"What are we, chopped liver?"

In last week's pre-earnings Foolish Forecast, I suggested that might be the sentiment floating around America's Car-Mart (NASDAQ:CRMT). It's been watching billionaire buyout artists like Warren Buffett and Eddie Lampert swarm around its competition at CarMax (NYSE:KMX) and AutoNation (NYSE:AN).

But Car-Mart's no wallflower, Fools. Eager for attention and impatient to dance, on Tuesday this used car dealer hopped up on a table in the middle of the high school prom and shouted: "Look at me!"

'Look at me'?
Well, how would you describe it when a company that everyone expected to post nearly flat sales and $0.16 per share in earnings, instead announced 15% sales growth and $0.29 per share in profit? That deserves a shout-out.

And yet, superb as the results turned out, Car-Mart management isn't content to take a bow just yet. While "pleased with the improvement in ... credit losses and ... collections," Chairman Skip Falgout noted, "we have further progress to make." According to Falgout, Car-Mart is only "beginning to realize the benefits of our increased advertising efforts and numerous sales initiatives." [Emphasis added.]

New CEO Hank Henderson agrees: "We are beginning to see the positive effects of ... numerous initiatives" aimed at improving the quality of cars available for sale, matching the right cars with the right buyers, and setting payment terms that "set the customer up for success."

There's no denying the improvements already made. In a generally tough economic environment, Car-Mart:

  • Grew its same-store sales more than 12%.
  • Sold nearly 8% more cars year over year this quarter.
  • Reduced bad debts ("charge-offs as a percent of average Finance Receivables") by 110 basis points.
  • Improved the percentage of customers who are current on their payments by more than 500 basis points, to 83.3%.
  • And made it easier for those customers to keep up with their monthly payments by requiring them to make larger down payments -- now averaging 7% of a vehicle's purchase price.

In short, after just one year of hard work, Car-Mart has made huge strides in improving the quality of its customer base, and its financial statements contain the proof.

The downside? With the stock already up 28% in three days on the good news, Buffett and Lampert may have missed their chance to buy in.

How did Car-Mart arrive in its current fix? Find out in:

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Fool contributor Rich Smith does not own shares of any company named above. Why do we tell you this? Because The Motley Fool has a disclosure policy.