Posted 2/19/2014 10:52 am
Updated 3 weeks ago
America's Car-Mart Inc. of Bentonville on Tuesday reported third-quarter profit of $1.5 million, or 16 cents per share, down 81 percent from $8 million, or 84 cents per share, in the same quarter last year.
The drop in profit came after a $4.9 million non-cash after-tax charge resulting from an increase to the allowance for credit losses. The company, which sells and finances used automobiles, said it increased that allowance amid tough economic conditions for customers and "stubbornly high net charge-off levels."
"Excluding the effect of the increase in the allowance for credit losses, we earned [68 cents] per diluted share for the quarter," CFO Jeff Williams said (PDF). "While this is certainly below where we had hoped to be, the decrease can be attributed to the continuing intense competitive environment that we are facing on the funding side coupled with the fact that our customers continue to be under significant pressure due to the persistent negative macro-economic environment.
"We know we can do better, but the business model is certainly being stress tested by forces outside of our control. We are working hard to continue to grow in a healthy manner so that we are in a good position if conditions change in our favor," he said.
Revenue reached $123 million, up 3 percent from $119 million during the same quarter last year. But same-store sales dropped nearly 3 percent.
America's Car-Mart (Nasdaq: CRMT) has 131 dealerships across the country. It opened two since the second quarter, including one in Troy, Ala., this week.
"We have opened seven new dealerships this year and have four more projects underway that we expect to open between now and the end of our fiscal year," CEO William Henderson said. "Our new dealerships are performing well and we are excited to be adding great new towns to our footprint. We have added almost 4,400 active accounts and are working hard to make these new customers, and our existing customers, fans for life of America's Car-Mart."