America's Car-Mart, Inc. (CRMT) on Q3 2022 Results - Earnings Call Transcript
Operator: Good day and thank you for standing by. Welcome to the America’s Car-Mart Third Quarter 2022 Results Conference Call. I would now like to hand the conference over to your speaker today, Jeff Williams, CEO and President. Please go ahead.
Jeff Williams: Okay. Well, thank you for joining us this morning. Our press release that went out last night was comprehensive and we hope you’ve had a chance to review it. We would also encourage you to view our investor video on our website which covers some important aspects of our business model. We love our business and the purpose in our work and we are very excited about the opportunity we have to support more customers and associates as a dramatically larger, more profitable company over time and be even better at providing our customers with what they need. I would like to thank all of our associates for all they do to make us better. Again, our press release was comprehensive. And I won’t repeat the press release comments here, but we’ll leave more time for Q&A at the end of our call. I will now turn it over to Vickie to go over some numbers. Vickie?
Vickie Judy: Thanks, Jeff. Good morning, everyone. Our productivity at our dealerships was 30.8 units, down 1.3%, over the prior quarter. As we mentioned, our productivity in November and December was up, but down in January, primarily due to the impact of the Omicron variant and it resulted in staffing shortages at our dealerships as well as impacting our customer traffic. The third quarter also compared to the prior year quarter, which had some positive impact from the stimulus payments that were disbursed in January of ‘21. For the current quarter, our net charge-offs as a percentage of average finance receivables was 5.3% compared to 4.9% in the prior year third quarter. And again, the prior year third quarter included stimulus payments, which positively impacted collections and net charge-offs in the prior year. Net charge-offs were 5.9% for the quarter ended 1/31/20 pre-pandemic. So from a long-term historical perspective, the current quarter net charge-offs are still much improved and well below historical third quarter levels despite the increase in the average retail sales price. We did see an uptick in our frequency of losses just above the unusually low prior year period levels, while the severity of losses on a relative basis were still improved compared to the prior year quarter. This is all consistent with some expected normalization after the unsustainable historic lows resulting from stimulus payments and other factors that we’ve experienced over the past 2 years. Recovery rates of repossessed units also contributed slightly to the decrease in the net charge-offs. Our recovery rates for the quarter were approximately 28.5% compared to 27.1% in the prior year quarter and 26.6% for the third quarter of fiscal ‘20. Our recoveries on repossessions are a smaller percentage of our overall profitability compared to others in the industry. It’s also important to note that as our receivable balance grows, a significant portion of the provision expense is related to increasing the balance sheet allowance reserve on the larger portfolio balance. Our finance receivable principal balance has grown by $220 million, and our deferred revenue has increased by $26 million during the last 9 months resulting in an additional provision expense of $47.5 million reflected in the income statement for the 9-month period for the reserve increase. Our 30-plus past due was at 4% compared to 2.8% in the prior year third quarter and 3.6% at 1/31/20 pre-pandemic. We believe the impact of the Omicron variant on our customers contributed to these higher delinquencies. Total collections of principal interest and light fees increased by $23 million or 20.1% over the prior year quarter and improved 8.2% per average customer. The average originating contract term was 40.4 months compared to 35 for the prior year quarter and up from 39.7 months sequentially. The overall increase in the term was less on a relative basis than the increase in the retail sales price would have indicated. Our weighted average contract term for the entire portfolio, including modifications, was 41.2 months compared to 35.7 months for the prior year quarter. The weighted average age of the portfolio increased slightly from approximately 8.7 months to 8.8 months. The early data that we have on longer contract terms and higher average selling prices looks promising for our collections and our customer success. The total gross profit per retail unit sold increased by nearly $1,000 to $6,773 or up 17.3% compared to the prior year quarter. The gross profit percentage was 37.8%, up from the sequential quarter at 37.5%. We did a nice job this quarter of stabilizing the gross margin impact, despite a sequential increase in the average retail sales price of $897 or 5.5%. Improved wholesale results and expense efficiencies contributed to this improvement in the gross margin percentage. We continue to leverage the investments we are making in our SG&A. Most of our increased spend has been focused on the payroll and benefits area as the single-most important part of our customer service is our associates who support those customers. And we’re focused on having highly trained, happy and engaged associates, especially in this current environment. We are now serving approximately 94,000 customers with an increase of more than 5,800 in the last 9 months, and we have over 2,000 total associates. At quarter end, our total debt was approximately $373 million. We had $2.6 million in cash and approximately $84 million in additional availability under our revolving credit facility based on our current borrowing base of receivables and inventory. As a reminder, we do have an existing $600 million commitment from our lenders with a $100 million accordion feature as well as the opportunity to access the securitization market as we grow. Our current debt to finance receivables ratio is 36%. During the first 9 months of fiscal ‘22, we added $220 million in receivables, increased inventory by $37 million. We repurchased $27 million of our common stock, and we funded $14 million in capital expenditures. As we go into income tax refund time, we generally carry more inventory units and a higher cost mix to support the sales during that time. Thank you. And I’ll let Jeff close this out.
Jeff Williams: Okay. Well, thank you, Vickie. We will continue to allocate capital with the priority of leveraging our existing dealership base while also looking at acquisitions and new dealership opening opportunities that present compelling growth opportunities for us as we look to expand our footprint, and we will continue to repurchase shares opportunistically. We are pushing forward, and when our industry normalizes, we will be in an even better spot to take advantage of opportunities. Again, and as always, we would like to thank our associates for their dedication and commitment to our purpose and their work and for continuing to persevere and excel through challenging and disruptive change. We have a great company, and we’re all working at getting better every day. And once again, we appreciate your interest in our great company. And we will now open it up for questions. Operator?
Operator: Thank you. Our first question comes from John Rowan with Janney. Your line is open.
John Rowan: Good morning.
Vickie Judy: Good morning.
John Rowan: Jeff, I just want to understand the press release shows the same-store or the unit volume growth for the 3 months with obviously the big decline in January, attributable to weather, Omicron and withdrawn stimulus from what I read. But you say that things have normalized and you are operating under normal conditions. I am just trying to figure out what normal conditions are in a flat-to-down used car price environment, because these 20% plus same-store revenue growth figures seem impossible to match if you have flat-to-down used car prices?
Jeff Williams: Yes. When we say normal we mean from an operational standpoint. We had dealerships that only had one or two associates staffing the stores for a week or two in the month of January. So there is no doubt when we look at the results for January, the volumes for January, those results were severely and negatively affected by the Omicron variant and the absenteeism that we saw with our workforce and that also translates into some negative effects from the consumer base at the same time. So, that’s our comments as related to January.
John Rowan: Any idea how unit volumes trended through the first half of February? .
Jeff Williams: They have been solid. We are still – tax money is a little bit pushed out this year, but I would say that our expectations for February and the fourth quarter are strong and solid and we should be in good shape, especially with our inventory at the levels that we are carrying into the quarter.
John Rowan: Okay. And then any reason – it doesn’t look like you published the data on the collections relative to finance receivables. I am just curious why that data is not there? I assume it’s probably related to the extended duration and that, that number is probably lower than it was. Is that a correct assumption?
Vickie Judy: Yes. We were just trying to focus on the total collection. So there is an overall view of what our collections are looking at, because yes, just looking at principal, it’s not going to be comparable with the extended term, but it was down about 2 percentage points, just looking at principal only.
Jeff Williams: Which was right in line with what you would expect from the term extensions, but the overall collection dollars were up over 20% and the actual amount collected per customer per month was up over 8%. So, those are much more important factors to us. And then when you factor in the point that we collected about $11 million more in interest income during the quarter, those are a lot more important than the principal collected percentage, which is going to go up and down based on term.
John Rowan: Okay. Alright. I will let someone else hop on. Thank you very much.
Jeff Williams: Thank you.
Operator: Thank you. Our next question comes from John Murphy with Bank of America. Your line is open.
John Murphy: Good morning. Just wanted to follow-up on the significant strength we are seeing in pricing and what that means to your consumer and their ability to purchase, because it does seem like this is crowding out some of your traditional consumer and hurting volumes. So, I mean just where do you think the price sensitivity is? And if we get normalization or pricing that normalizes to something that’s a little bit more normal relative to new vehicle pricing that there might be an opportunity to drive volumes significantly higher just from that normalization and pricing alone?
Jeff Williams: Yes, there is certainly some pressure on the volumes because of the high prices. There are customers that are not in the market right now, because prices are so high, but we are keeping a close eye on affordability and payment to incomes and our customers are receiving significant wage increases. Their wages are growing rapidly in the markets that we do serve to offset inflation somewhat. And we believe there is going to be a lag effect – a positive lag effect with wages for our customer base over time, but affordability is an issue. We would love to see a leveling off of used car prices. Maybe even some deflation in car prices would help us out and be very much welcomed by our company. The economics improve with lower prices. The affordability is better for a consumer and more customers would come into the market and be buying cars, but for the high prices right now. So, our results are especially strong when you can consider the fact that affordability and the price increases we have seen over the last year are significant.
John Murphy: Yes. No, I agree. If you think about the average age of the vehicles sold this quarter versus history, I mean, is it relatively similar? And is there an opportunity to maybe dive a little bit older in the vehicle population for sourcing to provide a good product that maybe a slightly better price for your consumer until we see some normalization here?
Jeff Williams: Yes. We do think there are some opportunities to go a little deeper with a little less expensive car. The market’s been in such a turmoil through the pandemic that it’s been really difficult to find good quality product at the lower price points that you feel comfortable putting your customers under. So we’re always balancing quality the fact that this car needs to last well beyond the contract term. And so it’s been a little dicey, a little tough at the lower price points but we are working hard to hit those lower price points. We do think there is going to be some opportunities as we go forward as credit losses normalize in the industry. We will have access to more and better lower-priced products as we go forward. But for right now, up to this point, it’s been pretty tough to find those lower price point cars that are mechanically sound and something that we would want to put our valuable – valued customers in. But we are working in that direction, and we do expect some improvements in that area as we go forward.
John Murphy: Okay. And this is just on your core consumer. I mean, obviously, you guys have tight relationships with your customers. The consumer confidence data out there is pretty tough. It reflects sort of a consumer that’s not real happy and under a little bit of duress. Yet, it just seems like, on the auto side, even down the income spectrum, there is tremendous amount of demand that’s unfilled. What do you think the disconnect is in some of these readings on consumer confidence versus what you’re seeing with your consumer? Or maybe you’re seeing the same kind of concern and distress in your consumer and they are just still buying cars. I’m just trying to understand what you’re seeing versus some of these metrics.
Jeff Williams: Well, for us, specifically, we sell cars to folks that need transportation. It’s not a total discretionary expenditure on our consumers’ behalf. It’s something that they need nondiscretionary in a lot of respects, and they realize the benefits, the reputation we have, and there is a lot of peace of mind with local transportation needs and dealing with America’s Car-Mart on a nondiscretionary purchase. They don’t have public transportation. They rely on us to keep them on the road. So for us specifically, I would say that that’s the primary reason that we’re seeing success when you might see consumer confidence not be so high.
John Murphy: That’s helpful. And then just lastly, Vickie, you mentioned something about going to the ABS market as the company grows. And I just missed the comment or the details around that. And what is the opportunity to unlock maybe more liquidity? I apologize, I missed the details around that comment that you made.
Vickie Judy: Yes. I just made a very general comment that we’ve studied that market for several years. Many of our competitors use that market. Our revolving credit facilities served us very well historically. But as we grow and the need for your borrowings grow, that market will definitely be one that we look to help support that growth.
John Murphy: So that would be on the finco side? Or would that be floor plan financing or both? Or I’m sorry, where would that – where the borrowing base on that come from?
Vickie Judy: Yes. On our receivables from our finance company. We would be putting out an auto ABS securitization.
John Murphy: Great. Okay. Thank you very much, guys.
Jeff Williams: Thank you.
Vickie Judy: Thank you.
Operator: Thank you. Our next question comes from Kyle Joseph with Jefferies. Your line is open.
Kyle Joseph: Hi, good morning. Thanks for taking my questions. I just want to touch base on – and apologies if I missed this but expectations for tax refund season in the coming months and the timing and magnitude you’re kind of expecting versus what we saw last year.
Jeff Williams: Yes. Our sources are telling us that the number of filings is behind on a time line, but the refunds that are being seen and anticipated will actually be up and may be up significantly this year. So the whole season might be a little bit delayed and then spread out over a longer period of time, but overall refunds are expected to be up this year for us – our customers.
Kyle Joseph: Got it. Thanks. And then just one follow-up for me. Just if you can give us an update on competition. Obviously, everyone is being impacted by higher used car prices. But – and you know how I think about your competition is both indirect auto finance companies as well as other dealers in your markets? Just give us an update on how the – how your competitors are faring?
Jeff Williams: Well, we think we continue to pick up market share in our locations. Absent the January effect that we just talked about, we’ve done very nicely on the volumes, and we would expect that our competition had the same issues in January that we did. But we believe that the high price of cars and the other inflationary pressures in the other areas of business are certainly putting us in a good spot to have more cars, to improve our service levels, the customer experience. And so we believe that we are picking up market share and we will pick up even more market share as we go forward by improving our offering and putting customers in really good cars and then providing the support after the sale that we’re so focused on.
Kyle Joseph: Great. That’s it for me. Thanks a lot for answering my questions.
Jeff Williams: Thank you.
Operator: Thank you. Our next question comes from Quinton Mathews with QKM. Your line is open.
Quinton Mathews: Good morning. How are you?
Vickie Judy: Good morning.
Quinton Mathews: A couple. So in your video, which I appreciate, you talk about historically kind of cheering on customers that graduate from you guys and kind of actually going after that pool of people. I was wondering if you could – I’m presuming what that means is moving up the subprime ladder. I guess if you could say where those people historically went where they go into another used lot who you thought was being more competitive? Will they go into dealerships? That’s kind of one on that. And then the bigger question I have is, when you think about what sounds like an acceptance for having longer terms, which is going to be partly the cars last longer, partly competition, and then it sounds like probably you’re going after this pool of people that you didn’t realize you could go after, if you could kind of parse out how you think the longer term breaks into those different buckets here or if there are different buckets? Which ones? And I know you generally like to give kind of generic answers, but if you could give like that third of third of third, that would be kind of helpful to really see what’s moving that longer term?
Jeff Williams: Yes. Well, in terms of customers graduating beyond us, that is a primary focus of ours. When we looked at customers successfully completing our contracts and then going down the street, as we congratulated them on their credit improvements, they were going through the – for the most part, the indirect lending channel through the new car dealerships, the used car division or the new car dealerships. And when we look at the economics of those deals versus our deal, we realized that we really shouldn’t be losing them out of the family hall. And so we’ve, over the last 1.5 years, 2 years, had a good focus, a big focus on keeping customers in the family for life and providing them with a car and terms that would be in line with a much better than what they are going to get down the Street. So our – as a result of that, our repeat business currently has moved from what was 40% range historically to 50% and above, and those are good customers that we know. We simply had to be more aggressive in keeping them in the family, provide them a better, higher dollar car, with a longer term, obviously, because they have earned it on the credit side. So that’s a big reason that our cost of cars and the term has gone out. But above that, and more important than that, as far as the price would be, what’s going on just in the used car market. With prices up 45% on the wholesale side to last year and 65% plus over 2 years, we’ve simply had to participate in the commodity aspect of our industry. And so those prices and those terms have had to move up and move out for us to maintain a competitive price payment per month for our customers. We’re not the low monthly payment company at all, but we do have to be in the ballpark in the universe with our customers. So that has been a big effect on our long-term extensions – the longer terms. As far as percentages that apply to each of these buckets, don’t really have anything specific for you there, but we are still well below competition on our term lengths, and we think we have even a little more term to give for the right customers and the right cars as we go forward and can do quite well in those areas.
Quinton Mathews: Okay. I guess my – I guess what it boils down to me is, as a guy who’s been a shareholder for close to a decade, there is clearly a change in the way that you guys are approaching The Street on what your pitch is. And I think it is also just an– it’s coming out of new growth opportunities and how the business is maturing. And so I know the term is a function of the car prices. But in your video and in your press release, 6 years ago, if we would have been talking about 41-month terms and this maybe was before your time, but I feel like Car-Mart would have just been – would have turned that business down. And now we seem to essentially be cheering that business on. It’s something that we can continue to earn high returns on. So you want price depreciation. You say you’re going after gross profit dollars, not margin, but if you – if the price depreciation goes down, you’re going to have lower gross profit dollars. But at the same time, we’re accepting longer terms. I’m just trying to figure out what’s like – what can give a long-term shareholder comfort that this really pretty drastic change is for the benefit and not an outcropping of a situation that is out of your control.
Jeff Williams: Yes. I think that a way to answer that is, I don’t know what our business would look like today had we not decided that better cars for better customers with affordable payments that match up to the competition would be something that make sense for us short-term and long-term. We’re improving our model as we go forward. We have service contracts now that are up to 3 years include oil change – oil changes. They also include roadside assistance products. We also have better data, better measurements, better scoring. Our repeat business once again is over 50%. So we do have to participate in environments where prices go up, and we have to participate in environments where prices go down, and we’ve been very nimble in either direction for 40 years. And when your industry is presented with the 45% or 65% increases in prices, then we have to adjust our model and get better and highlight our strengths, work on our weaknesses and make our model and our business better, and that’s what we’re doing. The industry is changing. The world is changing, the online competition. There is more blurred lines between all the competition than there is ever been, and we have to be relevant, and we have to invest and we have to push forward. And we think we’re doing that at the right rate, at the right levels, but we’re going to maintain the fact that we’re going to be nimble as we go forward and adjust as we can and adjust as we have for 40 years.
Quinton Mathews: Perfect. And don’t get me wrong. I mean, I applaud everything that’s happening. I just – it’s the business – if you went back to 2013, ‘14 time frame and the competition was increasing and it wasn’t priced in necessarily, but the America’s Car-Mart of that day would have probably take a little bit more of a walk away from some of the business approach. So I’m not saying it’s a bad thing. I’m just saying it’s different. So trying to get used to it? So, on your acquisitions, do you rebrand those, the couple that you’ve acquired, the one in Illinois and the other one you closed? Do you rebrand those or you keep the names?
Jeff Williams: We keep the names for a period of time. And then we will rebrand those at a certain point in time when the customer base for the seller has kind of run off to a large extent, and then we will rebrand at that point.
Quinton Mathews: Okay. And are you acquiring dealerships that you are just as happy or more happy keeping the current general managers in place, or are you shifting managers like you would on a greenfield to a new store location and moving people up through the original Car-Mart?
Jeff Williams: No. We are all about keeping the existing associates for the seller in place. That’s a very big benefit for the seller and for us as a buyer is to have that staff, including the manager, stay in the seat and help us build our book while the old book gets run out. So, we are keeping management and all the staff in place and efficient and excited about being part of our team.
Quinton Mathews: Got it. How many – I mean if you think about – I don’t know if you have given guidance on kind of greenfield and acquisitions. How quickly do you think you can – or what’s your goal to grow the store count on an annual basis?
Jeff Williams: We are in the process of being a little more specific in that area. We have opened a few dealerships in the last few years. We have had a couple of acquisitions to the tune of four or five a year. We have got a number of things going on within our company on the software conversions and the centralization of certain efforts. So, we are solidifying some foundational efforts in several different places. And we will be able to be more specific on a lot of growth opportunities and goals as we get a little closer – get down the road just a little bit. But there are significant opportunities, we believe for acquisitions of very good operators. And of course, there are several very good towns and cities in close proximity to where we already operate that need a Car-Mart. So, we have a lot of greenfield opportunities.
Quinton Mathews: So, is it a positive? Will you get comfortable? Is it something you can go from 4 to 5 to 7 to 10? Is that in the range, or you don’t want to be specific?
Jeff Williams: I would think so, over time.
Quinton Mathews: Okay. On the software upgrades, is that just CRM? Are you doing like a tire ERP? Because rarely do you ever see an entire back-end kind of ERP system go smoothly without causing problems that can last easily a year in businesses?
Vickie Judy: We are being very measured about how we implement it. So, we started with our CRM module. We are currently in the process of adding the front end side to the ERP project, which that should go live early in our new fiscal year. And then our last piece will be to layer in our loan originations system and the dealership impact. So, we are going to make sure all of the infrastructure is in place, everything else is working. And we are doing it in a very measured manner. So, the impact at the dealership level is minimized.
Quinton Mathews: Okay. And when should that last piece – is that a kind of second half of this next fiscal year or…?
Vickie Judy: Yes. It will probably get at least started. I am not sure about the finishing part in this next fiscal year. But pieces of it will get rolled in next fiscal year.
Quinton Mathews: Okay. One more one for – that’s always confusing to me and then just one more quick one. On the provisions, you gave and I will go back and listen to it, but the $47.5 million extra provisioning over the last nine months, I always have a hard time trying to figure out what your provisions are going to be. And I would think that if the allowance for loan loss as a percentage of the average receivable is static, whether year-over-year or sequentially, that as a percentage of sales, your provisioning would be roughly the same, but you really had a pretty big jump year-over-year. And you are provisioning significantly more right now than you are taking it and write-off to your allowance. So, I don’t know if there is a kind of a quick way to explain how you can think about what that’s going to be on a go-forward basis or what it should be on an annualized basis if your allowance doesn’t change as a percentage of receivables?
Vickie Judy: Yes. That’s what I was trying to demonstrate. It’s really about the amount of principal receivables that we are adding to our balance sheet. So, when you are growing finance receivables as much as we have, that $220 million over the last nine months, there is going to be a fairly significant impact to the provision just because you have such a larger portfolio balance.
Jeff Williams: Then as collected, that reserve gets relieved, but the balance…
Quinton Mathews: Yes. But why is the percentage of sale – why would it change as a percentage. I mean I get why it goes up in absolute terms, but why on a percentage of sales would it change if your allowance as a percentage of your receivables is staying the same?
Jeff Williams: Well, the sales fluctuates a little differently than the AR balance. It’s just math on that side.
Vickie Judy: Yes.
Quinton Mathews: Okay. Well, I am sure. I am probably just an idiot on that, so.
Jeff Williams: The big point here is when you look at our AR growth, we have deferred a large dollar amount, we have deferred with our ancillary products. And then we have also reserved a big chunk of that in the bad debt reserve on the balance sheet. So, that’s the point Vickie was making is, of the $220 million, we have on our balance sheet a very significant reserve against that in addition to the deferred revenue components. So and all of that is recognized later down the road and in the future as the loans perform.
Quinton Mathews: Okay. And then you gave $27 million in common stock you bought back in the quarter. How many shares do you know?
Vickie Judy: The $27 million was over the nine months.
Quinton Mathews: Okay. How much did you do in the last – in this quarter?
Vickie Judy: I think there were 63,000 or so shares in the quarter repurchased.
Quinton Mathews: Do you know the price or the total amount, I mean?
Vickie Judy: Yes, it was about – yes, it was a little over $6 million. It averaged $102 per share, I think.
Quinton Mathews: Okay. Is your buyback – I mean, it’s weird because like you buy back – like you bought back more than $145 million, a little less, I think, at $125 million and even less at whatever this is going to end up being like $100 million or something. So, I mean is that just a function because you had more money to put in some place? You guys – I think you guys buy back judiciously if you look at it in the long-term, but you always seem to like ratchet down your buybacks when your stock is cheaper, and I don’t quite get that.
Vickie Judy: Well, some of it is just a function of where we are at in the market. I mean obviously, we have invested significant dollars in our receivables growth and our sales and inventory, which as we said, is going to be our primary priority for capital allocation. So, when you are having to invest more in those two areas, it does leave less for stock repurchases. And again trying to stay measured on the leverage on our balance sheet and where we want to be there. And again, there has been so many changes in the environment we have been in over the past couple of years, so.
Jeff Williams: Some of it’s just timing on blackout periods and the – just some of it is just related to what we can do and win out there in the market, so.
Quinton Mathews: Well, alright. I appreciate all your color and I guess I just feel I have been around long enough with you guys that I appreciate all you do, and I nitpick only because I somewhat feel like I am justified because I have been around a long time. And so my nitpick on that would be like when the stock is at $180 million and like you are clearly over-earning in the short-term because of used car prices, I don’t know, maybe reorient how you think about the share buybacks. But that’s a small nitpick. I appreciate what you guys do. And thank you for your time today.
Vickie Judy: Thank you.
Operator: Thank you. Our next question comes from Jean Neustadt with U.S. Capital Advisors. Your line is open.
Jean Neustadt: Yes. I just would like to congratulate you on your progress through these hard times. And kind of continue with the share buyback. I have been in this stock a long, long time, and it appears to me it’s time to maybe stop the buyback and start some dividends. I would just like your comment on why you aren’t paying a dividend with the kind of the money you are earning today?
Jeff Williams: Yes. Thank you for your question. We have just always considered share repurchases to be the best way to reward the very long-term shareholder base. So, it sounds like you are a long-term shareholder, and you benefited from that. But we have always taken that position that we want to reward the long-term shareholders. And the best way to do that would be through the share repurchase program.
Jean Neustadt: Well, dividends reward us also. And you have got the shares down now to where – quite frankly, to sell 100,000 shares today would be impossible. So, you have got it down to where the shares are fairly illiquid, and to put a dividend out there would also increase the capability of many institutions to be able to purchase your shares, they can’t today because there is not a dividend. So, as far as I am concerned and others, by the way, a dividend of some nature could be in order at this point.
Jeff Williams: Okay. Well, thank you for your comments there. We will take that into consideration. Thank you.
Operator: And I am showing no further questions at this time. I would like to turn the call back over to Jeff Williams for closing remarks.
Jeff Williams: Okay. Well, once again, thank you for joining us this morning. Thank you for your interest in our company. And once again, thanks to all of our great associates out there that do fantastic work and filled their wholesales into this effort every day. We have got a great team and great associates and a lot of positive things going on here at Car-Mart, and we are very excited about our future. So, thanks for joining us. Have a great day.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
