by Chris Bahn
Posted 8/21/2013 11:05 am
Updated 11 months ago
America's Car-Mart Inc. shareholders voted Wednesday at the company’s annual meeting to re-elect six board members and also approved an advisory vote on executive compensation for the fiscal year.
President and CEO Hank Henderson, CFO Jeff Williams, Cameron Smith, John David Simmons, Dan. J. Englander and Williams M. Sams were all reappointed to the board of Car-Mart (CRMT), which is headquartered in Bentonville.
Shareholders met a day after the company released its first quarter earnings results. Car-Mart reported net income of $7.5 million and revenues of $123 million, compared to $110 million during the opening quarter of last year.
"We are very pleased with our top line growth for the quarter," Henderson said during an earnings call on Tuesday. “Our general managers continue to work hard at helping our customers succeed and are meeting the challenges of the current competitive environment head on. We are determined to earn the repeat business of our customers by doing everything we can to help them purchase a quality vehicle with affordable payment terms and excellent service."
“Even though our revenues were up, we feel like we could have done even better as we believe that increased funding to the sub-prime auto industry continues to have a negative effect on our business, especially on the provision for credit losses line," Henderson added. “We believe that many companies that are competing for our customers on the funding side are not focused on earning repeat business tied to customer success. We believe that by helping our customers successfully complete the terms of their contracts, which has always been and will always be our primary focus, we will continue to fulfill our vision of being the most respected buy-here-pay-here organization in the country."
Car-Mart now has 126 dealerships, up 10 from the first quarter of 2012. Henderson said the company has additional openings planned, and Car-Mart should add 12 dealerships by the end of the fiscal year.
"Revenues, gross margin percentage and selling, general and administrative expenses were all in line with our internal expectations for the quarter," Williams said. "We were pleased with the top line growth and sales volume productivity improvements in the face of a challenging macroeconomic environment for our customer and additional competitive pressures on the funding side. Our provision for credit losses is certainly higher than we would like but our expected cash on cash returns continue to be very attractive even with the higher credit loss amounts.
"For competitive reasons, we continued to lengthen our overall contract terms during the quarter, to 29.5 months up from 28.1 at this time last year and 29.3 for the 4th quarter of 2013, which contributed to lower collections and a higher provision for credit losses. We expect to continue our efforts to attract and retain better customers through slightly longer terms and somewhat lower down payments in this competitive environment."