PHOENIX — NowAuto Group Inc. announced its fiscal 2010 second quarter results, noting improvements in charge-off and default rates and a net investment increase of 19 percent over the past two quarters.
The company attributed its performance to tighter credit standards, a renewed focus on contract management and system upgrades. However, company officials cautioned against expectations of a quick recovery.
"The present condition of the subprime and below subprime auto market has continued to impact our industry and our company," said Scott Miller, NowAuto’s CEO. “While we have managed to increase year-over-year sales revenue, our challenge has been, and will continue to be on, collections. ... Tighter underwriting criteria yielded positive results in the September 2010 quarter. Nevertheless, we expect a difficult environment for the foreseeable future."
The company reported revenue of $1.47 million compared to revenue of approximately $1.36 million in the prior year. During the quarter ended Dec. 31, 2009, NowAuto’s gross margin improved to 54.7 percent due to sale of higher margin vehicles and increased interest income.
"We continue to seek new ways to improve ourselves and have seen some success," said CFO Faith Forbis. "The current economy has created many challenges that will continue in the near future. Nevertheless, we have been slowly building momentum."