Car-Mart(US:CRMT)2025-09-09 19:33PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter Item 1. Financial Statements This section presents America's Car-Mart, Inc.'s unaudited condensed consolidated financial statements and related notes for the specified periods Condensed Consolidated Balance Sheets (Unaudited) This section provides the unaudited condensed consolidated balance sheets as of July 31, 2025, and April 30, 2025 | (Dollars in thousands) | July 31, 2025 | April 30, 2025 | | :--------------------- | :------------ | :------------- | | Assets: | | | | Cash and cash equivalents | $9,666 | $9,808 | | Restricted cash | $111,761 | $114,729 | | Finance receivables, net | $1,183,452 | $1,180,673 | | Inventory | $112,451 | $112,229 | | Total Assets | $1,607,974 | $1,606,474 | | Liabilities & Equity: | | | | Total liabilities | $1,042,643 | $1,036,552 | | Total equity | $564,931 | $569,522 | - Total assets increased slightly by $1,500 thousand from April 30, 2025, to July 31, 2025, reaching $1,607,974 thousand. Total liabilities also increased by $6,100 thousand, while total equity decreased by $4,600 thousand12 Condensed Consolidated Statements of Operations (Unaudited) This section presents the unaudited condensed consolidated statements of operations for the three months ended July 31, 2025 and 2024 | (Dollars in thousands except share and per share amounts) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :-------------------------------------------------------- | :------------------------------- | :------------------------------- | | Total revenues | $341,312 | $347,763 | | Total costs and expenses | $348,714 | $348,946 | | Loss before taxes | $(7,402) | $(1,183) | | Net loss | $(5,736) | $(964) | | Net loss attributable to common stockholders | $(5,746) | $(974) | | Basic loss per share | $(0.69) | $(0.15) | | Diluted loss per share | $(0.69) | $(0.15) | - The company reported a significant increase in net loss, from $(964) thousand in Q1 2024 to $(5,736) thousand in Q1 2025. Total revenues decreased by 1.9% YoY, while total costs and expenses remained relatively flat15 Condensed Consolidated Statements of Cash Flows (Unaudited) This section provides the unaudited condensed consolidated statements of cash flows for the three months ended July 31, 2025 and 2024 | (In thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(5,918) | $(14,972) | | Net cash used in investing activities | $(439) | $(8,513) | | Net cash provided by financing activities | $3,247 | $27,659 | | (Decrease) increase in cash, cash equivalents, and restricted cash | $(3,110) | $4,174 | | Cash, cash equivalents, and restricted cash end of period | $121,427 | $98,621 | - Net cash used in operating activities decreased significantly from $(14,972) thousand in Q1 2024 to $(5,918) thousand in Q1 2025. However, net cash provided by financing activities also saw a substantial decrease from $27,659 thousand to $3,247 thousand17 Condensed Consolidated Statements of Equity (Unaudited) – Three Months Ended July 31, 2025 This section presents the unaudited condensed consolidated statements of equity for the three months ended July 31, 2025 | (In thousands, except share data) | Balance at April 30, 2025 | Issuance of common stock | Purchase of treasury shares | Stock based compensation | Dividends on subsidiary preferred stock | Net loss | Balance at July 31, 2025 | | :-------------------------------- | :------------------------ | :----------------------- | :-------------------------- | :----------------------- | :------------------------------------- | :------- | :----------------------- | | Total Equity | $569,522 | $69 | $(71) | $1,157 | $(10) | $(5,736) | $564,931 | - Total equity decreased from $569,522 thousand at April 30, 2025, to $564,931 thousand at July 31, 2025, primarily due to a net loss of $(5,736) thousand20 Condensed Consolidated Statements of Equity (Unaudited) – Three Months Ended July 31, 2024 This section presents the unaudited condensed consolidated statements of equity for the three months ended July 31, 2024 | (In thousands, except share data) | Balance at April 30, 2024 | Issuance of common stock | Purchase of treasury shares | Stock based compensation | Dividends on subsidiary preferred stock | Net loss | Balance at July 31, 2024 | | :-------------------------------- | :------------------------ | :----------------------- | :-------------------------- | :----------------------- | :------------------------------------- | :------- | :----------------------- | | Total Equity | $470,750 | $76 | $(24) | $1,325 | $(10) | $(964) | $471,153 | - Total equity increased slightly from $470,750 thousand at April 30, 2024, to $471,153 thousand at July 31, 2024, despite a net loss of $(964) thousand, primarily supported by stock-based compensation and common stock issuance23 Notes to Consolidated Financial Statements (Unaudited) This section provides detailed notes to the unaudited condensed consolidated financial statements, explaining key accounting policies and financial details A – Organization and Business America's Car-Mart, Inc. is an automotive retailer specializing in integrated auto sales and finance for used cars - America's Car-Mart, Inc. operates 154 dealerships as of July 31, 2025, focusing on integrated auto sales and financing for customers with limited credit histories25 B – Summary of Significant Accounting Policies This section outlines the company's key accounting policies, including consolidation, estimates, cash, revenue recognition, and other financial items - The company operates in a single reportable segment focused on integrated automotive sales and financing solutions for subprime customers28 - Restricted cash, totaling $111,761 thousand at July 31, 2025, is primarily from collections on auto finance receivables and reserve accounts for non-recourse notes payable, not available to the company or its creditors353637 - The allowance for credit losses at July 31, 2025, was $326,100 thousand, representing 23.35% of the principal balance in finance receivables, reflecting management's estimate of expected credit losses55 - Total revenues for the three months ended July 31, 2025, were $341,312 thousand, primarily from used auto sales ($234,985 thousand) and interest and other income ($65,072 thousand)1574 C – Finance Receivables, Net This section details finance receivables, including components, credit loss allowance, delinquency rates, and contract modifications | (In thousands) | July 31, 2025 | April 30, 2025 | | :------------- | :------------ | :------------- | | Gross contract amount | $1,952,693 | $1,946,042 | | Principal balance | $1,515,681 | $1,509,155 | | Allowance for credit losses | $(326,070) | $(323,100) | | Finance receivables, net | $1,183,452 | $1,180,673 | - The allowance for credit losses increased by $3,000 thousand in Q1 2026, reaching 23.35% of finance receivables, up from 23.25% at April 30, 202585 | Delinquency Status | July 31, 2025 Principal Balance | July 31, 2025 % of Portfolio | April 30, 2025 Principal Balance | April 30, 2025 % of Portfolio | July 31, 2024 Principal Balance | July 31, 2024 % of Portfolio | | :----------------- | :-------------------------------- | :--------------------------- | :------------------------------- | :---------------------------- | :-------------------------------- | :--------------------------- | | Current | $1,206,214 | 79.58% | $1,208,330 | 80.06% | $1,155,006 | 78.82% | | 30-60 days past due | $42,080 | 2.78% | $34,407 | 2.28% | $38,035 | 2.60% | | > 90 days past due | $7,831 | 0.52% | $5,694 | 0.38% | $5,610 | 0.38% | - The percentage of finance receivables 30 days or more past due increased to 3.8% at July 31, 2025, from 3.4% at April 30, 2025. The company implemented a new seven-rank scorecard in May 2025 to improve risk assessment4489 | Metric | July 31, 2025 | July 31, 2024 | | :------------------------------------------ | :------------ | :------------ | | Average total collected per active customer per month | $585 | $562 | | Principal collected as a percent of average finance receivables | 7.9% | 7.8% | | Average down-payment percentage | 4.9% | 5.2% | | Average originating contract term (in months) | 44.9 | 44.3 | - Contract modifications, primarily term extensions, affected 12.9% of the total gross finance receivables portfolio at July 31, 2025, down from 13.8% at July 31, 2024. These modifications aim to support customers and mitigate credit losses97 D – Property and Equipment, Net This section summarizes the company's property and equipment, net, including various asset categories and accumulated depreciation | (In thousands) | July 31, 2025 | April 30, 2025 | | :------------- | :------------ | :------------- | | Land | $11,998 | $11,998 | | Buildings and improvements | $23,604 | $23,575 | | Furniture, fixtures and equipment | $26,140 | $26,139 | | Leasehold improvements | $51,586 | $51,466 | | Construction in progress | $1,115 | $1,028 | | Less accumulated depreciation and amortization | $(59,240) | $(57,312) | | Total | $55,203 | $56,894 | - Property and equipment, net, decreased by $1,700 thousand from April 30, 2025, to July 31, 2025, primarily due to depreciation exceeding new expenditures100172 E – Accrued Liabilities This section summarizes the company's accrued liabilities, including cash overdraft, employee compensation, and deferred sales tax | (In thousands) | July 31, 2025 | April 30, 2025 | | :------------- | :------------ | :------------- | | Cash overdraft | $7,452 | $1,289 | | Employee compensation | $9,704 | $7,983 | | Deferred sales tax | $11,412 | $10,326 | | Total | $46,607 | $35,949 | - Total accrued liabilities increased by $10,658 thousand from April 30, 2025, to July 31, 2025, primarily driven by a significant increase in cash overdraft and employee compensation101173 F – Debt Facilities This section details the company's debt facilities, including revolving credit and non-recourse notes, outlining terms and recent activities | (In thousands) | July 31, 2025 | April 30, 2025 | | :------------- | :------------ | :------------- | | Revolving line of credit, net | $164,394 | $204,769 | | Non-recourse notes payable, net | $610,750 | $572,010 | | Total debt | $775,144 | $776,779 | - The company's revolving line of credit decreased by $40,375 thousand, while non-recourse notes payable increased by $38,740 thousand, reflecting a shift in funding strategy. Total debt remained relatively stable102 - On May 29, 2025, the company completed a securitization transaction (2025-2 Issuance) of $216,000 thousand aggregate principal amount of asset-backed notes with an overall weighted average life adjusted coupon of 6.27%105107 - The 2023-1 Issuance of non-recourse notes was fully paid off in July 2025. No debt was outstanding under the warehouse loan facility as of July 31, 2025107 G – Fair Value Measurements This section defines fair value measurements, outlining valuation methodologies and estimated fair values for various financial instruments | Financial Instrument and Other Assets | July 31, 2025 Carrying Value | July 31, 2025 Fair Value | April 30, 2025 Carrying Value | April 30, 2025 Fair Value | | :------------------------------------ | :----------------------------- | :----------------------- | :------------------------------ | :------------------------ | | Cash and cash equivalents | $9,666 | $9,666 | $9,808 | $9,808 | | Restricted cash | $111,761 | $111,761 | $114,729 | $114,729 | | Finance receivables, net | $1,183,452 | $932,144 | $1,180,673 | $928,130 | | Non-recourse notes payable, net | $610,750 | $619,380 | $572,010 | $581,029 | - The fair value of finance receivables, net, was $932,144 thousand at July 31, 2025, significantly lower than its carrying value of $1,183,452 thousand, reflecting an estimated 34% to 39% discount a third-party purchaser might apply112 H – Capital Stock This section outlines the company's authorized capital stock, including common and preferred shares, and details a public offering - The company completed a public offering of 1,700,000 common shares in September 2024, generating $73,800 thousand in net proceeds, with an additional $5,600 thousand from the partial exercise of an over-allotment option115 - As of July 31, 2025, there were 8,277,613 shares of common stock outstanding, an increase from 8,263,280 shares at April 30, 2025116 I – Weighted Average Shares Outstanding This section provides weighted average common shares outstanding for basic and diluted earnings per share calculations | | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Weighted average shares outstanding-basic | 8,274,054 | 6,396,757 | | Weighted average shares outstanding-diluted | 8,274,054 | 6,396,757 | - Weighted average basic and diluted shares outstanding increased significantly from 6,396,757 in Q1 2024 to 8,274,054 in Q1 2025117 J – Stock-Based Compensation This section details the company's stock-based compensation plans, including award types, expense, and valuation assumptions - Total stock-based compensation expense for all plans was approximately $1,200 thousand ($905 thousand after tax) for Q1 2025, a decrease from $1,300 thousand ($1,100 thousand after tax) in Q1 2024119 | Black-Scholes Option Pricing Model Assumptions | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | | Expected terms (years) | 1.9 | 4.9 | | Risk-free interest rate | 3.93% | 5.13% | | Volatility | 54% | 60% | - The company granted 61,318 options in Q1 2025 (2024 Equity Incentive Plan) with a grant-date fair value of $875 thousand, and 29,363 restricted shares. Unrecognized compensation cost for unvested options is $1,600 thousand and for restricted stock is $4,900 thousand125126129130 K – Commitments and Contingencies This section details the company's commitments and contingencies, including standby letters of credit, lease obligations, and legal proceedings - The company has standby letters of credit totaling $4,700 thousand at July 31, 2025, related to insurance policies132 | Maturity of lease liabilities | Amount (in thousands) | | :---------------------------- | :-------------------- | | Total undiscounted operating lease payments | $86,144 | | Present value of operating lease liabilities | $66,948 | - The company does not expect the final outcome of its legal proceedings to have a material adverse effect on its financial position, results of operations, or cash flows134 L - Supplemental Cash Flow Information This section provides supplemental cash flow disclosures, including interest paid, income taxes paid, and non-cash transactions | (In thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :------------- | :------------------------------- | :------------------------------- | | Interest paid | $16,850 | $17,062 | | Income taxes paid, net | $85 | $1,297 | | Inventory acquired in repossession and accident protection plan claims | $29,616 | $26,975 | - Income taxes paid, net, decreased significantly from $1,297 thousand in Q1 2024 to $85 thousand in Q1 2025136 M – Acquisitions This section details the company's acquisition of Texas Auto Center (TAC), including purchase price and asset allocation - On June 3, 2024, the company acquired Texas Auto Center (TAC) for a total purchase price of $13,500 thousand, including $3,500 thousand in contingent consideration137138 - The acquisition resulted in the recognition of $8,500 thousand in goodwill, $5,000 thousand in inventory, and $7,400 thousand in gross right-of-use assets and lease liabilities139 N - Segment Reporting This section confirms the company operates as a single reportable segment and provides a breakdown of significant expenses - The company operates as a single reportable segment, with the CEO managing on a consolidated basis using sales, provision for credit losses, and net income (loss) as primary financial measures140 | (Dollars in thousands) | Three Months Ended July 31, 2025 | Change (%) | Three Months Ended July 31, 2024 | | :--------------------- | :------------------------------- | :--------- | :------------------------------- | | Total compensation and benefits | $33,188 | 11.3% | $29,807 | | Store occupancy costs | $5,495 | 13.3% | $4,850 | | Advertising costs | $1,344 | 33.3% | $1,008 | | Other overhead costs | $11,381 | 3.0% | $11,046 | | Total selling, general and administrative expenses | $51,408 | 10.1% | $46,711 | O – Subsequent Events This section discloses a subsequent securitization transaction completed on August 28, 2025, involving asset-backed notes - On August 28, 2025, the company completed a securitization transaction (ACM Auto Trust 2025-3) issuing $133,300 thousand Class A Notes (5.01%) and $38,600 thousand Class B Notes (6.08%), collateralized by $291,500 thousand of accounts receivables143 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, condition, liquidity, and critical accounting estimates Forward-Looking Information This subsection highlights the company's forward-looking statements regarding future objectives, plans, and goals, and lists various risks - Forward-looking statements cover areas such as operational infrastructure investments, same dealership sales and revenue growth, customer growth, gross profit margins, business acquisitions, technological investments, future credit losses, collection results, supply and demand of used vehicles, interest rates, and seasonality148 - Key risk factors include general economic conditions, availability of quality used vehicles, access to capital, effectiveness of underwriting and collections, competition, changes in consumer finance laws, technological advances, security breaches, and the ability to integrate acquisitions147148 Overview This overview reiterates the company's business model and discusses recent financial performance, including revenue decline and credit loss challenges - Revenue for the first three months of fiscal 2026 declined 1.9% YoY, primarily due to a 5.7% decrease in retail units sold, partially offset by a 7.5% increase in interest income151 - Provision for credit losses as a percentage of sales increased to 37.3% in Q1 2026, up from 33.2% in Q1 2025, driven by increased frequency and severity of losses and lower sales153 - The company is improving vehicle quality, aiming to reduce repair costs and enhance recovery values, and has upgraded its loan origination system (LOS) with a new scorecard and risk-based pricing to improve underwriting and collections152155 Three Months Ended July 31, 2025 vs. Three Months Ended July 31, 2024 This section provides a detailed comparison of consolidated operations for the three months ended July 31, 2025, and 2024 | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | % Change (2025 vs 2024) | | :---------------------------------- | :------------------------------- | :------------------------------- | :---------------------- | | Total revenues | $341,312 | $347,763 | (1.9)% | | Sales | $276,240 | $287,248 | (3.8)% | | Interest income | $65,072 | $60,515 | 7.5% | | Cost of sales | $175,080 | $186,570 | (6.2)% | | Selling, general and administrative | $51,408 | $46,711 | 10.1% | | Provision for credit losses | $103,036 | $95,423 | 8.0% | | Pretax loss | $(7,402) | $(1,183) | (525.7)% | | Retail units sold | 13,568 | 14,391 | (5.7)% | | Gross profit per retail unit sold | $7,456 | $6,996 | 6.6% | - Total revenues decreased by $6,500 thousand (1.9%) due to a 5.7% decrease in retail units sold, partially offset by a 7.5% increase in interest income from higher average finance receivables and interest rates162163 - Gross margin as a percentage of sales improved to 36.6% in Q1 2026 from 35.0% in Q1 2025, driven by vehicle sales pricing improvements, reduced repair costs, and improved wholesale retention rates164 - SG&A expenses increased by $4,700 thousand (10.1%) due to technology investments and higher compensation, while provision for credit losses increased by $7,600 thousand (8.0%) due to higher loss frequency and severity166167 Financial Condition This section analyzes the company's major balance sheet accounts, including finance receivables, inventory, property and equipment, and liabilities | (In thousands) | July 31, 2025 | April 30, 2025 | | :------------- | :------------ | :------------- | | Finance receivables, net | $1,183,452 | $1,180,673 | | Inventory | $112,451 | $112,229 | | Property and equipment, net | $55,203 | $56,894 | | Accounts payable and accrued liabilities | $80,584 | $70,929 | | Notes payable, net | $610,750 | $572,010 | | Revolving line of credit, net | $164,394 | $204,769 | - Finance receivables, net, increased by 0.2% since April 30, 2025, and 5.1% since July 31, 2024. The company anticipates finance receivables growth to be slightly higher than overall revenue growth due to longer contract terms170 - Inventory increased by $200 thousand (0.2%) during Q1 2026, with annualized inventory turns decreasing to 6.2 from 6.7 in the prior year171 - Notes payable, net, increased by $38,740 thousand to $610,750 thousand, while the revolving line of credit, net, decreased by $40,375 thousand to $164,394 thousand, reflecting recent securitization activities169175 Liquidity and Capital Resources This section discusses the company's cash flows, operating profit drivers, liquidity sources, and future capital needs | (In thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(5,918) | $(14,972) | | Net cash used in investing activities | $(439) | $(8,513) | | Net cash provided by financing activities | $3,247 | $27,659 | | (Decrease) increase in cash | $(3,110) | $4,174 | - Cash flows used in operating activities decreased from $(14,972) thousand in Q1 2024 to $(5,918) thousand in Q1 2025, primarily due to increased finance receivable collections and decreased originations179 - The company's liquidity is impacted by vehicle acquisition costs, which have risen due to tight used vehicle supply and tariffs, and macroeconomic pressures affecting customer payment ability180181183 - Primary liquidity sources include income from operations, proceeds from non-recourse notes payable, warehouse facilities, and revolving credit facilities. As of July 31, 2025, the company had $9,700 thousand cash on hand and $20,800 thousand available under its revolving credit facilities185 Off-Balance Sheet Arrangements This section discloses the company's off-balance sheet arrangements, specifically standby letters of credit related to insurance policies - The company has three standby letters of credit totaling $4,700 thousand at July 31, 2025, related to insurance policies190 Related Finance Company Contingency This section explains the tax implications of intercompany sales of finance receivables between subsidiaries and potential risks - Car-Mart of Arkansas sells finance receivables to Colonial Auto Finance, Inc., allowing a tax deduction for the difference between tax basis and sales price, which also reduces the overall effective state income tax rate191 - Failure to satisfy the material provisions of tax regulations could result in the loss of tax deductions and an increase in the company's effective income tax rate191 Critical Accounting Estimates This section identifies the allowance for credit losses as a critical accounting estimate, emphasizing qualitative judgment - The allowance for credit losses is identified as a critical accounting estimate, requiring management to project future loan performance, including cash flows, prepayments, and charge-offs196 - At July 31, 2025, the allowance for credit losses was $326,100 thousand, representing 23.35% of the principal balance in finance receivables, a slight increase from 23.25% at April 30, 2025194 Recent Accounting Pronouncements This section discusses recently issued FASB accounting pronouncements and their expected impact on the company - The company is evaluating ASU 2024-03, which requires enhanced disclosures of certain natural expense categories, effective for annual periods beginning after December 15, 2026200201 - ASU 2023-09, related to income tax disclosures, will be adopted in the Annual Report on Form 10-K for fiscal year ending April 30, 2026, with no expected material effect199 Seasonality This section describes the seasonal patterns in the company's vehicle sales and operating profit, with varying activity levels - 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 during these periods202 Item 3. Quantitative and Qualitative Disclosures about Market Risk This section addresses the company's exposure to market risk, primarily from changes in interest rates affecting debt obligations - The company's primary market risk exposure is to changes in interest rates, particularly on its revolving credit facilities, which have variable interest rates204205 - A 1% increase in interest rates would result in an approximate $1,600 thousand increase in annual interest expense and a corresponding decrease in net income before income tax, based on the $168,600 thousand outstanding balance on the revolving line of credit at July 31, 2025205 - Finance receivables carry fixed annual interest rates ranging from 12.99% to 23.00%, while revolving credit facilities accrue interest at SOFR plus 3.50% (or base rate plus 1.0% for non-SOFR amounts)206 Item 4. Controls and Procedures This section discusses the evaluation of the company's disclosure controls and procedures, identifying a material weakness and remediation efforts Evaluation of Disclosure Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective due to a material weakness in loan modification disclosures - The company's disclosure controls and procedures were deemed ineffective as of July 31, 2025, due to a material weakness in internal control over financial reporting related to omitted loan modification disclosures207208 - Despite the material weakness, management concluded that the condensed consolidated financial statements fairly present the financial position, results of operations, and cash flows208 Remediation Efforts to Address Material Weakness Management has initiated remediation efforts to address the material weakness, including process enhancements, resource increases, and training - Enhancing internal processes for compliance with ASC 310-10-50-42 through 50-44 disclosure requirements for loan modifications - Increasing accounting and financial reporting resources by adding experienced personnel - Providing targeted training to accounting and financial reporting personnel to strengthen understanding and review procedures212 Changes in Internal Control over Financial Reporting No material changes in internal control over financial reporting occurred during the quarter, apart from ongoing remediation efforts - No material changes in internal control over financial reporting occurred during the quarter, apart from ongoing remediation efforts for the identified material weakness210 Inherent Limitations on Effectiveness of Controls Management acknowledges that control systems provide only reasonable assurance and have inherent limitations due to resource constraints - Management recognizes that control systems provide only reasonable assurance and cannot prevent or detect all errors or instances of fraud due to inherent limitations and resource constraints211 PART II. OTHER INFORMATION This section provides other required information, including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings This section states that the company is involved in various legal proceedings but does not expect a material adverse effect - The company is a defendant in various legal proceedings but does not anticipate a material adverse effect on its financial position, results of operations, or cash flows from their outcomes214 Item 1A. Risk Factors This section indicates no material changes to the company's risk factors since the last annual report on Form 10-K - No material changes to the company's risk factors have occurred since the Form 10-K for the fiscal year ended April 30, 2025215 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports no share repurchases during the quarter and reiterates the company's dividend policy and restrictions - No shares were repurchased under the company's stock repurchase program during the first quarter of fiscal year 2026216 - The company has not historically issued dividends and does not expect to in the foreseeable future, and is currently restricted from paying dividends or repurchasing shares without lender consent217218 Item 3. Defaults Upon Senior Securities This item is marked as not applicable, indicating no defaults upon senior securities Item 4. Mine Safety Disclosure This item is marked as not applicable, indicating no mine safety disclosures Item 5. Other Information This section states that no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the three months ended July 31, 2025221 Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, debt agreements, and certifications - Exhibits include corporate governance documents (Articles of Incorporation, Bylaws), debt agreements (Indenture, Purchase Agreement, Sale and Servicing Agreement related to ACM Auto Trust 2025-2), and certifications (CEO/CFO certifications under Exchange Act Rules 13a-14(a) and 13a-14(b))222 SIGNATURES This section contains the signatures of the company's President and Chief Executive Officer and Chief Financial Officer, certifying the report - The report is signed by Douglas W. Campbell, President and Chief Executive Officer, and Jonathan M. Collins, Chief Financial Officer, on September 9, 2025226