compared to the 2010 quarter.

The “buy here, pay here” used car company sold 9,049 vehicles during the quarter, up 6.7% compared to the 2010 quarter. Company officials also boasted that their active customer base exceeded 51,000.

William “Hank” Henderson, Car-Mart president and CEO, said the company will continue to use its positive cash flow to expand market area with new dealerships. The company recently opened a dealership in Albertville, Ala., the ninth location in the state.

“We now operate 108 dealerships in eight states. We anticipate opening new lots at an approximate 10% annual rate into the future," Jeff Williams, Car-Mart chief financial officer, said in the Aug. 9 statement about the Albertville opening.

Other financial measures noted in the Car-Mart report included:
• Cash flows supported the significant increase in revenues and the $11.9 million increase in finance receivables, $700,000 in net capital expenditures, and $11.1 million in common stock re-purchases with only a $9.9 million increase in debt;

• Debt to equity of 31.1% and debt to finance receivables of 19.5%;

• Allowance for credit losses remained unchanged at 22% of finance receivables; and,

• Down payments increased to 7.3% from 7.2% for the prior year quarter.

“We continue to execute our game-plan very effectively as we grow the business in a controlled manner. We are excited about our future prospects and the opportunities that will develop for our Associates as well as for our new customers as we open new dealerships and continue to grow our customer base at existing locations,” Henderson said in the earnings report.

The company also reported that Car-Mart board chairman Tilman J. Falgout III is retiring after October. Falgout, who was named chairman in May 2004, was the Car-Mart CEO between May 2002 and October 2007.

“Skip participated in a period of tremendous growth for the Company," Henderson noted.

Shares of thinly traded Car-Mart (NASDAQ: CRMT) closed Thursday at $31.30, down 87 cents on a day when the NASDAQ Index fell more than 5%. Car-Mart issued its earnings report after the markets closed. During the past 52 weeks, the share price has ranged from a $37.50 high to a $21.57 low.