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What changed in AMERICAS CARMART INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AMERICAS CARMART INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+367 added−313 removedSource: 10-K (2025-08-08) vs 10-K (2024-07-15)

Top changes in AMERICAS CARMART INC's 2025 10-K

367 paragraphs added · 313 removed · 199 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

64 edited+53 added−54 removed30 unchanged
Biggest changeUpon the customer and the Company reaching a preliminary agreement as to financing terms, the Company obtains a credit application from the customer which includes information regarding employment, residence and credit history and personal references. These items are entered into the origination system and then certain information is verified by Company personnel.
Biggest changePayment schedules are designed to align with customers’ pay periods and may be weekly, bi-weekly, semi-monthly, or monthly, with approximately 78% of payments due on a weekly or bi-weekly basis. Once preliminary financing terms are agreed upon, the Company obtains a credit application from the customer, which includes information on employment, residence, credit history, and personal references.
Judy is a Certified Public Accountant and prior to joining the Company her experience included approximately five years in public accounting with Arthur Andersen & Co. and approximately 17 years at National Home Centers, Inc., a home improvement product and building materials retailer, most recently as Vice President of Financial Reporting. Jeffrey A.
Judy is a Certified Public Accountant and prior to joining the Company her experience included approximately five years in public accounting with Arthur Andersen & Co. and approximately 17 years at National Home Centers, Inc., a home improvement product and building materials retailer, most recently as Vice President of Financial Reporting.
Industry Used Car Sales. The market for used car sales in the United States is significant. Used car retail sales typically occur through franchised new car dealerships that sell used cars or independent used car dealerships. The Company operates in the Integrated Auto Sales and Finance segment of the independent used car sales and finance market.
The market for used car sales in the United States is significant. Used car retail sales typically occur through franchised new car dealerships that sell used cars or independent used car dealerships. The Company operates in the Integrated Auto Sales and Finance segment of the independent used car sales and finance market.
Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems. As of April 30, 2024, the Company operated 154 dealerships located primarily in small cities throughout the South-Central United States.
Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems. As of April 30, 2025, the Company operated 154 dealerships located primarily in small cities throughout the South-Central United States.
The Company historically targets smaller communities in which to locate its dealerships (i.e., populations from 20,000 to 50,000), but has operations in larger cities such as Tulsa, Oklahoma; Lexington, Kentucky; Springfield, Missouri; Chattanooga and Knoxville, Tennessee and Little Rock, Arkansas.
The Company historically targets smaller communities in which to locate its dealerships (i.e., populations from 20,000 to 50,000), but has operations in larger cities such as Austin, Texas; Tulsa, Oklahoma; Lexington, Kentucky; Springfield, Missouri; Chattanooga and Knoxville, Tennessee; and Little Rock, Arkansas.
Management believes the Company is in compliance in all material respects with all applicable federal, state and local laws, ordinances and regulations; however, the adoption of additional laws, changes in the interpretation of existing laws, or the Company’s entrance into jurisdictions with more stringent regulatory requirements could have a material adverse effect on the Company’s used vehicle sales and finance business.
Management believes the Company is in compliance in all material respects with all applicable federal, state and local laws, ordinances and regulations; however, the adoption of additional laws, changes in the interpretation of existing 13 Table of Contents laws, or the Company’s entrance into jurisdictions with more stringent regulatory requirements could have a material adverse effect on the Company’s used vehicle sales and finance business.
The Company believes that developing and maintaining a relationship with its customers is critical to the success of the Company. A large percentage of sales at mature dealerships are made to repeat customers, and additional sales result from customer referrals.
The Company believes that maintaining and nurturing a strong relationship with its customers is critical to the success of the Company. A large percentage of sales at mature dealerships are made to repeat customers, and additional sales result from customer referrals.
The Company focuses on providing a quality vehicle with affordable payment terms while maintaining relatively shorter-term lengths compared to others in the industry on its installment sales contracts (overall portfolio weighted average of 47.9 months). Operating in Smaller Communities .
The Company focuses on providing a quality vehicle with affordable payment terms while maintaining relatively shorter-term lengths compared to others in the industry on its installment sales contracts (overall portfolio weighted average of 48.3 months). Operating in Smaller Communities .
When opening a new dealership, the Company will either remodel an existing structure on the property to conduct business or construct a new facility. Dealership facilities typically range in size from 1,500 to 5,000 square feet. Purchasing. The Company purchases vehicles primarily from wholesalers, new car dealers, rental/fleet companies, auctions and the general public.
When opening a new dealership, the Company will either remodel an existing structure on the property to conduct business or construct a new facility. Dealership facilities typically range in size from 1,500 to 5,000 square feet. Vehicle Procurement. The Company acquires vehicles primarily from wholesalers, new car dealers, rental and fleet companies, auctions, and the general public.
Below is a summary of dealerships operating during the fiscal years ended April 30, 2024, 2023 and 2022: Years Ended April 30, 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 8 Below is a summary of dealership locations by state as of April 30, 2024, 2023 and 2022: As of April 30, Dealerships by State 2024 2023 2022 Arkansas 37 37 38 Oklahoma 29 30 30 Missouri 18 18 18 Alabama 16 16 16 Texas 14 14 13 Kentucky 12 12 12 Georgia 9 9 9 Tennessee 9 10 8 Mississippi 5 5 5 Illinois 3 3 3 Indiana 1 1 1 Iowa 1 1 1 Total 154 156 154 Dealerships are located on leased or owned property between one and four acres in size.
Below is a summary of dealerships operating during the fiscal years ended April 30, 2025, 2024, and 2023: Years Ended April 30, 2025 2024 2023 Dealerships at beginning of year 154 156 154 Dealerships opened or acquired 2 1 3 Dealerships closed (2) (3) (1) Dealerships at end of year 154 154 156 Below is a summary of dealership locations by state as of April 30, 2025, 2024, and 2023: Years Ended April 30, Dealerships by State 2025 2024 2023 Arkansas 37 37 37 Oklahoma 29 29 30 Missouri 18 18 18 Alabama 16 16 16 Texas 16 14 14 Kentucky 12 12 12 Georgia 7 9 9 Tennessee 9 9 10 Mississippi 5 5 5 Illinois 3 3 3 Indiana 1 1 1 Iowa 1 1 1 Total 154 154 156 Dealerships are located on leased or owned property between one and four acres in size.
By developing a personal relationship with its customers, the Company believes it is in a better position to assist a customer, and the customer is more likely to cooperate with the Company should the customer experience financial difficulty during the term of his or her installment contract.
By developing a personal relationship with its customers, the Company believes it is in a better position to assist a customer, and the customer is more likely to cooperate with the Company should the customer experience financial difficulty during the term of their installment contract.
In addition, the Company is leveraging its growing online presence, including an intuitive website, online inventory browsing, and seamless online application process, to improve the buying experience while also reaching beyond physical dealership locations. 7 Operations Operating Segment.
In addition, the Company is leveraging its growing online presence, including an intuitive website, online inventory browsing, and seamless online application process, to improve the buying experience while also reaching beyond physical dealership locations.
Campbell held management positions at AutoNation from September 2014 to March 2018 serving as Used Vehicle Director, Eastern Region, in AutoNation’s corporate office and later as General Manager of its Honda Dulles dealership. Preceding AutoNation, Mr. Campbell served fifteen years with Coral Springs Auto Mall, most recently serving as Executive General Manager. Vickie D.
Campbell held management positions at AutoNation from September 2014 to March 2018 serving as Used Vehicle Director, Eastern Region, in AutoNation’s corporate office and later as General Manager of its Honda Dulles dealership. Preceding AutoNation, Mr. Campbell served fifteen years with Coral Springs Auto Mall, most recently serving as Executive General Manager. 15 Table of Contents Jonathan M.
Management expects this to continue for the foreseeable future and believes the reduced availability of used vehicle financing will provide the Company an opportunity to gain market share and better serve an increasing customer base. 12 Competition The used automotive retail industry is fragmented and highly competitive.
Management expects the current conditions to continue for the foreseeable future and believes the reduced availability of used vehicle financing elsewhere will provide the Company an opportunity to gain market share and better serve an increasing customer base. 12 Table of Contents Competition The used automotive retail industry is fragmented and highly competitive.
Human Capital Resources At America’s Car-Mart, Inc., our associates are the heart of our business. Our associates are committed to making a difference for customers, their communities and each other. As of April 30, 2024, the Company, including its consolidated subsidiaries, employed a diverse associate base of approximately 2,280 fulltime associates.
Human Capital Resources At America’s Car-Mart, Inc., our associates are the heart of our business. Our associates are committed to making a difference for customers, their communities and each other. As of April 30, 2025, the Company, including its consolidated subsidiaries, employed a diverse associate base of approximately 2,300 full-time associates.
Excluding the amount of total cash, the Company’s adjusted ratio of debt to finance receivables (a non-GAAP measure) as of April 30, 2024 was 46.0% which the Company believes is lower than many of its competitors.
Excluding the amount of total cash, the Company’s adjusted ratio of debt to finance receivables (a non-GAAP measure) as of April 30, 2025 was 43.2%, which the Company believes is lower than many of its competitors.
Due to growth, the Company has, to a larger extent, also had to look outside of the Company for associates possessing requisite skills and core competencies and who share the values and appreciate the unique culture the Company has developed over the years.
Due to growth, the Company has, to a larger extent, also had to look outside of the Company for associates possessing requisite skills and core competencies and who share the values and appreciate the unique culture the Company has developed over the years. Management expects to continue recruiting outside talent to support future growth.
While dealerships operate on a decentralized basis, the Company has established policies, procedures, and business practices for virtually every aspect of a dealership’s operations. Detailed online operating manuals are available to assist the dealership manager and office, sales and collections personnel in performing their daily tasks. As a result, each dealership is operated in a uniform manner.
While dealerships operate on a decentralized basis, the Company has established policies, procedures, and business practices for virtually every aspect of a 7 Table of Contents dealership’s operations. Detailed online operating manuals are available to assist the dealership manager and office, sales and collections personnel in performing their daily tasks.
As of April 30, 2024, the Company’s ratio of debt to finance receivables (revolving credit facilities and non-recourse notes payable divided by principal balance of finance receivables) was 52.6%.
As of April 30, 2025, the Company’s ratio of debt to finance receivables (revolving credit facilities and non-recourse notes payable divided by principal balance of finance receivables) was 51.5%.
We believe such programs demonstrate the Company’s commitment to the long-term growth, motivation, and success of our associates. Available Information The Company’s website is located at www.car-mart.com.
We believe that these initiatives underscore the Company’s commitment to the long-term growth, motivation, and success of our associates. Available Information The Company’s website is located at www.car-mart.com.
Judy has served as Chief Financial Officer of the Company since January 2018. Before becoming Chief Financial Officer in January 2018, Ms. Judy served as Principal Accounting Officer since March 2016 and Vice President of Accounting since August 2015. Since joining the Company in May 2010, Ms. Judy has also served as Controller and Director of Financial Reporting. Ms.
Judy currently serves as Chief Accounting Officer and served as Chief Financial Officer of the Company from January 2018 to May 2025. Before becoming Chief Financial Officer in January 2018, Ms. Judy served as Principal Accounting Officer since March 2016 and Vice President of Accounting since August 2015. Since joining the Company in May 2010, Ms.
A large part of dealership management and account representatives’ incentive compensation is tied directly or indirectly to collection results. The Company has a collections department and support staff at the corporate level to work with field operators to improve collection results. This team monitors efficiencies and the effectiveness of account representatives as they work to improve customer success rates.
The Company has a collections department and support staff at the corporate level to work with field operators to improve collection results. This team monitors efficiencies and the effectiveness of account representatives as they work to improve customer success rates.
The Company’s operating success has been a benefit for recruiting outside talent; however, the Company expects the hiring environment to continue to be challenging as a result of increasing wages, competition for qualified workers, and the impact of inflation on our business and operations. Cultivating Customer Relationships.
While the Company’s operating success and its Recruiting Team have aided Management's recruiting efforts, the Company expects the hiring environment to continue to be challenging as a result of increasing wages, competition for qualified workers, and the impact of inflation on our business and operations. Cultivating Customer Relationships.
The Company’s average retail sales price was $19,113 per unit in fiscal 2024, compared to $18,080 in fiscal 2023. Used vehicle pricing continued to increase due to the high demand and tight supply of used vehicles.
The Company focuses on selling basic and affordable transportation to its customers. The Company’s average retail sales price was $19,398 per unit in fiscal 2025, compared to $19,113 in fiscal 2024. Used vehicle pricing continued to increase due to the high demand and tight supply of used vehicles.
Judy 58 Chief Financial Officer Jeffrey A. Williams 61 CEO Emeritus Douglas Campbell became Chief Executive Officer, President and a director of the Company in October 2023, after serving as President of the Company for the prior year. Before joining the Company, Mr.
Judy 59 Chief Accounting Officer Jamie Fischer 46 Chief Operating Officer Douglas Campbell became Chief Executive Officer, President and a director of the Company in October 2023, after serving as President of the Company for the prior year. Before joining the Company, Mr.
However, as a result of the recent inflationary environment, increased funding costs, and increased insurance costs, credit availability for used vehicle financing has tightened.
In addition, as a result of the recent inflationary environment, increased funding costs, and increased insurance costs, credit availability for used vehicle financing across the market has tightened from the financing availability levels experienced during the past decade.
The Company monitors operating costs as a percentage of revenues and per customer served and strives to provide excellent service at a low cost. Well-Capitalized. The Company believes it can fund its planned growth from net income generated from operations supplemented by its external capital resources.
The Company regularly tracks operating costs as a percentage of revenues and on a per-customer basis, striving to deliver high-quality service while maintaining a cost-efficient structure. Well-Capitalized. The Company believes it can fund its planned growth from net income generated from operations supplemented by its external capital resources.
The Company only provides financing to its customers for the purchase of its vehicles and selected ancillary products, and the Company does not provide any type of financing to non-customers.
The Company provides financing to substantially all customers who purchase vehicles at its dealerships. Financing is offered exclusively for the purchase of the Company’s vehicles and selected ancillary products; the Company does not extend financing to non-customers.
The Company is able to cultivate these relationships through a variety of communication channels, including our recently developed customer relationship management technology and direct face-to-face interactions as a high percentage of customers visit Company dealerships in-person to make payments and for account and vehicle servicing needs. 6 Business Strengths The Company believes it possesses a number of strengths or advantages that distinguish it from most of its competitors.
The Company is able to cultivate these relationships through traditional communication channels and direct face-to-face interactions, as a high percentage of customers visit Company dealerships in person to make payments and for account and vehicle servicing needs.
These limits have generally been based on either (i) a specified margin above the federal primary credit rate, (ii) the age of the vehicle, or (iii) a fixed rate. 13 The Company is also subject to a variety of federal, state and local laws and regulations that pertain to the environment, including compliance with regulations concerning the use, handling and disposal of hazardous substances and wastes.
The Company is also subject to a variety of federal, state and local laws and regulations that pertain to the environment, including compliance with regulations concerning the use, handling and disposal of hazardous substances and waste.
The information contained on the website or available by hyperlink from the website is not incorporated into this Annual Report on Form 10-K or other documents the Company files with, or furnishes to, the SEC. 15 Executive Officers of the Registrant The following table provides information regarding the executive officers of the Company as of April 30, 2024: Name Age Position with the Company Douglas Campbell 48 Chief Executive Officer and President Vickie D.
The information contained on the website or available by hyperlink from the website is not incorporated into this Annual Report on Form 10-K or other documents the Company files with, or furnishes to, the SEC.
With our comprehensive safety and education program and attention to proper procedures at our dealerships, the number of incidents is below industry standards for all retail locations. Our Legal and Compliance departments are responsible for safety education and training, and regularly reviews indicators and areas where risks and injuries can occur, helping to eliminate hazards.
Our Legal and Compliance departments are responsible for safety education, training, OSHA compliance and reporting, and regular reviews of indicators and areas where risks and injuries can occur, helping to eliminate hazards.
We seek to educate and empower associates to improve and maintain their overall health. Further, we offer resources for preventive care, such as flu shots, vaccinations and other preventative health screenings. Associates have access to retirement investment plans and legal consultants to help them save for their future needs.
We seek to empower associates to improve and maintain their overall health and wellness through this program which provides associates access to financial planning, legal consultants, and professional resources that promote associates’ mental health and general well-being. Further, we offer resources for preventive care, such as flu shots, vaccinations and other preventative health screenings.
The Company also utilizes several collection efforts centrally at the corporate office through texting, phone calls and other methods to supplement the field efforts. Over the last five fiscal years, the Company’s annual provision for credit losses as a percentage of sales have ranged from a low of 19.31% in fiscal 2021 to 36.48% in fiscal 2024 (average of 26.36%).
Over the last five fiscal years, the Company’s annual provision for credit losses as a percentage of sales has ranged from a low of 19.31% in fiscal 2021 to a high of 36.48% in fiscal 2024, with an average of 28.14% over the period.
Further, corporate office personnel monitor the dealerships’ operations through weekly visits and a number of daily, weekly and monthly communications and reports. Low-Cost Operator. The Company has structured its dealership and corporate office operations to minimize operating costs. The number of associates employed at the dealership level is dictated by the number of active customer accounts each dealership services.
As a result, each dealership is operated in a uniform manner. Further, corporate office personnel monitor the dealerships’ operations through weekly visits and a number of daily, weekly and monthly communications and reports. Cost-Efficient Operating Model. The Company has designed its dealership and corporate operations to maintain a disciplined focus on minimizing operating costs.
From a health perspective, the Company believes it is important to support the physical, mental, social, environmental and financial well-being of our Car-Mart associates at work and at home. The Company is committed to doing so with key initiatives that inspire associates to strive for long-term sustainable health and wellness for themselves and their families.
From a health perspective, the Company believes it is important to support the physical, mental, social, environmental and financial well-being of our Car-Mart associates at work and at home. To support this commitment, we provide a comprehensive Employee Assistance Program at no additional cost to our associates and their immediate family members.
Sales associates are paid a commission for sales in addition to an hourly wage. Sales are made on an “as is” basis; however, customers are given an option to purchase a service contract, which covers certain vehicle components and assemblies.
Inventory turnover occurs approximately seven times annually. Vehicle sales are primarily conducted by dealership managers, assistant managers, manager trainees, or sales associates. Sales associates receive a commission in addition to an hourly wage. Sales are completed on an “as is” basis; however, customers have the option to purchase a service contract covering certain vehicle components and assemblies.
Vehicle purchasing is performed by corporate buyers as well as purchasing agents in our local communities. Dealership managers are authorized to purchase vehicles as needed. The Company centrally sets purchasing guidelines and monitors the quantity and quality of vehicles purchased and holds responsible parties accountable for results.
Vehicle purchasing is primarily conducted by corporate buyers, with additional support from purchasing agents located in the Company’s local markets. Additionally, dealership managers are authorized to procure vehicles as needed to meet local demand. The Company establishes centralized purchasing guidelines and actively monitors the quantity and quality of vehicles acquired, holding responsible parties accountable for adherence to these standards.
For covered components and assemblies, the Company coordinates service with third-party service centers with which the Company typically has previously negotiated labor rates. The vast majority of the Company’s customers elect to purchase a service contract when purchasing a vehicle. Additionally, the Company offers its customers to whom financing is extended an accident protection plan (“APP”) product.
For covered repairs, the Company coordinates service through third-party service centers with which it has negotiated favorable labor rates. A substantial majority of customers elect to purchase such service contracts at the time of sale. Additionally, the Company offers an Accident Protection Plan (“APP”) to customers who finance their purchases.
The corporate office, based in Rogers, Arkansas, consists of regional vice presidents of operations, area operations managers, as well as regional support personnel in inventory, sales, collections, compliance and human resources. The corporate office also provides training and development personnel, accounting and management information systems personnel, compliance and risk personnel, administrative personnel and senior management.
The Company’s corporate headquarters, located in Rogers, Arkansas, provides centralized oversight of dealership operations. It includes senior management and personnel supporting functions such as regional operations, inventory, sales, collections, compliance, human resources, accounting, and information systems.
The corporate office monitors and oversees dealership operations. The corporate office has access to operating and financial information and reports on each dealership on a daily, weekly, monthly, quarterly, and annual basis. This information includes cash receipts and disbursements, inventory and receivables levels and statistics, receivables aging, sales and account loss data.
The corporate office monitors dealership performance through daily, weekly, monthly, and annual reviews of financial and operational data, including cash receipts, inventory levels, receivables aging, and sales performance. This information is used to prepare company-wide reports and manage field operations.
The Company seeks to hire honest and hardworking individuals to fill entry-level positions, nurture and develop these associates, and promote them to managerial positions from within the Company.
As the Company continues to build out its infrastructure and centralize certain operational functions, it may selectively expand into larger urban markets where strategically appropriate. Enhanced Management Talent and Experience. The Company seeks to hire honest and hardworking individuals to fill entry-level positions, nurture and develop these associates, and promote them to managerial positions from within the Company.
The Company has successfully completed acquisitions in each of the last three fiscal years and anticipates that future acquisitions will likely contribute to its growth. These plans are subject to change based on both internal and external factors. Selling Basic Transportation. The Company focuses on selling basic and affordable transportation to its customers.
The Company has successfully completed acquisitions in each of the past five fiscal years and anticipates that future acquisitions will continue to contribute meaningfully to its overall growth trajectory. These strategic initiatives are subject to ongoing evaluation and may be adjusted in response to internal assessments or changing market conditions. Selling Basic Transportation.
None of the Company’s employees are covered by a collective bargaining agreement, and the Company believes that its relations with its employees are positive. Diversity and Inclusion The Company’s culture is one that fosters diversity, equity and inclusion. We view diversity as an important factor in reflecting the values and cultures of all our associates.
None of the Company’s employees are covered by a collective bargaining agreement, and the Company is committed to an environment where associates feel respected, valued, and empowered to reach their full potential. Equity and Inclusion The Company’s culture is one that values equity and inclusion and fosters engagement.
All associates are required to complete orientation courses in culture, safety, sexual harassment and discrimination awareness, and other compliance topics. Associates also have access to online training programs for the development of job-specific skills, leadership behaviors, and advanced topics such as unconscious bias.
The Company is committed to the continuous development of its associates through various training, mentoring, and career advancement programs. All associates are required to complete orientation courses on Company culture, safety, sexual harassment and discrimination awareness, and other compliance-related topics.
Each dealership is an operating segment with its results regularly reviewed by the Company’s Head of Operations in an effort to make decisions about resources to be allocated to the segment and to assess its performance. Individual dealerships meet the aggregation criteria for reporting purposes under the current accounting guidance.
The Company operates with its consolidated results regularly reviewed by the Company’s Chief Operating Decision Maker in an effort to make decisions about resources to be allocated and to assess performance. The Company operates in the Integrated Auto Sales and Finance segment of the used car market.
Many of our associates have the opportunity to earn additional compensation through commissions, performance-based salary increases and bonuses. All associates earn above minimum wage requirements under both state and federal law requirements. In addition, associates have a menu of benefit options to choose from to meet their needs. The Company offers multiple programs for associate training, mentoring, and advancement.
Our compensation philosophy emphasizes performance, both on an individual and company-wide basis. Many associates have the opportunity to earn additional compensation through commissions, performance-based salary adjustments, and bonuses. All associates are compensated at levels exceeding both state and federal minimum wage requirements. Additionally, a broad selection of benefit options is made available to our associates to accommodate their unique needs.
The Company’s specific annual safety goals are to eliminate all preventable work-related injuries, illnesses and property damage and achieve 100% compliance with all established safety procedures. Internally, we track workplace injuries among associates, customers and other third parties at our facilities.
All vendors must comply with all applicable laws and regulations while also satisfying the Company’s due diligence processes and related vendor requirements. The Company’s annual and continuing safety goals are to eliminate all preventable work-related injuries, illnesses and property damage and achieve 100% compliance with all established safety procedures.
The Company provides centralized support to the dealership manager by assisting in underwriting decisions when needed, as well as providing training and reporting used for monitoring customer accounts on a daily, weekly and monthly basis. Collections. All of the Company’s retail installment contracts are serviced by Company personnel at the dealership level.
Centralized support is provided to dealership managers through underwriting assistance, training, and regular reporting to monitor customer accounts on a daily, weekly, and monthly basis. Collections . The Company services all retail installment contracts through personnel located at the dealership level. Approximately 46% of customers make payments in person at the dealership where they purchased their vehicle.
APP is available in most of the states in which the Company operates, and the vast majority of financed customers elect to purchase this product when purchasing a vehicle in those states. 9 The Company has a 7-day vehicle exchange policy.
This product contractually obligates the Company to cancel the outstanding balance on the financing contract if the vehicle is declared a total loss or is stolen, as defined under the terms of the APP agreement. The APP product is available in most states where the Company operates, and the vast majority of financed customers elect to purchase it.
Customers can send their payments through the mail, set up ACH auto draft, make mobile and online payments, and make payments at certain money service centers. Each dealership closely monitors its customer accounts using the Company’s proprietary receivables and collections software that stratifies past due accounts by the number of days past due.
To facilitate convenience, the Company offers multiple payment options, including mail payments, in-person debit or cash payments, debit or ACH auto drafts, mobile and online payments, phone system payments, and payments at select retailers using personalized barcodes. Each dealership closely monitors customer accounts using the Company’s proprietary receivables and collections software, which stratifies past due accounts by days delinquent.
If a customer is not satisfied with their purchase, the customer has the option to return the vehicle within 7 days after purchasing the vehicle or before having driven the car for 500 miles (whichever occurs first), and the Company will exchange it for another vehicle of equal or lesser value.
The Company maintains a seven-day vehicle exchange policy. Customers dissatisfied with their purchase may exchange the vehicle for one of comparable value within seven days of purchase or before the vehicle accrues 500 miles, whichever occurs first.
When purchasing inventory, focus is given to three general areas: • Compliance with Company standards, including an internal condition report; • Costs and physical characteristics of the vehicle, based on market values; and • Vehicle reliability and historical performance, based on market conditions.
In evaluating inventory purchases, the Company focuses on three primary criteria: • Compliance with Company standards, including an internal condition report; • Costs and physical characteristics of the vehicle, based on market values; and • Vehicle reliability and historical performance, based on market conditions. 9 Table of Contents Generally, the Company acquires vehicles that are between five and twelve years old, with mileage ranging from approximately 70,000 to 140,000 miles, and pays between $7,000 and $15,000 per vehicle, with an average purchase price of approximately $9,500.
Dealerships are generally open Monday through Saturday from 9:00 a.m. to 6:00 p.m. Dealership Locations and Facilities.
Larger dealerships typically employ personnel in roles such as general manager, assistant manager(s), office manager, office clerks, service manager, collections staff, sales staff, inventory associates (detailers), and on-call drivers. Dealerships generally operate Monday through Saturday, from 9:00 a.m. to 6:00 p.m. Dealership Locations and Facilities.
As of April 30, 2024, approximately 71% of the Company’s dealerships were located in cities with populations of 50,000 or less. The Company believes that by operating in smaller communities it develops strong personal relationships, resulting in better collection results.
As of April 30, 2025, approximately 69% of the Company’s dealerships were located in communities with populations of 50,000 or fewer. The Company believes that focusing on these smaller markets fosters stronger personal relationships with customers, which supports improved collection performance. Additionally, operating costs—including salaries, rent, and advertising—tend to be lower in these areas compared to major metropolitan markets.
The vice presidents of operations and the area operations managers routinely review and monitor the status of customer collections to ensure collection activities are conducted in compliance with applicable policies and procedures.
Senior operations personnel, including vice presidents and area operations managers, regularly review collection performance to ensure compliance with established policies and procedures. The Company believes timely engagement with past due accounts is critical to successful collections.
Associate compensation is standardized for each dealership position and adjusted for various markets. Other operating costs are closely monitored and scrutinized. Technology is utilized to maximize efficiency. Our recent technology investments in a new loan origination system and an enterprise resource planning system have been foundational in improving efficiencies and operational flexibility as the Company grows.
The Company leverages technology to enhance operational productivity; recent investments in a new loan origination system and an enterprise resource planning (ERP) system have been instrumental in driving efficiencies and providing greater operational flexibility to support growth.
In addition, the Company maintains its “Car-Mart U” training program which builds on the foundation established in the Future Manager program by providing a series of blended learning solutions preparing assistant managers for a general manager or other elevated management role by introducing new curriculum focused on advanced leadership training, business concepts and customer experience.
Furthermore, the Car-Mart U program builds upon the foundational knowledge gained through the Future Manager Training Program, offering a blended learning curriculum that prepares assistant managers for roles such as general manager or other senior management positions. This program incorporates advanced leadership training, business concepts, and customer experience strategies.
The Company typically does not purchase sports cars or luxury cars. A member of dealership management inspects and test-drives vehicles prior to a sale. The Company strives to purchase vehicles that require little or no repair as the Company has limited facilities to repair or recondition vehicles.
The Company’s primary focus is providing reliable, basic transportation to its customers. The vehicle inventory primarily consists of sport utility vehicles, trucks, and sedans, while the Company typically does not acquire sports cars or luxury vehicles. Prior to sale, a member of dealership management inspects and test-drives each vehicle to ensure quality standards are met.
The Company’s objective is to offer its customers basic transportation at a fair price and treat each customer in such a manner as to earn his or her repeat business. The Company attempts to build a positive reputation in each community where it operates and generate new business from such reputation as well as from customer referrals.
The Company’s objective is to provide customers with reliable basic transportation at a fair price while fostering positive customer experiences to encourage repeat business. The Company seeks to establish and maintain a strong reputation within each community it serves, generating new business through customer referrals. For mature dealerships, repeat customers represent a significant portion of total sales.
The Company’s installment sales contracts as of April 30, 2024, typically include down payments ranging from 0% to 20% (average of 5.4%), terms ranging from 18 months to 69 months (average of 47.9 months), and a fixed annual interest rate of 18.25% for contracts originating after early December 2023 (up from 18.0%) for all states except Arkansas, Illinois and acquired dealerships in Tennessee.
As of April 30, 2025, the Company’s installment sales contracts typically include down payments ranging from 0% to 20%, with an average down payment of 5.5%).
The dealership manager who makes the credit decision is ultimately responsible for collecting the contract, and his or her compensation is directly related to the collection results of his or her dealership.
Recent refinements to underwriting guidelines within the origination system have enhanced dealership managers’ ability to evaluate applicants’ stability and creditworthiness. The dealership manager who approves the credit decision is 10 Table of Contents ultimately responsible for contract collections, with compensation directly tied to the collection performance of the dealership.
The Company believes that the timely response to past due accounts is critical to its collections success. 10 The Company has established standards with respect to the percentage of accounts one and two weeks past due, 15 or more days past due and 30 or more days past due (delinquency standards), and the percentage of accounts where the vehicle was repossessed, or the account was charged off that month (account loss standard).
The Company has established delinquency standards for accounts one and two weeks past due, 15 or more days past due, and 30 or more days past due, as well as loss standards related to repossessions and charge-offs. The Company actively works to maintain low delinquency rates and minimize repossessions.
For those vehicles that are repossessed, a large portion are returned or surrendered by the customer on a voluntary basis. Other repossessions are performed by Company personnel or third-party repossession agents.
For repossessed vehicles, a significant portion are voluntarily returned or surrendered by customers. Remaining repossessions are conducted by Company personnel or third-party agents. Depending on condition, repossessed vehicles are either retailed through Company dealerships or sold wholesale, primarily via physical or online auctions. New Dealership Openings.
Removed
During fiscal 2024, credit losses signaled a return to more normal pre-pandemic levels, but customers are still faced with continued inflationary pressure and increasing interest rates from federal monetary policy. The percentage of credit loss as a percentage of sales was impacted by the lower sales revenue in fiscal 2024. See Item 1A, Risk Factors, for further discussion.
Added
A large part of dealership management and account representatives’ incentive compensation is tied directly or indirectly to collection results. The Company utilizes numerous collections strategies to mitigate loss and provide ongoing support to its customers who often experience financial challenges.
Removed
Maintaining a Decentralized Operation. The Company’s dealerships operate on a decentralized basis. Each dealership is ultimately responsible for the quality of its vehicles, making sales contacts, making credit decisions with our loan origination system, and collecting the contracts it originates in accordance with established policies and procedures.
Added
The Company also utilizes several collection efforts centrally at the corporate office through texting, phone calls and other methods to supplement the field efforts. As part of our collections efforts we offer contract modifications, primarily involving term extensions.
Removed
Approximately 50% of customers make their payments in person at one of the Company’s dealerships.
Added
During fiscal 2025, credit losses improved to 32.68% due to the continued favorable performance in contracts originated under the Company's enhanced underwriting system. Standardized Operations with Local Empowerment and Customer Engagement. The Company’s dealerships operate within a consistent framework of standardized processes that ensure quality, compliance, and operational efficiency across all locations.
Removed
This decentralized structure is complemented by the oversight and involvement of corporate office management and the maintenance of centralized financial controls, including monitoring proprietary credit scoring, establishing standards for down-payments and contract terms, and an internal compliance function. 5 Expanding Through Controlled Organic Growth and Strategic Acquisitions.
Added
These processes guide key functions such as vehicle quality assurance, sales lead generation, credit decision-making through our loan origination system, and contract collections. While these standards provide a cohesive operational foundation, dealership managers are empowered to make decisions that best serve their customers. This localized leadership fosters responsiveness to customer needs and strengthens community ties.
Removed
The Company grows by increasing revenues at existing dealerships and opening or acquiring new dealerships. The Company has historically viewed organic growth at its existing dealerships as its primary source for growth. The Company continues to make infrastructure investments in order to improve performance of existing dealerships and to support growth of its customer count.
Added
Approximately 46% of customers make their payments in person at a dealership, enabling regular face-to-face interactions that build trust, encourage timely payments, and provide immediate support for service or payment concerns. This blend of structured operations and community-level empowerment supports a customer-centric culture that drives engagement and satisfaction. Expansion Through Disciplined Organic Growth and Strategic Acquisitions.
Removed
The Company acquired one new dealership during the year ending fiscal 2024 with 154 locations. The Company intends to continue to add new dealerships primarily through the pursuit of strategic acquisition opportunities that it believes will enhance its brand and maximize the return to its shareholders.
Added
The Company pursues growth through both increased revenue generation at existing dealership locations and the selective addition of new dealerships, either through openings or acquisitions. Historically, organic growth from existing operations has represented the primary driver of the Company’s expansion.
Removed
Further, the Company believes that operating costs, such as salaries, rent and advertising, are lower in smaller communities than in major metropolitan areas. As the Company builds its infrastructure and certain aspects of the business become more centralized, we may expand and operate in larger cities. Enhanced Management Talent and Experience.
Added
To support this strategy, the Company continues to invest in infrastructure improvements designed to enhance dealership performance and facilitate the growth of its customer base. In fiscal year 2025, the Company completed the acquisition of a dealership group comprising two locations.
Removed
The Company has also been able to attract quality individuals via its Training and Development Team and Recruiting Team. Management has determined that it will be increasingly difficult to grow the Company without looking for outside talent.
Added
The Company intends to continue expanding its footprint primarily through the pursuit of strategic acquisition opportunities 6 Table of Contents that are expected to strengthen its brand and optimize long-term shareholder returns.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

36 edited+25 added−5 removed60 unchanged
Biggest changeSignificant increases in the inventory of used vehicles during periods of economic slowdown or recession may also depress the prices at which repossessed automobiles may be sold or delay the timing of these sales. The prices of used vehicles are variable and a rise or decline in the used vehicle prices may have an adverse effect on the Company’s business.
Biggest changeFurther, periods of economic slowdown may also be accompanied by temporary or prolonged decreased consumer demand for motor vehicles and declining used vehicle prices. 16 Table of Contents Significant increases in the inventory of used vehicles during periods of economic slowdown or recession may also depress the prices at which repossessed automobiles may be sold or delay the timing of these sales.
Acquisitions are accompanied by a number of inherent risks, including, without limitation, the difficulty of integrating acquired companies and operations; potential disruption of our ongoing business and distraction of our management or the management of the target company; difficulties in maintaining controls, procedures and policies; potential impairment of relationships with associates and partners as a result of any integration of new personnel; potential inability to manage an increased number of locations and associates; failure to realize expected efficiencies, synergies and cost savings; reaction to the transaction among the companies’ customers and potential customers; and the effect of any government regulations which relate to the businesses acquired. 18 ● Availability of suitable dealership sites .
Acquisitions are accompanied by a number of inherent risks, including, without limitation, the difficulty of integrating acquired companies and operations; potential disruption of our ongoing business and distraction of our management or the management of the target company; difficulties in maintaining controls, procedures and policies; potential impairment of relationships with associates and partners as a result of any integration of new personnel; potential inability to manage an increased number of locations and associates; failure to realize expected efficiencies, synergies and cost savings; reaction to the transaction among the companies’ customers and potential customers; and the effect of any government regulations which relate to the businesses acquired. • Availability of suitable dealership sites .
Our ability to increase revenues at existing dealerships or expand our business through additional dealership openings or strategic acquisitions is dependent on a sufficiently favorable level of operating performance to support the management, personnel and capital resources necessary to successfully grow existing locations, open and operate new locations, or acquire new locations. ● Ability to successfully identify, complete and integrate new acquisitions.
Our ability to increase revenues at existing dealerships or expand our business through additional dealership openings or strategic acquisitions is dependent on a sufficiently favorable level of operating performance to support the management, personnel and capital resources necessary to successfully grow existing locations, open and operate new locations, or complete acquisitions. • Ability to successfully identify, complete and integrate new acquisitions.
If conditions arise that impair vehicle sales during the first or fourth fiscal quarters, the adverse effect on the Company’s revenues and operating results for the year could be disproportionately large. 19 The effects of any future public health crisis could have a significant impact on our business, sales, results of operations and financial condition.
If conditions arise that impair vehicle sales during the first or fourth fiscal quarters, the adverse effect on the Company’s revenues and operating results for the year could be disproportionately large. The effects of any future public health crisis could have a significant impact on our business, sales, results of operations and financial condition.
If we are unable to hire and retain qualified and competent personnel to operate our new dealerships, these dealerships may not be profitable, which could have a material adverse effect on our future financial condition and operating results. ● Availability and cost of vehicles .
If we are unable to hire and retain qualified and competent personnel to operate our dealerships, these dealerships may not be profitable, which could have a material adverse effect on our future financial condition and operating results. • Availability and cost of vehicles .
Credit losses tend to be higher at new dealerships due to fewer repeat customers and less experienced associates; therefore, the opening of new dealerships tends to increase the Company’s overall credit losses. This may require the Company to incur additional costs to reduce future credit losses or to close the underperforming locations altogether.
Credit losses tend to be higher at new dealerships due to fewer repeat customers and less experienced associates; therefore, the opening of new dealerships, excluding acquired dealerships, tends to increase the Company’s overall credit losses. This may require the Company to incur additional costs to reduce future credit losses or to close the underperforming locations altogether.
In the normal course of business, the used automotive retail industry is subject to changes in regional U.S. economic conditions, including, but not limited to, interest rates, gasoline prices, inflation, personal discretionary spending levels, and consumer sentiment about the economy in general.
In the normal course of business, the used automotive retail industry is subject to changes in national and regional U.S. economic conditions, including, but not limited to, interest rates, gasoline and grocery prices, inflation, personal discretionary spending levels, and consumer sentiment about the economy in general.
This could also make it difficult for the Company to supply appropriate levels of inventory for an increasing number of dealerships without significant additional costs, which could limit our future sales or reduce future profit margins if we are required to incur substantially higher costs to maintain appropriate inventory levels. ● Acceptable levels of credit losses at new dealerships .
This could also make it difficult for the Company to supply appropriate levels of inventory for an increasing number of dealerships without significant additional costs, which could limit our future sales or reduce future profit margins if we are required to incur substantially higher costs to maintain appropriate inventory levels. 18 Table of Contents • Acceptable levels of credit losses at new dealerships .
If the Company’s assumptions and judgments prove to be incorrect, its current allowance for credit losses may not be sufficient and adjustments may be necessary to allow for different economic conditions or adverse developments in its contract portfolio which could adversely affect the Company’s financial condition and results of operations.
If the Company’s assumptions and judgments prove to be incorrect, its current allowance for credit losses may not be sufficient and adjustments may be necessary to allow for different economic conditions or adverse developments in its contract portfolio which could adversely affect the Company’s financial 20 Table of Contents condition and results of operations.
The Company provides financing in connection with the sale of substantially all of its vehicles. These sales are made primarily to customers residing in Alabama, Arkansas, Georgia, Illinois, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas with approximately 27.1% of revenues resulting from sales to Arkansas customers.
The Company provides financing in connection with the sale of substantially all of its vehicles. These sales are made primarily to customers residing in Alabama, Arkansas, Georgia, Illinois, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas with approximately 28% of revenues resulting from sales to Arkansas customers.
Additionally, our liquidity could be negatively impacted if economic conditions were to once again deteriorate due to a future COVID-19 outbreak or other public health crisis, which could require us to pursue additional sources of financing to obtain working capital, maintain appropriate inventory levels, support the origination of vehicle financing, and meet our financial obligations.
Additionally, our liquidity could be negatively impacted if economic conditions were to once again deteriorate due to a future public health crisis, which could require us to pursue additional sources of financing to obtain working capital, maintain appropriate inventory levels, support the origination of vehicle financing, and meet our financial obligations.
Risks Related to the Company ’ s Operations The Company may have a higher risk of delinquency and default than traditional lenders because it finances its sales of used vehicles to credit-impaired borrowers . Substantially all of the Company’s automobile contracts involve financing to individuals with impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders.
The Company may have a higher risk of delinquency and default than traditional lenders because it finances its sales of used vehicles to credit-impaired borrowers . Substantially all of the Company’s automobile contracts involve financing to individuals with impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders.
Additionally, the Company’s finance subsidiary, Colonial, is deemed a “larger participant” in the automobile finance market and is therefore subject to examination and supervision by the CFPB, which has broad regulatory powers over consumer credit products and services such as those offered by the Company.
Additionally, the Company’s finance subsidiary, Colonial, is deemed a “larger participant” in the automobile finance 17 Table of Contents market and currently remains subject to examination and supervision by the CFPB, which has broad regulatory powers over consumer credit products and services such as those offered by the Company.
If these systems fail to perform as designed or if we fail to respond effectively to consumer buying preferences or keep pace with technological advances by our competitors, it could have a material adverse effect on our business, financial condition and results of operations.
If these systems fail to perform as designed or if the Company fails to respond effectively to consumer buying preferences or keep pace with technological advances by its competitors, it could have a material adverse effect on the Company’s business, financial condition and results of operations.
The Company is also limited in its ability to pay dividends or make other distributions to its shareholders without the consent of its lender. Therefore, stockholders should not rely on future dividend income from shares of the Company’s common stock. Item 1B. Unresolved Staff Comments Not applicable.
The Company is also restricted from paying dividends or making other distributions to its shareholders without the consent of its lender. Therefore, stockholders should not rely on future dividend income from shares of the Company’s common stock. Item 1B. Unresolved Staff Comments Not applicable.
Any future deterioration in economic conditions or consumer financial health may result in additional future credit losses that may not be fully reflected in the allowance for credit losses. 20 The Company ’ s success depends upon the continued contributions of its management teams and the ability to attract and retain qualified employees.
In addition, any future deterioration in economic conditions or consumer financial health may result in additional future credit losses that may require us to increase the allowance for credit losses. The Company ’ s success depends upon the continued contributions of its management teams and the ability to attract and retain qualified employees.
We may be unable to keep pace with technological advances and changes in consumer behavior affecting our business, which could adversely affect our business, financial condition and results of operations. We rely on our information technology systems to facilitate digital sales leads.
The Company may be unable to keep pace with technological advances and changes in consumer behavior, which could adversely affect its business, financial condition and results of operations. The Company relies on its information technology systems to facilitate digital sales leads.
Increased competition on the financing side of the business could result in increased credit losses. The Company competes principally with other independent Integrated Auto Sales and Finance dealers, and with (i) the used vehicle retail operations of franchised automobile dealerships, (ii) independent used vehicle dealers, and (iii) individuals who sell used vehicles in private transactions.
The Company competes principally with other independent Integrated Auto Sales and Finance dealers, and with (i) the used vehicle retail operations of franchised automobile dealerships, (ii) independent used vehicle dealers, and (iii) individuals who sell used vehicles in private transactions.
Although the Company believes that its underwriting criteria and collection methods enable it to manage the higher risks inherent in financing made to non-prime borrowers, no assurance can be given that such criteria or methods will afford adequate protection against such risks.
Although the Company believes that its underwriting criteria and collection methods enable it to manage the higher risks inherent in financing made to non-prime borrowers, no assurance can be given that such criteria or methods will afford adequate protection against such risks. Additionally, changes in regulatory or bankruptcy laws could have an impact on the Company’s losses.
A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of a sufficient number of willing buyers and sellers of the common stock at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which the Company has no control.
A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of a sufficient number of willing buyers and sellers of the common stock at any given time.
The Company generates cash from income from continuing operations. The cash is primarily used to fund finance receivables growth. To the extent finance receivables growth exceeds income from continuing operations, the Company generally increases its borrowings under its revolving credit facilities and, more recently, has issued non-recourse notes through asset-back securitization transactions to provide the cash necessary to fund operations.
The Company generates cash from income from continuing operations. The cash is primarily used to fund finance receivables growth. In addition to income from continuing operations, the Company generally funds its finance receivables growth and operations through borrowings under its revolving credit facilities and periodic issuances of non-recourse notes through asset-back securitization transactions.
The consequences of any future adverse public health developments could have a material adverse effect on our business, sales, results of operations and financial condition.
The continued health and productivity of our associates, including management teams, is critical to our business, and any disruption could adversely affect our operations, The consequences of any future adverse public health developments could have a material adverse effect on our business, sales, results of operations and financial condition.
The effects of any future outbreaks of the pandemic or similar health crises could negatively impact all aspects of our business, including used vehicle sales and financing, finance receivable collections, repossession activity and inventory acquisition. Our business is also dependent on the continued health and productivity of our associates, including management teams, throughout this crisis.
The effects of any future pandemic or similar public health crises could negatively impact all aspects of our business, including consumer demand, used vehicle sales and financing, finance receivable collections, repossession activity and inventory acquisition.
Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in the technology used by the Company to protect transaction data being breached or compromised. 21 In addition, many of the third parties who provide products, services, or support to the Company could also experience any of the above cyber risks or security breaches, which could impact the Company's customers and its business and could result in a loss of customers, suppliers, or revenue.
In addition, many of the third parties who provide products, services, or support to the Company could also experience any of the above cyber risks or security breaches, which could impact the Company’s customers and its business and could result in a loss of customers, suppliers, or revenue.
Consequently, the impact of climate change-related events, including efforts to reduce or mitigate the effects of climate change, may adversely impact the Company’s operating results. 22 Risks Related to the Company ’ s Common Stock The Company ’ s stock trading volume may result in greater volatility in the market price of the Company ’ s common stock and may not provide adequate liquidity for investors.
Risks Related to the Company ’ s Common Stock The Company ’ s stock trading volume may result in greater volatility in the market price of the Company ’ s common stock and may not provide adequate liquidity for investors.
Our ability to optimize our digital sales platform is affected by online search engines and classified sites that are not direct competitors but that may direct online traffic to the websites of competing automotive retailers. These third-party sites could make it more difficult for us to market our vehicles online and attract customers to our online offerings.
The Company’s ability to optimize its digital sales platform is affected by online search engines and classified sites that are not direct competitors but that may direct online traffic to the websites of competing automotive retailers.
Periods of economic slowdown or recession are often characterized by high unemployment and diminished availability of credit, generally resulting in increases in delinquencies, defaults, repossessions and credit losses. Further, periods of economic slowdown may also be accompanied by temporary or prolonged decreased consumer demand for motor vehicles and declining used vehicle prices.
Periods of economic slowdown or recession are often characterized by high unemployment and diminished availability of credit, generally resulting in increases in delinquencies, defaults, repossessions and credit losses.
Recent and future disruptions in domestic and global economic and market conditions, including rising interest rates and higher grocery and gasoline prices, or significant changes in the political environment (such as the ongoing military conflicts in the Middle East, and Ukraine) and/or public policy, could adversely affect consumer demand or increase the Company’s costs, resulting in lower profitability for the Company.
Recent and future disruptions in domestic and global economic and market conditions, including as a result of the recent and potential future implementation of increased tariffs and other changes in trade policies, or significant changes in the political environment and/or public policy, could adversely affect consumer demand or increase the Company’s costs, resulting in lower profitability for the Company.
The global outbreak of COVID-19 led to severe disruptions in general economic activities, particularly retail operations, as businesses and federal, state, and local governments implemented mandates to mitigate this public health crisis. The pandemic has affected consumer demand and the overall health of the U.S. economy.
The global outbreak of COVID-19 led to severe disruptions in general economic activities, particularly retail operations and global supply chains, and affected consumer demand and the overall health of the U.S. economy for an extended period following the height of the pandemic.
Capital and credit markets were significantly affected by onset of the crisis and could be disrupted once again by any future wave of the virus or outbreak of a new coronavirus variant, and our ability to obtain any new or additional financing is not guaranteed and largely dependent upon evolving market conditions and other factors.
Capital and credit markets may also be disrupted by such events, and our ability to obtain any new or additional financing is not guaranteed and largely dependent upon evolving market conditions and other factors.
The Company is unable to predict with certainty the future impact of the most recent global and domestic economic conditions on consumer demand in our markets or on the Company’s costs. A reduction in the availability or access to sources of inventory could adversely affect the Company ’ s business by increasing the costs of vehicles purchased.
The prices of used vehicles are variable and a rise or decline in the used vehicle prices may have an adverse effect on the Company’s business. The Company is unable to predict with certainty the future impact of the most recent global and domestic economic conditions on consumer demand in our markets or on the Company’s costs.
The outlook for the U.S. economy and the impacts of efforts to reduce inflation through interest rate increases remains uncertain, which may adversely affect the Company’s financial condition, results of operations and liquidity.
The outlook for the U.S. economy and the impacts to the automotive industry and individual consumers of the recently imposed tariffs, any future tariffs and any retaliatory actions by other countries remains uncertain, which may adversely affect the Company’s financial condition, results of operations and liquidity.
Further, to address changes in consumer buying preferences and to improve customer experience, inventory procurement and recruiting and training, we make corresponding technology and systems upgrades. We may not be able to establish sufficient technological upgrades to support evolving consumer buying preferences and to keep pace with our competitors.
The Company may not be able to establish sufficient technological upgrades to support evolving consumer buying preferences and to keep pace with its competitors.
Our ability to source vehicles could also be impacted by the closure of auctions and wholesalers as a result of any future public health crisis, adverse economic conditions, or other factors. 17 The used automotive retail industry is fragmented and highly competitive, which could result in increased costs to the Company for vehicles and adverse price competition.
The used automotive retail industry is fragmented and highly competitive, which could result in increased costs to the Company for vehicles and adverse price competition. Increased competition on the financing side of the business could result in increased credit losses.
The cost and availability of sources of inventory could affect the Company’s ability to open new dealerships. The long-term impacts of the economic downturn due to COVID-19 on new car sales volumes and the ability of auctions and wholesalers to continue to operate is uncertain.
The cost and availability of sources of inventory could affect the Company’s ability to open new dealerships or increase revenue at existing dealerships.
Any future decline in new car sales could further adversely affect the Company’s access to and costs of inventory.
Any future decline in new car sales as a result of the recent and potential future U.S. trade policy changes or other factors could further exacerbate challenges related to sourcing inventory or increase the cost of vehicles.
Removed
The Company acquires vehicles primarily through wholesalers, new car dealers, individuals and auctions. There can be no assurance that sufficient inventory will continue to be available to the Company or will be available at comparable costs.
Added
A downturn in economic conditions, disruptions in the equity or debt markets, high unemployment or underemployment, depressed vehicle or housing prices, unsustainable debt levels, high inflation, high interest rates, unfavorable changes in interest rates, the introduction of trade tariffs or other policies that negatively impact the automotive industry, declines in household incomes or savings, deteriorating consumer or business sentiment, consumer or commercial bankruptcy filings, or declines in the strength of national or local economies could decrease demand for our products and services, increase the amount and rate of delinquencies and losses, raise our operating and other expenses, and negatively impact the returns on and the value of our portfolio.
Removed
Any reduction in the availability of inventory or increases in the cost of vehicles could adversely affect gross margin percentages as the Company focuses on keeping payments affordable to its customer base. The Company could have to absorb a portion of cost increases.
Added
A reduction in the availability or access to sources of inventory could adversely affect the Company ’ s business by increasing the costs of vehicles purchased. The Company primarily acquires vehicles through wholesalers, new car dealers, rental and fleet companies, auctions, and the general public.
Removed
The supply of vehicles at appropriate prices available to the Company is significantly affected by overall new car sales volumes, which were negatively impacted by the business and economic and supply chain disruptions following the outbreak of the COVID-19 pandemic and have historically been materially and adversely affected by prior economic downturns.
Added
However, there is no assurance that sufficient inventory will continue to be available to the Company, nor that vehicles will be available at comparable prices. Any reduction in inventory availability or increase in vehicle acquisition costs could negatively impact the Company’s gross margin, particularly as it strives to maintain affordable payments for its customer base.
Removed
At April 30, 2024 the Company had an allowance for credit losses at 25.32% (compared to 23.91% at April 30, 2023) of the principal balance of finance receivables, net of deferred revenue and pending APP claims.
Added
In such instances, the Company may need to absorb a portion of these cost increases, which could adversely affect profitability. The availability and pricing of vehicles is heavily influenced by overall new car sales volumes.
Removed
The increase in the allowance for credit losses was primarily due to continuing inflationary pressure on customers and the update to our calculation methodology and the performance of our loan portfolio in the second quarter of the fiscal year 2024.
Added
New car sales have historically been vulnerable to economic downturns and disruptions to supply chains and could be impacted by tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions.
Added
Additionally, the Company’s ability to procure vehicles may be adversely affected by disruptions in the wholesale and auction markets, including closures or reduced operations due to future public health crises, continued economic volatility, or other unforeseen factors. Such disruptions could restrict access to vehicles or drive up acquisition costs, further impacting the Company’s operational performance and margins.
Added
While new car sales volumes and the operations of auctions and wholesalers have generally stabilized since the pandemic, long-term changes in supply chain dynamics and vehicle turnover continue to create uncertainty and could be impacted by tariffs or the imposition of new tariffs, trade wars, barriers or restriction, or threats of such actions.
Added
Risks Related to the Company ’ s Operations The Company identified a material weakness in its internal control over financial reporting, and if it is unable to achieve and maintain effective internal control over financial reporting, its ability to produce accurate financial statements on a timely basis could be impaired and its public reporting may be unreliable.
Added
Effective internal control over financial reporting is necessary for the Company to detect and prevent material misstatements in a timely manner in order to provide reasonable assurance regarding the reliability of our financial reporting and the presentation of its financial statements in accordance with GAAP.
Added
Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed by the Company in the reports we file or submit to the SEC is accumulated and communicated to management to allow timely decisions regarding required disclosure.
Added
A material weakness, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Added
Based on the Company’s evaluation of the effectiveness of its internal control over financial reporting as of April 30, 2025, the Company determined that it had a material weakness as of April 30, 2025 because of inadequate controls to appropriately analyze all relevant information required for complete and accurate presentation and disclosure under GAAP.
Added
This principally resulted from (1) incorrect assessment during the initial adoption of ASU 2022-02, (2) ineffective disclosure controls and procedures that did not identify missing required disclosures under ASC 310-10-50-42 through 50-44, and (3) turnover in technical accounting resources leading to a reduction of requisite expertise.
Added
Accordingly, the Company’s disclosure controls and procedures and internal control over financial reporting as of April 30, 2025 were not effective due to the material weakness discussed above. 19 Table of Contents The Company is implementing significant organizational and process improvements to address the material weakness, including hiring experienced financial reporting personnel and enhancing its disclosure controls and procedures.
Added
The remediation actions are being monitored by the Audit Committee of the Board of Directors. However, the Company cannot assure you that these efforts will remediate this material weakness in a timely manner, or at all, or that the Company will be able to maintain effective controls and procedures even if it remediates this material weakness.
Added
If the Company is unable to successfully remediate this material weakness, design or operate effective controls and procedures, or identify any future material weaknesses, the accuracy and timing of its financial reporting may be adversely affected, it may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports and it may experience a loss of public confidence, which could have an adverse effect on the Company’s business, financial condition and the market price of the Company’s common stock.
Added
The Company is required to disclose changes made in its internal control procedures on a quarterly basis, and management is required to assess the effectiveness of these controls annually.
Added
As an “accelerated filer,” the Company’s independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. An independent assessment of the effectiveness of the Company’s internal controls could detect problems that management’s assessment might not.
Added
Any additional undetected material weaknesses in the Company’s internal controls could lead to further financial statement restatements and require the Company to incur additional expenses of remediation.
Added
In addition, if the Company is unable to remediate this material weakness, or if the Company is otherwise unable to conclude that its internal control over financial reporting is effective, the Company could lose investor confidence in the accuracy and completeness of its financial reports, the market price of its securities could decline, and the Company could be subject to sanctions or investigations by regulatory authorities.
Added
Failure to remedy any material weakness in the Company’s internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict the Company’s future access to the capital markets.
Added
Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in the technology used by the Company to protect transaction data being breached or compromised.
Added
These third-party sites could make it 21 Table of Contents more difficult for the Company to market its vehicles online and attract customers to its online offerings. Further, to address changes in consumer buying preferences and to improve customer experience, inventory procurement and recruiting and training, the Company makes corresponding technology and systems upgrades.
Added
Consequently, the impact of climate change-related events, including efforts to reduce or mitigate the effects of climate change, may adversely impact the Company’s operating results.
Added
This presence 22 Table of Contents depends on the individual decisions of investors and general economic and market conditions over which the Company has no control.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+2 added−0 removed6 unchanged
Biggest changeIn connection with that oversight responsibility, our Senior Vice President of Technology and Chief Legal Officer meet with the Innovation and Technology Committee on a quarterly basis to provide information and updates on a range of cybersecurity topics which may include our cybersecurity program and governance processes; cyber risk monitoring and management; the status of projects to strengthen our cybersecurity and privacy capabilities; recent significant incidents or threats impacting our operations, industry, or third-party suppliers; and the emerging threat landscape. 24 Our information security team works closely with key stakeholders, including regulators, government agencies, law enforcement, peer institutions, industry groups, and develops and invests in talent and innovative technology to manage cybersecurity risk.
Biggest changeIn connection with that oversight responsibility, our Chief Technology Officer and Chief Legal Officer meet with the Audit Committee on a quarterly basis to provide information and updates on a range of cybersecurity topics which may include our cybersecurity program and governance processes; cyber risk monitoring and management; the status of projects to strengthen our cybersecurity and privacy capabilities; recent significant incidents or threats impacting our operations, industry, or third-party suppliers; and the emerging threat landscape.
Our cybersecurity program leverages both internal and external techniques and expertise across the cybersecurity spectrum. We maintain and utilize industry best practice capabilities, processes, and other security-related measures, based upon National Institute of Standards and Technology (NIST) and Control Objectives for Information Technologies (CoBIT) frameworks.
Our cybersecurity program leverages both internal and external techniques and expertise across the cybersecurity spectrum. We maintain and utilize industry best practice capabilities, processes, and other security-related measures, based 23 Table of Contents upon National Institute of Standards and Technology (NIST) and Control Objectives for Information Technologies (CoBIT) frameworks.
The ability and availability of information to monitor the cybersecurity practices and controls of our suppliers is limited, and there can be no assurance that we can prevent or mitigate the risk of any compromise or failure in information systems, software, networks, and other assets owned or controlled by our suppliers.
The ability and availability of information to monitor the cybersecurity practices and controls of our suppliers and third party service providers is limited, and there can be no assurance that we can prevent or mitigate the risk of any compromise or failure in information systems, software, networks, and other assets owned or controlled by our suppliers and third party service providers.
We also expect our suppliers to follow the same industry-standard security practices that we follow. Despite having thorough due diligence, onboarding, and cybersecurity assessment processes in place for our suppliers, the responsibility ultimately rests with our suppliers to establish and uphold their respective cybersecurity programs.
We also expect our suppliers and third party service providers to follow the same industry-standard security practices that we follow. Despite having thorough due diligence, onboarding, and cybersecurity assessment processes in place for our suppliers, the responsibility ultimately rests with our suppliers to establish and uphold their respective cybersecurity programs.
The above framework tracks and allows team members to monitor each incident throughout its lifecycle to ensure the Company is informed about and following cybersecurity incidents as they are mitigated and remediated. Post-incident reviews are also performed to determine if there are any additional controls that may feasibly be implemented to prevent recurrence.
The above framework is designed to track and allow team members to monitor each incident throughout its lifecycle to ensure the Company is informed about and following cybersecurity incidents as they are mitigated and remediated. Post-incident reviews would also be performed to determine if there are any additional controls that may feasibly be implemented to prevent recurrence.
When a cybersecurity threat or incident is identified, the Senior Vice President of Technology and the security team works closely with cross functional committees, leveraging subject matter expertise across the organization, as part of our incident response plans and promptly provides information to senior management, with the goal of timely assessing such incidents, determining applicable disclosure requirements and communicating with the Chairs of the Innovation and Technology Committee and the Audit Committee, regarding any significant cybersecurity incidents, including those experienced by third party service providers, which may pose significant risk to our business, customers, clients, associates and stakeholders, and continues to provide regular reports until such incidents are concluded.
In the event that a cybersecurity threat or incident is identified, the Chief Technology Officer and the security team would work closely with cross functional committees, leveraging subject matter expertise across the organization, as part of our incident response plans and promptly provide information to senior management, with the goal of timely assessing such incidents, determining applicable disclosure requirements and communicating with the Chair of the Audit Committee regarding any significant cybersecurity incidents, including those experienced by third party service providers, which may pose significant risk to our business, customers, clients, associates and stakeholders, and continues to provide regular reports until such incidents are concluded.
Item 1C. Cybersecurity Material Effects of Cybersecurity Incidents Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations, or financial condition. Further information regarding cybersecurity risks can be found in Item 1A.
Item 1C. Cybersecurity Material Effects of Cybersecurity Incidents Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations, or financial condition. Further information regarding cybersecurity risks can be found in Item 1A. Risk Factors, of this Annual Report on Form 10-K.
Risk Factors, of this Annual Report on Form 10-K. 23 Cybersecurity Risk Management and Strategy We consider the protection of our customers’ and corporate data to be a priority within our business.
Cybersecurity Risk Management and Strategy We consider the protection of our customers’ and corporate data to be a priority within our business.
Cybersecurity Governance Our Board of Directors oversees the management of risks inherent in the operation of our business, with a focus on the most significant risks that we face, including those related to cybersecurity. Our Board of Directors has delegated oversight of cybersecurity, including privacy and information security, as well as enterprise risk management to the Innovation and Technology Committee.
Cybersecurity Governance Our Board of Directors oversees the management of risks inherent in the operation of our business, with a focus on the most significant risks that we face, including those related to cybersecurity.
Added
Our Board of Directors has delegated oversight of cybersecurity, including privacy and information security, as well as enterprise risk management to the Audit and Compliance Committee (the “Audit Committee”).
Added
Our information security team works closely with key stakeholders, including regulators, government agencies, peer institutions, industry groups, and develops and invests in talent and innovative technology to manage cybersecurity risk.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFor additional information regarding the Company’s properties, see “Operations-Dealership Locations and Facilities” under Item 1 above.
Biggest changeFor additional information regarding the Company’s properties, see “Operations-Dealership Locations and Facilities” under Item 1 above. 24 Table of Contents
Item 2. Properties As of April 30, 2024, the Company leased approximately 86% of its facilities, including dealerships and the Company’s corporate offices. These facilities are located principally in the states of Alabama, Arkansas, Georgia, Illinois, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas. The Company’s corporate offices are located in approximately 50,000 square feet of leased space in Rogers, Arkansas.
Item 2. Properties As of April 30, 2025, the Company leased approximately 87% of its facilities, including dealerships and the Company’s corporate offices. These facilities are located principally in the states of Alabama, Arkansas, Georgia, Illinois, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas. The Company’s corporate offices are located in approximately 50,000 square feet of leased space in Rogers, Arkansas.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the outcome of these proceedings cannot be predicted with certainty, the Company does not expect the final outcome of any of these proceedings, individually or in the aggregate, to have a material adverse effect on the Company’s financial position, results of operations or cash flows. Item 4. Mine Safety Disclosure Not applicable. 25 PART II
Biggest changeWhile the outcome of these proceedings cannot be predicted with certainty, the Company does not expect the final outcome of any of these proceedings, individually or in the aggregate, to have a material adverse effect on the Company’s financial position, results of operations or cash flows. Item 4. Mine Safety Disclosure Not applicable. 25 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph assumes that the value of the investment in the Company’s common stock and each index or peer group was $100 on April 30, 2019. 26 The dollar value at April 30, 2024 of $100 invested in the Company’s common stock on April 30, 2019 was $57.79, compared to $201.71 for the NASDAQ Market Index (U.S.
Biggest changeThe graph assumes that the value of the investment in the Company’s common stock and each index or peer group was $100 on April 30, 2020. * $100 invested on 4/30/2020 in stock or index, including reinvestment of dividends. Fiscal year ending April 30.
Stockholder Return Performance Graph Set forth below is a line graph comparing the fiscal year end percentage change in the cumulative total stockholder return on the Company’s common stock to (i) the cumulative total return of the NASDAQ Market Index (U.S. companies), and (ii) the market-weighted value of a customized peer group of automotive dealership companies (“Auto Dealerships”) composed of the common stock of Asbury Automotive Group, Inc.; AutoNation, Inc.; CarMax, Inc.; Copart, Inc.; Group 1 Automotive, Inc.; Lithia Motors, Inc.; Penske Automotive Group, Inc.; Rush Enterprises, Inc.; and Sonic Automotive, Inc. for the period of five fiscal years commencing on May 1, 2019 and ending on April 30, 2024.
Stockholder Return Performance Graph Set forth below is a line graph comparing the fiscal year end percentage change in the cumulative total stockholder return on the Company’s common stock to (i) the cumulative total return of the NASDAQ Market Index (U.S. companies), and (ii) the market-weighted value of a customized peer group of automotive dealership companies (“Auto Dealerships”) composed of the common stock of Asbury Automotive Group, Inc.; AutoNation, Inc.; CarMax, Inc.; Copart, Inc.; Group 1 Automotive, Inc.; Lithia Motors, Inc.; Penske Automotive Group, Inc.; Rush Enterprises, Inc.; and Sonic Automotive, Inc. for the period of five fiscal years commencing on May 1, 2020 and ending on April 30, 2025.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Equity The Company’s common stock is traded on the NASDAQ Global Select Market under the symbol CRMT. Holders of Record As of June 19, 2024, there were approximately 988 shareholders of record.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Equity The Company’s common stock is traded on the NASDAQ Global Select Market under the symbol CRMT. Holders of Record As of July 31, 2025, there were approximately 977 shareholders of record.
Issuer Purchases of Equity Securities The Company is authorized to repurchase shares of its common stock under its common stock repurchase program. On December 14, 2020, the Board of Directors authorized the repurchase of up to an additional one million shares along with the balance remaining under its previous authorization approved and announced on November 16, 2017.
Issuer Purchases of Equity Securities On December 14, 2020, the Board of Directors authorized the repurchase of up to one million shares in addition to the balance remaining under its previous authorization approved and announced on November 16, 2017.
The Company is also limited in its ability to pay dividends or make other distributions to its shareholders without the consent of its lender. Please see “Liquidity and Capital Resources” under Item 7 of Part II for more information regarding this limitation.
The Company is currently restricted from paying dividends or making other distributions to its shareholders without the consent of its lender. See “Liquidity and Capital Resources” under Item 7 of Part II for more information regarding these restrictions.
No shares of the Company’s common stock were purchased under the Company’s stock repurchase program during fiscal 2024.
Therefore, no shares of the Company’s common stock were purchased under the Company’s stock repurchase program during the fourth quarter of fiscal 2025. Item 6. [Reserved] 27 Table of Contents
Companies) and $249.06 for the Auto Dealerships peer group. Dividend Policy Since its inception, the Company has paid no cash dividends on its common stock. The Company currently intends for the foreseeable future to continue its policy of retaining earnings to finance future growth.
The Company currently intends for the foreseeable future to continue its policy of retaining earnings to finance future growth.
Added
The dollar value at April 30, 2025 of $100 invested in the Company’s common stock on April 30, 2020 was $71.90, compared to $203.93 for the NASDAQ Market Index (U.S. Companies) and $274.23 for the Auto Dealerships peer group. 26 Table of Contents Dividend Policy Since its inception, the Company has paid no cash dividends on its common stock.
Added
On September 16, 2024, the Company entered into an amendment to its revolving credit facilities that, among other things, restricts the Company from future repurchases of the Company’s stock. See Note B to the Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K for additional information on these restrictions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThese investments reflect our commitment to providing the necessary inventory and facilities to support a growing customer base. 34 Liquidity and Capital Resources The following table sets forth certain historical information with respect to the Company’s Statements of Cash Flows (in thousands): Years Ended April 30, 2024 2023 2022 Operating activities: Net income $ (31,393 ) $ 20,432 $ 95,014 Provision for credit losses 423,406 352,860 238,054 Losses on claims for accident protection plan 34,504 25,107 21,871 Depreciation and amortization 6,871 5,602 4,033 Amortization of debt issuance costs 5,139 5,461 775 Stock based compensation 4,174 5,314 5,496 Deferred income taxes (21,507 ) 8,866 8,750 Finance receivable originations (1,079,946 ) (1,161,132 ) (1,009,858 ) Finance receivable collections 455,828 434,458 417,796 Accrued interest on finance receivables (792 ) (1,188 ) (1,559 ) Inventory 139,186 133,047 51,057 Accounts payable and accrued liabilities (9,338 ) 8,621 5,167 Deferred accident protection plan revenue (1,229 ) 17,150 21,850 Deferred service contract revenue 1,540 24,542 30,645 Income taxes, net 6,301 (8,984 ) (424 ) Other (1) (6,642 ) (5,884 ) (7,845 ) Total (73,898 ) (135,728 ) (119,178 ) Investing activities: Purchase of investments (4,815 ) (5,549 ) (1,574 ) Purchase of property and equipment (1) (6,146 ) (22,106 ) (15,796 ) Proceeds from sale of property and equipment 316 84 20 Total (10,645 ) (27,571 ) (17,350 ) Financing activities: Debt facilities, net 27,330 119,580 (186,037 ) Non-recourse debt, net 83,381 72,900 399,994 Change in cash overdrafts 823 - (1,802 ) Purchase of common stock (365 ) (5,196 ) (34,698 ) Dividend payments (40 ) (40 ) (40 ) Exercise of stock options, including tax benefits and issuance of common stock (173 ) 1,502 (1,195 ) Total 110,956 188,746 176,222 Increase in cash, cash equivalents, and restricted cash $ 26,413 $ 25,447 $ 39,694 (1) Prepaid expenses and other assets at April 30, 2022, reflects an immaterial reclassification of approximately $6.0 million of capitalized implementation costs related to a cloud-computing arrangement previously recorded in Property and equipment, net, and did not impact operating income.
Biggest changeThe proceeds from the Company’s common stock offering during the second quarter substantially offset the increase in finance receivables for fiscal year 2025. 39 Table of Contents Liquidity and Capital Resources The following table sets forth certain historical information with respect to the Company’s Statements of Cash Flows (in thousands): Years Ended April 30, 2025 2024 2023 Operating activities: Net income (loss) $ 17,932 $ (31,393) $ 20,432 Provision for credit losses 374,559 423,406 352,860 Losses on claims for accident protection plan 34,525 34,504 25,107 Depreciation and amortization 7,647 6,871 5,602 Amortization of debt issuance costs 6,200 5,139 5,461 Stock based compensation 4,708 4,174 5,314 Deferred income taxes (10,662) (21,507) 8,866 Finance receivable originations (1,075,080) (1,079,946) (1,161,132) Finance receivable collections 469,379 455,828 434,458 Accrued interest on finance receivables (525) (792) (1,188) Inventory 114,573 139,186 133,047 Accounts payable and accrued liabilities 17,616 (9,338) 8,621 Deferred accident protection plan revenue (378) (1,229) 17,150 Deferred service contract revenue (7,158) 1,540 24,542 Income taxes, net 4,409 6,301 (8,984) Other (6,509) (6,642) (5,884) Total (48,764) (73,898) (135,728) Investing activities: Purchase of investments (7,527) (4,815) (5,549) Purchase of property and equipment (3,890) (6,146) (22,106) Proceeds from sale of property and equipment 42 316 84 Total (11,375) (10,645) (27,571) Financing activities: Revolving credit facilities, net 6,579 33,227 121,843 Notes payable, net 18,558 83,381 72,900 Change in cash overdrafts 466 823 - Debt issuance costs (9,006) (5,897) (2,263) Purchase of common stock (434) (365) (5,196) Dividend payments (40) (40) (40) Exercise of stock options, including tax benefits and issuance of common stock 74,106 (173) 1,502 Total 90,229 110,956 188,746 Increase in cash, cash equivalents, and restricted cash $ 30,090 $ 26,413 $ 25,447 40 Table of Contents The primary drivers of operating profits and cash flows include (i) top line sales (ii) interest income on finance receivables, (iii) gross margin percentages on vehicle sales, and (iv) credit losses, a significant portion of which relates to the collection of principal on finance receivables.
Interest expense for fiscal 2024 as a percentage of sales increased to 5.6% in fiscal 2024 from 3.2% in fiscal 2023.
Interest expense for fiscal 2024 as a percentage of sales increased to 5.6% from 3.2% in fiscal 2023.
We strongly encourage investors to review our consolidated financial statements included in this Annual Report on Form 10-K in their entirety and not rely solely on any one, single financial measure. The reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures as of April 30, 2024, are provided in the table below.
We strongly encourage investors to review our consolidated financial statements included in this Annual Report on Form 10-K in their entirety and not rely solely on any one, single financial measure. The reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures as of April 30, 2025 and 2024, are provided in the table below.
These efforts resulted in the lowest percentage change in annual selling, general and administrative expenses in over five years at just a 1.5% increase. 31 Provision for credit losses as a percentage of sales increased to 36.5% for fiscal 2024 compared to 29.3% for fiscal 2023.
These efforts resulted in the lowest percentage change in annual selling, general and administrative expenses in over five years at just a 1.5% increase. Provision for credit losses as a percentage of sales increased to 36.5% for fiscal 2024 compared to 29.3% for fiscal 2023.
On a dollar basis, our gross margin per retail unit sold increased by $593 in fiscal 2024 compared to fiscal 2023. The average retail sales price for fiscal 2024 was $19,113, a $1,033 increase over the prior fiscal year, with over half of the increase attributable to vehicle price and the remaining related to ancillary products.
On a dollar basis, our gross margin per retail unit sold increased by $593 in fiscal 2024 compared to fiscal 2023. The average retail sales price for fiscal 2024 was $19,113, a $1,033 increase over the prior fiscal year, with over half of the increase attributable to vehicle price and the remainder related to ancillary products.
The increase resulted from increased collections costs due primarily to a higher frequency of repossessions and increased spending in professional services around improvements in technology, as well as operating in a higher inflationary environment, which was partially offset by operational improvements and cost-cutting measures implemented in fiscal 2024.
The increase resulted from increased collections costs due primarily to a higher frequency of repossessions and increased spending in professional services around improvements in technology, as well as operating in a higher inflationary environment, partially offset by operational improvements and cost-cutting measures implemented in fiscal 2024.
The Company’s policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accrued penalties or interest as of April 30, 2024.
The Company’s policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accrued penalties or interest as of April 30, 2025.
The increased frequency and severity of losses was partially mitigated by improved collection results from loans originated using our new LOS system compared to our outstanding loans originated under our legacy system. Approximately 20% of the portfolio balance of April 30, 2024 originated under the new LOS system.
The increased frequency and severity of losses was partially mitigated by improved collection results from loans originated using our new underwriting system compared to our outstanding loans originated under our legacy system. Approximately 20% of the portfolio balance at April 30, 2024 originated under the new underwriting system.
The decline in revenue for fiscal 2024 is attributable to an 8.8% decrease in retail units sold, largely reflecting the challenging macroeconomic environment for our customers, partially offset by an 18.8% increase in interest and other income and a 5.7% increase in the average retail sales price.
The decline in revenue for fiscal 2024 is attributable to an 8.8% decrease in retail units sold, largely reflecting the challenging macroeconomic environment for our customers, partially offset by an 18.8% increase in interest and other 36 Table of Contents income and a 5.7% increase in the average retail sales price.
The Company strives to improve the quality of the inventory and maintain adequate turns while maintaining inventory levels to ensure an adequate supply of vehicles, in volume and mix, and to meet sales demand. 33 Property and equipment, net, decreased by approximately $1.3 million as of April 30, 2024 as compared to fiscal 2023.
The Company strives to improve the quality of the inventory and maintain adequate turns while maintaining inventory levels to ensure an adequate supply of vehicles, in volume and mix, and to meet sales demand. Property and equipment, net, decreased by approximately $3.5 million as of April 30, 2025 as compared to fiscal 2024.
The allowance for credit losses at April 30, 2024 of $331.3 million, was 25.32% of the principal balance in finance receivables of $1.4 billion, less unearned accident protection plan revenue of $51.8 million, unearned service contract revenue of $68.9 million and, pending APP claims of $6.4 million.
The allowance for credit losses at April 30, 2024, $331.3 million, was 25.32% of the principal balance in finance receivables of $1.4 billion, less deferred APP revenue of $51.8 million, deferred service contract revenue of $68.9 million, and pending APP claims of $6.4 million.
The Company increased the allowance for credit losses as a percentage of finance receivables from 23.91% at April 30, 2023 to 25.32% at April 30, 2024. The allowance for credit losses represents the Company’s expectation of future net charge-offs at the measurement date.
The Company decreased the allowance for credit losses as a percentage of finance receivables from 25.32% at April 30, 2024 to 23.25% at April 30, 2025. The allowance for credit losses represents the Company’s expectation of future net charge-offs at the measurement date.
The provision for credit losses as a percentage of sales was higher during the current year due to the growth in the balance of finance receivables, net of deferred revenue of $61.7 million, coupled with a decrease in sales of $43.4 million. An increase in net charge-offs also contributed to the higher provision.
The provision for credit losses as a percentage of sales was higher during fiscal 2024 due to the growth in the balance of finance receivables, net of deferred revenue, coupled with a decrease in sales of $43.4 million. An increase in net charge-offs also contributed to the higher provision.
The Company maintains an allowance for credit losses on an aggregate basis at a level it considers sufficient to cover estimated losses expected to be incurred on the portfolio at the measurement date in the collection of its finance receivables currently outstanding. At April 30, 2024, the weighted average contract term was 47.9 months with 36.1 months remaining.
The Company maintains an allowance for credit losses on an aggregate basis at a level it considers sufficient to cover estimated losses expected to be incurred on the portfolio at the measurement date in the collection of its finance receivables currently outstanding. At April 30, 2025, the weighted average contract term was 48.3 months with 35.9 months remaining.
Historically, most of the cash generated from operations has been used to fund finance receivables growth, capital expenditures and common stock repurchases.
Historically, most or all of the cash generated from operations has been used to fund finance receivables growth, capital expenditures, and as applicable, common stock repurchases.
The Company incurred approximately $6.1 million in expenditures during fiscal year 2024, primarily related to remodeling of existing locations. These expenditures were offset by $6.9 million in depreciation expense during fiscal 2024.
The Company incurred approximately $3.9 million in expenditures during fiscal year 2025, primarily related to remodeling of existing locations. These expenditures were offset by $7.6 million in depreciation expense during fiscal 2025.
The Company currently anticipates that the growth in finance receivables will generally be slightly higher than overall revenue growth on an annual basis due to overall term length increases in our installment sales contracts, partially offset by improvements in underwriting and collection procedures in an effort to reduce credit losses.
The Company currently anticipates that the growth in finance receivables will continue to modestly exceed the overall change in revenue on an annual basis due to overall term length increases in our installment sales contracts, partially offset by improvements in underwriting and collection procedures in an effort to reduce credit losses.
The allowance for credit losses is reviewed at least quarterly by management with any changes reflected in current operations. 38 The allowance for credit losses is a critical accounting estimate for the following reasons: ● estimates relating to the allowance for credit losses require management to project future loan performance, including cash flows, prepayments, and charge-offs; ● the allowance for credit losses is influenced by factors outside of management’s control such as industry and business trends, geopolitical events and the effects of laws and regulations as well as economic conditions including, but not limited to, inflation; and ● judgment is required to determine whether the model used to generate the allowance for credit losses produces results that appropriately reflect a current estimate of lifetime expected credit losses.
The allowance for credit losses is reviewed at least quarterly by management with any changes reflected in current operations. 43 Table of Contents The allowance for credit losses is a critical accounting estimate for the following reasons: • estimates relating to the allowance for credit losses require management to project future loan performance, including cash flows, prepayments, and charge-offs; • the allowance for credit losses is influenced by factors outside of management’s control such as industry and business trends, geopolitical events and the effects of laws and regulations as well as economic conditions including, but not limited to, inflation; and • judgment is required to evaluate whether the model used to generate the allowance for credit losses, which is then adjusted for changes in customer interest rates, credit deterioration and delinquency rates, as well as the expected effects from current and forecasted inflation, produces an allowance that appropriately reflects a current estimate of lifetime expected credit losses.
Decreases in the overall volume of new car sales, particularly domestic brands, lead to decreased supply and generally increased prices in the wholesale used car market.
Decreases in the overall volume of new car sales, particularly domestic brands, lead to decreased supply in the used car market.
The Company expects the tight used vehicle supply and strong demand for the types of vehicles we purchase to continue to keep purchase costs and resulting sales prices elevated for the short term but anticipates that an increase in marketplace wages for our customers could enhance affordability.
The Company expects that the tight supply of used vehicles, strong demand for the types of vehicles we purchase, and market reactions to ongoing tariff uncertainty will continue to keep purchase costs and resulting sales prices elevated in the short term, However, an increase in marketplace wages for our customers could enhance affordability.
Years Ended April 30, 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 % At fiscal year-end 2024, inventory decreased 1.7% ($1.8 million), compared to fiscal year-end 2023.
Years Ended April 30, 2025 2024 2023 Growth in finance receivables, net of deferred revenue 6.2 % 4.9 % 24.2 % Revenue growth (0.2) % (0.5) % 17.6 % At fiscal year-end 2025, inventory increased 4.4%, or $4.8 million, compared to fiscal year-end 2024.
For fiscal year 2024, growth in finance receivables, net of deferred revenue, of 4.9% exceeded revenue decline of 0.5%, due primarily to the increases in term lengths of our installment sales contracts as the Company strives to keep payments affordable for our customers.
For fiscal year 2025, growth in finance receivables, net of deferred revenue was 6.2%, while revenue decline of 0.2%, due primarily to the increases in term lengths of our installment sales contracts as the Company strives to keep payments affordable for our customers.
In July 2024, the Company entered into Amendment No. 7 to its revolving credit agreement to allow for, among other things, the entry into an amortizing warehouse agreement with recourse against the Company with respect to up to 10% of the aggregate amount borrowed under the warehouse facility and to amend the fixed charge coverage ratio under the credit agreement.
In July 2024, the Company entered into Amendment No. 7 to its revolving credit agreement to allow for, among other things, the entry into an amortizing warehouse agreement and to amend the fixed charge coverage ratio under the credit agreement.
Borrowings on the Company’s revolving credit facilities fluctuate primarily based upon a number of factors including (i) net income, (ii) finance receivables changes, (iii) funds available from asset-backed securitization offerings and/or warehouse facilities, (iv) income taxes, (v) capital expenditures, and (vi) common stock repurchases.
See Note F for further details on the revolving line of credit. Borrowings on the Company’s revolving credit facilities fluctuate based upon a number of factors including (i) net income, (ii) finance receivables changes, (iii) funds available from asset-backed securitization offerings, warehouse facilities and/or other capital financing sources, (iv) income taxes, and (v) capital expenditures.
As a % of Sales 2024 2023 2022 2023 2022 2024 2023 2022 Operating Statement: Revenues: Sales $ 1,160,798 $ 1,204,194 $ 1,038,682 (3.6 )% 15.9 % 100.0 % 100.0 % 100.0 % Interest and other income 233,096 196,219 151,853 18.8 29.2 20.1 16.3 14.6 Total 1,393,894 1,400,413 1,190,535 (0.5 ) 17.6 120.1 116.3 114.6 Costs and expenses: Cost of sales, excluding depreciation shown below 758,546 800,788 658,615 (5.3 )% 21.6 % 65.3 66.5 63.4 Selling, general and administrative 179,421 176,696 156,130 1.5 13.2 15.5 14.7 15.0 Provision for credit losses 423,406 352,860 238,054 20.0 48.2 36.5 29.3 22.9 Interest expense 65,348 38,312 10,919 70.6 250.9 5.6 3.2 1.1 Depreciation and amortization 6,871 5,602 4,033 22.7 38.9 0.6 0.5 0.4 Loss on disposal of property and equipment 437 361 149 21.1 142.3 - - - Total 1,434,029 1,374,619 1,067,900 4.3 28.7 123.5 114.2 102.8 (Loss) income before income taxes $ (40,135 ) $ 25,794 $ 122,635 (3.5 )% 2.1 % 11.8 % Operating Data (Unaudited): 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 Compared to Fiscal 2023 Total revenues decreased $6.5 million, or 0.5%, in fiscal 2024, as compared to revenue growth of 17.6% in fiscal 2023, principally as a result of declines in revenue from (i) dealerships that operated a full twelve months in both fiscal years ($13.8 million), and (ii) dealerships that were closed during or after the year ended April 30, 2023 ($14.9 million), partially offset by revenue growth from (iii) dealerships opened or acquired after April 30, 2023 ($22.2 million).
As a % of Sales 2025 2024 2023 2024 2023 2025 2024 2023 Operating Statement: Revenues: Sales $ 1,146,208 $ 1,160,798 $ 1,204,194 (1.3) % (3.6) % 100.0 % 100.0 % 100.0 % Interest and other income 244,724 233,096 196,219 5.0 18.8 21.4 20.1 16.3 Total 1,390,932 1,393,894 1,400,413 (0.2) (0.5) 121.4 120.1 116.3 Costs and expenses: Cost of sales, excluding depreciation shown below 726,055 758,546 800,788 (4.3) % (5.3) % 63.3 65.3 66.5 Selling, general and administrative 188,921 179,421 176,696 5.3 1.5 16.5 15.5 14.7 Provision for credit losses 374,559 423,406 352,860 (11.5) 20.0 32.7 36.5 29.3 Interest expense 70,650 65,348 38,312 8.1 70.6 6.2 5.6 3.2 Depreciation and amortization 7,647 6,871 5,602 11.3 22.7 0.7 0.6 0.5 Loss on disposal of property and equipment 299 437 361 (31.6) 21.1 - - - Total 1,368,131 1,434,029 1,374,619 (4.6) 4.3 119.4 123.5 114.2 Income (loss) before taxes $ 22,801 $ (40,135) $ 25,794 2.0 % (3.5) % 2.1 % Operating Data (Unaudited): Retail units sold 57,022 57,989 63,584 (1.7) % (8.8) % Average dealerships in operation 154 154 155 - (0.6) Average units sold per dealership per month 30.9 31.4 34.2 (1.6) (8.2) Average retail sales price $ 19,398 $ 19,113 $ 18,080 1.5 5.7 Gross profit per retail unit sold $ 7,368 $ 6,937 $ 6,344 6.2 9.3 Same store revenue growth (5.0) % (1.0) % 16.7 % Receivables average yield 16.6 % 16.2 % 15.7 % 35 Table of Contents Fiscal 2025 Compared to Fiscal 2024 Total revenues decreased $3.0 million, or 0.2%, in fiscal year 2025 compared to fiscal year 2024, primarily as a result of declines in revenue from (i) dealerships that operated a full twelve months in both fiscal years ($68.2 million), and (ii) dealerships that were closed during or after the year ended April 30, 2024 ($18.3 million), which were mostly offset by revenue generated from (iii) dealerships opened or acquired after April 30, 2024 ($83.5 million).
Fiscal 2023 Compared to Fiscal 2022 Total revenues increased $209.9 million, or 17.6%, in fiscal 2023, as compared to revenue growth of 31.2% in fiscal 2022, principally as a result of (i) revenue growth from dealerships that operated a full twelve months in both fiscal years ($196.7 million), and (ii) revenue from stores opened or acquired during or after the year ended April 30, 2022 ($15.3 million), partially offset by (iii) decreased revenue from dealerships closed during or after the year ended April 30, 2022 ($2.1 million).
Fiscal 2024 Compared to Fiscal 2023 Total revenues decreased $6.5 million or 0.5%, in fiscal 2024, as compared to revenue growth of 17.6% in fiscal 2023, principally as a result of declines in revenue from (i) dealerships that operated a full twelve months in both fiscal years ($13.8 million), and (ii) dealerships that were closed during or after the year ended April 30, 2023 ($14.9 million), partially offset by revenue generated from (iii) dealerships opened or acquired after the year ended April 30, 2023 ($22.2 million).
The average term for installment sales contracts at April 30, 2024 was 47.9 months, compared to 46.3. months for April 30, 2023.
The weighted average contract term for the portfolio of installment sales contracts at April 30, 2025 was 48.3 months, compared to 47.9. months for April 30, 2024.
Selling, general and administrative expenses are, for the most part, more fixed in nature. In dollar terms, selling, general and administrative expenses increased $2.8 million from fiscal 2023.
Selling, general and administrative expenses, as a percentage of sales increased to 15.5% in fiscal 2024 from 14.7% for fiscal 2023. Selling, general and administrative expenses are, for the most part, more fixed in nature. In dollar terms, selling, general and administrative expenses increased $2.8 million from fiscal 2023.
Cash flows used in operating activities for fiscal 2023 compared to fiscal 2022 increased primarily as a result of (i) an increase in finance receivable originations and (ii) a decrease in deferred revenue, partially offset by an increase in (iii) finance receivable collections.
Cash flows used in operating activities for fiscal 2025 compared to fiscal 2024 decreased primarily as a result of (i) an increase in net income and (ii) a decrease in deferred income taxes, (iii) an increase in finance receivable collections and (iv) a decrease in finance receivable originations.
Other than its letters of credit, the Company is not a party to any off-balance sheet arrangement that management believes is reasonably likely to have a current or future effect on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. 37 Related Finance Company Contingency Car-Mart of Arkansas and Colonial do not meet the affiliation standard for filing consolidated income tax returns, and as such they file separate federal and state income tax returns.
Other than its letters of credit, the Company is not a party to any off-balance sheet arrangement that management believes is reasonably likely to have a current or future effect on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
In October 2023, the FASB issued an accounting pronouncement (ASU 2023-06) related to disclosure or presentation requirements for various subtopics in the FASB’s Accounting Standards Codification (“Codification”). The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission's (“SEC”) regulations and facilitate the application of GAAP for all entities.
The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission’s (“SEC”) regulations and facilitate the application of GAAP for all entities.
On a short-term basis, the Company’s principal sources of liquidity include income from operations, proceeds from non-recourse notes payable issued under asset-back securitization transactions, warehouse facilities, borrowings under its revolving credit facilities, and other potential financing sources.
The Company expects to continue to lease the majority of the properties where its dealerships are located. 41 Table of Contents The Company’s principal sources of liquidity include income from operations, proceeds from non-recourse notes payable issued under asset-back securitization transactions, warehouse facilities, borrowings under its revolving credit facilities, and other potential debt or equity financing sources.
The Company’s operations are principally conducted through its two operating subsidiaries, America’s Car Mart, Inc., an Arkansas corporation (“Car-Mart of Arkansas”), and Colonial Auto Finance, Inc., an Arkansas corporation (“Colonial”). Collectively, Car-Mart of Arkansas and Colonial are referred to herein as “Car-Mart.” The Company primarily sells older model used vehicles and provides financing for substantially all of its customers.
References to the Company include the Company’s consolidated subsidiaries. The Company’s operations are principally conducted through its two operating subsidiaries, America’s Car Mart, Inc., an Arkansas corporation (“Car-Mart of Arkansas”), and Colonial Auto Finance, Inc., an Arkansas corporation (“Colonial”).
This strong demand for used vehicles, coupled with modest levels of new vehicle sales in recent years, have led to a generally ongoing tight supply of used vehicles available to the Company in both quality and quantity. Wholesale prices continued to soften in calendar year 2024 but remain high compared to the last several years.
Sustained macro-economic pressures affecting our customers have helped keep demand high in recent years for the types of vehicles we purchase. This strong demand for used vehicles, coupled with modest levels of new vehicle sales in recent years, have led to a generally ongoing tight supply of used vehicles available to the Company in both quality and quantity.
To the extent finance receivables growth, common stock repurchases, and capital expenditures exceed income from operations, the Company has increased borrowings under our revolving credit facilities and secured additional funding through the issuance of asset-backed non-recourse notes. 35 Cash flows used in operating activities for fiscal 2024 compared to fiscal 2023 decreased primarily as a result of (i) an increase in the provision for credit losses and (ii) a decrease in finance receivable originations, partially offset by an (iii) increase in cash used for accounts payable and accrued liabilities and (iv) a net loss.
Cash flows used in operating activities for fiscal 2024 compared to fiscal 2023 decreased primarily as a result of (i) an increase in the provision for credit losses and (ii) a decrease in finance receivable originations, partially offset by (iii) an increase in cash used for accounts payable and accrued liabilities and (iv) a net loss.
The increase in interest expense is primarily due to the higher interest rates in 2024 as well as the higher average borrowings in fiscal 2024 ($730.3 million in fiscal 2024 compared to $568.3 million for fiscal 2023). 60% of the increase in interest expense is attributable to the higher interest rates in 2024 and 40% is attributable to the increase in borrowings.
Interest expense for fiscal 2025 as a percentage of sales increased to 6.2% in fiscal 2025 from 5.6% in fiscal 2024. The increase in interest expense is primarily due to higher average borrowings in fiscal 2025 ($769.7 million in fiscal 2025 compared to $730.3 million for fiscal 2024) as well as the higher interest rates in 2025.
The Company has also increased the level of accountability for its purchasing agents including updates to sourcing and pricing guidelines. The Company continues to build relationships with national vendors that can supply a large quantity of high-quality vehicles. The Company’s liquidity is also impacted by our credit losses.
Additionally, the Company has heightened accountability for its purchasing agents through updates to sourcing and pricing guidelines. Ongoing efforts also include the cultivation of relationships with national vendors capable of supplying large volumes of high-quality vehicles. The Company’s liquidity is also influenced by its credit losses.
The allowance takes into account quantitative and qualitative factors such as historical credit loss experience, with consideration given to changes in contract characteristics (i.e., average amount financed, greater than 30-day delinquencies, term, and interest rates), credit quality trends, collateral values, current and forecasted inflationary economic conditions, underwriting and collection practices, concentration risk, credit review, and other external factors.
The allowance takes into account quantitative and qualitative factors such as historical credit loss experience, with consideration given to changes in contract characteristics (i.e., customer interest rates, credit deterioration and delinquency rates), current and forecasted inflationary economic conditions, amongst others.
The Company initiated a strategic partnership with an industry leader and implemented initiatives around vehicle reconditioning efforts, transportation and scaling are expected to provide a better volume of affordable units. Selling, general and administrative expenses, as a percentage of sales increased to 15.5% in fiscal 2024 from 14.7% for fiscal 2023.
The Company initiated a strategic partnership with an industry leader in October 2023 and implemented initiatives around vehicle reconditioning efforts, transportation and scaling that aided the Company’s cost improvement efforts during the second half of fiscal 2024 and in fiscal 2025 and are expected to continue to provide a better volume of affordable units going forward.
April 30, 2024 April 30, 2023 Debt: Revolving lines of credit, net $ 200,819 $ 167,231 Non-recourse notes payable, net 553,629 471,367 Total debt $ 754,448 $ 638,598 Cash: Cash and cash equivalents $ 5,522 $ 9,796 Restricted cash from collections on auto finance receivables 88,925 58,238 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 %
April 30, 2025 April 30, 2024 Debt: Revolving lines of credit, net $ 204,769 $ 200,819 Non-recourse notes payable, net 572,010 553,629 Total debt (A) $ 776,779 $ 754,448 Cash: Cash and cash equivalents $ 9,808 $ 5,522 Restricted cash on auto finance receivables 114,729 88,925 Total cash, cash equivalents, and restricted cash (B) $ 124,537 $ 94,447 Debt, net of total cash (A-B) $ 652,242 $ 660,001 Principal balance of finance receivables (C) $ 1,509,155 $ 1,435,388 Ratio of debt to finance receivables (A/C) 51.5 % 52.6 % Ratio of debt, net of total cash, to finance receivables ((A-B)/C) 43.2 % 46.0 %
At April 30, 2024 the Company had $82.9 million of operating lease commitments, including $23.8 million of non-cancelable lease commitments under the lease terms, and $59.1 million of lease commitments for renewal periods at the Company’s option that are reasonably assured.
The $86.6 million of operating lease commitments includes $21.3 million of non-cancelable lease commitments under the lease terms and $65.3 million of lease commitments for renewal periods at the Company’s option that are reasonably assured.
Thus, although the Company does routinely repurchase stock, the Company is limited in its ability to pay dividends or make other distributions to its shareholders without the consent of the Company’s lenders.
Thus, the Company is restricted from paying dividends or making other distributions to its shareholders without the consent of the Company’s lenders.
Macro-economic factors such as unemployment levels and general inflation on core and discretionary items can significantly affect our collection results and ultimately credit losses. Currently, as our customers look to cover rising costs of non-discretionary items, such as childcare, insurance, groceries and gasoline, it may impact their ability to make their car payments.
Macro-economic factors, such as unemployment rates and general inflation affecting both core and discretionary items, can significantly impact collection results and, consequently, credit losses. At present, as customers face rising costs for non-discretionary items like childcare, insurance, groceries, and gasoline, their ability to meet vehicle payment obligations may be strained.
The Company has devoted significant efforts to improving its purchasing processes to ensure adequate supply at appropriate prices which includes the new partnership with an industry leader, expanding its purchasing territories to larger cities in close proximity to its dealerships and forming relationships with reconditioning partners to reduce purchasing costs.
The Company has made substantial efforts to enhance its purchasing processes in order to secure an adequate supply of vehicles at competitive prices. This includes a strategic partnership with an industry leader, the expansion of its purchasing territories into larger cities near its dealerships, and the establishment of relationships with reconditioning partners to reduce procurement costs.
In July 2024, the Company entered into a $150 million amortizing warehouse agreement backed by a portion of its finance receivables. The warehouse facility accrues interest at a rate of SOFR plus 350 basis points, with payments of principal and interest due monthly and a scheduled maturity date of July 12, 2026.
The warehouse facility accrues interest at a rate of SOFR plus 350 basis points, with payments of principal and interest due monthly and a scheduled maturity date of July 12, 2026. The Company primarily used the funds from the warehouse facility to pay down outstanding amounts borrowed under the revolving line of credit to fund finance receivables.
We do not expect this update to have a material impact on our consolidated financial statements. In December 2023, the FASB issued an accounting pronouncement (ASU 2023-09) related to income tax disclosures.
We do not expect this update to have a material impact on our consolidated financial statements.
At April 30, 2024, the Company had approximately $5.5 million of cash on hand and $73.4 million of availability under its revolving credit facilities (see Note F to the Consolidated Financial Statements in Item 8).
At April 30, 2025, the Company had approximately $9.8 million of cash on hand and approximately an additional $27.3 million of availability under its revolving credit facilities (see Note F to the Consolidated Financial Statements). The revolving credit facility has a scheduled maturity date of March 31, 2027, with total permitted borrowings of $350 million at April 30, 2025.
Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its consolidated financial statements upon adoption. In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments – Credit Losses .
Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its consolidated financial statements upon adoption. In October 2023, the FASB issued an accounting pronouncement (ASU 2023-06) related to disclosure or presentation requirements for various subtopics in the FASB’s Accounting Standards Codification (“Codification”).
The allowance for credit losses as a percentage of finance receivables, net of deferred revenue and pending accident protection plan (“APP”) claims, increased from 23.91% at April 30, 2023 to 26.04% at October 31, 2023 due to the implementation of the third-party software to assist in calculating the allowance for credit losses as well as the performance of the loan portfolio during the first six months of fiscal 2024.
The high credit loss percentage for fiscal 2024 was primarily driven by the Company’s implementation in October 2023 of third-party software to provide more accurate credit loss calculations, which resulted in an increase in the allowance for credit losses, as percentage of finance receivables, net of deferred revenue and pending APP claims, from 23.91% at April 30, 2023 to 25.32% at April 30, 2024 (26.04% at October 31, 2023), and a corresponding increase in the provision for credit losses.
The Company expects to use cash from operations and borrowings to (i) grow its finance receivables portfolio, (ii) purchase fixed assets of approximately $6 million in the next 12 months as we complete facility updates and general fixed asset requirements, (iii) repurchase shares of common stock when favorable conditions exist and (iv) reduce debt to the extent excess cash is available.
No debt was outstanding under the warehouse loan facility as of April 30, 2025 The Company expects to use cash from operations and other financing sources to (i) periodically pay down the outstanding principal balance of the revolving line of credit, (ii) grow its finance receivables portfolio, (iii) purchase fixed assets of approximately $9 million in the next 12 months as we complete facility updates and general fixed asset requirements, (iv) fund dealership acquisitions as opportunities arise on terms acceptable to the Company, and (v) reduce the Company’s remaining debt to the extent excess cash is available.
The Company focuses on the benefits of excellent customer service and its “local” face-to-face offering in an effort to help customers succeed, while continuing to enhance the Company’s digital services and offerings to meet growing demands for an integrated digital-online sales and service experience.
The Company also prioritizes excellent customer service, leveraging its “local” face-to-face approach, while continuing to expand and enhance digital and online services to meet the growing demand for an integrated, seamless sales and service experience. In recent years, the Company has focused on offering a diverse mix of vehicles at various price points to improve affordability for customers.
The Company consistently focuses on collections. Each dealership is responsible for its own collections with supervisory involvement of the corporate office. Over the last five fiscal years, the Company’s provision for credit losses as a percentage of sales has ranged from a low of approximately 19.31% in fiscal 2021 to 36.48% in fiscal 2024 (average of 26.36%).
Over the past five fiscal years, the Company’s provision for credit losses as a percentage of sales has ranged from a low of approximately 19.3% in fiscal 2021 to a high of 36.5% in fiscal 2024, with an average of 28.1%. In fiscal 2025, the provision for credit losses as a percentage of sales decreased to 32.7%.
Financial Condition The following table sets forth the major balance sheet accounts of the Company at April 30, 2024, 2023 and 2022 (in thousands): April 30, 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 (1) 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 (1) Prepaid expenses and other assets at April 30, 2022, reflects an immaterial reclassification of approximately $6.0 million of capitalized implementation costs related to a cloud-computing arrangement previously recorded in Property and equipment, net, and did not impact operating income.
The increase in interest expense is primarily due to the higher interest rates in 2024 as well as the higher average borrowings in fiscal 2024 ($730.3 million in fiscal 2024 compared to $568.3 million for fiscal 2023). 60% of the increase in interest expense is attributable to the higher interest rates in 2024, and 40% is attributable to the increase in borrowings. 37 Table of Contents Financial Condition The following table sets forth the major balance sheet accounts of the Company at April 30, 2025, 2024 and 2023 (in thousands): Years Ended April 30, 2025 2024 2023 Assets: Finance receivables, net $ 1,180,673 $ 1,098,591 $ 1,063,460 Inventory 112,229 107,470 109,290 Income taxes receivable, net - 2,958 9,259 Property and equipment, net 56,894 60,361 61,682 Liabilities: Accounts payable and accrued liabilities 70,929 49,207 55,108 Deferred revenue 113,245 120,781 120,469 Income tax payable, net 1,451 - - Deferred income tax liabilities, net 7,146 17,808 39,315 Notes payable, net 572,010 553,629 471,367 Revolving line of credit, net 204,769 200,819 167,231 The following table shows receivables growth compared to revenue growth during each of the past three fiscal years.
The Company believes that the proper execution of its business practices is the single most important determinant of its long-term credit loss experience. Over the last five fiscal years, the Company’s gross margin as a percentage of sales has ranged from a high of approximately 40.2% in fiscal 2021 to a low of 33.5% in fiscal 2023 (average of 36.9%).
Over the past five fiscal years, the Company’s gross margin as a percentage of sales has fluctuated, reaching a high of approximately 40.2% in fiscal 2021 and a low of 33.5% in fiscal 2023, with an average of 36.3%.
Generally, this is because the management at new and developing dealerships tends to be less experienced in making credit decisions and collecting customer accounts and the customer base is less seasoned. More mature dealerships have more repeat customers and, on average, repeat customers are a better credit risk than non-repeat customers.
Credit losses, on a percentage basis, tend to be higher at new and developing dealerships due to less experienced management and a less seasoned customer base. More mature dealerships typically have a higher rate of repeat customers, who are generally lower credit risks.
During fiscal 2024, the Company grew finance receivables by $62.0 million, decreased inventory by $1.8 million, and purchased investments and fixed assets of $11.0 million with a $115.8 million increase in total debt and a $89.4 million increase in debt, net of cash (a non-GAAP Measure).
During fiscal 2025, the Company funded finance receivables growth of $73.8 million, increased inventory by $4.8 million, invested in an acquisition and fixed assets of $11.4 million and increased total cash by $30.1 million with income from operations, a $22.3 million increase in total debt and $73.8 million in net proceeds from the sale of common stock.
The Company’s cost structure is more fixed in nature and is sensitive to volume changes. Revenue can be affected by our level of competition, which is influenced to a large extent by the availability of funding to the sub-prime automobile industry, together with the availability and resulting purchase cost of the types of vehicles the Company purchases for resale.
The Company’s cost structure is relatively fixed and is sensitive to changes in volume. Revenue is influenced by factors such as competition, the availability of funding in the subprime automobile industry, and fluctuations in the purchase costs of vehicles for resale. Additionally, the macroeconomic environment plays a significant role in revenue performance.
These notes accrue interest at fixed rates with a weighted average rate of 9.0% as of April 30, 2024. The Company also maintains a revolving line of credit with a group of lenders with available borrowings based on and secured by eligible finance receivables and inventory.
The Company used the net proceeds from this offering to pay down a portion of the Company’s revolving line of credit. The Company maintains a revolving line of credit with a group of lenders with available borrowings based on and secured by eligible finance receivables and inventory.
Based on the Company’s current analysis of credit losses, the allowance for credit losses at April 30, 2024 decreased to 25.32% of finance receivables, net of deferred revenue and pending APP claims, which was primarily driven by changes in the underwriting process and refinement to the underwriting guidelines due to the implementation of the Company’s new loan origination system.
As of April 30, 2025, the Company’s allowance for credit losses decreased to 23.25% of finance receivables, net of deferred revenue and pending APP claims.
The increase in revenue for fiscal 2023 is attributable to (i) a 10.4% increase in average retail sales price, (ii) a 4.9% increase in retail units sold and (iii) a 29.2% increase in interest and other income, due to the $289.2 million increase in average finance receivables.
The overall decline in revenue for fiscal 2025 was primarily due to a 1.7% decrease in retail units sold, partially offset by a 5.0% increase in interest and other income and a 1.5% increase in the average retail sales price. Interest income increased approximately $11.6 million compared to fiscal 2024, due to the $36.9 million increase in average finance receivables.
Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems. As of April 30, 2024, the Company operated 154 dealerships located primarily in small cities throughout the South-Central United States. Car-Mart has been operating since 1981.
Collectively, Car-Mart of Arkansas and Colonial are referred to herein as “Car-Mart.” The Company primarily sells older model used vehicles and provides financing for substantially all of its customers. Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems.
As of April 30, 2024, the Company had an expected federal net operating loss carryforward of $83 million, which may be carried forward indefinitely until the loss is fully recovered. The Company had $553.6 million and $471.4 million of non-recourse notes payable outstanding related to asset-backed term funding transactions as of April 30, 2024 and 2023, respectively.
Deferred income tax liabilities, net, decreased approximately $10.7 million on April 30, 2025, compared to April 30, 2024, primarily due to a net operating loss carryforward for the related finance company. The Company had $572.0 million and $553.6 million of notes payable outstanding related to asset-backed term funding transactions as of April 30, 2025 and 2024, respectively.
Interest under the revolving credit facilities is payable monthly at an interest rate determined based on the Company’s consolidated leverage ratio for the preceding fiscal quarter. The current applicable interest rate under the credit facilities is generally the Secured Overnight Financing Rate (SOFR) plus 3.50%.
The credit facilities provide for four pricing tiers for determining the applicable interest rate, based on the Company’s consolidated leverage ratio for the preceding fiscal quarter.
We plan to adopt this pronouncement for our fiscal year beginning May 1, 2025, and we do not expect it to have a material effect on our consolidated financial statements. 39 Non-GAAP Financial Measure This Annual Report on Form 10-K contains financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP).
We plan to adopt this pronouncement for our fiscal year beginning May 1, 2025, and we do not expect it to have a material effect on our consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.
At April 30, 2024 and 2023 the Company had $200.8 million and $167.2 million, respectively, in outstanding borrowings under the revolving credit facilities. Historically, income from continuing operations, as well as borrowings on the revolving credit facilities, have funded the Company’s finance receivables growth, capital asset purchases, and common stock repurchases.
Historically, income from operations, as well as borrowings on the revolving credit facilities and securitized debt, have funded the Company’s finance receivables growth and capital asset purchases and, as applicable, common stock repurchases. The overall increase in total borrowings during fiscal 2025 was made to support an increase in finance receivables, with longer terms, and a growing customer base.
The fiscal year 2022 credit losses began to normalize to pre-pandemic levels but were still below historical levels despite the increase in the average retail sales price.
In fiscal 2022, credit losses began to return to pre-pandemic levels, though they remained below historical averages, despite an increase in average retail sales prices, and in fiscal 2023, credit losses exceeded pre-pandemic levels, due in part to the expiration of federal stimulus programs and prevailing macroeconomic conditions.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the Company's Consolidated Financial Statements and Notes thereto appearing in Item 8 of this Annual Report on Form 10-K.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto appearing in Item 8 of this Annual Report on Form 10-K. 28 Table of Contents Restated Disclosure Information for Contract Modifications for Interim Periods Pursuant to a Current Report on Form 8-K filed by the Company on July 30, 2025, the Company is including the previously omitted footnote disclosure that should have been included in the Company’s interim unaudited Condensed Consolidated Financial Statements for each of the quarterly periods included in the Company’s Quarterly Reports on Form 10-Q filed with the SEC during fiscal years 2025 and 2024 regarding contract modifications made to borrowers experiencing financial difficulty.
Gross margin is also affected by the percentage of wholesale sales to retail sales, which relates for the most part to repossessed vehicles sold at or near cost.
The Company’s gross margin is primarily influenced by the cost of vehicles purchased, with lower-priced vehicles generally yielding higher gross margin percentages but lower gross profit dollars. Additionally, the margin is impacted by the proportion of wholesale sales relative to retail sales, which is primarily associated with the sale of repossessed vehicles, typically sold at or near cost.
Cost of sales, as a percentage of sales, increased to 66.5% compared to 63.4% in fiscal 2022, resulting in a decrease in the gross margin percentage to 33.5% of sales in fiscal 2023 from 36.6% of sales in fiscal 2022.
The cost of sales as a percentage of total sales decreased to 63.3% in fiscal 2025, compared to 65.3% in fiscal 2024, resulting in a gross margin of 36.7% in fiscal 2025, which includes a 0.7% benefit from the change in accounting estimate for revenue recognition related to service contracts.
Net charge-offs as a percentage of average finance receivables increased to 23.3% for fiscal 2023 compared to 18.3% for the prior year.
Provision for credit losses as a percentage of sales decreased to 32.7% for fiscal 2025 compared to 36.5% for fiscal 2024. Net charge-offs as a percentage of average finance receivables decreased to 25.9% for fiscal 2025 compared to 27.2% for the prior year. The Company experienced an improvement in both the frequency and severity of losses.
The increase in interest expense is primarily due to the higher interest rates in 2023 as well as the higher average borrowings in fiscal 2023 ($568.3 million in fiscal 2023 compared to $331.6 million for fiscal 2022). 71% of the increase in interest expense is attributable to the higher interest rates in 2023 and 29% is attributable to the increase in borrowings.
Approximately two-thirds of the increase in interest expense is attributable to the increase in borrowings, and one-third is attributable to the higher interest rates in 2025.
The decrease was partially offset by a 5.7% increase in the average retail sales price and an 18.8% increase in interest income. The Company earns revenue from the sale of used vehicles, and in most cases a related service contract and an accident protection plan product, as well as interest income and late fees from the related financing.
When combined with enhanced inventory procurement efficiencies, these initiatives are expected to improve the customer experience and contribute to better gross margins. The Company generates revenue primarily through the sale of used vehicles, typically accompanied by a related service contract and accident protection plan, as well as interest income and late fees from financing.
In February 2024, the Company entered into Amendment No. 6 to its revolving credit agreement (see Note F to the Consolidated Financial Statements) which extends the term of the Company’s revolving credit facilities to September 30, 2025, and reduces the total permitted borrowings from $600 million to $340 million.
On February 28, 2025, the Company entered into Amendment No. 9 to its revolving credit agreement that, among other things, extended the maturity date of the credit facility to March 31, 2027 and increased the total permitted borrowings by $30 million to $350 million.
Off-Balance Sheet Arrangements The Company has two standby letters of credit relating to insurance policies totaling $3.9 million at April 30, 2024.
The Company believes it will have adequate liquidity to continue to grow its revenues and to satisfy its capital needs for the foreseeable future through expected financing sources such as additional securitized borrowings or public registered offerings. 42 Table of Contents Off-Balance Sheet Arrangements The Company has two standby letters of credit relating to insurance policies totaling $4.4 million at April 30, 2025.
Credit losses and charge-offs can also be impacted by market and economic factors, including a competitive used vehicle financing environment and macro-economic conditions such as inflation in the price of childcare, insurance, rent, gasoline, groceries, and other staple items.
Credit losses can also be influenced by market and economic factors, such as competition in the used vehicle financing space and macroeconomic pressures, including inflation in essential goods and services. However, as the Company provides affordable transportation, these economic conditions do not always lead to higher credit losses.
In dollar terms, selling, general and administrative expenses increased $20.6 million from fiscal 2022. These investments are expected to be leveraged, creating efficiencies in the business allowing us to serve more customers in future years. Provision for credit losses as a percentage of sales increased to 29.3% for fiscal 2023 compared to 22.9% for fiscal 2022.
Selling, general and administrative (SG&A) expenses as a percentage of sales increased to 16.5% in fiscal 2025, compared to 15.5% for fiscal 2024. SG&A expenses are, by nature, relatively fixed. In absolute terms, SG&A expenses rose by $9.5 million from fiscal 2024.
Removed
Overview America’s Car-Mart, Inc., a Texas corporation (the “Company”), is one of the largest publicly held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. References to the Company include the Company’s consolidated subsidiaries.
Added
These disclosures relate to the Company’s systematic modification program that assists borrowers experiencing financial difficulty. The required disclosures that the Company is now including relate to contract modifications affecting $436.1 million, or 28.9%, of the Company’s gross finance receivables as of April 30, 2025.
Removed
While Car-Mart has grown its revenues between approximately 3.5% and 31.2% per year over the last ten years preceding 2024 (average 12.0%), revenue for the fiscal year ended April 30, 2024, declined slightly compared to fiscal 2023 primarily due to an 8.8% decrease in retail units sold.
Added
These modifications primarily consist of: • Term extensions and • Combination of modifications, which include both term extensions and interest rate reductions as determined by the bankruptcy court when a borrower declares Chapter 13 bankruptcy.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−0 removed3 unchanged
Biggest changeThe Company’s finance receivables now carry a fixed annual interest rate of 18.25% (up from 18.0% at April 30, 2023) for all states, except Arkansas at 16.75% (which is subject to a usury cap of 17.0%), Illinois (originates at 19.5% – 21.5%), and acquired dealerships in Tennessee (which originate at up to 23.0%), based on the Company’s contract interest rate as of the contract origination date, while its revolving credit facilities contain variable interest rates that fluctuate with market interest rates. 40
Biggest changeThe Company’s finance receivables carry a fixed annual interest rate based on the Company’s contract interest rate as of the origination date of the installment sale contract, while its revolving credit facilities contain variable interest rates that fluctuate with market interest rates. The Company’s finance receivables carry annual interest rates ranging from 12.99% to 23.0%.
The impact of a 1% increase in interest rates would result in increased annual interest expense of approximately $2.0 million and $1.7 million based on the amounts outstanding at April 30, 2024 and 2023, respectively, and a corresponding decrease in net income before income tax.
The impact of a 1% increase in interest rates would result in increased annual interest expense of approximately $2.0 million based on the amounts outstanding at April 30, 2025 and 2024, and a corresponding decrease in net income before income tax.
The Company had an outstanding balance on its revolving line of credit of $200.8 million at April 30, 2024 and $167.2 million at April 30, 2023.
The Company had an outstanding balance on its revolving line of credit of $204.8 million at April 30, 2025 and $200.8 million at April 30, 2024.
The Company’s earnings are impacted by its net interest income, which is the difference between the income earned on interest-bearing assets and the interest paid on interest-bearing notes payable. During the third quarter of fiscal 2024, the Company increased the interest rate by 0.25%.
The Company’s earnings are impacted by its net interest income, which is the difference between the income earned on interest-bearing assets and the interest paid on interest-bearing notes payable.
Added
The interest 45 Table of Contents rate on the Company’s revolving credit facilities is generally SOFR plus 3.50%, or for non-SOFR amounts the base rate of 7.50% plus 1% at April 30, 2025. 46 Table of Contents

Other CRMT 10-K year-over-year comparisons