For the fiscal
quarter ended:
|
Commission file number: |
July 31, 2008 | 0-14939 |
Texas | 63-0851141 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.)
|
Title of Each Class |
Outstanding
at
September
9, 2008
|
|
Common stock, par value $.01 per share | 11,777,731 |
Item 1. Financial Statements |
America’s Car-Mart,
Inc.
|
July
31, 2008
|
April
30, 2008
|
|||||||
(unaudited)
|
|
|||||||
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 267 | $ | 153 | ||||
Accrued
interest on finance receivables
|
893 | 833 | ||||||
Finance
receivables, net
|
173,282 | 163,344 | ||||||
Inventory
|
14,737 | 13,532 | ||||||
Prepaid
expenses and other assets
|
1,429 | 832 | ||||||
Income
tax receivable
|
3,334 | 3,400 | ||||||
Goodwill
|
355 | 355 | ||||||
Property
and equipment, net
|
18,431 | 18,140 | ||||||
$ | 212,728 | $ | 200,589 |
Liabilities
and stockholders’ equity:
|
||||||||
Accounts
payable
|
$ | 3,914 | $ | 3,871 | ||||
Deferred
payment protection plan revenue
|
6,679 | 4,631 | ||||||
Accrued
liabilities
|
9,695 | 11,063 | ||||||
Deferred
tax liabilities
|
6,226 | 3,465 | ||||||
Revolving
credit facilities and notes payable
|
42,628 | 40,337 | ||||||
69,142 | 63,367 | |||||||
Commitments
and contingencies
|
||||||||
Stockholders’
equity:
|
||||||||
Preferred
stock, par value $.01 per share, 1,000,000 shares
authorized;
|
||||||||
none
issued or outstanding
|
- | - | ||||||
Common
stock, par value $.01 per share, 50,000,000 shares
authorized;
|
||||||||
12,139,674
issued (12,091,628 at April 30, 2008)
|
121 | 121 | ||||||
Additional
paid-in capital
|
38,367 | 37,284 | ||||||
Retained
earnings
|
110,588 | 105,307 | ||||||
Less:
Treasury stock, at cost, 403,941 shares
|
(5,490 | ) | (5,490 | ) | ||||
Total
stockholders’equity
|
143,586 | 137,222 | ||||||
$ | 212,728 | $ | 200,589 |
Consolidated Statements of Operations |
America’s Car-Mart,
Inc.
|
Three
Months Ended
|
||||||||
July
31,
|
||||||||
2008
|
2007
|
|||||||
Revenues:
|
||||||||
Sales
|
$ | 69,226 | $ | 52,863 | ||||
Interest
income
|
6,435 | 5,844 | ||||||
75,661 | 58,707 | |||||||
Costs
and expenses:
|
||||||||
Cost
of sales
|
39,027 | 31,538 | ||||||
Selling,
general and administrative
|
12,818 | 11,195 | ||||||
Provision
for credit losses
|
14,490 | 11,519 | ||||||
Interest
expense
|
693 | 810 | ||||||
Depreciation
and amortization
|
319 | 274 | ||||||
67,347 | 55,336 | |||||||
Income
before taxes
|
8,314 | 3,371 | ||||||
Provision
for income taxes
|
3,033 | 1,230 | ||||||
Net
Income
|
$ | 5,281 | $ | 2,141 | ||||
Earnings
per share:
|
||||||||
Basic
|
$ | .45 | $ | .18 | ||||
Diluted
|
$ | .45 | $ | .18 | ||||
Weighted
average number of shares outstanding:
|
||||||||
Basic
|
11,707,243 | 11,875,782 | ||||||
Diluted
|
11,790,086 | 11,967,690 | ||||||
Consolidated Statements of Cash Flows |
America’s Car-Mart,
Inc.
|
Three
Months Ended
|
|||
July
31,
|
|||
2008
|
2007
|
Operating
activities:
|
|||||||||
Net
income
|
$ | 5,281 | $ | 2,141 | |||||
Adjustments
to reconcile net income from operations
to
net cash provided by (used in) operating activities:
|
|||||||||
Provision
for credit losses
|
14,490 | 11,519 | |||||||
Claims
under payment protection plan
|
742 | - | |||||||
Depreciation
and amortization
|
319 | 274 | |||||||
(Gain)
loss on sale of property and equipment
|
(10 | ) | 47 | ||||||
Share
based compensation
|
682 | 232 | |||||||
Unrealized
loss on derivative
|
13 | - | |||||||
Deferred
income taxes
|
2,761 | 196 | |||||||
Changes
in operating assets and liabilities:
|
|||||||||
Finance
receivable originations
|
(65,793 | ) | (48,853 | ) | |||||
Finance
receivable collections
|
35,345 | 30,553 | |||||||
Accrued
interest on finance receivables
|
(60 | ) | (67 | ) | |||||
Inventory
|
4,073 | 5,815 | |||||||
Prepaid
expenses and other assets
|
(597 | ) | (125 | ) | |||||
Accounts
payable and accrued liabilities
|
(299 | ) | 3,228 | ||||||
Deferred
payment protection plan revenue
|
2,048 | - | |||||||
Income
taxes receivable
|
251 | 797 | |||||||
Excess
tax benefit from share-based payments
|
(185 | ) | - | ||||||
Net
cash provided by (used in) operating activities
|
(939 | ) | 5,757 | ||||||
Investing
activities:
|
|||||||||
Purchase
of property and equipment
|
(647 | ) | (697 | ) | |||||
Proceeds
from sale of property and equipment
|
29 | 44 | |||||||
Net
cash used in investing activities
|
(618 | ) | (653 | ) | |||||
Financing
activities:
|
|||||||||
Exercise
of stock options and warrants
|
147 | - | |||||||
Excess
tax benefit from share-based compensation
|
185 | ||||||||
Issuance
of common stock
|
69 | 39 | |||||||
Change
in cash overdrafts
|
(1,021 | ) | 1,992 | ||||||
Proceeds
from notes payable
|
16 | - | |||||||
Principal
payments on notes payable
|
(202 | ) | (180 | ) | |||||
Proceeds
from revolving credit facilities
|
18,245 | 13,697 | |||||||
Payments
on revolving credit facilities
|
(15,768 | ) | (20,671 | ) | |||||
Net
cash provided by (used in) financing activities
|
1,671 | (5,123 | ) | ||||||
Increase
(decrease) in cash and cash equivalents
|
114 | (19 | ) | ||||||
Cash
and cash equivalents at:
|
Beginning
of period
|
153 | 257 | ||||||
End of period | $ | 267 | $ | 238 |
Notes to Consolidated Financial Statements (Unaudited) |
America’s Car-Mart, Inc.
|
Furniture,
fixtures and equipment
|
3
to 7 years
|
Leasehold
improvements
|
5
to 15 years
|
Buildings
and improvements
|
18
to 39 years
|
July
31,
2008
|
July
31,
2007
|
||
Expected
term (years)
|
5.0
|
5.0
|
|
Risk-free
interest rate
|
3.33%
|
5.02%
|
|
Volatility
|
90%
|
80%
|
|
Dividend
yield
|
—
|
—
|
Plan
|
|||||
1997
|
2007
|
||||
Minimum
exercise price as a percentage of fair market value at date of
grant
|
100%
|
100%
|
|||
Last
expiration date for outstanding options
|
July
2, 2017
|
October
16, 2017
|
|||
Shares
available for grant at July 31, 2008
|
0
|
640,000
|
July
31,
|
April
30,
|
||
(In
thousands)
|
2008
|
2008
|
Gross
contract amount
|
$ | 244,306 | $ | 231,069 | ||||
Unearned
finance charges
|
(23,979 | ) | (22,916 | ) | ||||
Principal
balance
|
220,327 | 208,153 | ||||||
Less
allowance for credit losses
|
(47,045 | ) | (44,809 | ) | ||||
$ | 173,282 | $ | 163,344 |
Three
Months Ended
July
31,
|
||||||||
(In
thousands)
|
2008
|
2007
|
||||||
Balance
at beginning of period
|
$ | 163,344 | $ | 139,194 | ||||
Finance
receivable originations
|
65,793 | 48,853 | ||||||
Finance
receivable collections
|
(35,345 | ) | (30,553 | ) | ||||
Provision
for credit losses
|
(14,490 | ) | (11,519 | ) | ||||
Inventory
acquired in repossession and payment protection plan
claims
|
(6,020 | ) | (4,487 | ) | ||||
Balance
at end of period
|
$ | 173,282 | $ | 141,488 |
Three
Months Ended
July
31,
|
|||
(In
thousands)
|
2008
|
2007
|
Balance
at beginning of period
|
$ | 44,809 | $ | 39,325 | ||||
Provision
for credit losses
|
14,490 | 11,519 | ||||||
Allowance
related to business acquisition, net change
|
- | (38 | ) | |||||
Net
charge-offs
|
(12,254 | ) | (11,493 | ) | ||||
Balance
at end of period
|
$ | 47,045 | $ | 39,313 |
July
31,
|
April
30,
|
||
(In
thousands)
|
2008
|
2008
|
Land
|
$ | 5,740 | $ | 5,740 | ||||
Buildings
and improvements
|
7,091 | 6,808 | ||||||
Furniture,
fixtures and equipment
|
4,463 | 4,295 | ||||||
Leasehold
improvements
|
5,345 | 5,213 | ||||||
Less
accumulated depreciation and amortization
|
(4,208 | ) | (3,916 | ) | ||||
$ | 18,431 | $ | 18,140 |
July
31,
|
April
30,
|
|||||||
(In
thousands)
|
2008
|
2008
|
||||||
Compensation
|
$ | 2,701 | $ | 3,354 | ||||
Cash
overdraft
|
1,535 | 2,556 | ||||||
Deferred
service contract revenue
|
2,425 | 2,295 | ||||||
Deferred
sales tax
|
1,131 | 1,035 | ||||||
Subsidiary
redeemable preferred stock
|
500 | 500 | ||||||
Interest
|
191 | 177 | ||||||
Other
|
1,212 | 1,146 | ||||||
$ | 9,695 | $ | 11,063 |
Revolving
Credit Facilities
|
||||||||||
Aggregate
|
Interest
|
Balance
at
|
||||||||
Primary
Lender
|
Amount
|
Rate
|
Maturity
|
July
31, 2008
|
April
30, 2008
|
|||||
Bank
of Oklahoma
|
$50.0
million
|
Prime
+/-
|
Apr 2009
|
$
33,065
|
$
30,587
|
Fair
Value Measurements Using
|
|||
Quoted
prices in
active
markets
(Level
1)
|
Significant
other
observable
inputs
(Level
2)
|
Significant
unobservable
inputs
(Level
3)
|
|
Interest
Rate Swap
|
-
|
13,000
|
-
|
Three
Months Ended
|
||||||||
July
31,
|
||||||||
2008
|
2007
|
|||||||
Weighted
average shares outstanding-basic
|
11,707,243 | 11,875,782 | ||||||
Dilutive
options and warrants
|
82,843 | 91,908 | ||||||
Weighted
average shares outstanding-diluted
|
11,790,086 | 11,967,690 | ||||||
Antidilutive
securities not included:
|
||||||||
Options
and warrants
|
467,064 | 93,228 | ||||||
Restricted
stock
|
- | 39,667 |
Three
Months Ended
|
|||
July
31,
|
|||
(In
thousands)
|
2008
|
2007
|
Supplemental
disclosures:
|
||||||||
Interest
paid
|
$ | 666 | $ | 845 | ||||
Income
taxes paid, net
|
20 | 239 | ||||||
Non-cash
transactions:
|
||||||||
Inventory
acquired in repossession and payment protection plan
claims
|
6,020 | 4,487 |
%
Change
|
As
a % of Sales
|
|||||||||||||||||||
Three
Months Ended
|
2008
|
Three
Months Ended
|
||||||||||||||||||
July
31,
|
vs.
|
July
31,
|
||||||||||||||||||
2008
|
2007
|
2007
|
2008
|
2007
|
||||||||||||||||
Revenues:
|
||||||||||||||||||||
Sales
|
$ | 69,226 | $ | 52,863 | 31.0 | % | 100.0 | % | 100.0 | % | ||||||||||
Interest
income
|
6,435 | 5,844 | 10.1 | 9.3 | 11.1 | |||||||||||||||
Total
|
75,661 | 58,707 | 28.9 | 109.3 | 111.1 | |||||||||||||||
Costs
and expenses:
|
||||||||||||||||||||
Cost
of sales
|
39,027 | 31,538 | 23.7 | 56.4 | 59.7 | |||||||||||||||
Selling,
general and administrative
|
12,818 | 11,195 | 14.5 | 18.5 | 21.2 | |||||||||||||||
Provision
for credit losses
|
14,490 | 11,519 | 25.8 | 20.9 | 21.8 | |||||||||||||||
Interest
expense
|
693 | 810 | (14.4 | ) | 1.0 | 1.5 | ||||||||||||||
Depreciation
and amortization
|
319 | 274 | 16.4 | .5 | .5 | |||||||||||||||
Total
|
67,347 | 55,336 | 21.8 | 97.3 | 104.7 | |||||||||||||||
Pretax
income
|
$ | 8,314 | $ | 3,371 | 147.6 | 12.0 | 6.4 | |||||||||||||
Operating
Data:
|
||||||||||||||||||||
Retail
units sold
|
7,353 | 5,847 | ||||||||||||||||||
Average
stores in operation
|
91 | 92 | ||||||||||||||||||
Average
units sold per store per month
|
26.9 | 21.2 | ||||||||||||||||||
Average
retail sales price
|
$ | 8,952 | $ | 8,407 | ||||||||||||||||
Same
store revenue change
|
28.5 | % | (8.3 | %) | ||||||||||||||||
Period
End Data:
|
||||||||||||||||||||
Stores
open
|
91 | 92 | ||||||||||||||||||
Accounts
over 30 days past due
|
3.6 | % | 4.1 | % |
July
31,
|
April
30,
|
|||||||
2008
|
2008
|
|||||||
Assets:
|
||||||||
Finance
receivables, net
|
$ | 173,282 | $ | 163,344 | ||||
Inventory
|
14,737 | 13,532 | ||||||
Property
and equipment, net
|
18,431 | 18,140 | ||||||
Liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
13,609 | 14,934 | ||||||
Debt
facilities
|
42,628 | 40,337 |
Three
Months Ended July 31,
|
||||||||
2008
|
2007
|
|||||||
Operating
activities:
|
||||||||
Net
Income
|
$ | 5,281 | $ | 2,141 | ||||
Provision
for credit losses
|
14,490 | 11,519 | ||||||
Finance
receivable originations
|
(65,793 | ) | (48,853 | ) | ||||
Finance
receivable collections
|
35,345 | 30,553 | ||||||
Inventory
|
4,073 | 5,815 | ||||||
Accounts
payable and accrued liabilities
|
(299 | ) | 3,228 | |||||
Change
in deferred payment protection plan revenue
|
2,048 | - | ||||||
Income
taxes payable
|
251 | 797 | ||||||
Deferred
income taxes
|
2,761 | - | ||||||
Other
|
904 | 557 | ||||||
Total
|
(939 | ) | 5,757 | |||||
Investing
activities:
|
||||||||
Purchase
of property and equipment
|
(647 | ) | (697 | ) | ||||
Sale
of property and equipment
|
29 | 44 | ||||||
Total
|
(618 | ) | (653 | ) | ||||
Financing
activities:
|
||||||||
Debt
facilities, net
|
2,291 | (7,154 | ) | |||||
Change
in cash overdrafts
|
(1,021 | ) | 1,992 | |||||
Issuance
of common stock
|
69 | 39 | ||||||
Exercise
of stock options and warrants
|
147 | - | ||||||
Excess
tax benefit from share-based compensation
|
185 | - | ||||||
Total
|
1,671 | (5,123 | ) | |||||
Increase
(decrease) in Cash
|
$ | 114 | $ | (19 | ) |
Year
1
|
Year
2
|
|||
Increase
(Decrease)
|
Increase
(Decrease)
|
Increase
(Decrease)
|
||
In
Interest Rates
|
in
Pretax Earnings
|
in
Pretax Earnings
|
||
(in
thousands)
|
(in
thousands)
|
|||
+200
basis points
|
$777
|
$1,848
|
||
+100
basis points
|
388
|
924
|
||
-
100 basis points
|
(388)
|
(924)
|
||
-
200 basis points
|
(777)
|
(1,848)
|
|
a)
|
Evaluation
of Disclosure Controls and
Procedures
|
|
b)
|
Changes
in Internal Control Over Financial
Reporting
|
Exhibit
Number
|
Description
of Exhibit
|
||
3.1
|
Articles
of Incorporation of the Company (formerly SKAI, Inc.), as amended,
incorporated by reference from the Company’s Registration Statement on
Form S-8 as filed with the Securities and Exchange Commission on November
16, 2005, File No. 333-129727, exhibits 4.1 through
4.8.
|
||
3.2
|
By-Laws
dated August 24, 1989, incorporated by reference from the Company’s
Registration Statement on Form S-8 as filed with the Securities and
Exchange Commission on November 16, 2005, File No. 333-129727, exhibit
4.9.
|
||
4.1 | Sixth Amendment to Amended and Restated Agented Revolving Credit Agreement, dated May 16, 2008, among Colonial Auto Finance, Inc., as borrower, Bank of Arkansas, N.A., Great Southern Bank, First State Bank of Northwest Arkansas, Enterprise Bank and Trust, Sovereign Bank, Commerce Bank, N.A. and First State Bank, incorporated by reference from the Company's Current Report on Form 8-K as filed with the Securities and Exchange Commission on May 21, 2008. | ||
4.2 | Fifth Amendment to Revolving Credit Agreement, dated May 16, 2008, among America's Car-Mart, Inc. an Arkansas corporation, and Texas Car-Mart, Inc. as borrowers, and Bank of Arkansas, N.A., as lender, incorporated by reference from the Company's Current Report on Form 8-K as filed with the Securities and Exchange Commission on May 21, 2008. | ||
4.3 | International Swap Dealers Association, Inc. Master Agreement, Schedule to the Master Agreement and Credit Support Annex dated May 15, 2008 among America's Car-Mart, Inc. Texas Car-Mart, Inc., Colonial Auto Finance, Inc. and Bank of Oklahoma, N.A., incorporated by reference from the Company's Current Report on Form 8-K as filed with the Securities and Exchange Commission on May 21, 2008. | ||
31.1
|
Rule
13a-14(a) certification.
|
||
31.2
|
Rule
13a-14(a) certification.
|
||
32.1
|
Section
1350 certification.
|
||
America’s Car-Mart, Inc. | |||
|
By:
|
\s\ William H. Henderson | |
William H. Henderson | |||
Chief Executive Officer | |||
(Principal Executive Officer) |
|
By:
|
\s\ Jeffrey A. Williams | |
Jeffrey A. Williams | |||
Chief Financial Officer and Secretary | |||
(Principal Financial and Accounting Officer) | |||
Dated: September 9, 2008 |