Good morning, everyone, and thank you for holding, and welcome to America's Car-Mart Fourth Quarter 2014 Conference Call. The topic of the call for the earnings and the operating results for the company's fiscal fourth quarter 2014. Before beginning, I would like to remind everyone that this call is being recorded and will be available for replay in the next 30 days. The dial-in number and access information are included in last night's press release, which can be found on America's Car-Mart website at www.car-mart.com. As you all know, 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. The company cannot guarantee the accuracy of any forecast or estimate, nor does it undertake any obligation to update such forward-looking statements. For more information regarding forward-looking information, please see Item 1, Part 1 of the company's annual report on Form 10-K for the fiscal year ended April 30, 2013, and its current and quarterly reports furnished to or filed with the Securities and Exchange Commission on Forms 8-K and 10-Q. Participating on the call this morning are Hank Henderson, the company's Chief Executive Officer and President; and Williams -- and Jeff Williams, Chief Financial Officer. I'd now like to turn the call over to the company's Chief Executive Officer, Hank Henderson. You may begin.

Good morning, everyone. We appreciate you joining us today. Our total revenue for this recent quarter was $123 million, that's down 2.3% from the prior year. Some of this decrease was due to increased competition and some of that was self-imposed as we've not been satisfied with our customers success rates and held the tire line during the quarter for better deal structures. The decrease in sales year-over-year was about 3 sales per month, per store. Jeff will go over that in a little more detail later, but that is obviously significant for us. But we believe that, at this time, working to improve our overall customer success rates is the right thing to do. We were successful in improving the quality of the deals overall. And as you would expect, it did have an impact on sales volumes. We brought down our average sales price by 1.8% to $9,785 in an effort to help ensure affordability for our customers. And our average down payment percentage was 9.7% for the quarter, up significantly from 8.7%, and I cannot emphasize enough what a big deal this is for us and for our customers. We are well aware of the impact of higher down payments on overall customer success, so we are extremely pleased with our results in this particular area. Obviously, we would've liked to see more sales for the quarter, but we were pleased with our improvements on our deals and feel like it was the right focus for this time. For as long as we've been in business, we have had to make adjustments in this area, always looking for the right balance. Overall, we would, of course, like to have seen better results for the year, but nevertheless, there were several very positive achievements for the year worth noting. We added 10 new locations, increased our active customer count by around 2,900, grew receivables by $16 million, we repurchased $13 million in stock, invested $3 million in GPS technology and invested over $1 million in our operational software; all this, and we actually paid down our debt by $2.5 million. All in all, these accomplishments reflect that we are continuing on the right direction for our long-term plans, and we are extremely well-positioned and well-prepared for any pullback from the newer competition that we may see in the near future. So I'll go ahead and turn it over to Jeff to give you more detail on the recent results, and then come back later with a few closing comments. So, Jeff?

Thanks, Hank. As Hank mentioned, total revenue for the quarter was right at $123 million. Same-store revenues decreased 7.1%. Revenues from stores in the 10-plus category was down around 10%. Stores in the 5- to 10-year category was down around 5%, partially offset by a 25% increase in revenues from our stores less than 5 years of age. We continue to face some top line headwinds due to tough environment. We have a customer base under more stress, more hesitant on big-ticket items, together with the direct effects of ultralow interest rates that continue to attract excess capital directed at the same consumer. Additionally, cars are built better and last longer. At the same time, our improved deal structure certainly had an effect on the top line, as Hank mentioned. We've been losing too many good customers to competitors that are not always concerned with customers' ultimate success. And we'll continue to try to find the right sales and risk balance. We know that we can execute better, and we're committed to pushing for improvements. Our continuing efforts to sell less expensive vehicles should help with our volume challenges as we move forward, but that does present some short-term challenges on the cost side, as we try to leverage our fixed cost structure. We have significant room for volume increases if conditions move in our favor. As always, we will focus on basic transportation needs. We'll continue to target flat to slightly decreasing overall sales prices in our efforts to keep our payments affordable, with rational term lengths, to increase customer success rates and further differentiate Car-Mart from the competition. As Hank mentioned, our down payment percentage was 9.7% for the quarter, which was outstanding and will contribute to better credit results in the future. That 9.7% was equal to…

All right. Thanks, Jeff. As I mentioned earlier, we opened 10 new stores this past year. We have 2 more lots that should be opening very soon as we begin this new year, and we do plan to continue to open new stores throughout this upcoming year. However, at this time, we plan to be even more selective than typical, so new store openings will more likely be right at 8 for this upcoming year, a little less than the 10% new store pace we'd like to see if conditions were more favorable. We have seen a couple of our recent openings had record-setting starts. So while we do learn from our mistakes, we also like to learn from our successes and do our best to repeat this and continue to assure great starts for our new locations. Before we go on to your questions, I would like to take a minute, if I could, to recognize Bill Sams, as he will be retiring from our board this year. Bill has been a director with us for the past 9 years and will certainly be missed. I would like to say, from myself and on behalf of all of us, Bill, we thank you for your confidence in us and believing in us throughout our ups and downs, and we thank you for your years of service as a director. You have helped us navigate these past several years and continue to grow our company the right way, and your contributions are greatly appreciated. That concludes our prepared remarks. And now, we would like to move on to your questions. Operator?

[Operator Instructions] Our first question comes from John Rowan of Sidoti & Company.

I was a little surprised to hear that the average duration increased. Kind of -- by the wording in the press release, it seemed like you guys were taking steps to be more proactive and improving the ability of customers to actually complete the transaction. So I'm curious, if it's not duration, what are you changing that you think is better for the consumer and why you're seeing sales decline, if it's not duration?

The terms, John, were actually down. The originating terms were actually down, so the terms were shorter and the down payments were higher. So both of those factors are going to be big positives for performance down the road. The one-term amount that is up is the entire portfolio, including modifications. So because our portfolio overall was more seasoned, it's quite a bit older this year than last. We had a few more modifications in that overall pool, which is part of the reason the terms are up, including modifications.

Okay. Did you give out the originating term?

Yes, we did.

You did. Okay. Okay, I'll look that up. And then, as far as capital goes, have you guys looked at all about doing an ABS deal on paying a dividend or buying back more stock? Obviously, the business is flowing, so I think there's more capital available for you guys to move around a bit.

Well, we're always looking at different options, and the ABS market is something that we do look at periodically and, certainly, with our very healthy balance sheet, gives us a lot of flexibility.

Our next question comes from Bill Armstrong of CL King & Associates.

Jeff and Hank, in your opening remarks and in your press release, you talk about the competition not sharing the same view of customer success in terms of seeing them through to the end of the contract, and that, that's pushing up your default rate. I can see how that would push up your competitors' default rate; how does that push up your default rate?

Well, obviously, a lot of our folks have been with us a long time. And with the aggressive deals that are offered out there right now, we're seeing some deals on some lower-end new cars or some higher-end used cars, either case, they're above what we sell. Some of the offerings are 0% down, no payments for 90 days. We've even seen no payments for a year, and then those are getting financed at 72 months, sometimes even longer. So it's a long time before they reach that equity point. And just knowing our customer base, this is not a good situation for them, we don't feel like. And so, they are attracted sometimes to drop what they have and go to a new car dealer. And I think we actually talked about this on the last call and tell it like it is. We've actually had occasions where we've had to go pick up our car at a new car dealership, where the new car dealer just said "Oh, you can just leave it here, and we'll put you in this." So we know that's a bad situation.

Okay. So that's -- there's been no letup in that situation then, it sounds like?

No, it was actually worse recently because people, in a lot of cases, people did have some money in hand so they could put down a down payment somewhere. And again, in a lot of the cases, there was a 0 down and they could just keep their money. Keep in mind, some of these customers had special payments due to us. That's one of the ways we keep their regular payments down throughout the year. We have some seasonal payments that we structure. In some cases, they thought, well, we can go over here and get this car for 0 down and not even make a special payment over here at Car-Mart and go spend this money on something else. And so, it did cost us some losses.

And as a reminder, about 95% of our customers get a $4,500 tax check in the first few weeks of February. So they really, at that point, have some ability to go find some decent financing somewhere else. And they've been aggressively marketed to default, which causes our issues on that side.

So in light of that, how are you able to increase your down payment, by as great amount as you did this quarter?

Well, unfortunately, we had to pass up on some sales, and that's one of the reasons our sales were down somewhat. We actually had pretty good traffic. Again, we stay very, very focused on our repeat business and cultivating new customers through our existing customer base. So we had the traffic there, but we just -- we were holding out for some better deals. We'd seen losses go up. We knew that it would cost us a bit. But in our -- we're certainly not just looking for short-term rewards, we're focused on long term, and this is the right move for us.

Okay. And then last question regarding SG&A. Jeff, did I hear you say that you expected to get some SG&A leverage going forward this year?

Yes. We don't have specific timing on that, but we certainly feel like the structure we have and certainly, we're going to be able to get some leverage at some point in the future. It's a little harder to pinpoint exactly what quarter that might happen. But we're committed to staying as lean as we can on the expense side and get some leveraging at some point.

Is it safe to assume that we're not going to see that until same-store sales get back into positive territory?

That would certainly help.

Our next question comes from Seth Basham of Wedbush Securities.

Seth Basham with Wedbush. I'm just trying to better understand the competitive environment out there right now. You talk about the competitors being very aggressive, more aggressive now than they had been over the last year or 2. I'm trying to understand what changes that environment When do losses rise so much that competitors start to tighten terms and take some of the pressure off you guys?

Well, we would like to know that, too. And I think Jeff even alluded to that in his earlier remarks. We've seen this cycle before, but I will have to say, correct me if I misstate here, but I think the cycle's already endured longer than what we've seen before. By this time, we would've already seen the pullback. So I can't really tell you for sure the mechanism exactly that's going to cause it to pull back, but we know from experience it typically does. And maybe it is that it's reduced, but there'll be some left behind that's going to stay there for quite some time that may be a reality. But really, I don't know when it's going to let up.

Yes. And then, the securitization market is hot as ever. I think April may have been one of the best months ever for ABS securitizations at even lower yield spreads. So we're not sure what it's going to take. But in the interim, we're going to try to do everything we can to reduce expenses and sell good deals to good people.

What are the signposts you're looking for in the environment to understand whether or not it changes?

Well, certainly, the securitization market itself would be an indication that things may be moving in the right direction. Interest rate increases would certainly help us in a big way. Higher default rates on the pools of loans that are out there. Decreasing wholesale values is certainly going to increase severity of losses out there for other folks, and any combination of those things would be positives for us.

And I'd add, too, just internally, I think where would feel it, we're not really experiencing this everywhere. We have to add, we do have a handful of towns where we don't seem to feel this pressure so much. But as it happens, where we've felt the pressure the most is in some of our larger areas where we do have several of our larger stores. So that's why it has impacted our sales to the level it has. So I think that we would see a pickup pretty quickly on our sales in some of these bigger stores, and a couple of particular markets if it started to pull back.

Okay. That's helpful. And lastly, just thinking about what you're doing with loan modifications. Have you changed your processes such that you're offering more modifications, and how do you expect that to play out going forward?

We haven't really changed our process there. It's typical that this time of year we have more, and I think we have a little more. It seems like a handful more people actually didn't get their tax refund. We saw a little bit more of that. And so our modifications were up somewhat recently, but it is seasonal, too. We do see more of it during this time of year.

[Operator Instructions] Looks like we have a follow-up question from John Rowan of Sidoti & Company.

Hank, last quarter, we talked on the conference call about comparable terms in the marketplace, right? And you were saying that your customers leasing or buying a similar vehicle from independent dealers, they were seeing loan terms of up to 48 months. Is that still the case? Has that changed? I'm just curious, from the customer standpoint, how big the duration difference is between coming to Car-Mart to get a car and going to any of the thousands of used car dealerships that are around everywhere?

Well, I will tell you, and as I just mentioned, some of our stores where we're seeing the greatest pressure are in some of our larger areas and actually from those guys, what we've been hearing the past few months is that their main competition is not necessarily just the other used car dealers, but it is new cars stores dipping down, not just with the new cars, but also what would, compared to us, would be the higher-end used cars. But we've heard quite a bit lately of terms as high as 72 months, so it's a significant difference.

I mean, 72 months is material, especially when you're dealing with even high-end used cars and whether or not you're keeping the mechanical life of that car.

Yes, yes.

Yes.

I mean, obviously, I think you have very little -- I would think you have very little appetite to sign a loan beyond the useful life of a vehicle. I would think that the frequency of default on that is close to 100%.

Right.

Yes.

That's the main measure we use. We don't want to put somebody in a car for a term that's longer than that asset is going to last. We want to them to have a real asset at the end of the term.

[Operator Instructions] I'm not showing any further questions in queue. I'd like to turn the call back over to management for any further remarks.

Okay. Well, we thank everyone for joining us today. And obviously, we'll be talking to you after our next quarter and hope we'll have some good news for you then. So we will get back to work, and you guys have a great rest of the day. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.