ROGERS, Ark., Sept. 18, 2024 (GLOBE NEWSWIRE) -- America's Car-Mart, Inc. (NASDAQ: CRMT) ("CarMart" or the "Company"), a large publicly held automotive retailer focused exclusively on the "Integrated Auto Sales and Finance" segment of the used car market, announced today that it intends to offer and sell, subject to market and other conditions, $65,000,000 of shares of common stock in an underwritten public offering. In addition, Car-Mart intends to grant the underwriters a 30-day option to purchase up to a ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2024 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 0-14939 AMERICA'S CAR-MART, INC. (Exact name of registrant as specified in its charter) Texas 63-0851141 (State or other juri ...

Financial Data and Key Metrics Changes - Total revenues decreased by $19 million, or 5.2%, largely due to a decline in retail units sold [11] - Interest income increased by 7.2%, primarily due to the increase in the consumer contract interest rate to 18.25% [12] - Average units sold per dealership per month decreased from 34.2 to 30.9, or 9.6% [12] - Net charge-offs as a percentage of average finance receivables for the quarter were 6.4% compared to 5.8% [15] - SG&A expense was $46.7 million, a slight increase compared to last year's first quarter [18] Business Line Data and Key Metrics Changes - Gross margin improved by 30 basis points for the quarter [5] - Average retail sales price increased by 2.4%, primarily due to increases in ancillary products [12] - Downpayments for the quarter increased by 20 basis points to 5.2% [13] - Total collections increased by 4.3% over last year, with the monthly average total collected per active customer rising to $562 from $535 [14] Market Data and Key Metrics Changes - Website traffic increased both year-over-year and sequentially, indicating strong consumer demand [4] - Application volumes were slightly softer, contributing to the decline in sales [4] - Delinquencies dropped 90 basis points to 3.5% at quarter-end [15] Company Strategy and Development Direction - The company aims to improve vehicle affordability by reducing the average retail price during the fiscal year [20] - Continued optimization of the loan origination system is a priority, with 40% of the portfolio now originated through this system [21] - The partnership with Cox Automotive is expected to enhance gross profit margins and improve vehicle affordability [6][21] - The company is actively looking for acquisition opportunities to enhance growth and shareholder returns [21] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the challenging economic environment for consumers and is focused on operational initiatives to improve business aspects [20] - There is a belief that used car prices will continue to fall at a normalized rate for the balance of the year [29] - The management is optimistic about the benefits from the loan origination system and expects it to drive better credit performance [30] Other Important Information - Inventory levels at quarter-end were up $7.1 million compared to fiscal year-end, primarily due to a recent acquisition [16] - Cash-on-cash returns for originated contracts in the first quarter are expected to be 72.4% [17] - Interest expense increased by $4 million, or 28.3%, due to a rise in rates and an increase in debt [19] Q&A Session Summary Question: Can you explain the headwind in SG&A that's coming from your acquisitions? - The company acquires SG&A costs from acquisitions without the corresponding customer portfolio, impacting initial profitability [22] Question: Can you explain how you think about the portfolio and how it sits today? - The back book of originations from fiscal years '21, '22, and '23 now represents less than 33% of the portfolio, with improvements expected as time progresses [24][26] Question: How much can affordability improve with your strategies? - The company is focused on reducing procurement costs by $500 to $800 per vehicle to enhance affordability [37] Question: What is the visibility on sales volume? - Website traffic has shown over 25% growth year-over-year, indicating strong demand, but application volumes are slightly down [36] Question: How is the competitive environment affecting the company? - Smaller competitors are facing financing challenges, creating acquisition opportunities for the company [32]

America's Car-Mart (CRMT) came out with a quarterly loss of $0.15 per share versus the Zacks Consensus Estimate of $0.57. This compares to earnings of $0.63 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -126.32%. A quarter ago, it was expected that this auto retailer would post earnings of $0.06 per share when it actually produced earnings of $0.06, delivering no surprise. Over the last four quarters, the company has not bee ...

EXHIBIT 99.1 America's Car-Mart Reports First Quarter Fiscal Year 2025 Results ROGERS, Ark., Sept. 04, 2024 (GLOBE NEWSWIRE) -- America's Car-Mart, Inc. (NASDAQ: CRMT) ("we," "Car-Mart" or the "Company"), today reported financial results for the first quarter ended July 31, 2024. First Quarter Key Highlights (FY'25 vs. FY'24 Q1, unless otherwise noted) Revenue was $347.8 million, down 5.2% Interest income increased $4.1 million, up 7.2% Total collections increased 4.3% to $172.9 million Favorable adjustment ...

ROGERS, Ark., Sept. 04, 2024 (GLOBE NEWSWIRE) -- America's Car-Mart, Inc. (NASDAQ: CRMT) ("we," "Car-Mart" or the "Company"), today reported financial results for the first quarter ended July 31, 2024. First Quarter Key Highlights (FY'25 vs. FY'24 Q1, unless otherwise noted) Revenue was $347.8 million, down 5.2% Interest income increased $4.1 million, up 7.2% Total collections increased 4.3% to $172.9 million Favorable adjustment to allowance for credit loss to 25.0%, down from 25.32% Net charge-offs as a % ...

America's Car-Mart (CRMT) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended July 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on September 4, 2024, might help the stock move higher if these key numbers are better ...

[FORM 10-K Cover Page Information](index=1&type=section&id=FORM%2010-K) This section provides key registrant details, including its legal status, stock information, and documents incorporated by reference [Registrant Information](index=1&type=section&id=Registrant%20Information) America's Car-Mart, Inc. (CRMT) is a Texas corporation, an accelerated filer, and has filed all required reports. Its common stock is traded on the NASDAQ Global Select Market - Registrant: AMERICA'S CAR-MART, INC., a Texas corporation[2](index=2&type=chunk) Registrant Status | Status | Value | | :--- | :--- | | Well-known seasoned issuer | No | | Required to file reports | Yes | | Filed all reports in preceding 12 months | Yes | | Submitted Interactive Data File | Yes | | Filer category | Accelerated filer | | Management's assessment of internal control | Filed and attested | | Shell company | No | Common Stock Information | Metric | Value | | :--- | :--- | | Trading Symbol | CRMT | | Exchange | NASDAQ Global Select Market | | Market Value (non-affiliates, Oct 31, 2023) | $390,091,664 | | Shares Outstanding (July 11, 2024) | 6,396,757 | [Documents Incorporated by Reference](index=3&type=section&id=DOCUMENTS%20INCORPORATED%20BY%20REFERENCE) Portions of the registrant's Proxy Statement for the 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this report - Portions of the 2024 Annual Meeting of Stockholders Proxy Statement are incorporated by reference into Part III of this report[8](index=8&type=chunk) [PART I](index=5&type=section&id=PART%20I) This part details the Company's business, risk factors, unresolved staff comments, cybersecurity, properties, legal proceedings, and mine safety disclosures [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section outlines forward-looking statements regarding the Company's future events, objectives, plans, and goals, emphasizing that actual results may differ materially due to various risks and uncertainties. Key areas include operational investments, sales growth, customer growth, gross profit margins, credit losses, vehicle supply/demand, interest rates, and economic conditions - The report contains forward-looking statements about future events, objectives, plans, and goals, identifiable by words like 'may,' 'will,' 'expect,' and 'anticipate'[14](index=14&type=chunk) - Actual results could differ materially from projections due to various risks and uncertainties, including operational infrastructure investments, sales and revenue growth, customer growth, gross profit margins, credit losses, and interest rates[15](index=15&type=chunk)[16](index=16&type=chunk) - Other factors influencing actual results include general economic conditions, availability and cost of used vehicles, credit facility access, underwriting and collection effectiveness, competition, management dependence, regulatory changes, technological advances, cybersecurity, and natural disasters[16](index=16&type=chunk)[20](index=20&type=chunk) [Item 1. Business](index=6&type=section&id=Item%201.%20Business) America's Car-Mart, Inc. is a leading publicly held automotive retailer specializing in the 'Integrated Auto Sales and Finance' segment of the used car market, primarily serving customers with limited financial resources. The Company operates 154 dealerships across the South-Central United States, focusing on a decentralized model, organic growth, strategic acquisitions, and strong customer relationships - America's Car-Mart, Inc. is one of the largest publicly held automotive retailers in the U.S., focused on the 'Integrated Auto Sales and Finance' segment of the used car market, selling older model used vehicles and providing financing to customers with limited credit[18](index=18&type=chunk) - As of April 30, 2024, the Company operated **154** dealerships primarily in small cities throughout the South-Central United States[18](index=18&type=chunk) [Business and Organization](index=6&type=section&id=Business%20and%20Organization) This section describes the Company's legal structure and operational entities - The Company, a Texas corporation formed in 1981, operates through its subsidiaries America's Car Mart, Inc. (Arkansas) and Colonial Auto Finance, Inc. (Arkansas)[18](index=18&type=chunk) [Business Strategy](index=6&type=section&id=Business%20Strategy) This section outlines the Company's core strategies for operations, growth, customer engagement, and market positioning - **Collecting Customer Accounts:** Daily focal point for personnel, measured by internal delinquency and account loss standards. Provision for credit losses as a percentage of sales ranged from **19.31% (FY2021) to 36.48% (FY2024)**, averaging **26.36%** over five years. FY2024 saw a return to pre-pandemic levels, impacted by inflation and interest rates[19](index=19&type=chunk)[20](index=20&type=chunk) - **Maintaining a Decentralized Operation:** Dealerships are responsible for vehicle quality, sales contacts, credit decisions (with loan origination system), and contract collection, complemented by corporate oversight and centralized financial controls[21](index=21&type=chunk) - **Expanding Through Controlled Organic Growth and Strategic Acquisitions:** Primary growth source is organic growth at existing dealerships, supported by infrastructure investments. Acquired one new dealership in FY2024, with plans for future strategic acquisitions[22](index=22&type=chunk) - **Selling Basic Transportation:** Focus on affordable used vehicles; average retail sales price increased to **$19,113** in FY2024 from **$18,080** in FY2023 due to high demand and tight supply. Average contract term is **47.9 months**[23](index=23&type=chunk) - **Operating in Smaller Communities:** Approximately **71%** of dealerships are in cities with populations of 50,000 or less, fostering strong relationships and lower operating costs[24](index=24&type=chunk) - **Enhanced Management Talent and Experience:** Promotes from within but also recruits outside talent due to growth, facing challenges from increasing wages and competition[25](index=25&type=chunk) - **Cultivating Customer Relationships:** Critical for success, leading to repeat business and referrals, maintained through CRM technology and face-to-face interactions[25](index=25&type=chunk) [Business Strengths](index=8&type=section&id=Business%20Strengths) This section highlights the Company's competitive advantages, including management expertise, operational efficiency, financial stability, and market opportunities - **Experienced and Motivated Management:** Strong senior management with extensive industry experience and expertise in subprime customers, driving innovation and growth[27](index=27&type=chunk) - **Proven Business Practices:** Highly structured operations with established policies, procedures, and online manuals, ensuring uniform dealership operation and corporate monitoring[28](index=28&type=chunk) - **Low-Cost Operator:** Dealership and corporate operations structured to minimize costs, utilizing technology (new loan origination and ERP systems) to maximize efficiency[29](index=29&type=chunk) - **Well-Capitalized:** Funds growth from net income and external capital (credit facilities, securitization market). Debt to finance receivables ratio was **52.6% (46.0% adjusted for cash)** as of April 30, 2024[30](index=30&type=chunk) - **Significant Expansion Opportunities:** Targets smaller communities but also operates in larger cities, with numerous suitable communities for physical expansion and leveraging a growing online presence[31](index=31&type=chunk) [Operations](index=9&type=section&id=Operations) This section details the Company's day-to-day business activities, including dealership management, vehicle sourcing, sales, financing, and corporate oversight - Each dealership is an operating segment, aggregated into one reportable segment due to similar characteristics in the Integrated Auto Sales and Finance market[33](index=33&type=chunk) - Dealerships operate on a decentralized basis, responsible for sales, credit decisions, and contract servicing, with corporate office assistance and monthly financial reviews[34](index=34&type=chunk) Dealership Locations Summary | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Dealerships at beginning of year | 156 | 154 | 151 | | Dealerships opened or acquired | 1 | 3 | 3 | | Dealerships closed | (3) | (1) | - | | Dealerships at end of year | 154 | 156 | 154 | - Vehicles are purchased primarily from wholesalers, new car dealers, rental/fleet companies, auctions, and the general public, focusing on 5-12 year old vehicles with 70,000-150,000 miles, averaging **$7,300** per vehicle[37](index=37&type=chunk) - The Company offers a 7-day vehicle exchange policy and primarily advertises through television, radio, digital, and social media[39](index=39&type=chunk)[41](index=41&type=chunk) - Financing is provided to substantially all customers, with typical down payments of **0-20% (average 5.4%)**, terms of **18-69 months (average 47.9 months)**, and a fixed annual interest rate of **18.25% (16.75% in Arkansas, 19.5-23.0% in Illinois/acquired TN dealerships)**[42](index=42&type=chunk) - Collections are handled at the dealership level, with approximately half of customers making in-person payments. The Company uses proprietary software, text notifications, and amicable resolutions before repossession[44](index=44&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - The Company pursues new dealership openings and strategic acquisitions, recently acquiring dealerships in Tennessee, Texas, and Arkansas to expand market presence[49](index=49&type=chunk)[50](index=50&type=chunk) - The corporate office in Rogers, Arkansas, provides oversight, training, compliance audits, and sets strategic direction, monitoring dealership performance through various reports and metrics[51](index=51&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk) [Industry](index=13&type=section&id=Industry) This section describes the market segment in which the Company operates and relevant industry trends - The Company operates in the Integrated Auto Sales and Finance segment, serving individuals with limited credit histories by offering less restrictive underwriting, flexible payment terms, and in-person payment options[56](index=56&type=chunk) - Used car financing has seen tightened credit availability due to inflation, increased funding costs, and insurance costs, which management believes presents an opportunity for market share gain[57](index=57&type=chunk) [Competition](index=14&type=section&id=Competition) This section addresses the competitive landscape within the used automotive retail and financing industry - The used automotive retail industry is fragmented and highly competitive, with competition for both vehicle purchase and resale, including financing[59](index=59&type=chunk) - Key competitive factors include financing availability for subprime customers, vehicle selection, pricing, dealership location, service contracts, accident protection plans, and customer service[60](index=60&type=chunk) [Seasonality](index=14&type=section&id=Seasonality) This section explains how seasonal factors influence the Company's vehicle sales and financial performance - The Company's third fiscal quarter (November-January) is historically the slowest for vehicle sales, while the first and fourth fiscal quarters (May-July and February-April) are the busiest, leading to a higher proportion of revenue and operating profit in those periods[61](index=61&type=chunk) [Regulation and Licensing](index=14&type=section&id=Regulation%20and%20Licensing) This section outlines the regulatory environment and licensing requirements affecting the Company's operations - Operations are subject to federal, state, and local laws governing vehicle sales, financing, advertising, and environmental protection[63](index=63&type=chunk)[67](index=67&type=chunk) - The Company's finance subsidiary, Colonial, is supervised by the CFPB as a 'larger participant' in the automobile financing market[64](index=64&type=chunk) - State laws impose limits on interest rates for installment contracts, based on factors like the federal primary credit rate, vehicle age, or a fixed rate[65](index=65&type=chunk) [Human Capital Resources](index=15&type=section&id=Human%20Capital%20Resources) This section describes the Company's workforce, including employee numbers, diversity initiatives, safety programs, and talent development efforts - As of April 30, 2024, the Company employed approximately **2,280** full-time associates, none covered by a collective bargaining agreement, with positive employee relations[69](index=69&type=chunk) - **Diversity and Inclusion:** Fosters diversity, equity, and inclusion, with **53% women** and **33% racially or ethnically diverse associates** as of April 30, 2024[70](index=70&type=chunk) - **Employee Safety and Health:** Prioritizes safety with comprehensive programs, tracking workplace injuries below industry standards, and supporting associate well-being through health initiatives and resources[71](index=71&type=chunk)[72](index=72&type=chunk) - **Talent and Development:** Committed to attracting, developing, and retaining motivated associates through competitive compensation, benefits, and multiple training programs like 'Future Manager' and 'Car-Mart U' for career advancement[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) [Available Information](index=16&type=section&id=Available%20Information) This section specifies where the Company's public filings and information can be accessed - The Company's website (www.car-mart.com) provides free access to its SEC filings, including 10-K, 10-Q, 8-K, and proxy statements[77](index=77&type=chunk) [Executive Officers of the Registrant](index=17&type=section&id=Executive%20Officers%20of%20the%20Registrant) This section lists the Company's executive officers and their key roles as of the reporting date Executive Officers as of April 30, 2024 | Name | Age | Position | | :--- | :--- | :--- | | Douglas Campbell | 48 | Chief Executive Officer and President | | Vickie D. Judy | 58 | Chief Financial Officer | | Jeffrey A. Williams | 61 | CEO Emeritus | - Douglas Campbell became CEO and President in October 2023, previously serving as President and holding senior roles at Avis Budget Group and AutoNation[79](index=79&type=chunk) - Vickie D. Judy has been CFO since January 2018, with prior roles as Principal Accounting Officer and VP of Accounting, and experience in public accounting[80](index=80&type=chunk) - Jeffrey A. Williams served as CEO Emeritus through April 30, 2024, and is a director, having previously been CEO and CFO of the Company[81](index=81&type=chunk) [Item 1A. Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The Company faces various risks that could materially and adversely affect its business, operating results, and financial condition. These include macroeconomic challenges, intense competition, regulatory compliance burdens, operational dependencies, and risks related to its common stock - The Company is subject to various risks that could materially and adversely affect its business, operating results, and financial condition[83](index=83&type=chunk) [Risks Related to the Company's Business, Industry, and Markets](index=18&type=section&id=Risks%20Related%20to%20the%20Company's%20Business,%20Industry,%20and%20Markets) This section details external risks impacting the Company's operations, including economic conditions, competition, and regulatory changes - **Economic Conditions:** Disruptions in domestic and global economic conditions (e.g., rising interest rates, inflation, high unemployment) could adversely affect consumer demand, increase costs, and lead to higher delinquencies and credit losses, especially for non-prime customers[84](index=84&type=chunk)[85](index=85&type=chunk) - **Inventory Availability and Cost:** Reduced availability or increased costs of used vehicles, influenced by new car sales volumes and supply chain disruptions, could negatively impact gross margins[86](index=86&type=chunk)[87](index=87&type=chunk) - **Competition:** The fragmented and highly competitive used automotive retail industry could lead to increased wholesale costs, lower sales and margins, and higher credit losses due to competitive financing options[89](index=89&type=chunk)[90](index=90&type=chunk) - **Regulatory Environment:** Operating in a highly regulated environment (federal, state, local laws, CFPB oversight) incurs significant compliance costs and potential penalties for non-compliance[91](index=91&type=chunk)[92](index=92&type=chunk) - **Geographic Concentration:** Business is geographically concentrated in twelve states, with **27.1%** of revenues from Arkansas, making results vulnerable to local economic conditions[93](index=93&type=chunk) - **Growth Strategy Dependence:** Growth depends on favorable operating performance, successful identification and integration of acquisitions, availability of suitable dealership sites, ability to attract and retain management, and acceptable credit loss levels at new dealerships[94](index=94&type=chunk)[95](index=95&type=chunk) - **Seasonal Fluctuations:** Third fiscal quarter (Nov-Jan) is slowest, while first and fourth quarters (May-Jul, Feb-Apr) are busiest, making annual results disproportionately affected by adverse conditions in peak quarters[96](index=96&type=chunk)[97](index=97&type=chunk) - **Public Health Crises:** Future public health crises could significantly impact sales, collections, inventory acquisition, and liquidity[98](index=98&type=chunk)[99](index=99&type=chunk) [Risks Related to the Company's Operations](index=21&type=section&id=Risks%20Related%20to%20the%20Company's%20Operations) This section covers internal operational risks, including credit loss management, employee dependence, information system integrity, and cybersecurity threats - **Higher Delinquency and Default Risk:** Financing sales to credit-impaired borrowers inherently carries a higher risk of delinquency, default, and repossession, impacting profitability if losses exceed expectations[100](index=100&type=chunk)[101](index=101&type=chunk) - **Sufficiency of Allowance for Credit Losses:** The allowance for credit losses, based on subjective estimates and assumptions, may not be sufficient to cover actual losses, potentially affecting financial condition and operating results. As of April 30, 2024, the allowance was **25.32%** of finance receivables, up from **23.91%** in 2023[102](index=102&type=chunk)[103](index=103&type=chunk) - **Dependence on Management and Qualified Employees:** Success relies on continued contributions of management teams and the ability to attract and retain qualified employees in a competitive labor market[104](index=104&type=chunk)[105](index=105&type=chunk) - **Information Systems Efficiency:** Business depends on efficient operation and integrity of information systems; failures could disrupt operations, impact sales, or lead to claims[106](index=106&type=chunk) - **Security Breaches and Cyber-attacks:** Vulnerability to cyber threats could damage operations, harm reputation, expose to liability for confidential customer information, and incur increased costs[108](index=108&type=chunk)[109](index=109&type=chunk) - **Technological Advances and Consumer Behavior:** Inability to keep pace with technological advances and changes in consumer behavior (e.g., digital sales platforms) could adversely affect business[110](index=110&type=chunk) - **Availability or Cost of Capital:** Changes in capital availability or cost (e.g., revolving credit facilities, securitization market) could adversely affect growth strategies and ability to meet financial obligations[111](index=111&type=chunk)[112](index=112&type=chunk) - **Climate-Change Related Events:** Natural disasters, weather events, and efforts to mitigate climate change (e.g., consumer preference for fuel-efficient vehicles, new regulations) can adversely impact operating results[113](index=113&type=chunk) [Risks Related to the Company's Common Stock](index=24&type=section&id=Risks%20Related%20to%20the%20Company's%20Common%20Stock) This section addresses risks associated with the Company's common stock, including trading volume and dividend policy - **Stock Trading Volume and Volatility:** Lower average daily trading volume compared to larger companies may lead to greater stock price volatility, with smaller transactions significantly impacting price and potentially limiting stockholder liquidity[114](index=114&type=chunk)[115](index=115&type=chunk) - **Dividend Policy:** The Company historically has not paid cash dividends and currently does not anticipate paying future dividends, intending to retain earnings for growth, and is limited by lender consent[116](index=116&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments applicable to the Company - This item is not applicable[117](index=117&type=chunk) [Item 1C. Cybersecurity](index=24&type=section&id=Item%201C.%20Cybersecurity) The Company prioritizes cybersecurity, continuously monitoring threats and investing in capabilities to protect customer and corporate data. Its cybersecurity program, guided by NIST and CoBIT frameworks, focuses on detection, incident management, and data protection, with Board oversight and regular reporting to the Innovation and Technology Committee - Cybersecurity incidents have not materially affected the Company's business strategy, results of operations, or financial condition[118](index=118&type=chunk) [Material Effects of Cybersecurity Incidents](index=24&type=section&id=Material%20Effects%20of%20Cybersecurity%20Incidents) This section confirms that past cybersecurity incidents have not had a material impact on the Company's business or financial performance - Risks from cybersecurity threats, including any previous incidents, have not materially affected the Company's business strategy, results of operations, or financial condition[118](index=118&type=chunk) [Cybersecurity Risk Management and Strategy](index=25&type=section&id=Cybersecurity%20Risk%20Management%20and%20Strategy) This section details the Company's approach to managing cybersecurity risks, including monitoring, investments, and framework adherence - The Company prioritizes protecting customer and corporate data, continuously monitoring the cybersecurity landscape and investing in capabilities and partnerships with business, service, and government agencies[120](index=120&type=chunk) - The cybersecurity program, based on NIST and CoBIT frameworks, includes threat detection, incident management, endpoint detection, cloud monitoring, data encryption, and business continuity plans[121](index=121&type=chunk)[122](index=122&type=chunk) - Suppliers are expected to follow industry-standard security practices, but the Company acknowledges limitations in monitoring and potential risks from third-party compromises[122](index=122&type=chunk) [Cybersecurity Governance](index=25&type=section&id=Cybersecurity%20Governance) This section describes the oversight structure for cybersecurity, including Board and committee responsibilities and reporting mechanisms - The Board of Directors oversees cybersecurity risks, delegating oversight to the Innovation and Technology Committee, which receives quarterly updates from the Senior VP of Technology and Chief Legal Officer[123](index=123&type=chunk) - The information security team collaborates with stakeholders and uses cross-functional committees for incident response, providing timely assessments and reports to senior management and relevant committees[124](index=124&type=chunk)[125](index=125&type=chunk) [Item 2. Properties](index=26&type=section&id=Item%202.%20Properties) As of April 30, 2024, the Company leased approximately 86% of its facilities, including dealerships and corporate offices, primarily located in ten South-Central U.S. states. The corporate offices occupy about 50,000 square feet in Rogers, Arkansas - As of April 30, 2024, the Company leased approximately **86%** of its facilities, including dealerships and corporate offices, located primarily in Alabama, Arkansas, Georgia, Illinois, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee, and Texas[126](index=126&type=chunk) - The corporate offices are located in approximately **50,000 square feet** of leased space in Rogers, Arkansas[126](index=126&type=chunk) [Item 3. Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The Company is involved in various legal proceedings in the ordinary course of business, but management does not anticipate that the outcome of these actions, individually or in aggregate, will have a material adverse effect on its financial position, results of operations, or cash flows - The Company is a defendant in various legal proceedings in the ordinary course of business[127](index=127&type=chunk) - Management does not expect the final outcome of these proceedings, individually or in aggregate, to have a material adverse effect on the Company's financial position, results of operations, or cash flows[127](index=127&type=chunk) [Item 4. Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This item is not applicable[128](index=128&type=chunk) [PART II](index=27&type=section&id=PART%20II) This part covers market information for common equity, related stockholder matters, issuer purchases of equity securities, management's discussion and analysis, quantitative and qualitative disclosures about market risk, financial statements, and controls and procedures [Item 5. Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholders%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The Company's common stock trades on NASDAQ under CRMT. As of June 19, 2024, there were 988 shareholders of record. The stock's cumulative total return over five fiscal years ending April 30, 2024, was $57.79 for a $100 investment, underperforming the NASDAQ Market Index ($201.71) and Auto Dealerships peer group ($249.06). The Company has not paid cash dividends and intends to retain earnings for future growth, with dividend payments restricted by lender consent. No shares were repurchased in fiscal 2024 - The Company's common stock is traded on the NASDAQ Global Select Market under the symbol CRMT[131](index=131&type=chunk) - As of June 19, 2024, there were approximately **988** shareholders of record[132](index=132&type=chunk) Stockholder Return Performance (April 30, 2019 - April 30, 2024) | Investment | Value at April 30, 2024 (from $100 invested on April 30, 2019) | | :--- | :--- | | Company's Common Stock | $57.79 | | NASDAQ Market Index (U.S. Companies) | $201.71 | | Auto Dealerships Peer Group | $249.06 | - The Company has not paid cash dividends on its common stock since inception and intends to retain earnings for future growth, with dividend payments limited by lender consent[137](index=137&type=chunk) - No shares of the Company's common stock were purchased under the stock repurchase program during fiscal 2024[138](index=138&type=chunk) [Item 6. [Reserved]](index=28&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved[139](index=139&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of America's Car-Mart, Inc.'s business, detailing its financial performance, condition, liquidity, and capital resources for the fiscal year ended April 30, 2024, compared to prior years. It highlights a slight revenue decline in FY2024 due to decreased retail units sold, offset by increased interest income and average retail sales price. Key discussions include credit loss trends, gross margin improvements, and the impact of macroeconomic factors and technology investments [Overview](index=29&type=section&id=Overview) This section provides a high-level summary of the Company's business model, recent financial performance, and key operational drivers - America's Car-Mart, Inc. is a leading publicly held automotive retailer focused on the 'Integrated Auto Sales and Finance' segment, selling used vehicles and providing financing to customers with limited financial resources[142](index=142&type=chunk) - Revenue for fiscal year ended April 30, 2024, declined slightly compared to fiscal 2023, primarily due to an **8.8% decrease in retail units sold**, partially offset by a **5.7% increase in average retail sales price** and an **18.8% increase in interest income**[143](index=143&type=chunk) - The Company's cost structure is fixed, making it sensitive to volume changes. Revenue is affected by competition, funding availability in the sub-prime auto industry, vehicle purchase costs, and the macroeconomic environment[144](index=144&type=chunk) - The provision for credit losses as a percentage of sales increased to **36.5%** in fiscal 2024, up from **19.31%** in fiscal 2021, reflecting a return to pre-pandemic levels and ongoing inflationary pressures. The allowance for credit losses was **25.32%** of finance receivables at April 30, 2024[149](index=149&type=chunk) - Gross margin as a percentage of sales increased to **34.7%** in fiscal 2024 from **33.5%** in fiscal 2023, driven by inventory life cycle efficiencies and decreased wholesale losses[152](index=152&type=chunk) [Consolidated Operations](index=32&type=section&id=Consolidated%20Operations) This section presents a detailed analysis of the Company's consolidated financial results, including revenue, costs, and key operating metrics for recent fiscal years Consolidated Operating Statement Summary (Years Ended April 30, in thousands) | Operating Statement | 2024 | 2023 | 2022 | % Change 2024 vs 2023 | % Change 2023 vs 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | Sales | $1,160,798 | $1,204,194 | $1,038,682 | (3.6)% | 15.9% | | Interest and other income | $233,096 | $196,219 | $151,853 | 18.8% | 29.2% | | Total Revenues | $1,393,894 | $1,400,413 | $1,190,535 | (0.5)% | 17.6% | | Cost of sales | $758,546 | $800,788 | $658,615 | (5.3)% | 21.6% | | Selling, general and administrative | $179,421 | $176,696 | $156,130 | 1.5% | 13.2% | | Provision for credit losses | $423,406 | $352,860 | $238,054 | 20.0% | 48.2% | | Interest expense | $65,348 | $38,312 | $10,919 | 70.6% | 250.9% | | Depreciation and amortization | $6,871 | $5,602 | $4,033 | 22.7% | 38.9% | | Loss on disposal of property and equipment | $437 | $361 | $149 | 21.1% | 142.3% | | Total Costs and Expenses | $1,434,029 | $1,374,619 | $1,067,900 | 4.3% | 28.7% | | (Loss) income before income taxes | $(40,135) | $25,794 | $122,635 | - | - | Consolidated Operating Data Summary (Years Ended April 30, Unaudited) | Operating Data | 2024 | 2023 | 2022 | % Change 2024 vs 2023 | % Change 2023 vs 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | Retail units sold | 57,989 | 63,584 | 60,595 | (8.8)% | 4.9% | | Average dealerships in operation | 154 | 155 | 152 | (0.6)% | 2.0% | | Average units sold per dealership per month | 31.4 | 34.2 | 33.2 | (8.2)% | 3.0% | | Average retail sales price | $19,113 | $18,080 | $16,372 | 5.7% | 10.4% | | Gross profit per retail unit sold | $6,937 | $6,344 | $6,272 | 9.3% | 1.1% | | Same store revenue growth | (1.0)% | 16.7% | 30.1% | - | - | | Receivables average yield | 16.2% | 15.7% | 15.8% | - | - | - **Fiscal 2024 vs. Fiscal 2023:** Total revenues decreased by **0.5%** due to an **8.8% decline in retail units sold**, partially offset by an **18.8% increase in interest income** and a **5.7% increase in average retail sales price**. Gross margin percentage increased to **34.7% (from 33.5%)**, and gross margin per retail unit sold increased by **$593**. Selling, general and administrative expenses increased by **1.5%**, while provision for credit losses as a percentage of sales rose to **36.5%** due to finance receivables growth and decreased sales. Interest expense increased by **70.6%** due to higher interest rates and increased borrowings[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) - **Fiscal 2023 vs. Fiscal 2022:** Total revenues increased by **17.6%** due to a **10.4% increase in average retail sales price**, a **4.9% increase in retail units sold**, and a **29.2% increase in interest income**. Gross margin percentage decreased to **33.5% (from 36.6%)** due to increased purchase costs and inflationary environment. Selling, general and administrative expenses increased by **$20.6 million** due to investments in technology and leadership. Provision for credit losses as a percentage of sales increased to **29.3%** due to the absence of stimulus payments and macroeconomic pressures[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[168](index=168&type=chunk) [Financial Condition](index=35&type=section&id=Financial%20Condition) This section analyzes the Company's balance sheet, focusing on key asset, liability, and equity accounts and their changes over time Major Balance Sheet Accounts (April 30, in thousands) | Account | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Assets:** | | | | | Finance receivables, net | $1,098,591 | $1,063,460 | $856,114 | | Inventory | $107,470 | $109,290 | $115,302 | | Income taxes receivable, net | $2,958 | $9,259 | $274 | | Property and equipment, net | $60,361 | $61,682 | $45,412 | | **Liabilities:** | | | | | Accounts payable and accrued liabilities | $49,207 | $55,108 | $47,925 | | Deferred revenue | $120,781 | $120,469 | $92,491 | | Deferred income tax liabilities, net | $17,808 | $39,315 | $30,449 | | Non-recourse notes payable, net | $553,629 | $471,367 | $395,986 | | Revolving line of credit, net | $200,819 | $167,231 | $44,670 | Receivables Growth vs. Revenue Growth (Years Ended April 30) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Growth in finance receivables, net of deferred revenue | 4.9% | 24.2% | 34.1% | | Revenue growth | (0.5)% | 17.6% | 31.2% | - Finance receivables growth of **4.9%** in fiscal 2024 exceeded revenue decline of **0.5%**, primarily due to increased installment sales contract term lengths (average **47.9 months** in FY2024 vs. **46.3 months** in FY2023)[170](index=170&type=chunk) - Inventory decreased by **1.7% ($1.8 million)** at fiscal year-end 2024, reflecting initiatives around inventory life cycle efficiencies. Annualized inventory turns were **7.0**, consistent with **7.1** in the prior year[171](index=171&type=chunk) - Deferred income tax liabilities, net, decreased by approximately **$21.5 million**, and the Company had an expected federal net operating loss carryforward of **$83 million** as of April 30, 2024[174](index=174&type=chunk) - Non-recourse notes payable outstanding increased to **$553.6 million (from $471.4 million in FY2023)** with a weighted average interest rate of **9.0%**. Revolving line of credit outstanding increased to **$200.8 million (from $167.2 million in FY2023)**[175](index=175&type=chunk)[176](index=176&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section evaluates the Company's ability to generate and manage cash, including operating, investing, and financing activities, and its access to capital Statements of Cash Flows Summary (Years Ended April 30, in thousands) | Cash Flow Activity | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(73,898) | $(135,728) | $(119,178) | | Net cash used in investing activities | $(10,645) | $(27,571) | $(17,350) | | Net cash provided by financing activities | $110,956 | $188,746 | $176,222 | | Increase in cash, cash equivalents, and restricted cash | $26,413 | $25,447 | $39,694 | | Cash, cash equivalents, and restricted cash end of period | $94,447 | $68,034 | $42,587 | - Primary drivers of operating profits and cash flows include sales, interest income, gross margin, and credit losses. Cash from operations and borrowings fund finance receivables growth, capital expenditures, and stock repurchases[181](index=181&type=chunk) - Cash flows used in operating activities decreased in fiscal 2024 primarily due to an increase in provision for credit losses and a decrease in finance receivable originations[182](index=182&type=chunk) - The Company's liquidity is impacted by vehicle purchase prices, which are elevated due to tight supply and strong demand, and credit losses, which are affected by macroeconomic factors like inflation[184](index=184&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) - As of April 30, 2024, the Company had **$5.5 million** cash on hand and **$73.4 million** availability under its revolving credit facilities. Total operating lease commitments were **$82.9 million**[189](index=189&type=chunk)[191](index=191&type=chunk) - In February 2024, the revolving credit agreement was amended, extending the term to September 30, 2025, and reducing permitted borrowings from **$600 million to $340 million**. In July 2024, a **$150 million** amortizing warehouse agreement was entered into to pay down the current revolving loan balance[191](index=191&type=chunk)[193](index=193&type=chunk) [Off-Balance Sheet Arrangements](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any transactions, agreements, or other contractual arrangements not recorded on the balance sheet that could have a material impact on the Company's financial condition - The Company has two standby letters of credit totaling **$3.9 million** at April 30, 2024, related to insurance policies[194](index=194&type=chunk) - Other than these letters of credit, the Company is not party to any off-balance sheet arrangements expected to have a material effect on its financial condition or results[194](index=194&type=chunk) [Related Finance Company Contingency](index=40&type=section&id=Related%20Finance%20Company%20Contingency) This section describes the tax implications and risks associated with intercompany finance receivable transactions between subsidiaries - Car-Mart of Arkansas sells finance receivables to Colonial at fair market value, allowing a tax deduction for the difference between tax basis and sales price, which reduces the Company's effective state income tax rate[195](index=195&type=chunk) - Failure to comply with Treasury Regulations regarding these transactions could result in the loss of tax deductions and an increase in the Company's effective income tax rate[195](index=195&type=chunk) [Critical Accounting Estimates](index=40&type=section&id=Critical%20Accounting%20Estimates) This section highlights the accounting estimates that require significant management judgment and could materially impact the financial statements - The most significant estimate is the allowance for credit losses, which is maintained at a level sufficient to cover estimated losses on finance receivables[197](index=197&type=chunk)[198](index=198&type=chunk) - At April 30, 2024, the allowance for credit losses was **$331.3 million**, representing **25.32%** of the principal balance in finance receivables, an increase from **23.91%** at April 30, 2023[198](index=198&type=chunk) - The estimate considers quantitative (historical loss experience, prepayment rates) and qualitative factors (underwriting changes, economic trends, collateral values, inflation forecasts), with a high degree of subjective judgment[199](index=199&type=chunk)[201](index=201&type=chunk) [Recent Accounting Pronouncements](index=41&type=section&id=Recent%20Accounting%20Pronouncements) This section outlines recently adopted and upcoming accounting standards and their expected impact on the Company's financial reporting - **ASU 2022-02 (Financial Instruments – Credit Losses):** Adopted on May 1, 2023, prospectively. Changes methodology for measuring credit losses and affects vintage disclosures for gross write-offs[203](index=203&type=chunk) - **ASU 2023-06 (Disclosure or Presentation Requirements):** Issued October 2023, aligns Codification with SEC regulations. Not expected to have a material impact[204](index=204&type=chunk) - **ASU 2023-09 (Income Tax Disclosures):** Issued December 2023, enhances transparency of income tax disclosures. Effective for annual periods beginning after December 15, 2024; Company plans to adopt May 1, 2025, with no material impact expected[205](index=205&type=chunk) [Non-GAAP Financial Measure](index=42&type=section&id=Non-GAAP%20Financial%20Measure) This section provides information on non-GAAP financial measures used by the Company to supplement its GAAP financial reporting - The Company presents 'debt, net of cash' and 'adjusted debt to finance receivables ratio' as non-GAAP measures to monitor leverage and evaluate balance sheet risk[207](index=207&type=chunk) Non-GAAP Financial Measures Reconciliation (April 30, in thousands) | Metric | April 30, 2024 | April 30, 2023 | | :--- | :--- | :--- | | Total debt | $754,448 | $638,598 | | Total cash, cash equivalents, and restricted cash | $94,447 | $68,034 | | Debt, net of total cash | $660,001 | $570,564 | | Principal balance of finance receivables | $1,435,388 | $1,373,372 | | Ratio of debt to finance receivables | 52.6% | 46.5% | | Ratio of debt, net of total cash, to finance receivables | 46.0% | 41.5% | [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Company's primary market risk exposure is to changes in interest rates, particularly affecting its variable-rate revolving credit facilities. A 1% increase in interest rates would lead to an approximate $2.0 million increase in annual interest expense based on April 30, 2024, outstanding balances - The Company's primary market risk is from changes in interest rates, particularly on its revolving credit facilities, which have variable interest rates[209](index=209&type=chunk)[210](index=210&type=chunk) - A **1% increase** in interest rates would result in an approximate **$2.0 million** increase in annual interest expense based on the **$200.8 million** outstanding balance at April 30, 2024[210](index=210&type=chunk) - Finance receivables carry fixed annual interest rates (e.g., **18.25%** for most states, **16.75%** in Arkansas), while revolving credit facilities have variable rates[211](index=211&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=43&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the Company's audited consolidated financial statements for the fiscal years ended April 30, 2024, 2023, and 2022, along with the independent registered public accounting firm's report. It includes the balance sheets, statements of operations, cash flows, equity, and comprehensive notes detailing accounting policies, financial instrument specifics, and other relevant disclosures - The section includes the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations, Cash Flows, Equity, and Notes to Consolidated Financial Statements[212](index=212&type=chunk) [Report of Independent Registered Public Accounting Firm](index=44&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) This section contains the auditor's opinion on the Company's consolidated financial statements and internal control over financial reporting - Grant Thornton LLP issued an unqualified opinion on the Company's consolidated financial statements for the period ended April 30, 2024, stating they present fairly the financial position and results of operations in conformity with GAAP[214](index=214&type=chunk) - The firm also expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of April 30, 2024, based on COSO criteria[215](index=215&type=chunk) - The allowance for credit losses was identified as a critical audit matter due to significant management judgments in adjusting historical loss experience and selecting/measuring factors for future forecasts[219](index=219&type=chunk)[220](index=220&type=chunk) [Consolidated Balance Sheets](index=46&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the Company's financial position, detailing its assets, liabilities, and equity at specific points in time Consolidated Balance Sheets (April 30, in thousands) | Account | 2024 | 2023 | | :--- | :--- | :--- | | **Assets:** | | | | Cash and cash equivalents | $5,522 | $9,796 | | Restricted cash | $88,925 | $58,238 | | Finance receivables, net | $1,098,591 | $1,063,460 | | Inventory | $107,470 | $109,290 | | Property and equipment, net | $60,361 | $61,682 | | Total Assets | $1,477,644 | $1,414,737 | | **Liabilities:** | | | | Accounts payable | $21,379 | $27,196 | | Deferred accident protection plan revenue | $51,836 | $53,065 | | Deferred service contract revenue | $68,945 | $67,404 | | Accrued liabilities | $27,828 | $27,912 | | Deferred income tax liabilities, net | $17,808 | $39,315 | | Lease liability | $64,250 | $62,300 | | Non-recourse notes payable, net | $553,629 | $471,367 | | Revolving line of credit, net | $200,819 | $167,231 | | Total liabilities | $1,006,494 | $915,790 | | **Equity:** | | | | Total stockholders' equity | $470,650 | $498,447 | | Total Liabilities, mezzanine equity and equity | $1,477,644 | $1,414,737 | [Consolidated Statements of Operations](index=47&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the Company's revenues, expenses, and net income (or loss) over specific fiscal periods, reflecting its operational performance Consolidated Statements of Operations (Years Ended April 30, in thousands) | Revenue/Expense | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Sales | $1,160,798 | $1,204,194 | $1,038,682 | | Interest and other income | $233,096 | $196,219 | $151,853 | | Total revenues | $1,393,894 | $1,400,413 | $1,190,535 | | Cost of sales | $758,546 | $800,788 | $658,615 | | Selling, general and administrative | $179,421 | $176,696 | $156,130 | | Provision for credit losses | $423,406 | $352,860 | $238,054 | | Interest expense | $65,348 | $38,312 | $10,919 | | Depreciation and amortization | $6,871 | $5,602 | $4,033 | | Loss on disposal of property and equipment | $437 | $361 | $149 | | Total costs and expenses | $1,434,029 | $1,374,619 | $1,067,900 | | (Loss) income before income taxes | $(40,135) | $25,794 | $122,635 | | (Benefit) provision for income taxes | $(8,742) | $5,362 | $27,621 | | Net (loss) income | $(31,393) | $20,432 | $95,014 | | Net (loss) income attributable to common stockholders | $(31,433) | $20,392 | $94,974 | | Basic EPS | $(4.92) | $3.20 | $14.59 | | Diluted EPS | $(4.92) | $3.11 | $13.92 | [Consolidated Statements of Cash Flows](index=48&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities, illustrating changes in the Company's liquidity Consolidated Statements of Cash Flows (Years Ended April 30, in thousands) | Cash Flow Activity | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(73,898) | $(135,728) | $(119,178) | | Net cash used in investing activities | $(10,645) | $(27,571) | $(17,350) | | Net cash provided by financing activities | $110,956 | $188,746 | $176,222 | | Increase in cash, cash equivalents, and restricted cash | $26,413 | $25,447 | $39,694 | | Cash, cash equivalents, and restricted cash end of period | $94,447 | $68,034 | $42,587 | [Consolidated Statements of Equity](index=49&type=section&id=Consolidated%20Statements%20of%20Equity) This section presents changes in the Company's equity accounts, including common stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income Consolidated Statements of Equity (Years Ended April 30, in thousands) | Account | April 30, 2024 | April 30, 2023 | April 30, 2022 | | :--- | :--- | :--- | :--- | | Balance at beginning of period | $498,547 | $476,534 | $411,957 | | Net (loss) income | $(31,393) | $20,432 | $95,014 | | Total equity at end of period | $470,750 | $498,547 | $476,534 | [Notes to Consolidated Financial Statements](index=50&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the amounts presented in the consolidated financial statements [Note A - Organization and Business](index=50&type=section&id=Note%20A%20-%20Organization%20and%20Business) This note describes the Company's legal structure, business model, and operational footprint - America's Car-Mart, Inc. is a publicly held automotive retailer specializing in 'Integrated Auto Sales and Finance' for used vehicles, primarily serving customers with limited credit histories. As of April 30, 2024, it operated **154** dealerships in the South-Central U.S[234](index=234&type=chunk) [Note B - Summary of Significant Accounting Policies](index=50&type=section&id=Note%20B%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles, methods, and estimates used in preparing the Company's financial statements - **Principles of Consolidation:** Includes America's Car-Mart, Inc. and its subsidiaries, with all intercompany accounts eliminated[235](index=235&type=chunk) - **Segment Information:** Each dealership is an operating segment, aggregated into one reportable segment due to similar characteristics in the Integrated Auto Sales and Finance market[236](index=236&type=chunk) - **Use of Estimates:** Financial statements require management estimates, with the allowance for credit losses being the most significant[237](index=237&type=chunk) - **Concentration of Risk:** Financing sales primarily to customers in Alabama, Arkansas, Georgia, Illinois, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee, and Texas, with **27%** of revenues from Arkansas[238](index=238&type=chunk) - **Restrictions on Distributions/Dividends:** Revolving credit facilities restrict stock repurchases and dividend payments, requiring certain financial conditions or lender consent[239](index=239&type=chunk) - **Cash Equivalents:** Highly liquid debt instruments with original maturities of three months or less[240](index=240&type=chunk) - **Restricted Cash:** Related to financing and securitization transactions, held by securitization trusts for non-recourse note payments. Total restricted cash was **$88.9 million** at April 30, 2024[241](index=241&type=chunk) - **Financing and Securitization Transactions:** Utilizes term securitizations for long-term funding, consolidating securitization trusts as primary beneficiary. Transfers of auto finance receivables are recognized as secured borrowings[242](index=242&type=chunk) - **Finance Receivables, Repossessions and Charge-offs and Allowance for Credit Losses:** Installment sale contracts have a weighted average interest rate of **16.9%**. Interest rate on new originations increased to **18.25%** in Q3 FY2024. Delinquent accounts are addressed promptly, with repossession as a last resort. Allowance for credit losses is estimated using an undiscounted cash flow model and qualitative factors. At April 30, 2024, the allowance was **$331.3 million (25.32% of principal balance)**[243](index=243&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - **Inventory:** Valued at the lower of cost or net realizable value on a specific identification basis; repossessed and trade-in vehicles recorded at fair value[249](index=249&type=chunk) - **Goodwill:** Impairment test performed annually; **$267,000** impairment recorded in FY2024 due to a dealership closure. Goodwill increased by **$2.7 million** due to an acquisition[250](index=250&type=chunk) - **Property and Equipment:** Stated at cost, depreciated using the straight-line method. Leasehold improvements amortized over the shorter of estimated life or lease period[251](index=251&type=chunk) - **Long-Lived Assets:** Reviewed for impairment when circumstances indicate carrying amount may not be recoverable; no impairment charges recognized in periods presented[252](index=252&type=chunk) - **Cloud Computing Implementation Costs:** Capitalizes certain implementation costs for cloud computing arrangements, amortized over the subscription term. Capitalized costs were **$16.7 million** at April 30, 2024[253](index=253&type=chunk) - **Cash Overdraft:** Represents outstanding checks net of deposits in transit, reflected in accrued liabilities[254](index=254&type=chunk) - **Deferred Sales Tax:** Sales tax liability for vehicles sold on installment in Alabama and Texas, due as payments are collected[255](index=255&type=chunk) - **Income Taxes:** Accounted for under the liability method. The Company believes its tax positions comply with applicable law, with no accrued penalties or interest as of April 30, 2024[256](index=256&type=chunk) - **Revenue Recognition:** Revenues from vehicle sales recognized when contract is signed and possession taken. Service contract revenues recognized ratably, APP revenues using 'Rule of 78's' method. Interest income recognized using simple effective interest method[257](index=257&type=chunk) - **Advertising Costs:** Expensed as incurred, primarily for television, radio, print, and digital marketing[258](index=258&type=chunk) - **Employee Benefit Plans:** Offers 401(k) plans with a **50%** company match up to **6%** of compensation. Also has an Employee Stock Purchase Plan[259](index=259&type=chunk) - **Earnings per Share:** Basic EPS computed by dividing net income attributable to common stockholders by average common shares outstanding. Diluted EPS includes dilutive common stock equivalents[260](index=260&type=chunk) - **Stock-Based Compensation:** Recognizes cost of employee services for equity awards based on fair value at grant date over service period. Uses Black-Scholes model for options[261](index=261&type=chunk) - **Treasury Stock:** Shares repurchased for stock-based compensation plans or general corporate purposes. Reserved shares for insurance policies and subsidiary requirements[262](index=262&type=chunk) - **Facility Leases:** Primarily operating leases for retail stores and office space. ROU assets and lease liabilities measured at present value of future lease payments. Weighted average remaining lease term of **11.4 years** and discount rate of **4.6%** at April 30, 2024[263](index=263&type=chunk) - **Recent Accounting Pronouncements:** Adopted ASU 2022-02 on May 1, 2023. ASU 2023-06 and ASU 2023-09 are not expected to have a material impact[264](index=264&type=chunk) [Note C - Finance Receivables, Net](index=59&type=section&id=Note%20C%20-%20Finance%20Receivables,%20Net) This note provides a detailed breakdown of the Company's finance receivables, including components, changes, credit quality, and related metrics Components of Finance Receivables (April 30, in thousands) | Component | 2024 | 2023 | | :--- | :--- | :--- | | Gross contract amount | $1,844,392 | $1,752,149 | | Less unearned finance charges | $(409,004) | $(378,777) | | Principal balance | $1,435,388 | $1,373,372 | | Less: estimated insurance receivables for APP claims | $(3,026) | $(5,694) | | Less: allowance for APP claims | $(3,171) | $(5,310) | | Less: allowance for credit losses | $(331,260) | $(299,608) | | Finance receivables, net | $1,097,931 | $1,062,760 | | Loan origination costs | $660 | $700 | | Finance receivables, net, including loan origination costs | $1,098,591 | $1,063,460 | Changes in Finance Receivables, Net (Years Ended April 30, in thousands) | Activity | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Balance at beginning of period | $1,062,760 | $855,424 | $626,077 | | Finance receivable originations | $1,079,946 | $1,161,132 | $1,009,859 | | Finance receivable collections | $(455,828) | $(434,458) | $(417,796) | | Provision for credit losses | $(423,406) | $(352,860) | $(238,054) | | Losses on claims for accident protection plan | $(34,504) | $(25,107) | $(21,871) | | Inventory acquired in repossession and accident protection plan claims | $(131,037) | $(141,371) | $(102,791) | | Balance at end of period | $1,097,931 | $1,062,760 | $855,424 | Changes in Allowance for Credit Losses (Years Ended April 30, in thousands) | Activity | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Balance at beginning of period | $299,608 | $237,823 | $177,267 | | Provision for credit losses | $423,406 | $352,860 | $238,054 | | Charge-offs | $(525,634) | $(414,397) | $(260,039) | | Recovered collateral | $133,880 | $123,322 | $82,541 | | Balance at end of period | $331,260 | $299,608 | $237,823 | - The allowance for credit losses increased to **25.32%** at April 30, 2024 (from **23.91%** in 2023), driven by inflationary outlook, fewer past due balances, and improvements from the new loan origination system (LOS)[298](index=298&type=chunk) Credit Quality Information for Finance Receivables (April 30, in thousands) | Delinquency Status | 2024 Principal Balance | 2024 % of Portfolio | 2023 Principal Balance | 2023 % of Portfolio | | :--- | :--- | :--- | :--- | :--- | | Current | $1,125,945 | 78.44% | $1,166,860 | 84.96% | | 3 - 29 days past due | $264,491 | 18.43% | $156,943 | 11.43% | | 30 - 60 days past due | $34,042 | 2.37% | $37,214 | 2.71% | | 61 - 90 days past due | $6,438 | 0.45% | $8,407 | 0.61% | | > 90 days past due | $4,472 | 0.31% | $3,948 | 0.29% | | Total | $1,435,388 | 100.00% | $1,373,372 | 100.00% | Key Finance Receivables Metrics (Twelve Months Ended April 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Average total collected per active customer per month | $554 | $534 | | Principal collected as a percent of average finance receivables | 31.7% | 34.7% | | Average down-payment percentage | 5.4% | 5.4% | | Average originating contract term (in months) | 44.0 | 42.9 | | Portfolio weighted average contract term, including modifications (in months) | 47.9 | 46.3 | - The Company's proprietary scoring models evaluate customer risk based on credit histories and application information, influencing agreement terms like maximum financed amount, term length, and minimum down payment[303](index=303&type=chunk) Finance Receivables by Credit Quality Indicator and Origination Year (April 30, 2024, in thousands) | Customer Score | 2024 | 2023 | 2022 | 2021 | 2020 | Prior to 2020 | Total | % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1-2 | $43,445 | $13,757 | $3,668 | $375 | $95 | $6 | $61,346 | 4.3% | | 3-4 | $300,323 | $117,904 | $36,349 | $4,552 | $325 | $158 | $459,611 | 32.0% | | 5-6 | $485,535 | $291,198 | $116,611 | $19,452 | $1,216 | $419 | $914,431 | 63.7% | | Total | $829,303 | $422,859 | $156,628 | $24,379 | $1,636 | $583 | $1,435,388 | 100.0% | | Gross charge-offs | $155,385 | $265,609 | $88,160 | $14,835 | $1,081 | $564 | $525,634 | | [Note D - Property and Equipment](index=61&type=section&id=Note%20D%20-%20Property%20and%20Equipment) This note provides a summary of the Company's property and equipment, including land, buildings, and accumulated depreciation Summary of Property and Equipment (April 30, in thousands) | Category | 2024 | 2023 | | :--- | :--- | :--- | | Land | $11,998 | $12,386 | | Buildings and improvements | $23,435 | $20,894 | | Furniture, fixtures and equipment | $21,752 | $18,989 | | Leasehold improvements | $50,689 | $47,315 | | Construction in progress | $2,393 | $7,176 | | Accumulated depreciation and amortization | $(49,906) | $(45,078) | | Property and equipment, net | $60,361 | $61,682 | [Note E - Accrued Liabilities](index=62&type=section&id=Note%20E%20-%20Accrued%20Liabilities) This note details the components of the Company's accrued liabilities, such as employee compensation, deferred sales tax, and other obligations Summary of Accrued Liabilities (April 30, in thousands) | Category | 2024 | 2023 | | :--- | :--- | :--- | | Employee compensation and benefits | $10,774 | $11,197 | | Deferred sales tax | $6,234 | $8,543 | | Fair value of contingent consideration | $3,193 | $1,943 | | Other | $7,627 | $6,229 | | Accrued liabilities | $27,828 | $27,912 | [Note F – Debt](index=62&type=section&id=Note%20F%20%E2%80%93%20Debt) This note provides information on the Company's debt instruments, including revolving credit facilities and non-recourse notes payable Summary of Debt (in thousands) | Debt Type | 2024 | 2023 | | :--- | :--- | :--- | | Revolving line of credit, net | $200,819 | $167,231 | | Non-recourse notes payable, net | $553,629 | $471,367 | | Total debt | $754,448 | $638,598 | - The Company has **$340.0 million** in permitted borrowings under a revolving line of credit, collateralized by finance receivables and inventory, with a scheduled maturity of September 30, 2025. The interest rate is generally SOFR plus **3.50%**[310](index=310&type=chunk) - At April 30, 2024, the Company had **$73.4 million** of additional availability under its revolving credit facilities and was in compliance with all covenants[311](index=311&type=chunk) - The Company has three series of asset-backed non-recourse notes outstanding (2023-1, 2023-2, 2024-1 Issuances) collateralized by installment sale contracts, with scheduled maturities through January 21, 2031, and weighted average fixed coupon rates ranging from **8.68% to 9.50%**. The 2022 Issuance was fully paid off in December 2023[313](index=313&type=chunk) [Note G – Fair Value Measurements](index=63&type=section&id=Note%20G%20%E2%80%93%20Fair%20Value%20Measurements) This note explains the Company's fair value measurement hierarchy and provides estimated fair values for financial instruments - Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction, using a three-level hierarchy of inputs (Level 1: quoted prices in active markets; Level 2: observable inputs other than Level 1; Level 3: unobservable inputs)[314](index=314&type=chunk)[315](index=315&type=chunk) Estimated Fair Values and Carrying Amounts (April 30, in thousands) | Financial Instrument | 2024 Carrying Value | 2024 Fair Value | 2023 Carrying Value | 2023 Fair Value | | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $5,522 | $5,522 | $9,796 | $9,796 | | Restricted cash | $88,925 | $88,925 | $58,238 | $58,238 | | Inventory - Repossessions | $18,182 | $18,182 | $16,451 | $16,451 | | Finance receivables, net | $1,098,591 | $882,764 | $1,063,460 | $844,624 | | Accounts payable | $21,379 | $21,379 | $27,196 | $27,196 | | Contingent Consideration | $3,193 | $3,193 | $1,943 | $1,943 | | Revolving line of credit, net | $200,819 | $200,819 | $167,231 | $167,231 | | Non-recourse notes payable | $553,629 | $553,003 | $471,367 | $470,209 | [Note H - Income Taxes](index=65&type=section&id=Note%20H%20-%20Income%20Taxes) This note provides a breakdown of the Company's income tax provision, reconciliation of the statutory rate, and deferred tax assets and liabilities Provision for Income Taxes (Years Ended April 30, in thousands) | Type | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Current | $12,765 | $(3,504) | $18,871 | | Deferred | $(21,507) | $8,866 | $8,750 | | Total | $(8,742) | $5,362 | $27,621 | Reconciliation of Tax Provision at Statutory Rate (Years Ended April 30, in thousands) | Item | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Tax provision at statutory rate | $(8,428) | $5,417 | $25,753 | | State taxes, net of federal benefit | $(1,204) | $774 | $3,679 | | Tax benefit from option exercises | $(227) | $(558) | $(1,356) | | Other, net | $1,1

As great as this was to see, the company's bottom line actually took a hit, with net income falling from $2.1 million to only $0.4 million. There were a couple of drivers behind this bottom-line pain. For starters, the provision for credit losses for the company increased from 26.4% of sales to 28%. Using the revenue generated in the final quarter of last year, that's an extra $5.8 million in pre-tax costs that investors would have seen this year compared to last year. In addition to this, interest expense ...

Loading... The Dow traded down 0.02% to 38,771.09 while the NASDAQ fell 0.03% to 17,851.60. The S&P 500 also rose, gaining, 0.13% to 5,480.41. Information technology shares jumped by 0.6% on Tuesday. Top Headline The company reported a fourth-quarter FY24 sales decline of 5.8% year-on-year to $364.67 million, beating the analyst consensus estimate of $361.47 million. EPS of 6 cents missed the analyst consensus estimate of 89 cents. Equities Trading DOWN Also Check This Out: How To Earn $500 A Month From Jab ...