Used-car retailer’s earnings rise 28%

Car-Mart’s stock at 12-month high

— America’s Car-Mart Inc., the Bentonville-based buyhere, pay-here auto chain, reported third-quarter net income Thursday of $7.3 million, or 73 cents a share, up 28 percent over the same period a year ago when it earned $5.7 million.

Revenue increased 13.8 percent to $105.4 million from $92.6 million. At the company’s car lots open at least a year, revenue rose 7.9 percent.

“Our people have once again delivered in excellent fashion,” Hank Henderson, president and chief executive officer, said in a conference call with industry analysts and reporters.

The earnings results beat the consensus estimate of 69 cents a share of analysts surveyed by Thomson Reuters.

Vehicle sales of 8,266 for the quarter were up 8.5 percent from a year ago. General administrative and sales expenses were down slightly, to 18.3 percent of sales from 19.2 percent.

Jeff Williams, chief financial officer, said the average price of vehicles sold rose $365 to $9,022.

He said the company is “not having problems finding good cars,” but that those cars are costing more.

David Burtzlaff, analyst with Stephens Inc. in Little Rock, called the company’s performance “another good quarter for them.” He cautioned, however, that rising vehicle prices could limit future growth.

“Their ability to manage car prices will be crucial going forward, to be able to manage the prices as far as affordability for the consumer,” he said. “You don’t see a lot of wage growth and prices keep going higher.”

For the first three quarters of Car-Mart’s fiscal year, net income has totaled $23.3 million, or $2.28 per diluted share, up from $19.8 million, or $1.77 a share for the comparable yearago quarters. Vehicle sales rose to 27,933, up 10.9 percent, from 25,178.

For the fiscal year to date, Car-Mart has opened six new outlets. Three more — two in Mississippi and one Tennessee — are to open in the final quarter of the fiscal year.

For the third-quarter reporting period, Car-Mart had an average store base of 111. In addition to Arkansas, home to the company’s largest concentration of stores, Car-Mart has outlets in Alabama, Indiana, Kentucky, Missouri, Mississippi, Oklahoma, Tennessee and Texas.

Williams said the average payoff period for buyers increased to 26.6 months from 24 months a year earlier.

The company repurchased 98,201 shares of its stock during the quarter. Since Feb. 1, it has repurchased almost 2.3 million shares.

More than 900,000 shares remain available under the company’s current repurchase plan.

Car-Mart’s stock closed Thursday at $45.31, a new high for the past year, up $5.28 or 13.16 percent on the Nasdaq. The stock has traded as low as $22.77 during that period.

Business, Pages 27 on 02/17/2012

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