Skip Falgout - Chairman, Chief Executive Officer Jeffrey Williams, Chief Financial Officer Hank Henderson - President

Dennis Telzrow -Stephens Inc Darren Maloney John Height - JMP Securities Brandon Hoffman – Hayden Capital Daniel O’Sullivan - Utendahl Bill Armstrong - C.L. King & Associates Daniel Furtado – Jefferies Clark Fledge – Stern Agee Thad McCartey - Intuition EQ Quentin Maynard - Moorehead Capital

Good morning and thank you. Most of you have already seen our press release this morning of our third quarter results.

We are pleased to announce that this morning we’ve reported net income of $3.4 million or $0.28 per diluted share versus a net loss of $50,000 or basically flat for the prior year quarter. Revenues were up 19.9%.

Same-store revenues were up 18.7% and retail unit sales were also up from the prior year quarter by 17.1%. Our down payments, credit losses, collection and delinquent accounts all showed significant improvement, resulting in strong cash flows for the quarter.

Jeff will go into more detail on the numbers in a minute. Although the quarter over quarter comparisons certainly are extremely positive, I believe the more important aspect to our performance this quarter and year-to-date is the continued improvement in the key metrics of our business.

In each major component of our operations, purchasing, underwriting, sales and collections, we have as you know invested considerable time, money and personnel to reestablish our core operation to build a platform for sustainable, profitable growth going forward. We are making progress in that regard.

As I mentioned in the press release this morning, we have strengthened our core competencies and at the same time, significantly improved our capital position to take advantage not only of our strengths and market presence, but also of our competitor’s weaknesses. Hank and his management team have done a great job in this quarter, and while all of us know there’s more to do, we are very pleased with our progress so far this year.

Now let me turn it over to Jeff to go over the financial results.

Thanks, Skip. As mentioned, our top line revenues for the quarter increased 19.9%, compared to the third quarter of last year.

The increase was the result of the 17.1% increase in retail unit volume, a 6.1% increase in our average retail selling price, a 5.6% increase in interest income, offset by a $600,000 decrease in wholesale sales. Same-store revenue increased by 18.7% for the quarter and we continue to see sales volume benefits of our increased advertising efforts and numerous other sales initiatives.

We are pleased with our 5.2% down payment percentage for the quarter; it was right in line with our expectations. We significantly expanded our tax refund anticipation sales efforts in the third quarter and we expect fourth quarter special payments, which coincide with the timing of actual tax refunds, to be strong and that has indeed been the case through the end of February.

Excluding the effect of our expanded tax refund anticipation sales, down payments for the quarter were over 1% higher than last year. Down payments for the entire fiscal year are up a full percentage point as compared to last year and closer to 1.5% higher when excluding the effect of our increase in tax refund sales.

For the quarter, our average initial loan term was right at 25.5 months compared to 25 months for the third quarter of last year. The initial term was up slightly due to the 6.1% increase in average retail selling price for the quarter at 8,801 compared to 8,293.

The average retail sales price for the quarter was up 3.6% from our second quarter’s average of 8,496. The sales revenue generated by our payment protection plan product and increased efficiencies in our retail pricing, as well as increased car costs led by higher than expected demand for more expensive vehicles, as well as cost pressures on the buy side which are more pronounced during this time of year, contributed to the increase.

Going forward, we expect to see some continuing growth in our average retail sales price when compared to prior year results and we will continue to work hard in our efforts and pushing for a leveling off of the increases we have seen. The increase in unit sales for the quarter was broad based across most of our dealerships.

Management continues to spend a significant amount of time working with individual lots to ensure each unit on a standalone basis is on a path to producing an economic profit, if not already there, and maximizing economic profits for those lots that are producing. We saw good results for the quarter with our smaller newer lots in getting their sales level up to an acceptable range, and we saw solid volume increases in most of our larger, more established dealerships.

We feel that we can continue to see increases at the top line, while maintaining the quality of the deals at the same time. All our dealerships, but particularly our newer dealerships, have significant capacity to increase sales volume, GAAP profits and economic profits going forward.

Interest income was up 5.6% for the quarter, as the effective interest rate was 12.8% compared to 12.6% in the prior-year period, combined with an increase in the average finance receivable balance. For the third quarter this year, our gross profit margin percentage was 43.2% of sales, which is up from 41.4% in the third quarter of last year and up from 42.1% from this year’s second quarter.

This sequential and prior-year increased gross margin percentages have resulted from significantly improved results for wholesale sales, which for the most part relate to cash sales of repossessed vehicles at or around breakeven, and increased efficiencies in retail pricing as well as the gross margin generated from the new payment protection plan product. Demand for our core vehicles is very much local in nature and remains very high, especially at this time of year.

We will continue to focus efforts on purchasing costs, retail pricing and repair and transport costs and expect to continue to see solid gross margin percentages going forward. In the third quarter of this year, SG&A as a percentage of sales decreased to 19.2% from 19.7% in the same period last year.

The overall dollar increase related to a 4.4% increase in the average number of stores in operation and the associated incremental cost of those stores; increased advertising expenditures, increased insurance costs and higher payroll costs. The higher payroll costs include a $500,000 increase in non-cash stock-based compensation during the quarter.

We are for the most part finished with our infrastructure investments which have been made over the last year-and-a-half. These investments were made to strengthen controls and improve efficiencies in our support functions.

We were able to leverage these infrastructure investments during the quarter and we will continue to leverage these investments going forward. For the current quarter, net charge-offs as a percentage of average financed receivables was 6.9% compared to 9.2% for the prior-year quarter.

We expect net charge-offs for the remainder of this year to be significantly below levels experienced during the last quarter of 2007. Collections as a percentage of average finance receivables increased to 16.6% from 16.2% for the prior-year quarter and to 50.4% from 48.2% for the nine-month period.

The higher percentage equates to more than $4 million in increased collections for the nine-month period. The quality of the portfolio, the steady average loan term, higher down payments and better collection efforts have led to increased collections and significantly better performance compared to last year.

The average percentage of finance receivables which were current during the third quarter was 82.3% compared to 80% last year. We believe that the increase in the quality of the portfolio is reflected in the higher current percent and the higher down payment percentages.

At January 31, 2008, our 30 plus past due accounts were at 3.7% compared to 3.8% at January 31, 2007. The positive trend on our 30-plus past due accounts continued past at the end of the quarter.

The historical average for 30 plus at the end of the third quarter has been closer to 4.5%. Our allowance for loan losses remains at 22% of finance receivables at January 31, 2008.

The provision for credit losses was 23.4% of sales during the quarter, compared to 30.6% for the third quarter of last year. We have seen significant improvement in our credit losses this year and we are working hard to bring the losses down further as we move forward.

We have seen a significant increase in cash flows from operations this fiscal year. In an effort to maximize our economic profit, we reinvested this cash flow in an additional $19.3 million in finance receivables, $2.2 million in Car-Mart due to stock repurchases.

We bought back approximately 187,000 shares all during the third quarter and some upgrades to existing facilities so those locations can continue to grow. Debt increased by about $3 million for the third quarter to $40.5 million, but actually decreased by $333,000 for the nine-month period.

Now total debt is down by $8.5 million from its high point in October of 2006. Our debt to equity stood at 30.7% and our debt to finance receivables was 20.5% at the end of the quarter.

We will continue to view our future investment decisions from an economic profit perspective, which includes analyzing returns on invested capital, on a location basis, as well as potential future investments through our stock repurchase program. We remain very proud of our extremely healthy balance sheet and are excited about the opportunity to continue to leverage our strengths into the future.

Our low leverage and asset-based lending agreement have allowed us to remain unaffected by this recent turmoil in the credit markets. We are currently at prime 6% on our revolving credit facility.

The rate going forward will fluctuate based on our financial performance. We anticipate a decrease in our rate to prime less a quarter as trailing six and 12 month financial ratios continue to improve.

Excess availability was $19.3 million at the end of the quarter as we continue to adjust to our expected operating run rate, we will ensure that the credit side of our balance sheet gives us the best possible capital structure while maintaining the proper level of conservatism. Now I’ll turn it over to Hank.

Thanks, Jeff. As I’ve said in the press release today, one of our major goals this year was to increase the profitability of our existing store base and to do that we slowed down our new store growth to allow us to implement the numerous initiatives that we discussed in our previous calls.

These initiatives addressed each area of our business: purchasing underwriting, sales and collections. We knew it would take some time for the results for these efforts to become evident and we are just recently beginning to see the positive impact.

The improved year-over-year results are basically on a same-store basis as last year. Our existing stores are on an average selling more vehicles, and we believe the improved quality of the transactions, along with improvement in collections should allow us to continue to increase growth and profitability at our existing stores as well as successfully open new stores.

When I say the quality of the transactions, primarily I am referring to three components of the deal. First, the vehicles are to better start with.

We are stocking our dealerships with the best possible cars, trucks and SUVs and the overall mix of our inventory is better than ever. Second, our underwriting has improved and will continue to improve as we build on our database and customer profile information.

Third, the terms of each deal are geared to increasing our success in reducing credit losses by tailoring the terms of each deal to not only our customer’s ability to pay, but also the expected longevity of the vehicle. These items we focus on every day and are constantly under review.

While we’re seeing some great results, not all of our dealerships are yet performing at a level that we want, but the number of underperforming lot is down substantially from even just our past quarter. We do have specific plans for each underperforming lot to get them up to par.

As we carefully considered each dealership’s prospects, it became evident that it would be better to close a few of our locations, which we did this past quarter, beginning with Wichita, Kansas. It did not fit into our growth plan geographically and it was a location that drained resources that could best be used otherwise.

Additionally, we are in the process of closing down two locations in Texas. Gainesville, which is currently a satellite location for Sherman, Texas and in Greenville which is satellite of Sulphur Springs, Texas.

There may be one other closure prior to year end, but I can tell you that otherwise we are entirely committed to the individual profitability of each store. Now on the other hand, it is important to note that all three of the new dealerships we have opened this fiscal year are performing well and are on track with our expectations.

In fact, Mountain Home, Arkansas just this past month had the biggest grand opening we ever had with record turnout despite 29 degree weather. As we’ve previously discussed, we have improved our new-store opening strategy and procedure and have allocated the necessary resources to better assure the success of our new stores.

We plan to open at least four new dealerships in fiscal ‘09. We are confident we can have at least this level of new store growth as we are seeing increasingly positive results for our existing stores, and also as we are effectively rebuilding our management bench strength.

Our management training program currently has over 20 trainees at various stages of development and having this number of quality trainees will allow us to adequately staff our new store locations, as we accelerate that growth in the future. As Skip and Jeff both indicated, it was a solid quarter for us, but we are not resting and to the contrary, we are following with great intensity on each of our current initiatives so that we can continue to build upon our success.

With that, that concludes our prepared remarks. So, now we would like to move on to your questions.

What a difference a year makes, right? A lot of hard work in between I understand that.

Maybe a little comment on competition and the credit markets as they impact your competitors and whether you are seeing any customers coming in the door who have been squeezed out so to speak by the AmeriCredit and Credit Acceptance, in that vein?

Dennis, I can tell you it is just more anecdotal, I have heard some of that from some of our managers. I don’t really have any way to quantify that or know how much of our business that is right now but yes I have heard from few managers that they have experienced some of that.

On the competitive front, any of the mom and pops getting hurt by this current credit crunch, so to speak? Availability of credit or having to sell paper at much higher rates?

Yes. I have got to believe they are; again I couldn’t tell you to what extend that impacts us but I would assume that’s the case.

These two other lots that you are going to close, Gainesville and Greenville, I assume there will be a little incremental financial costs like we saw with Wichita or less or greater?

It really shouldn’t be as significant as Wichita because as we mentioned these are smaller satellite stores in close proximity. Can you expand on that a little bit Jeff?

We are not expecting a significant loss from closure on any of the lots other than Wichita at this point. It should be pretty minor.

Wichita, was there something other than the geographical location that made it more challenging?

Well, primarily I think a big part of it was it was kind out there on its own and as we know when our lots are in close proximity we have better support we do tend to do better. That was a lot that had been opened long time ago and our growth plans right now don’t include Kansas and so we thought best is to go ahead and pull out now.

I would tell you we can make excuses whatever, but it was a store that just did not do well for us.

The other two in Texas sort of the same thing they just never worked out?

I can tell you that overall in Texas we are beginning to see some very promising results. Things are getting better there, these are a couple of locations that since opened they just really did not have the volume of sales for us and struggled.

Again, as I mentioned, these were lot that where in close proximity to existing locations anyway and so just to lighten the load down there and focus more on the stores we feel like have better longer-term prospects, we just made that decision to do that.

Any comment on inventory availability cost? I saw a quirky news item the people of Mexico now are only going to buy 1998 cars, so don’t go by any of those.

Yes we got that. Yes.

The ones we repossessed might have more value.

Yes, send them south.

Yes.

Any trends on inventory buying?

I will tell you, it’s interesting. As we go into this time each year we always feel the heat and the costs go up, but it’s really offset, I have to tell you, our purchasing department were really genuine in that area.

Our guys are doing such a better job that although it might be a tougher environment, I think our guys are working harder and smarter and really we’re seeing a lot of improvements in how we’re able to source cars and what we’re able to offer to our customers.

I wanted to better understand the payment protection products and I think in your last quarter’s transcripts it mentioned that the bulk of your cars were sold with this product. Is that correct?

We currently sell the payment protection plan in three states: Arkansas, Alabama, and Missouri. And we’re working, hopefully we’ll be expanding that to a couple more states.

It is product were about the customer pay us a fee for this obviously and if their vehicle is or totaled we waive the balance. So for customers that can’t afford full coverage insurance in particular its a great benefit because it does give them some protection, where in essence they end up paying us in the range of $15 to $20 a month for this whereas full coverage might cost $150 a month or so.

It is a good benefit where we do offer it. Our penetration rate is in excess of 90%, just where we want it and again I hope that we’ll be able to expand that throughout the company.

So that’s an insurance surrogate product then? Does that meet the State minimum liable requirements and such?

No, it doesn’t have anything to do with liability, I want to be very clear. It is not an insurance product.

That’s an issue we are very careful with. It’s definitely not insurance.

It is a debt cancellation agreement.

Does that book through the Colonial unit?

No, that’s a Car-Mart product.

It’s a Car-Mart product. Where do you book the losses or anticipate losses?

I mean, from a summary financial standpoint, is that in your loss provision, is it bundled there?

The losses are flowed through cost of sales. The product sales are in sales and the cost associated with those losses is in cost of sales.

With fiscal stimulus package, given it is probably a little bit different than maybe just the normal tax refunds that people might see, I would assume that that’s probably accretive for your business?

We expect it will be, it should be a benefit to both sales and collections.

A question related to credit, I mean in contrast to national statistics where we’re seeing credit performance deteriorate on most asset classes you guys have shown very stable, if not improving credit trends. I know you took measured steps over the last several quarters to deal with this.

Can you kind of pinpoint, or give us a little bit of information of where you’re seeing the credit improvement from? Is it from a better transaction, is it from the seasoning of the weaker performing stores that you contained over the past several quarters?

Can you highlight where you’re seeing the benefits come from?

I think it’s all of the things that you mentioned and the fact that it is something we talk about here everyday with our managers. As we said, we feel like we are doing a better job on the purchasing, and certainly in our business with the quality of the cars that you have out there impacts that.

Another component as I mentioned earlier is that we have been much more disciplined throughout this past year with regard to our down payment requirements and the structure of our term being careful not to have a term on a vehicle that is too long and that makes a difference. We are also working harder to better educate our managers ourselves on our underwriting decision and to tighten up on those were appropriate.

John I would tell you, for the most part, this is the same customer base, I think we are just doing a much better job in the selection process and the underwriting and the collection on the back end. If you look at the quality of the cars we have on the lots they are really good cars, and it all starts there.

There’s one other thing that you mentioned, it’s right. As our smaller stores season more, they began to roll in some of our repeat customers, which obviously are proven and we have a better sense of the risk there, and obviously our repeat customers or repeat business is something that we track and we talk about a lot and taking good care of those folks and good customers come back and it helps in the long term.

You guys have always adjusted your customers are stressed from an economic perspective. Are you getting the sense that they are any more or less stressed?

Obviously you are improving your underwriting and your management credit, but are you getting the sense at the customers that there is an increased amount of stress level out there?

It’s not a short-term thing. This is not anything new, but over time yes they are.

The car payment amounts to a bigger part of their pay check than it did many years ago. So yes, it is tough and that is why we try to adapt to that as best we can but at the same time we can’t get too carried away and stretch it out too far.

We try to do the best we can to assure that they can get into an equity situation in that vehicle as quickly as possible.

Hank, you did refer to the automated underwriting system. Maybe can you guys give a little bit more color on the deployment of that and anything to do with your Copart relationship?

Well, just speaking strictly to our scoring model that we have been working on and have discussed somewhat, I would tell you, it is still in more of a testing phase. We do have it live on a few lots.

We are testing I think in all of 13 of our locations right now. We’re still in the process of learning ourselves how to best use that.

It does enable us to see the quality of the deals we sell in a given time period and to more quickly address any concerns with managers but it’s not what you would consider fully deployed at this time. We think it will be helpful.

This is a learning process for us.

And the Copart relationship?

Obviously we still have a relationship. We do sell a lot of cars and our cars for the most part do well through the Copart auction process, actually do better than the local auction for the most part.

So they are still part of our disposable process of the wholesales.

You guys have obviously a big uptick in demand related to the normal seasonality of tax refunds. Are you still seeing that demand persist or was that more of a just a brief pickup related to the specific tax refund season?

No, I think we’ve got some momentum that seems to be carrying forward.

Yes, I think it’s beyond that. A lot of things we started months ago John, the advertising, the quality of the cars, the retraining and supplemented of our sales staff, I mean all of those things are coming together that we feel internally that this is more than just a tax refund season.

We really do. We are tracking more customers, more traffic in most of our lots for us to give a better selection process and what we’re seeing so far in the first month of fourth quarter is a continuation of that kind of traffic.

So we think it is more than just a short term deal.

Can give some color on how many modifications or deferrals were performed in the quarter and how that’s that trended out over the past year? Any uptick or decrease for that matter?

Of course we track deferrals monthly and the deferral percentages for the quarter were right in line with our expectations and all of our internal metrics. They were in line with some historical standards.

So all in all, the quarter was good from a deferral or refinance standpoint and actually in the fourth quarter we were starting off with slightly lower numbers on deferrals so we are in pretty good shape on the side.

So trended in line with the historical -- I assume some sort of uptick just seasonally but then coming back down after January?

Yes. You will see some leading up to tax refunds that spike a little bit but we didn’t see anything that we don’t see every year and in fact a little lower than historical averages and then we’ve seen some good progress after the end of the quarter.

What percentage of your portfolio are inventory in the truck SUV camp? Are you experiencing any pressure on your recovery values or your retail sell price on that portion of the inventory?

We have a group of vehicles we consider our premium vehicles, which includes SUVs, pickups and some imports and right now I think 39% of our inventory would fall into that category whereas a year or so go it was substantially less than that. Obviously, it helps sales with having the better selection out there and I will tell you that despite the gas prices and all that, those are the popular vehicles.

People want the SUVs, they want the trucks and we also know from experience that being able to put the customer in the vehicle that they are happy with, that they are able to buy something that they want does help assure the success of that and ultimately benefits our credit losses. So, right now we feel really good about our current inventory selection as a matter of fact.

That is what our advertising that we are running around right now is related to is letting people know that we do have a good selection.

What percentage of your customers are repeat customers?

Yes it is about a third. And keep in mind that includes a lot of newer stores that really don’t yet have the people paying off the cars and get back in.

So our more mature stores actually run a number higher than that.

Yes, that’s right. Over 50% or so.

Can you give the dollar amounts for the average down payments for the quarter and the same number as of last year?

Around $600 this quarter and about $560 last year. That’s a little misleading -- we did highlight and push tax refund sales a little earlier in the quarter.

Which are zero downs for the most part. So we are quite pleased with that 5.2% for this year but it is a little misleading in the fact that we got more special payments coming in the fourth quarter related to those sales.

That’s zero down?

We don’t include the down payment, the special payment that is made up and some people might but we don’t so you have a fair number of zero downpayments going into that first quarter number that we expect to see when the customer gets his tax refund to make up that down payment or more.

Your average term went up about half a month during the quarter. I guess that was due partially to higher average selling prices.

Any concerns there because you’d worked hard to get that average term down. How are you looking at that now?

Well, you’re exactly right. The increase in the term was entirely correlated to the increase in the average price.

Actually this is a part of our business we feel we are doing a much better job with. We’re still following the same guidelines that we began about a year ago.

We’re still on track with that.

I will tell you that the average term for the entire portfolio is pretty much flat with last year’s third quarter even though we’re up just a little bit for the third quarter by itself as far as the original terms, the portfolio is pretty much flat on the term basis at the end of the quarter.

Do feel that you can handle that slight increase in average term because the cars should last longer then maybe a year ago?

That would be what we’re hoping for yes. I think it’s we’re doing a good job with the purchasing.

I think we’re doing a good job of getting the cars bought right and so I think that as the price moves up a little bit. It’s a good assumption for us that it is slightly better car.

From the customer side, the deal, transaction is a better deal to, all aspects of it.

With the tax stimulus with the rebates, the government did that earlier in this decade, I think it was 2001 and 2002, I forgot the exact year. Do you recall how your business reacted to that stimulus package back then?

You know, I can’t give you any specifics, we talked about that. It was quite a bit less money at the time, I think it was $300 at the time.

But I’m sure that it was helpful particularly in the collections at that level and I think this time it’s going to be more significant. We are expecting to see some benefit there at the sales in addition to the help it can bring to collections.

That Wichita store was your only store in Kansas, right?

That’s right.

So you exited that market. What was it about Kansas?

I know you had just one store out there -- why not fill up that Southeastern quadrant of Kansas with more stores rather than exiting the market? Was it just not a good market?

What was your thinking along those lines?

Well, actually when you look at the size of towns that we target, believe it or not there are really not that many towns in that area that suit us. You have a good question, I think if there were we would have done exactly that.

But it’s just wasn’t an area that we had a lot of options to really build up the support in that area and we feel like we’ve got a lot better options ahead of us and lot more time to do this better. We feel like if we were going to be committed to expanding that area that we should just go ahead and get out now.

But towns that were either too small or too big basically?

For the most part in that area when you move outside of Wichita they were mostly too small.

I think we look at it once, there were only four towns in the whole state.

They would be spread out which is not ideal for us.

If you have ever driven through Kansas you could understand part of this decision. These towns are spread out and it would be harder to manage, we seem to be able to do better in towns that are much closer together in the South Central United States as opposed to Kansas.

It is kind of a one-off situation anyway and it truly made sense to make that decision.

So you’re closing a couple of Texas stores and I think Hank, you mentioned that you might do one more by April 30th. What state would that be in?

That’s also in Texas.

So is that definitely going to close, or is it just a matter of timing?

It likely will. That decision is not final today, but it likely will, but beyond that we don’t have anything on the table up for discussion to close at this time.

Are you planning to open any stores during the current quarter?

No, we don’t have any during this quarter.

For fiscal ‘09, you’re looking to open at least four new stores. Should we model that four or may be bump it up a little bit?

I think four is going to be the mark.

Did I hear correctly that gross margins expanded even after normalizing for the payment protection program?

Yes.

I just want to get a handle on what do you think is driving that? I mean it probably touches back on the competitive side, but with what we are reading in the headlines in terms of stress and just vehicle sales in general going down, I would expect that margins would be flat to down.

Can you just help me reconcile that?

The biggest contributor year-over-year is the level of wholesale sales. Last year, at this point selling 20% fewer units and our repossessions were higher.

We just had a much higher percentage of our total sales that we are going out at the wholesale level at basically breakeven so we’ve gotten a pretty nice bump this year from a more normalized breakdown between retail sales and wholesale sales. So, we’ve gotten a nice increase and a sustainable increase going forward from just that mix of sales.

And an improvement in the wholesale sales, the values.

Yes, basically in the improved values of the wholesale sales at the same time. The pricing guys, the efficiency of our pricing at the lot level has improved.

We are doing a better job on expense management.

Excellent. So, you feel pretty confident that this should be relatively sticky going forward.

Yes. We feel like we have got a good gross margin number.

We may be able to increase it just a little bit, but we feel pretty good about the level it is at right now.

The US economy seems to be very near recession, yet you all did exceptionally well and furthermore, if the economy does in fact slip into recession, how do you believe that will impact your stores?

I believe that ultimately it puts more people in our market. I think that as people struggle that buy here, pay here alternative to buying a car becomes a lot more attractive to several folks and I think ultimately those are pretty good customers.

You know Clark, in our markets we are a brand name and those folks who are used to being up a little bit up higher on the food chain in the credit markets look to bring in better cars and I guess Car-Mart has a real advantage in the local mom and pops particularly. Somebody earlier had asked that question, it’s hard to have hard evidence of it, anecdotally I think Hank, you said we’re seeing it.

Recession, I am not saying is good for Car-Mart necessarily, but our customers have always been somewhat in a personal recession on their finances and folks come to our dealership because of their own issues.

I got on the call a little bit late, so this question may have already been posed, but for about the last probably seven years I have averaged changing out one of my cars about once a year and I have consistently taken that car and always gotten a bid from CarMax and the car may be had consistently been about 15% above whatever dealer was going to offer me for a trade in. I just sold one of my cars less than a month ago and CarMax offered me a little bit over 10% below what the dealer offered me on a trade in.

When I talked to the wholesaler at the dealership their explanation was that they were hearing that CarMax’s inventories were full and they were backing off of their prices they were offering for automobiles. I was just curious if you guys were seeing that number one and number two, what impact or implication do you see that having for your purchasing?

As far as us backing off our inventory? I am sorry.

I am curious if -- one of the things that I’d always looked at before was it seemed that CarMax was such an aggressive buyer out there in the used car market that it pretty much created -- almost seem to create an uplift in prices across the entire used car segment. I’m just curious if they back off of their purchasing, if you’re seeing a decline maybe in some of the prices you are having to pay for automobiles you’re acquiring or if you think that could potentially have an impact somewhere down the road if this trend continues?

Well, obviously we’d love to see the prices go down. I would tell you we’re really not in the same market as CarMax, speaking specifically to them.

We are in a typically smaller market and we do try to buy locally and our purchasing make up is more a composite of how the new car stores are doing in all the towns that we are in which are primarily smaller towns. What we really see is when the local guys sales are up and they’re trading for more cars, there is more on the market that tends to help our process.

But if your question is specifically does this move with CarMax seem to impact us, we haven’t seen that correlation.

You know I think what you are seeing, I have read some of this and talked to few folks too, the demand for the late model used car in the big cities which is essentially the CarMax sales is dropping off somewhat. I mean that is as much because of a lack of demand but a lack of financing for those cars and that’s sort of a follow up to an earlier question that some of us folks that perhaps would look at CarMax for a later model used car, the financing is not available.

That’s the customer that not necessarily geographically because we are not in CarMax’s backyard, but that is type of customer that maybe at your lot when that financing is in-house and available. I think CarMax has some big inventories for that reason, is on the financing side.

So you wouldn’t see that as much of an impact as say, I don’t think it’s any big secret that First Cash Financial had bought Auto Masters back a couple of years ago and I think Stephens brokered that deal and they recently put out a report saying Auto Master is destroying the earnings of First Cash Financial. I believe most of their loss, if not all of their loss, are in direct competition with you guys, aren’t they?

I think about 12 of their stores are in the same market as we are in.

So if their stores are experiencing difficulty obviously they thought they had the same customers as what they have got at the pawn shop, but if their stores are experiencing difficulty, do you think that you’re getting a benefit from that or is it too early to tell?

I really couldn’t I say. I couldn’t say how that would necessarily benefit us.

I think we just try to do the best we can with our customers and move forward. We can’t always necessarily speak to what the other guys are doing.

When you are looking at the four new stores next year, have you given any guidance on where you are expecting those to be, even in a region?

We haven’t, but Alabama is definitely a market that we like and that we will continue to expand there. We also have a couple of, what I guess we call, fill-ins where we already exist both in Oklahoma and Kentucky.

We do have several towns that we’ve targeted, and as we move forward this next year it will be the best four prospects of those.

Can you just tell me what your average price was this quarter?

$8,801.

Your expansion for next year, you are talking about opening up four dealerships. Just curious given the current environment in the market, are you seeing any acquisitions that might be attractive?

We always keep that as one of our alternatives, but for the most part I’d expect these to be new stores Car-Mart ground up, but we’re always looking at that. We haven’t seen any prospects necessarily to go forward on.

You closed a dealership this quarter and you’re looking to close a few more. Are you maintaining a watch list if you will, a number of dealerships on a list that you’re looking at for potential future closures?

Well, I think that is what we spoke to beyond what we just announced that we are closing, we have one other that is in consideration, but beyond that we feel committed to all the other stores and to get them all up to the level we believe they can be. Obviously as things happen throughout future and it becomes necessary to consider such we will, but today we don’t have any others on the table to consider closing.

I thank you all very much. It was a good quarter and we look forward to our fourth quarter and continued good results.

I look forward to talking to you all in a couple of months. If you have any other question, feel free to call us.

Thank you.