Car-Mart executives receive pay raises

by The City Wire staff ([email protected]) 144 views 

The top three executives at America’s Car-Mart Inc. in Bentonville each got a double-digit boost in pay last year, according to a recent proxy filing with the Securities and Exchange Commission.

The hefty pay raises are the result of stellar corporate earnings and almost a 10% annual growth rate in the number of stores added in the past fiscal year. At the same time investors saw their share value increase from $24.40 in 2011 to $47.17 one year later — a whopping 93% gain.

Since fiscal 2012 ended April 30, shares have continued to hold those gains, though trading slightly lower Tuesday (Aug. 7), at $46.92. The 12-month target price forecast by analysts is $52 per share, recently raised from $48.

CEO Hank Henderson scored a 36.16% annual increase in total compensation earning $608,576 for fiscal 2012.

Henderson’s base salary of $410,833 in 2012 was 17.38% higher than the prior year, but the majority of his raise came in a bonus linked directly to company profitability. The total bonus in 2012 was $182,875, up substantially from $82,750 received in the prior year.

Jeff Williams, chief financial officer, received a base pay of $307,500 in fiscal 2012, up 23% from the prior year. Total compensation jumped 31.6% to $431,613 thanks to a large bonus, also tied to company profits.

The same was true for Eddie Hight, Car-Mart’s chief operating officer. Hight earned a base salary of $307,500 in fiscal 2012, up from the prior year. His total compensation rose to $451,805 compared to $347,002 a year ago.,

Car-Mart will hold its annual shareholder meeting in Bentonville on Sept. 14, and company officials have plenty to celebrate as the buy here, pay here auto dealer stays on its fast track for growth and profitability.

The company will report its first quarter earnings for fiscal 2013 Thursday Aug. 16 and celebrates 31 years in business this month.

Wall Street expects Car-Mart to earn 87 cents per share for the three months ending July 31.That’s an 11.5% increase in net profits from the year-ago period.

During the company’s fiscal 2012 it returned $3.60 per share in net earnings, up 11% from the prior year, while top line growth continued to average 14% annually as it has done for the past decade.

"We now have 116 dealerships in nine states. As we have been discussing for some time now, Car-Mart will continue to focus on increasing sales volumes at our existing stores and at the same time add great new locations," Jeff Williams, chief financial officer, recently noted in a release.

"Our solid financial results, strong balance sheet and competitive strengths will continue to allow us to provide the best possible service to our 53,000+ active customers and to future customers we will gain as we grow. We continue to expect to open additional dealerships at an approximate 10% annual rate into the future," Williams added.

Daniel Furtado, analyst with Jefferies & Co. said in June, Car-Mart is a great growth story trading at just $9 per share in 2009, to near $48 in 2012. He said the company has consistently grown top line revenue and earnings per share by double-digits regardless of the economic climate.

C.L. King analyst Bill Armstrong noted in May, “Car-Mart has a favorable set of competitive, economic and demographic factors going for it. With a business model that is not easy to run (hence the dearth of large successful buy here, pay here competitors), management execution has been strong, as evidenced by the steady level of credit losses even with a store base growing at 10% per year. We project mid- to high-teens earnings growth for the company stock over the next three to four years.”