America's CAR-MART Inc (CRMT) 2023 Q3 法說會逐字稿

Good day, everyone. Thank you for holding, and welcome to America's Car-Mart's Third Quarter Fiscal 2023 Conference Call. The topic of this call will be the earnings and operating results for the company's third quarter fiscal year of 2023. Before we begin, today's call is being recorded and will be available for replay for the next 12 months.

今天是個好日子。感謝您的參與，歡迎來到美國 Car-Mart 的 2023 財年第三季度電話會議。本次電話會議的主題是公司 2023 財年第三季度的收益和經營業績。在我們開始之前，今天的電話會議正在錄製中，未來 12 個月都可以重播。

As a reminder, some of management's comments today may include forward-looking statements, which inherently involve risks and uncertainties that could cause actual results to differ materially from management's present view. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

提醒一下，今天管理層的一些評論可能包含前瞻性陳述，這些陳述本質上涉及風險和不確定性，可能導致實際結果與管理層目前的觀點存在重大差異。這些聲明是根據 1995 年《私人證券訴訟改革法案》的安全港條款作出的。

The company cannot guarantee the accuracy of any forecast or estimate nor does it undertake any obligation to update forward-looking statements. For more information regarding forward-looking information, please see Part 1 of the company's annual report on Form 10-K for the fiscal year ended April 30th, 2022, and its current quarterly reports furnished to or filed with the Securities and Exchange Commission on Forms 8-K and 10-Q.

公司不能保證任何預測或估計的準確性，也不承擔更新前瞻性陳述的任何義務。有關前瞻性信息的更多信息，請參閱公司截至 2022 年 4 月 30 日止財政年度的 10-K 表格年度報告的第 1 部分，以及向美國證券交易委員會提交或備案的當前季度報告表格8-K 和 10-Q。

Participating on the call this morning are Jeff Williams, the company's Chief Executive Officer; Doug Campbell, President; and Vickie Judy, Chief Financial Officer. And now I'd like to turn the call over to the company's Chief Executive Officer, Jeff Williams.

參加今天上午電話會議的有公司首席執行官傑夫·威廉姆斯 (Jeff Williams)；道格·坎貝爾，總裁；和首席財務官 Vickie Judy。現在我想把電話轉給公司的首席執行官傑夫威廉姆斯。

Okay. Well, thank you for joining us this morning. We saw an increase in unit volumes for the quarter, both on an absolute basis and on a same-store basis, and absent weather challenges, would have seen more unit volume increases. Doug will cover sales for the quarter in just a minute.

好的。好吧，謝謝你今天早上加入我們。我們看到本季度的單位銷量在絕對基礎上和同店基礎上都有所增加，而且如果沒有天氣挑戰，單位銷量會增加更多。道格將在一分鐘內介紹本季度的銷售情況。

Our volume increases are in the face of affordability challenges and overall inflationary pressures and when compared to the previous 2 years, a lack of stimulus in the marketplace. However, overall used car prices did come down in 2022. As expected, we are seeing a normal tax season uptick in the most recent months, but we do expect pricing to level off in the short term and experience a more gradual normal decline for the balance of the year.

我們的銷量增長是在面臨負擔能力挑戰和整體通脹壓力的情況下發生的，與前兩年相比，市場缺乏刺激。然而，整體二手車價格在 2022 年確實下降了。正如預期的那樣，我們看到最近幾個月的稅收季節正常上漲，但我們確實預計價格會在短期內趨於平穩，並且會經歷更緩慢的正常下降年的餘額。

The car we do buy is expected to better hold value due to supply-demand affordability dynamics. Our customers' wages are expected to continue to rise, leading to improvements in affordability and higher future sales volumes. We expect that used car affordability will shift back to historical levels over time, bringing with it and increasing customers seeking credit and the outstanding service they receive from America's Car-Mart.

由於供需承受力動態，我們購買的汽車預計會更好地保值。預計我們客戶的工資將繼續上漲，從而提高負擔能力和更高的未來銷量。我們預計，隨著時間的推移，二手車的購買力將恢復到歷史水平，隨之而來的是越來越多的客戶尋求信貸以及他們從美國 Car-Mart 獲得的優質服務。

According to Cox Automotive, access to auto credit tightened again in January, reflecting conditions that were the tightest since June of 2021 for all loan types. There was a slight loosening for the independent dealer channel in January from December, but on a year-over-year basis, all channels were tighter with credit unions tightening the most.

根據 Cox Automotive 的數據，1 月份汽車信貸的獲取再次收緊，反映出所有貸款類型的條件是 2021 年 6 月以來最緊縮的。獨立經銷商渠道在 1 月份比 12 月份略有鬆動，但與去年同期相比，所有渠道都更加緊張，其中信用合作社收緊的幅度最大。

We will benefit as good folks migrate down into our market. The timing of our loan origination system rollout, which we will discuss more could not be better from the picking up market share and setting ourselves up to sell between 40 and 50 cars per dealership per month over the next 3 years and to eventually average over 1,000 active customers per dealership. Doug and I will cover a few specifics on some key initiatives.

隨著好人遷移到我們的市場，我們將受益。我們將討論更多的貸款發起系統推出的時機，從獲得市場份額和設定我們在未來 3 年內每個經銷商每月銷售 40 到 50 輛汽車並最終平均超過 1,000 輛汽車來看，再好不過了每個經銷商的活躍客戶。道格和我將介紹一些關鍵舉措的一些細節。

As to people, the recent addition of several talented people to our senior management team is allowing us to benefit from their skills and outside experiences, helping us effectively complete and leverage the initiatives and investments that we've been making in the business. We're improving processes, increasing accountability and reorganizing work to maximize efficiency.

在人員方面，最近我們的高級管理團隊增加了幾位有才華的人，這使我們能夠從他們的技能和外部經驗中受益，幫助我們有效地完成和利用我們一直在業務中進行的計劃和投資。我們正在改進流程、加強問責制並重組工作以最大限度地提高效率。

As we've discussed, areas include procurement and inventory management, wholesale improvements, reconditioning, logistics, the loan origination system, IT data and digital, and we're making huge strides in all these areas, very exciting.

正如我們所討論的，領域包括採購和庫存管理、批發改進、修復、物流、貸款發放系統、IT 數據和數字，我們在所有這些領域都取得了長足的進步，非常令人興奮。

Our enterprise resource planning or ERP initiative is progressing and is expected to be completed by the end of the calendar year. The ERP is critical in our efforts to eliminate manual tasks and improve efficiency and operating flexibility, allowing for future growth. Within the ERPs, the customer relationship management module or the CRM, the continuing development of the CRM will allow us to harness visibility of customer touch points in one place, improving the customer experience, allowing us to serve more customers at a high level while increasing the funnel of potential new customers.

我們的企業資源規劃或 ERP 計劃正在進行中，預計將在日曆年年底完成。 ERP 在我們消除手動任務、提高效率和運營靈活性的努力中至關重要，從而實現未來的增長。在 ERP、客戶關係管理模塊或 CRM 中，CRM 的持續發展將使我們能夠在一個地方利用客戶接觸點的可見性，改善客戶體驗，使我們能夠在高水平上為更多客戶服務，同時增加潛在新客戶的渠道。

The CRM provides the underpinning of our new loan origination system. This investment is critical and will allow us to become a data-driven company, better supporting field operations teams as they serve our customers.

CRM 為我們的新貸款發放系統提供了基礎。這項投資至關重要，將使我們成為一家數據驅動的公司，更好地支持現場運營團隊為我們的客戶提供服務。

As mentioned in the press release, we completed the acquisitions of 3 new dealerships in December. These dealerships are located in Knoxville, Tennessee and in Taylor, Texas Great Towns. And we expect the acquisitions to play a leading role in our future plans, and we're actively talking to multiple parties. We believe we can add 5 or more dealerships per year via acquisitions with our current resources and more as we look forward and refine our processes. I'll turn it over to Doug now. Doug.

正如新聞稿中所述，我們在 12 月完成了對 3 家新經銷商的收購。這些經銷店位於田納西州諾克斯維爾和得克薩斯州大城鎮泰勒。我們預計收購將在我們未來的計劃中發揮主導作用，我們正在積極與多方進行對話。我們相信，隨著我們展望和改進我們的流程，我們每年可以通過利用我們現有的資源進行收購來增加 5 家或更多經銷商。我現在將其轉交給 Doug。道格。

Thanks, Jeff, and good morning, everyone. I'll cover 2 more initiatives before providing some color on our sales performance. Our reconditioning pilot is moving along nicely, and we are processing several hundred vehicles per month now with strategic partners who have footprint in our trade territory. We've been pleased with the results thus far and are seeing cost reductions and quality improvements when compared to other channels.

謝謝，傑夫，大家早上好。在為我們的銷售業績提供一些顏色之前，我將介紹另外 2 個計劃。我們的翻新試點進展順利，我們現在每月與在我們的貿易領域有足蹟的戰略合作夥伴一起處理數百輛汽車。到目前為止，我們對結果很滿意，與其他渠道相比，我們看到了成本的降低和質量的提高。

Our expectation is that within 6 months, we'll be processing north of 1,000 units per month, utilizing this channel, and we'll continue to scale it as needed. At maturity, we see a scenario where we could source 50% of our vehicles utilizing this channel. Our preliminary findings indicate the effort is worth $300 to $500 per unit. However, the indirect benefits are enormous and will allow us to grow sales and volume productivity.

我們的期望是，在 6 個月內，我們將利用此渠道每月處理超過 1,000 個單位，並且我們將根據需要繼續擴展它。在成熟的時候，我們看到了一個場景，我們可以利用這個渠道採購 50% 的車輛。我們的初步調查結果表明，每件作品價值 300 到 500 美元。然而，間接收益是巨大的，將使我們能夠增加銷售額和批量生產率。

Next, I spoke a fair bit regarding our new loan origination system on the last call, where I outlined that we had successfully installed the credit application portal throughout 23% of our stores. Our original goal was to complete the balance of the installation by May 1.

接下來，我在上次電話會議上談到了我們新的貸款發放系統，其中我概述了我們已經在 23% 的商店中成功安裝了信貸申請門戶。我們最初的目標是在 5 月 1 日之前完成安裝的平衡。

I want to take the opportunity to thank all of the teams who have worked tirelessly on completing the installation on now 100% of our operation as of February 1. All customers who apply online are receiving text message responses as to the status of their application, including down payment requirements and what they're qualified for. Customers who reply to these messages are interacting with team members here at headquarters on follow-up questions and appointment setting needs. Any customers who require more time cascade into a different workflow, where one of our stores will ensure that work alongside them until they're ready to purchase.

我想藉此機會感謝所有不知疲倦地完成安裝的團隊，截至 2 月 1 日，我們 100% 的運營已經完成。所有在線申請的客戶都會收到有關其申請狀態的短信回复，包括首付要求和他們的資格。回复這些消息的客戶正在與總部這裡的團隊成員就後續問題和預約設置需求進行互動。任何需要更多時間的客戶都會進入不同的工作流程，我們的一家商店將確保與他們一起工作，直到他們準備好購買。

We're currently prioritizing what functionality to deploy for our dealerships and consumers that will enable a more frictionless transaction. I'd also like to discuss credit application volumes, which is one of the larger issues we were trying to address with the LOS initiative.

我們目前正在優先考慮為我們的經銷商和消費者部署哪些功能，以實現更順暢的交易。我還想討論信貸申請量，這是我們試圖通過 LOS 計劃解決的更大問題之一。

Our customers have been and continue to engage with us differently. The submission of the online credit application is a great indicator for customers and their propensity to buy and the demand for our services. Prior to COVID, we have begun seeing that shift, but it has accelerated throughout the pandemic and continues to do so.

我們的客戶一直並將繼續以不同的方式與我們互動。提交在線信貸申請是了解客戶及其購買傾向和對我們服務需求的重要指標。在 COVID 之前，我們已經開始看到這種轉變，但這種轉變在整個大流行期間加速了，並將繼續如此。

Historically, applications that were done at our stores exceeded the applications performed remotely. This has been a slow shift but approached a ratio of 1:1 just prior to COVID. However, currently, that ratio now favors remote applications versus in-store applications at a ratio of 2:1. All of this has transpired while gross credit application volume from the 2 channels has grown over 25% when comparing the monthly averages from 2019 and 2022.

從歷史上看，在我們商店完成的應用程序超過了遠程執行的應用程序。這是一個緩慢的轉變，但在 COVID 之前接近 1:1 的比例。但是，目前，該比率現在有利於遠程應用程序與店內應用程序，比率為 2:1。與 2019 年和 2022 年的月平均值相比，這兩個渠道的信貸申請總量增長了 25% 以上。

If we isolated the results from the pilot stores compared to the rest of the company, the results are even greater. It's notable that this was achieved with no incremental marketing spend. There are more customers than we can serve, and it's important that we serve them in a differentiated way.

如果我們將試點商店的結果與公司其他部分進行比較，結果會更好。值得注意的是，這是在沒有增加營銷支出的情況下實現的。客戶的數量超出了我們的服務能力，因此我們以差異化的方式為他們提供服務非常重要。

Doug, those are great points. I'd like to add a few others to consider. The LOS will allow us to streamline underwriting, including credit reports and income verification, eliminate the manual processes and capture documents more efficiently than we have in the past, the opportunities around regression analysis, marketing and data mining are huge. In addition, we'll also be leveraging a third party to perform tax and fee calculations, which have historically been done by internal resources. So the LOS benefits are both better efficiencies and cost savings, and the total CapEx for this initiative is very minimal with ongoing incremental cost of around $13 per unit sold. So hugely positive all the way around.

道格，這些都是很棒的觀點。我想添加一些其他的來考慮。 LOS 將使我們能夠簡化承保，包括信用報告和收入驗證，消除手動流程並比過去更有效地獲取文檔，回歸分析、營銷和數據挖掘方面的機會是巨大的。此外，我們還將利用第三方來執行稅費計算，這在以往都是由內部資源完成的。因此，LOS 的好處是提高效率和節省成本，並且該計劃的總資本支出非常少，持續增加的成本約為每售出 13 美元。一路上都非常積極。

Thanks, Vickie. Those points really underscore the importance of the initiative. I'll take a moment to provide some additional color on sales. We finished the quarter with a little over 14,500 units.

謝謝，薇琪。這些要點確實強調了該倡議的重要性。我會花點時間提供一些額外的銷售顏色。本季度結束時，我們的銷量略高於 14,500 台。

As Jeff mentioned earlier, the adverse effects from weather had an impact on our operations team. There were a couple of weather events during the quarter, but I'll limit my commentary to the event that took place in late January. Almost every store was impacted in some way, but over half of our stores were located in areas where a state of emergency had been declared. During this period, we requested our leaders to prioritize the safety of our associates and our customers by providing adequate time to hunker down and to return to work when it was safe to do so.

正如傑夫之前提到的，天氣的不利影響對我們的運營團隊產生了影響。本季度發生了幾起天氣事件，但我的評論僅限於 1 月下旬發生的事件。幾乎每家商店都受到了某種程度的影響，但我們一半以上的商店位於已宣布進入緊急狀態的地區。在此期間，我們要求我們的領導優先考慮我們員工和客戶的安全，提供足夠的時間讓他們冷靜下來，並在安全的情況下重返工作崗位。

We believe this event had a drag on our sales volume for the quarter of roughly 300 to 400 units, which impacted our pretax income by about $1 million. Absent that impact, our sales performance versus the prior year would have been up about 5% or 6% versus the 2.7% positive that we finished the quarter with. We're very proud of our leaders and associates for navigating all of these challenges and still finishing the quarter on a positive note.

我們認為這一事件拖累了我們本季度約 300 至 400 台的銷量，這使我們的稅前收入減少了約 100 萬美元。如果沒有這種影響，我們的銷售業績與上一年相比將增長約 5% 或 6%，而我們在本季度結束時為 2.7%。我們為我們的領導者和同事們應對所有這些挑戰並仍然以積極的態度結束本季度感到非常自豪。

When looking at the average selling price, it was up 8% or about $1,341 when compared to the same period last year. We continue to manage the issues in our industry regarding affordability and supply chains, some of which is reflected in our sales price. When comparing the average selling prices of vehicles sequentially, they're relatively flat. Additionally, as a reminder, we made some decisions as a management team in the prior quarter to increase the selling prices of vehicles and ancillary products given the average selling price for the first time as they went into effect in mid-December.

從平均售價來看，與去年同期相比上漲了 8% 或約 1,341 美元。我們繼續管理我們行業中有關負擔能力和供應鏈的問題，其中一些問題反映在我們的銷售價格中。按順序比較車輛的平均售價時，它們相對持平。此外，提醒一下，我們作為管理團隊在上一季度做出了一些決定，以提高車輛和輔助產品的售價，因為它們於 12 月中旬生效，這是第一次考慮到平均售價。

Lastly, I'll cover gross margins. We finished the quarter at 33.6%. And on the prior call, we mentioned wholesale performance having a negative contribution on these gross margins by approximately 200 basis points. While there's much we can and will do to improve the margins as a general statement. The quickest way to add some benefit here was to centrally manage the sale of these wholesale vehicles.

最後，我將介紹毛利率。我們以 33.6% 的成績結束了本季度。在之前的電話會議上，我們提到批發業績對這些毛利率的貢獻約為 200 個基點。雖然我們可以而且將會做很多事情來提高利潤率作為一般聲明。在這裡增加一些好處的最快方法是集中管理這些批發車輛的銷售。

During the quarter, we ran a pilot on a subset of wholesale volume, which got us a healthy bump in retention prices. That's reflected in the 147 basis point improvement you see here sequentially. Given wholesale volumes for us as a company, have hovered around 20,000 units a year and have been for about the last 5 years or so this represents a huge opportunity when you annualize that benefit. We'll be continuing to scale the pilot and anticipate the entire company benefiting from this over the next couple of quarters. Now I'll turn it over to Vickie, who will highlight our financial results. Vickie.

在本季度，我們對一部分批發量進行了試點，這使我們的保留價格有了健康的增長。這反映在您在此處連續看到的 147 個基點的改進中。考慮到我們作為一家公司的批發量，每年徘徊在 20,000 台左右，並且在過去 5 年左右的時間裡一直如此，當您將收益年化時，這代表了一個巨大的機會。我們將繼續擴大試點規模，並預計整個公司將在接下來的幾個季度中從中受益。現在我將把它交給 Vickie，她將重點介紹我們的財務業績。薇琪。

Thank you, Doug. For the current quarter, our net charge-offs as a percentage of average finance receivables were 5.9%, relatively flat sequentially, but also flat compared to the pre-pandemic third quarter of fiscal year '19. They were slightly above our prior 5-year average at 5.6% but still below our 10-year average of 6% for third quarter.

謝謝你，道格。對於本季度，我們的淨註銷占平均融資應收賬款的百分比為 5.9%，環比持平，但與 19 財年大流行前的第三季度相比也持平。它們略高於我們之前的 5 年平均水平 5.6%，但仍低於我們第三季度 6% 的 10 年平均水平。

The primary driver of the increased charge-offs was an increased frequency of losses, but we also experienced an increase in the relative severity of losses. The declining wholesale prices also had an effect. Recovery rates decreased to about 28%.

沖銷增加的主要驅動因素是損失頻率增加，但我們也經歷了損失相對嚴重程度的增加。批發價格下降也產生了影響。回收率下降到約 28%。

As Doug discussed, we will be focused on maximizing our efficiencies around the wholesale process to offset a piece of the declining market impact. We are focused on keeping customers in their vehicles as always, but especially working with them during the upcoming income tax refund time.

正如 Doug 所討論的那樣，我們將專注於最大限度地提高批發流程的效率，以抵消市場下降的一部分影響。我們一如既往地專注於讓客戶留在他們的車輛中，但特別是在即將到來的所得稅退稅時間與他們合作。

The quality of the portfolio remains strong with applicant quality consistent with prior year. We continue to improve the percentage of the portfolio held with our highest credit quality customers. Delinquencies have remained in line with historical percentages and are trending positively over the prior year.

投資組合的質量仍然很高，申請人的質量與上一年一致。我們繼續提高最高信用質量客戶持有的投資組合的百分比。拖欠率與歷史百分比保持一致，並且比上一年呈積極趨勢。

Our accounts 30-plus days past due was at 3.7% compared to 4% in the prior year quarter. This is particularly notable since this year's quarter end was on a Tuesday, the highest delinquency day on average versus the prior year quarter, which ended on a Saturday, the lowest delinquency day on average.

我們的賬戶逾期 30 天以上為 3.7%，而去年同期為 4%。這一點尤其值得注意，因為今年的季度末是在周二，這是平均拖欠率最高的一天，而上一季度結束於週六，是平均拖欠率最低的一天。

Total collections were up over 11% to $153 million and total collections per active customer per month were up 5.9% to $519. The average originating contract term for the quarter was 42.5 months compared to 40.4 for the prior year quarter and down slightly from 42.6 months sequentially.

總收款額增長了 11% 以上，達到 1.53 億美元，每位活躍客戶每月的總收款額增長了 5.9%，達到 519 美元。本季度的平均原始合同期限為 42.5 個月，而去年同期為 40.4 個月，比上一季度的 42.6 個月略有下降。

As Doug mentioned, the average selling price was up $1,341 and for the quarter versus the prior year quarter with only a 2.1-month increase in the term compared to the prior year third quarter. It is encouraging that the originating terms and the average retail selling prices increases are flattening.

正如 Doug 所提到的，本季度的平均售價與去年同期相比上漲了 1,341 美元，與去年第三季度相比僅增加了 2.1 個月。令人鼓舞的是，原產地價格和平均零售價格的漲幅趨於平緩。

Our weighted average contract term for the entire portfolio, including modifications, was 45.4 months compared to 41.2 for the prior year quarter. And positively, the weighted average age of the portfolio increased 12.5% from approximately 8.8 months to 9.9 months.

我們整個投資組合的加權平均合同期限（包括修改）為 45.4 個月，而去年同期為 41.2 個月。積極的一面是，投資組合的加權平均年齡從大約 8.8 個月增加 12.5% 至 9.9 個月。

Our SG&A spend increased $5.6 million over the prior year quarter. Most of this increase relates to the investments in our people, both the cost of the new key positions and our focus on staying competitive in terms of total rewards and compensation for our valued associates.

我們的 SG&A 支出比去年同期增加了 560 萬美元。這一增長大部分與對我們員工的投資有關，既包括新關鍵職位的成本，也包括我們在為重要員工提供的總回報和薪酬方面保持競爭力的重點。

Increased collection costs due primarily to the higher frequency of repossessions, the addition of 3 new dealerships since last year and the inflation impact on nearly all expenses also contributed to the remaining increase. Many of the long-term investments we're making are reflected in the income statement as we centralize certain noncore functions.

收款成本的增加主要是由於收回頻率較高、自去年以來增加了 3 家新經銷商以及通貨膨脹對幾乎所有費用的影響也導致了剩餘的增長。由於我們集中某些非核心職能，我們正在進行的許多長期投資都反映在損益表中。

As we complete our initiatives that Jeff and Doug discussed, we will become more efficient, be able to increase sales volumes and expect to leverage our SG&A cost. Our customer count increased by 6% over the prior year to 99,577 customers. We continue to believe we can serve a much larger customer base with appropriate returns. Our expectation is to leverage these investments by serving more customers.

當我們完成 Jeff 和 Doug 討論的計劃時，我們將變得更有效率，能夠增加銷量並期望利用我們的 SG&A 成本。我們的客戶數量比上一年增加了 6%，達到 99,577 名客戶。我們仍然相信我們可以為更大的客戶群提供適當的回報。我們的期望是通過為更多客戶提供服務來利用這些投資。

At quarter end, our revolving debt was approximately $27.8 million. We have $4.3 million in cash and approximately $148 million in additional availability under our revolving credit facilities based on our current borrowing base of receivables and inventory.

季度末，我們的循環債務約為 2780 萬美元。根據我們目前的應收賬款和存貨借款基礎，我們有 430 萬美元的現金和大約 1.48 億美元的額外可用性。

We closed on our second securitization at the end of the quarter, issuing $400 million in bonds with a weighted average fixed coupon of 8.7%, and our total securitized nonrecourse notes payable was $588 million, with $61 million in restricted cash related to those notes. Our total debt, net of cash to finance receivables ratio is 42.2%. Thank you, and I'll let Jeff close this out.

我們在本季度末完成了第二次證券化，發行了 4 億美元的債券，加權平均固定息票率為 8.7%，我們的證券化無追索權應付票據總額為 5.88 億美元，與這些票據相關的受限制現金為 6100 萬美元。我們的總債務（扣除現金與應收賬款融資比率）為 42.2%。謝謝，我會讓 Jeff 結束這件事。

Okay. Well, thank you, Vickie. Obviously, we're very proud of our company, and I wanted to take and give you a perspective on where we are, where we've come from in the last 3 years and most importantly, where we're going.

好的。好吧，謝謝你，薇琪。顯然，我們為我們的公司感到非常自豪，我想向您介紹一下我們所處的位置，過去 3 年我們從哪裡來，最重要的是，我們要去哪裡。

Since January of '20, our book value per share has grown from $44 to $78. That's a 77% increase while equity has gone from around $290 million to almost $500 million. This in an environment where the average retail sales price has moved up 50% and inflation in all other areas of the economy has increased the cost of doing business.

自 20 年 1 月以來，我們的每股賬面價值從 44 美元增長到 78 美元。這是 77% 的增長，而股本從大約 2.9 億美元增加到近 5 億美元。這是在平均零售價格上漲 50% 且所有其他經濟領域的通貨膨脹增加了經商成本的環境下發生的。

For many years, we've talked about the need to hold on tight to our conservative balance sheet with a historical debt to AR of around 30% or less so that we would be in a great position to accelerate growth when conditions moved in our favor. The pandemic resulting stimulus and the return of inflation with higher interest rates presented such an opportunity to us, and we've taken advantage.

多年來，我們一直在討論有必要嚴格控制我們保守的資產負債表，歷史債務應收賬率約為 30% 或更少，這樣當情況對我們有利時，我們將處於加速增長的有利位置.大流行導致的刺激措施和通貨膨脹的回歸以及更高的利率為我們提供了這樣的機會，我們已經利用了這一機會。

Our debt to AR net of cash is 42%, extremely healthy and the increase can be looked at as representing a onetime investment in moving our book from 32 months to 45 months with the increase in car prices plus additional investments in the initiatives that we have funded. Investments have been made to position the company to come out on the other side of this historic period in better shape with more opportunities than we had going in. These investments are individually and collectively heavy lifts but are all necessary for us to reach our full potential and to be the company that we all want to be.

扣除現金後，我們對 AR 的債務為 42%，非常健康，這一增長可以看作是一次性投資，隨著汽車價格的上漲以及對我們現有舉措的額外投資，我們將賬面期限從 32 個月提高到 45 個月資助。已經進行了投資，使公司能夠在這一歷史時期的另一端以更好的狀態走出去，並獲得比我們進入時更多的機會。這些投資無論是個人還是集體都是繁重的工作，但對於我們充分發揮潛力來說都是必要的成為我們都想成為的公司。

Also, as Vicki mentioned, a significant amount of our current investment in SG&A is long-term focused to be leveraged over time. Our business model is time tested, and with the improvements we're making, the best way to serve our customer base. The all-in cost of ownership from a consumer standpoint is, in most cases, better than competitive offerings when considering our shorter terms and lower interest rates.

此外，正如 Vicki 所提到的，我們目前對 SG&A 的大量投資是長期關注的，以便隨著時間的推移發揮槓桿作用。我們的商業模式經過了時間的考驗，隨著我們不斷改進，這是服務客戶群的最佳方式。考慮到我們較短的期限和較低的利率，在大多數情況下，從消費者的角度來看，總擁有成本優於競爭產品。

The fact that our repeat business is now over 50% is an indicator of how strong the model is, and the model is getting stronger every day. What we do is essential and we have an obligation to serve more customers who deserve the peace of mind they get from being part of the Car-Mart family. We expect the cost of vehicles to flatten and term to flatten as well with consumer affordability and our cash flows to improve as we look ahead. We will be gaining significant efficiencies in the inventory management area and expect annual turns to materially improve above prepandemic levels.

我們的重複業務現在超過 50% 這一事實表明該模型有多強大，並且該模型每天都在變得更強大。我們所做的事情是必不可少的，我們有義務為更多的客戶提供服務，他們值得作為 Car-Mart 家族的一員而安心。展望未來，我們預計車輛成本和期限將趨於平緩，消費者的負擔能力和我們的現金流也會有所改善。我們將在庫存管理領域獲得顯著的效率，並預計年度周轉率將大大提高，高於大流行前的水平。

Going forward, as we stated in the press release, over the next 3 to 5 years, we expect to generate returns on equity at historical levels by increasing volume productivity, improving gross margins as a function of procurement initiatives by leveraging SG&A and through acquisitions of well-operated dealerships. We expect our cash-on-cash returns to not only produce an increased dollar return but also percentage returns in line with historical results.

展望未來，正如我們在新聞稿中所述，在未來 3 到 5 年內，我們希望通過提高批量生產率、通過利用 SG&A 和收購經營良好的經銷商。我們預計我們的現金回報不僅會產生更高的美元回報，而且還會產生與歷史結果一致的百分比回報。

The cash generating potential of our business is strong. We will continually review our organizational and cost structure and make changes proactively to put our company in the best position. And finally, the consumers we serve want to hear yes, and the LOS has decided to give them a yes from the comfort of their homes, minimizing the sometimes unpleasant part of the car buying experience, allowing their time at our dealerships to be focused on kicking tires and taking test drives and getting in and out quickly.

我們業務的現金產生潛力很強。我們將不斷審查我們的組織和成本結構，並積極做出改變，使我們的公司處於最佳位置。最後，我們服務的消費者希望聽到“是”，LOS 決定在他們舒適的家中給予他們“是”的答复，最大限度地減少購車體驗中有時不愉快的部分，讓他們在我們的經銷商處的時間可以專注於踢輪胎，試駕，快速進出。

Our ability to provide a sufficient quantity of quality vehicles with affordable payment terms is our biggest opportunity and will set the baseline for where we take our company. The demand for our offering is high and will continue to increase over time. We are confident in our ability around procurement and inventory management, and we're very excited about our future. And as always, I'd like to thank all of our great associates for their dedication to our purpose and for all they do every day to keep our customers on the road. Thank you, and we will now open it up for questions. Operator.

我們能夠以負擔得起的付款條件提供足夠數量的優質車輛，這是我們最大的機會，並將為我們公司的發展方向設定基準。對我們產品的需求很高，並將隨著時間的推移繼續增加。我們對我們在採購和庫存管理方面的能力充滿信心，我們對我們的未來感到非常興奮。和往常一樣，我要感謝我們所有優秀的員工，感謝他們為實現我們的目標而付出的努力，感謝他們每天為讓我們的客戶繼續前進所做的一切。謝謝，我們現在將公開提問。操作員。

(Operator Instructions) And our first question comes from John Murphy from Bank of America. John, if your lines on mute could you please mute it? And our next question comes from John Rowan from Janney.

（操作員說明）我們的第一個問題來自美國銀行的約翰·墨菲。約翰，如果你的台詞是靜音的，你能把它靜音嗎？我們的下一個問題來自 Janney 的 John Rowan。

So I just want to drill down on duration a little bit. So the originating duration is relatively flat sequentially, actually down a little bit sequentially. But the effective entire portfolio duration was actually up sequentially and up year-over-year. I'm assuming that this is due to higher modifications. Is that correct?

所以我只想深入了解持續時間。因此，原始持續時間順序相對平坦，實際上順序下降了一點。但整個投資組合的有效久期實際上是環比上升的，而且是同比上升的。我假設這是由於更高的修改。那是對的嗎？

Yes. We did have slightly higher modifications this quarter, not anything out of our ordinary range. But certainly, as time for us to continue to work with our customers, certainly as we approach the income tax refund season as well.

是的。本季度我們確實進行了略高的修改，沒有超出我們正常範圍的任何修改。但可以肯定的是，隨著我們繼續與客戶合作的時間，當然也隨著我們接近所得稅退稅季節。

So most of it, John might relate to the fact that the average age of the entire portfolio went up 12.5% from 8.8 months to 9.9. So that's going to set out the overall age of the entire portfolio, which is representative of just the increase in age and turn.

所以大部分，約翰可能與整個投資組合的平均年齡從 8.8 個月上升 12.5% 到 9.9 的事實有關。因此，這將列出整個投資組合的總體年齡，這僅代表年齡和轉向的增加。

Okay. And then if there were some increased modifications, did that have any impact on delinquencies? I mean you did get a lower delinquency number for 30 days year-over-year. But in the press release, it shows the average or the total current portion of the portfolio was down year-over-year. So can you just compare the 2, one going up on going down and whether or not modifications had any impact on those?

好的。然後，如果有一些增加的修改，這對拖欠有什麼影響嗎？我的意思是你確實有 30 天的拖欠率同比下降。但在新聞稿中，它顯示投資組合的平均或總當前部分同比下降。那麼，您能否只比較 2，一個上升和下降，以及修改是否對它們有任何影響？

Yes. I mean they would have some impact. Again, our modifications were not outside a normal range pretty consistent with where we usually see modifications.

是的。我的意思是它們會產生一些影響。同樣，我們的修改沒有超出正常範圍，這與我們通常看到的修改非常一致。

[Operar Instructions) And our next question comes from Vincent Caintic from Stephens.

[操作說明] 我們的下一個問題來自 Stephens 的 Vincent Caintic。

So first question is a broad one. One I've been getting a lot from investors, but if you could maybe talk about what you think would be right post-pandemic annual earnings run rate. So you have $0.22 of EPS for this quarter. Consensus for fiscal 2024 is about $5.35. So I'm just wondering what you think kind of annual earnings should be when we think about a post-pandemic number? And then how we get from this quarter to where you'd like to be kind of on a run rate basis going forward?

所以第一個問題是一個廣泛的問題。一個我從投資者那裡得到了很多，但如果你能談談你認為大流行後的年度收益運行率是正確的。所以本季度的每股收益為 0.22 美元。 2024 財年的共識約為 5.35 美元。所以我只是想知道，當我們考慮大流行後的數字時，您認為年收入應該是多少？然後我們如何從這個季度到你希望在運行率基礎上前進的地方？

Yes. As we mentioned in the press release and the comments earlier, we do expect to return earnings to return on equity, more in line with historical results pre-pandemic and to do that, all the initiatives in place on volume and productivity improvements, gross margin improvements, expense management and better credit results should get us there over time.

是的。正如我們在新聞稿和之前的評論中提到的那樣，我們確實希望將收益回報為股本回報率，更符合大流行前的歷史結果，為此，所有在數量和生產率提高、毛利率方面的舉措都已到位隨著時間的推移，改進、費用管理和更好的信用結果應該會讓我們實現目標。

We're currently adding a lot of reserves to the balance sheet, on the credit reserve side, but cash-on-cash returns for us look very healthy. And we expect over time, again, as we mentioned, dollar returns and percentage returns to be in line on a cash-on-cash basis with historical results. So we're optimistic that what we're doing and the initiatives in place and productivity improvements will come along nicely and get us in a spot within 3 years, 5 years to get ROE back closer to historical levels.

我們目前在信貸儲備方面向資產負債表增加了大量準備金，但我們的現金回報看起來非常健康。正如我們所提到的，我們預計隨著時間的推移，美元回報率和百分比回報率將與歷史結果保持一致。因此，我們樂觀地認為，我們正在做的事情以及實施的舉措和生產力的提高將會很好地進行，並讓我們在 3 年內到達一個位置，5 年內讓 ROE 回到接近歷史水平的水平。

Okay. Perfect. So like historical metrics are sort of -- you think we can get back to that or even improve from that level. Is that fair from your comments?

好的。完美的。所以就像歷史指標一樣——你認為我們可以回到那個水平，甚至可以從那個水平上改進。從你的評論來看，這公平嗎？

That would be -- yes, that would be our intentions with all the investments we're making in the business.

那將是——是的，這將是我們對業務進行的所有投資的意圖。

Okay. Great. And my follow-up, so a more specific question just about the inventory. So I appreciate your comments on the press release about that inventory levels we're getting back to historical levels. But if you talk about what's the average aged inventory and are we pretty much done from this point or maybe after tax refund season were done from this point in terms of inventory normalization.

好的。偉大的。我的後續行動是關於庫存的更具體的問題。因此，我感謝您對我們正在恢復到歷史水平的庫存水平的新聞稿發表評論。但是，如果你談論平均陳舊庫存是多少，我們是否從這一點開始完成，或者從庫存正常化的角度來看，從這一點開始退稅季節完成之後。

I think we've worked through a good percentage. The majority of our inventory challenges. There's some lift to work through, but we are getting there, making progress, fully focused on improving efficiencies and inventory turns and working through some product that has been acquired over the last year or so. But I'd say we're well on our way, and we're not fully finished yet, but making good progress.

我認為我們已經完成了很大一部分。我們的大部分庫存挑戰。有一些工作要做，但我們正在取得進展，完全專注於提高效率和庫存周轉率，並處理過去一年左右收購的一些產品。但我想說我們進展順利，我們還沒有完全完成，但取得了很好的進展。

Yes. I'd add the inventory that we're sourcing out of this new channel as it starts to make its way through the ecosystem, we'll also have a benefit there. And the wholesale, what I'll call the centralized wholesale selling that to be accretive to the margins that we'll have going forward, too. So that's exciting as well.

是的。我會添加我們從這個新渠道採購的庫存，因為它開始通過生態系統，我們也會在那裡受益。還有批發，我稱之為集中批發銷售，這也將增加我們未來的利潤率。所以這也很令人興奮。

Okay. Great. And sorry, did you have the days of aged inventory, I think last quarter was in the mid to high 50s. Just want to have that comparison.

好的。偉大的。對不起，你有過陳舊庫存的日子嗎，我想上個季度是在 50 年代中期到中期。只是想有那個比較。

That was days inventory and days sales in inventory, and that's relatively flat with what it was last year. I think the aged inventory has come down. We are making progress again. We worked through most of it. We have a little work to do there.

那是存貨天數和存貨銷售天數，與去年持平。我認為陳舊的庫存已經下降。我們又在進步了。我們完成了大部分工作。我們在那裡有一些工作要做。

And I am showing no further questions. I would now like to turn the call back over to Jeff Williams for closing remarks.

我不再提出更多問題。我現在想把電話轉回給傑夫·威廉姆斯，請他作結束語。

Okay. Again, well, thank you for listening in today. I appreciate your interest in America's Car-Mart. And again, thanks to all of our associates out there for all they do to keep our customers on the road. Have a great day. Thank you.

好的。再次感謝您今天的收聽。感謝您對美國汽車市場的關注。再次感謝我們所有的員工，感謝他們為讓我們的客戶繼續前進所做的一切。祝你有美好的一天。謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。