Car-Mart(CRMT) - 2025 Q3 - Quarterly Results

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]