America's Car-Mart, Inc. (CRMT): history, ownership, mission, how it works & makes money

A Brief History of America's Car-Mart, Inc. (CRMT)

Foundation and Early Growth

America's Car-Mart, Inc. was founded in 1981 by William H. "Bill" McCarthy in Rogers, Arkansas. The company specializes in selling used cars, primarily to customers with limited access to traditional financing options.

Initial Public Offering

The company went public in 1996, trading on the NASDAQ under the symbol CRMT. At the time of its IPO, Car-Mart’s stock was priced at $6.00 per share.

Acquisition Strategy

In its growth strategy, America's Car-Mart has acquired several dealerships, expanding its presence across multiple states. By 2021, the company operated over 150 locations across the southeastern United States.

Financial Performance

For the fiscal year ended April 30, 2022, America's Car-Mart reported revenues of approximately $483 million, a year-over-year increase of 12.2%. Net income for the same period reached $33 million.

Stock Performance

As of October 2023, America's Car-Mart's stock has experienced fluctuations in value, with a 52-week range of $27.89 - $49.10. The current market capitalization is around $400 million.

Customer Demographics

The primary customers of America's Car-Mart are individuals with subprime credit scores. Research indicates that approximately 60% of customers are first-time car buyers or those who have been turned down by traditional lenders.

Financial Metrics

Recent Developments

In 2023, America's Car-Mart announced plans to expand its online sales platform, aiming to increase e-commerce capabilities for customers. The company estimates that online sales could contribute up to 10% of total revenue within the next few years.

Community Involvement

America's Car-Mart actively engages in community support initiatives, donating over $500,000 annually to various charities and local organizations, enhancing its corporate social responsibility profile.

Future Outlook

Analysts project a compounded annual growth rate (CAGR) of 8% for America's Car-Mart over the next five years, driven by expanding market share and improving customer financing solutions.

A Who Owns America's Car-Mart, Inc. (CRMT)

Ownership Structure

America's Car-Mart, Inc. (CRMT) is a publicly traded company listed on the NASDAQ under the ticker symbol CRMT. As of August 2023, the ownership structure is comprised of institutional investors, individual shareholders, and company insiders.

Institutional Ownership

As per the most recent data, institutional ownership is approximately 66.2%. Key institutional shareholders include:

Insider Ownership

Insider ownership accounts for about 5.0% of the total shares, reflecting the confidence of the management in the company's growth potential. Notable insiders include:

Individual Shareholders

Individual shareholders hold approximately 28.8% of the total shares. The majority of these are retail investors, with a growing interest in the automotive sales and financing sector.

Recent Stock Performance

The stock price of America's Car-Mart, Inc. (CRMT) has seen fluctuations throughout 2023. As of August 30, 2023, the stock price was $80.25, with a 52-week range of $60.00 - $95.00.

Future Outlook

The company continues to expand its footprint in the used vehicle retail market, focusing on value-driven offerings and enhancing customer experience. Key strategic initiatives may affect ownership dynamics and shareholder value in the coming years.

America's Car-Mart, Inc. (CRMT) Mission Statement

America's Car-Mart, Inc. is dedicated to providing quality used vehicles to customers with a focus on customer satisfaction and ethical business practices. The mission statement emphasizes the importance of meeting the diverse needs of its clientele while ensuring financial empowerment.

Core Values

• Integrity: Commitment to honesty in all business dealings.
• Customer Focus: Prioritizing the needs and satisfaction of the customer.
• Community Engagement: Involvement in local communities through support and service.
• Teamwork: Collaborating among employees to achieve excellence.

Financial Overview

As of the fiscal year ending April 30, 2023, America's Car-Mart reported the following financial highlights:

Customer Demographics

The typical customer demographic for America's Car-Mart includes:

Market Presence

America's Car-Mart operates in the following states:

• Arkansas
• Missouri
• Tennessee
• Oklahoma
• Texas
• Kentucky

Strategic Goals

Key strategic goals include:

• Expand Market Reach: Targeting new geographical areas for growth.
• Enhance Customer Experience: Implementing technology to improve service delivery.
• Sustainable Practices: Incorporating eco-friendly practices in operations.

Community Involvement

America's Car-Mart actively participates in community initiatives, contributing to local charities and providing scholarships for students. In 2023, the company donated approximately $250,000 to various non-profit organizations.

Conclusion

America's Car-Mart continues to focus on its mission statement of delivering quality vehicles while ensuring customer satisfaction and community engagement.

How America's Car-Mart, Inc. (CRMT) Works

Business Model

America's Car-Mart, Inc. operates a unique business model within the automotive industry by specializing in the sale of used vehicles, primarily targeting the subprime market segment. The company focuses on the sale and financing of vehicles to customers with limited access to traditional credit options. As of the fiscal year ended April 30, 2023, the company reported $350 million in revenue, a 14% increase from the previous year.

Financial Performance

In the most recent fiscal year, America's Car-Mart, Inc. achieved the following financial metrics:

Customer Financing

The company offers in-house financing options which allows it to serve customers who may not qualify for conventional loans. The average loan amount financed by America's Car-Mart stands at approximately $15,000, with an average interest rate of around 19%.

Inventory Management

America's Car-Mart maintains an inventory of roughly 9,300 vehicles, sourced mainly from auctions and trade-ins. The average holding period for a vehicle is approximately 45 days. The company focuses on vehicles priced between $10,000 and $20,000.

Store Locations

As of October 2023, America's Car-Mart operates 150 locations across 12 states. The company's largest markets include:

Marketing Strategies

The company employs various marketing strategies to attract customers, including:

• Digital Advertising
• Social Media Campaigns
• Community Engagement Events
• Referral Programs

Customer Demographics

The primary customer base for America's Car-Mart consists of individuals with annual incomes below $50,000. The company estimates that about 75% of its customers have subprime credit ratings.

Risk Management

America's Car-Mart employs rigorous risk management practices to mitigate defaults on customer loans, including:

• Creditworthiness assessments
• Loan-to-value ratios
• Vehicle repossession strategies

Recent Developments

In 2023, America's Car-Mart announced plans to expand its footprint by opening 10 new locations in strategic markets, which is expected to increase revenue by approximately $20 million annually.

How America's Car-Mart, Inc. (CRMT) Makes Money

Revenue Streams

America's Car-Mart, Inc. generates revenue primarily through the sale of used vehicles and the associated financing options provided to customers. The company specializes in the buy-here-pay-here (BHPH) model, allowing customers to make payments directly to the dealership.

Used Vehicle Sales

In fiscal year 2023, America's Car-Mart reported total revenues of approximately $469 million from used vehicle sales. The average selling price of a vehicle was around $19,000.

Financing Revenue

The financing segment is crucial to America's Car-Mart's profitability. As of Q3 2023, the company had a finance receivables balance of around $500 million, with an average interest rate of 19.71%. This segment contributed approximately $105 million in revenue for the fiscal year 2023, representing a significant portion of overall income.

Gross Profit Margins

America's Car-Mart operates with varying gross profit margins across its segments. In fiscal 2023, the company's gross profit margins for vehicle sales stood at approximately 40%. The financing segment had a higher gross profit margin, estimated at 65%.

Operational Costs

The operational costs for America's Car-Mart include vehicle acquisition, reconditioning, and administrative expenses. For FY 2023, these costs were reported as follows:

Market Expansion and Customer Demographics

America's Car-Mart has been expanding its market presence, focusing on low to moderate-income customers. The company operates over 150 locations across the U.S. as of 2023. The target demographic typically has limited access to traditional financing options, making BHPH dealerships appealing.

Impact of Economic Conditions

The company’s performance is influenced by economic factors such as unemployment rates and consumer credit availability. In a strong economic climate, demand for vehicles typically increases, whereas economic downturns can negatively affect sales. For the period from 2022 to 2023, the U.S. unemployment rate averaged around 3.7%, contributing to a favorable environment for vehicle sales.

Inventory Management

As of the end of FY 2023, America's Car-Mart maintained an inventory of approximately 13,000 vehicles. Efficient inventory turnover is key; the average time a vehicle spends in inventory is about 45 days. The company aims for a vehicle turnover rate of 8 times per year.

Future Projections

America's Car-Mart aims to increase its market share and enhance profitability through strategic initiatives. The company projects revenue growth of approximately 10-15% annually, driven by expansion into new markets and an increase in its customer base.