Profile: America's Car-Mart Inc (CRMT.OQ)
24 Mar 2017
America's Car-Mart, Inc., incorporated on August 23, 1989, is an automotive retailer focused on the integrated auto sales and finance segment of the used car market. The Company conducts its operations through its two operating subsidiaries, America's Car Mart, Inc. (Car-Mart of Arkansas) and Colonial Auto Finance, Inc. (Colonial) (Collectively, Car-Mart of Arkansas and Colonial are referred to as Car-Mart). The Company primarily sells older model used vehicles and provides financing for all of its customers. As of April 30, 2016, the Company operated 143 dealerships located primarily in small cities throughout the South-Central United States.
Dealerships are operated on a decentralized basis. Each dealership is responsible for buying (with the assistance of a corporate office buyer) and selling vehicles, making credit decisions, and servicing and collecting the installment contracts it originates. Dealerships also maintain their own records and make daily deposits. The Company has both regular and satellite dealerships. Satellite dealerships are similar to regular dealerships, except that they tend to be smaller and sell fewer vehicles. The Company purchases vehicles primarily from wholesalers, new car dealers, individuals and auctions. The majority of vehicle purchasing is performed by the Company's buyers, although dealership managers are authorized to purchase vehicles as needed. The Company's buyers purchase vehicles between 6 and 12 years of age with 90,000 to 140,000 miles. It focuses on providing basic transportation to its customers. It does not purchase sports cars or luxury cars. Some of the vehicles the Company sells include the Chevrolet Impala, Chevrolet Malibu, Chrysler 300, Ford Taurus, Ford Fusion, Dodge Ram Pickup, Ford Explorer and the Ford F-150 Pickup. It also sells a number of trucks and sport utility vehicles.
Dealerships maintain an inventory of 25 to 75 vehicles depending on the maturity of the dealership and the time of the year. Inventory turns over 9 to 10 times each year. For covered components and assemblies, the Company coordinates service with third party service centers. Additionally, the Company offers its customers to whom financing is extended a payment protection plan product. This product contractually obligates the Company to cancel the remaining amount owed on a contract where the vehicle has been totaled, as defined in the plan, or the vehicle has been stolen. The Company provides financing to all of its customers who purchase a vehicle at one of its dealerships. It only provides financing to its customers for the purchase of its vehicles, and it does not provide any type of financing to non-customers. As of April 30, 2016, the Company's installment sales contracts include down payments ranging from 0% to 17% (average of 7%), terms ranging from 18 months to 42 months (average of 31.6 months) and a fixed annual interest rate of 15% (weighted average of 14.9%). The Company requires that payments be made on a weekly, bi-weekly, semi-monthly or monthly basis, scheduled to coincide with the day the customer is paid by his or her employer.
America's Car-Mart Inc
802 SE Plaza Ave Ste 200
BENTONVILLE AR 72712-3220