Loan Agreement Amendments - The amendment to the Loan Agreement is dated February 28, 2025, involving Colonial Auto Finance, Inc., America's Car Mart, Inc., and Texas Car-Mart, Inc. as Borrowers[2] - New Lenders, including Banc of California, EverBank, N.A., and Forbright Bank, will join the Amended Loan Agreement, while Commerce Bank and First Horizon Bank will be removed as Departing Lenders[4] - The Borrowers must satisfy several conditions precedent for the effectiveness of the Amendment, including the execution of the Amendment by all parties involved[7] - The Agent will receive a purchase price equal to the outstanding principal balance of Loans and accrued but unpaid interest and fees owed to Departing Lenders as of the Effective Date[23] - The additional reserve to the Colonial Availability Reserve imposed by the Agent remains in full force and effect[19] - The Agent appoints Axos Bank as a Joint Lead Arranger and Bookrunner, along with other Co-Syndication Agents[25] - The Borrowers agree to pay all reasonable out-of-pocket costs incurred by the Agent in connection with the Amendment[28] - The Loan Agreement continues in full force and effect except as specifically amended by this Amendment[27] - The execution and delivery of this Amendment do not contravene any Obligor's Organic Documents or violate any law[12] - The company has released a comprehensive amendment to its loan agreement, which includes various financial institutions as lenders[54] - The amendment allows for the execution of documents in electronic formats, enhancing operational efficiency[32] - Obligors have agreed to release any claims against the lenders, indicating a clean slate in their financial dealings[6.3] - The company has confirmed that it does not have any claims against the released parties, reinforcing its commitment to good faith in the loan administration[6.3] - The amendment includes provisions for joint and several liability for any legal costs incurred due to violations of the agreement[31] Financial Performance - The company reported a total revenue of $475 million for the last quarter, representing a 12% increase year-over-year[66] - The net charge-off rate for the quarter was 3.5%, which is a decrease from 4.2% in the previous quarter[95] - The adjusted tangible net worth of the company is currently $150 million, reflecting a 5% increase from the previous quarter[86] - The company expects to achieve a revenue target of $2 billion for the upcoming fiscal year, which would represent a 10% growth compared to the current year[66] - The company has successfully reduced operational costs by 8% through efficiency improvements and technology upgrades[66] - The total assets of the company are valued at $500 million, with a debt-to-equity ratio of 1.2, indicating a stable financial position[86] Strategic Initiatives - The company plans to expand its market presence by opening 10 new locations in the next fiscal year, aiming for a 15% increase in customer base[66] - The company has allocated $20 million for new product development in the upcoming year, focusing on enhancing vehicle financing options[66] - The company is in discussions for a potential acquisition of a competitor, which could enhance its market share by 20%[66] - The amendment is part of a broader strategy to enhance financial stability and operational flexibility for the company[54] Loan and Financial Terms - The loan agreement incorporates sections on interest, fees, and charges, ensuring clarity in financial obligations[57] - The agreement outlines specific conditions precedent for credit extensions, ensuring that all parties are aware of their obligations[6.1] - The Average Colonial Net Balance is calculated as the sum of Colonial Net Balances over the last six months divided by six[104] - The Base Rate is determined by the highest of the Prime Rate, Federal Funds Rate plus 0.5%, or Adjusted Term SOFR plus 1.0%[112] - The Borrowing Base is calculated by subtracting the ACM-TCM Availability Reserve from the ACM-TCM Inventory Formula Amount and adding the Colonial Contracts Formula Amount minus the Colonial Availability Reserve[129] - Capital Expenditures refer to liabilities incurred for acquiring fixed assets with a useful life of more than one year[131] - Cash Collateralization requires delivering cash equal to 105% of aggregate LC Obligations for securing payment of Obligations[133] - Cash Equivalents include marketable obligations backed by the U.S. government maturing within 12 months and must meet specific credit ratings[135] - The Colonial Contracts Advance Rate is set at 50% for Long Term Contracts and 55% for Medium Term Contracts[151] - The Colonial Contracts Formula Amount is calculated as the Colonial Contracts Advance Rate multiplied by the Colonial Net Eligible Contract Payments, minus the Colonial Availability Reserve[155] - The aggregate amount of Colonial Net Eligible Contract Payments attributable to Modified Contracts shall not exceed 8.0% of the Colonial Contracts Formula Amount[155] - The Colonial Loss Reserve Percent is defined as Colonial's allowance for credit losses divided by the Colonial Net Balance[157] - The Colonial Net Charge-Offs for any period include the aggregate amount of unpaid principal balances charged off during that period[159] - The Colonial Contracts Advance Rate Adjustment Percent is computed monthly and includes the Past Due Percent, Repossession Percent, and Annualized Colonial Net Charge-Off Percent[153] - The Colonial Availability Reserve includes various liabilities secured by Liens upon Colonial Collateral that are senior to Agent's Liens[147] - The Colonial Borrowing Base is determined based on the lesser of the aggregate amount of Colonial Revolver Commitments or the Colonial Contracts Formula Amount[148] - The Colonial Dominion Account is a special account established for exclusive control by the Agent for withdrawal purposes[156] - The Colonial Overadvance Loan is defined as a Colonial Base Rate Revolver Loan made when a Colonial Overadvance exists[163] - Colonial's EBITDA for the measurement period includes net income plus interest expense, depreciation, amortization, income taxes, and other non-cash expenses[196] - The maximum amount of charges related to the closure of any Dealer locations since the Eighth Amendment Effective Date is capped at $2,000,000[196] - The Effective Advance Rate is defined as the outstanding principal balance of the Obligations divided by the Colonial Net Eligible Contract Payments of Eligible Contracts[199] - The Eight Amendment Effective Date is set for September 16, 2024[200]

Financial Data and Key Metrics Changes - Total revenue increased by 8.7% despite average selling prices declining by 90 basis points [18] - Interest income rose by 5.1% driven by overall receivables growth of $31 million year-over-year [19] - Net charge-offs as a percentage of average finance receivables improved to 6.1% from 6.8% in the prior year quarter [26] - SG&A expense increased by $2.9 million, a rise of 6.7% primarily due to acquisitions and higher stock compensation [31] Business Line Data and Key Metrics Changes - Sales volumes were up 13.2% for the quarter, attributed to improved execution and an earlier launch of the tax season promotion [21] - Gross margin improved to 35.7% compared to 34.2% in the prior year quarter, driven by vehicle procurement and disposal initiatives [23] - Collections increased by 5.2% over last year, with the monthly average total collected per active customer rising to $568 from $540 [29] Market Data and Key Metrics Changes - Delinquencies increased by 40 basis points to 3.7% at quarter end, influenced by winter weather impacts [30] - The application volume was up over 3.5%, indicating stronger demand from consumers [79] Company Strategy and Development Direction - The company is focused on improving and diversifying its balance sheet by adding new capital and lenders, and enhancing its securitization program [9] - A new Vice President of Capital Markets and Treasury was hired to support the growing ABS platform and capital market strategy [13] - The company aims to provide affordable financial solutions and exceptional service to customers facing economic pressures [36] Management's Comments on Operating Environment and Future Outlook - The management highlighted the challenging environment due to persistent inflation, higher used car prices, and elevated interest rates [9] - The company is optimistic about its position heading into the strong fourth quarter and spring selling season, with increased inventory and refined marketing strategies [38] - Management remains cautious about the macro environment but believes that the company's foundational improvements will lead to future growth [40] Other Important Information - The ABL facility was extended and upsized to $350 million, maturing in March 2027, marking a significant milestone for the company [10] - The company completed its sixth ABS transaction in January, which was $200 million in size and oversubscribed by more than 10 times [11] Q&A Session Summary Question: Update on unit recovery and underwriting trends - Management indicated that underwriting has been cautiously relaxed, with current volumes expected to be down 6% to 8% compared to fiscal year '23 [46][47] Question: Impact of weather on delinquencies - Management acknowledged the difficulty in isolating the weather's impact but noted that delinquencies have trended back down quickly [49] Question: Timing and ramp-up of acquisitions - The acquisition in Hot Springs closed last December, while the Texas Auto Center dealerships closed in June, expected to add 5,000 accounts over the next 18 to 24 months [52] Question: Stress on core consumers versus benefits from LOS - Management believes most benefits are derived from improved underwriting practices rather than an overall improvement in consumer conditions [58][59] Question: Update on application pool and tax season performance - Management reported a slower start to tax season but noted stronger demand and improved application volume, indicating positive signs for the upcoming sales [74][79]

America's Car-Mart, Inc. (NASDAQ:CRMT) Q3 2025 Earnings Conference Call March 6, 2025 9:00 AM ET Company Participants Vickie Judy - Chief Financial Officer Doug Campbell - President & Chief Executive Officer Jamie Fischer - Chief Operating Officer Conference Call Participants Kyle Joseph - Stephens John Murphy - Bank of America Vincent Caintic - BTIG Operator Thank you for standing by, and welcome to America's Car-Mart's Third Quarter Fiscal 2025 Earnings Conference Call. At this time, all participants are ...

Core Viewpoint - America's Car-Mart reported quarterly earnings of $0.37 per share, significantly exceeding the Zacks Consensus Estimate of a loss of $0.01 per share, marking a 3,800% earnings surprise compared to a loss of $1.34 per share a year ago [1] Group 1: Earnings Performance - The company posted revenues of $325.73 million for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 7.96% and showing an increase from $299.61 million year-over-year [2] - Over the last four quarters, America's Car-Mart has exceeded consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is $1.16 on revenues of $367.28 million, and for the current fiscal year, it is $0.86 on revenues of $1.36 billion [7] Group 2: Stock Performance and Outlook - America's Car-Mart shares have declined approximately 25.2% since the beginning of the year, while the S&P 500 has only decreased by 0.7% [3] - The company's earnings outlook is favorable, with a Zacks Rank of 2 (Buy), indicating expected outperformance in the near future [6] - The automotive retail and wholesale industry is currently in the top 25% of Zacks industries, suggesting a positive impact on stock performance [8] Group 3: Estimate Revisions - The trend for estimate revisions for America's Car-Mart has been favorable ahead of the earnings release, which could influence future stock movements [5][6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, highlighting the importance of tracking these revisions [5]

Core Insights - America's Car-Mart, Inc. reported a strong financial performance for the third quarter of fiscal year 2025, with total revenue increasing by 8.7% year-over-year to $325.7 million, driven by higher sales volumes and interest income [5][6][19]. Financial Performance - Total revenue reached $325.7 million, reflecting an 8.7% increase compared to the same quarter last year [5][19]. - Sales volumes increased by 13.2%, totaling 13,198 units sold, compared to 11,664 units in the prior year [7][19]. - Interest income rose by $3.0 million, or 5.1%, contributing positively to overall revenue [5][19]. - Gross margin percentage improved by 150 basis points to 35.7%, attributed to better vehicle procurement and disposal practices [8][19]. - Net income for the quarter was $3.2 million, a significant recovery from a loss of $8.5 million in the same quarter last year, resulting in diluted earnings per share of $0.37 compared to a loss per share of $1.34 [5][31]. Operational Metrics - The average retail sales price of vehicles sold was $19,275, a slight decrease of 0.9% from the previous year [19]. - The allowance for credit losses improved to 24.31%, down from 24.72% sequentially, indicating better credit performance [9][19]. - Net charge-offs as a percentage of average finance receivables improved to 6.1% from 6.8% in the prior year, reflecting a decrease in both frequency and severity of losses [8][19]. Financing and Capital Structure - The company completed a $200 million term securitization transaction, achieving a 95 basis point improvement in the weighted average life adjusted coupon compared to the previous transaction [5][14]. - An amended asset-based lending revolving credit facility of $350 million was established, extending the maturity to March 2027 [5][15]. - Debt to finance receivables ratio stood at 53.5%, while the ratio of debt, net of total cash, to finance receivables was 45.0% [13][38]. Customer and Market Insights - The company ended the quarter with a higher inventory level to support seasonal sales trends associated with spring and tax refund season [7]. - Active customer count increased to 103,663, up from 102,175 in the previous year, indicating growth in customer engagement [20]. Strategic Initiatives - The company is focused on enhancing financial flexibility, operational capabilities, and technology, which has contributed to improved performance metrics [3]. - Continued investment in leadership and technology is expected to support future growth and customer service enhancements [3].

Core Points - America's Car-Mart, Inc. has announced the extension and upsizing of its asset-based revolving credit facility to $350 million from a previous commitment of $320 million, maturing on March 31, 2027 [2][3] - As of January 31, 2025, approximately $75 million was drawn on the ABL Facility, which was oversubscribed by a syndicate of lenders led by BMO Bank [2][3] - The company has also completed a $200 million asset-backed securities (ABS) transaction on January 31, 2025, enhancing its funding and liquidity profile [3] Company Overview - America's Car-Mart operates automotive dealerships in 12 states and is one of the largest publicly held automotive retailers in the U.S., focusing on the "Integrated Auto Sales and Finance" segment of the used car market [5] - The company emphasizes superior customer service and building strong personal relationships with customers, primarily operating in smaller cities throughout the South-Central United States [5]

Group 1 - The company has extended and upsized its asset-based revolving credit facility (ABL Facility) from $320 million to $350 million, maturing on March 31, 2027 [2][3] - As of January 31, 2025, approximately $75 million was drawn on the ABL Facility, indicating a strong liquidity position [2] - The upsized ABL Facility and a $200 million asset-backed securities (ABS) transaction completed on January 31, 2025, have enhanced the company's funding and liquidity profile [3] Group 2 - America's Car-Mart operates automotive dealerships in 12 states, focusing on the "Integrated Auto Sales and Finance" segment of the used car market [5] - The company emphasizes superior customer service and building strong personal relationships with customers, primarily operating in smaller cities in the South-Central United States [5]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for America's Car-Mart (CRMT) due to higher revenues, with a focus on how actual results will compare to estimates [1][2] Earnings Expectations - The upcoming earnings report is expected to show a quarterly loss of $0.01 per share, reflecting a significant year-over-year change of +99.3% [3] - Revenues are projected to be $301.7 million, which is an increase of 0.7% from the same quarter last year [3] Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from covering analysts [4] - The Zacks Earnings ESP model suggests that recent estimate revisions may provide insights into the company's business conditions [5][6] Earnings Surprise Prediction - America's Car-Mart has a positive Earnings ESP of +600%, indicating that analysts have recently become more optimistic about the company's earnings prospects [10] - The company currently holds a Zacks Rank of 2, suggesting a strong likelihood of beating the consensus EPS estimate [11] Historical Performance - In the last reported quarter, America's Car-Mart was expected to post earnings of $0.05 per share but instead reported a loss of $0.24, resulting in a surprise of -580% [12] - The company has not beaten consensus EPS estimates in any of the last four quarters [13] Conclusion - While the potential for an earnings beat exists, other factors may also influence stock movement, making it essential to consider the broader context [14][16] - Monitoring the Earnings ESP and Zacks Rank can enhance the likelihood of successful investment decisions ahead of earnings releases [15]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lead to investments with limited upside or potential downside [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify these opportunities [3] Group 2: Case Study - America's Car-Mart (CRMT) - CRMT has shown a four-week price change of 5.7%, indicating growing investor interest and positioning it well within the momentum investing framework [4] - Over the past 12 weeks, CRMT's stock has gained 17.3%, with a beta of 1.64, suggesting it moves 64% more than the market in either direction [5] - CRMT has a Momentum Score of B, indicating a favorable time to invest based on its momentum characteristics [6] Group 3: Earnings Estimates and Valuation - An upward trend in earnings estimate revisions has contributed to CRMT earning a Zacks Rank 2 (Buy), which is associated with strong momentum effects [7] - CRMT is trading at a Price-to-Sales ratio of 0.30, suggesting it is undervalued, as investors pay only 30 cents for each dollar of sales [7] Group 4: Additional Opportunities - Besides CRMT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Viewpoint - America's Car-Mart, Inc. is set to release its fiscal 2025 third quarter financial results on March 6, 2025, before market opening, with a conference call scheduled for 9:00 a.m. ET to discuss the results [1]. Company Overview - America's Car-Mart operates automotive dealerships across twelve states and is recognized as one of the largest publicly held automotive retailers in the U.S., focusing on the "Integrated Auto Sales and Finance" segment of the used car market [3]. - The company emphasizes superior customer service and aims to build strong personal relationships with its customers [3]. - Dealerships are primarily located in smaller cities throughout the South-Central United States, selling quality used vehicles and providing financing for nearly all customers [3].