2023 Annual Report
To Our Fellow Stockholders:
Our industry, and America's Car-Mart's place in it, are essential. Supporting over 102,000
customers, or $1.4 billion in accounts receivable, we have an obligation to drive healthy,
profitable growth as our customers’ lives, and the communities we serve, are made better
because of our work. Over 50% of our unit sales are to repeat customers. Many customers have
alternative financing options but choose nonetheless to stay with us year after year because of
peace of mind delivered by our local, decentralized, relationship-based solution. We are proud
of the fact that Newsweek recently named us to its “Most Trustworthy Companies in America
2023” list.
Active Customers
Over the last 20+ years, we have compounded the number of customers served and annual
revenue by 7.5% and 12.5%, respectively. In fiscal 2023 sales productivity increased by 3.0% to
an average of thirty-four vehicles per dealership per month, serving an average of 660
customers. Within the next two years, we expect our dealerships to retail between 40-50
vehicles per month, eventually supporting 1,000 or more customers. As alternative credit
offerings continue to tighten, higher credit customers increasingly shop with us. Our business
model has shown its ability to effectively address the needs of our customers, as demonstrated
by the growing demand for our services.
Significant Top-Line Growth ($’s in millions)
Our vision – to be America’s best auto sales and finance company in the eyes of our associates
and customers while improving the communities we serve - resonates outside the company.
This is evidenced by the recent additions of several exceptionally talented leaders to our
outstanding team. Doug Campbell joined us in October 2022 as President. Doug's deep auto
industry knowledge, passion, and considerable management skills will take our company to the
next level, helping us reach our full potential. Holly Thomson, who also joined us in October
2022 as Chief Digital Officer, is quickly bringing our digital offerings forward. Holly has several
years of relevant experience and successive leadership roles with direct-to-consumer financial
products and user experience teams. In order to capitalize on upcoming opportunities, we
continue to add talented people in a variety of roles supporting both our associates and our
customers.
We find ourselves in a unique and pivotal time, where various unprecedented factors are
significantly affecting consumers, our industry, and your company. In a year, the pendulum has
swung from a time when consumers had trillions, with no inflation, to a period marked by the
absence of fiscal stimulus and high inflation. In our industry in particular, inflation has been
especially pronounced. The mounting expenses related to higher used car prices, rent, fuel,
vehicle insurance, groceries, and interest rates, among others, are unavoidable for our
customers. While acknowledging these challenges, we remain committed to supporting them at
a high level. We extended contract terms to keep payment increases lower than the overall
increase in used-car prices. Further, we expect consumer affordability to improve as vehicle
prices normalize in relation to overall inflation, wages, and employment.
Near-term industry challenges present substantial strategic opportunities for America's Car-
Mart. Our healthy balance sheet and ongoing access to capital allow us to grow and take
advantage of market opportunities. We had $500 million in equity with a book value per share of
$78 on April 30, 2023. We recently completed our third asset-backed non-recourse term
securitization and have a $600 million revolving line of credit with a group of commercial banks.
Total debt, net of cash, to finance receivables (non-GAAP) was 41.5% on April 30, 2023. Our
financial model is flexible, and we will continue to deploy capital to maximize appropriate
returns.
Book Value per Share
$78.29
$73.72
$61.41
$45.80
$22.46
$24.43
$26.91
$28.39
$30.68
$38.95
$33.72
$90.00
$80.00
$70.00
$60.00
$50.00
$40.00
$30.00
$20.00
$10.00
$-
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
We are focused on growing over the long term at far higher margins. Future profit improvements
will come from three areas. First, we are focused on increasing gross margin percentages as we
streamline and strengthen our procurement and inventory management processes. We expect
improved sourcing, reconditioning, logistics and wholesale results, together with aggressive
inventory management, will reduce costs and drive improved margin percentages. Second, we
expect to see improvements in credit losses as we leverage our recent investments, continue to
improve the quality of our product, and attract higher credit-rated customers. Third, we can
increase our profitability by leveraging our infrastructure investments through both productivity
increases and acquisitions. Internally, we measure our progress in leveraging our scale by
SG&A per unit sold, SG&A per account, and headcount. Importantly, a significant percentage of
our current SG&A is related to our long-term business investments. Going forward, we expect
to generate a return on equity in line with historical, pre-pandemic levels. We are focused on
becoming a more productive, accountable organization by eliminating manual processes,
rationalizing headcount, leveraging technology, and aggressively working to attract talented
leaders and team members.
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Return on Average Equity
29.1%
19.4%
18.2%
21.4%
16.6%
13.3%
10.2%
15.7%
8.7%
5.0%
4.2%
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
We are well-positioned for unique acquisition opportunities presented by this period of historical
competitive disruption. Elevated used car prices, greater credit losses, and higher capital costs
are, forcing major competitors to shut their doors. In times of difficulty we remain focused on the
basics. Our best competitors are generally a subset of owner-operated dealerships that have
not borrowed excessively, focus on getting a sound automobile to their customers on
reasonable terms, and provide both friendly service and disciplined collections. Our acquisition
platform provides experienced owner operators with an exit strategy, their communities with
employment, and customers with alternatives. We historically do not acquire credit risk in these
transactions; rather we structure them with multi-year earn outs based on building successful
books of business measured from our acquisition date. Given the potential for value creation
through acquisitions, we are increasing our people investment in this area. We believe that
acquisitions will provide a significant source of future growth, earning attractive returns for
shareholders.
Underpinning our confidence in the business, our extensive long-term investments are nearing
completion, allowing us to benefit from scale by improving our offering and in turn expanding
market share. These investments include the loan origination system (LOS), enterprise resource
planning (ERP), and customer relationship management (CRM) software enhancements and
implementations. We are becoming an efficient, data-driven company, and we expect to derive
enormous efficiencies from the elimination of manual tasks. Our ongoing investment in the
centralization of inventory procurement, reconditioning and wholesale functions, as well as
certain collections and other administrative tasks, both increases profitability and frees up labor
hours at our stores, enabling field associates to focus on growth and improved customer
experience. Additionally, we have nearly completed our multi-year effort to improve and expand
our physical facilities. Combined, these complex initiatives and time-consuming investments are
foundational to our future success.
The implementation of our LOS and the expansion of our CRM capabilities will enhance our
speed and personalized service before, during, and after a sale. Today, customers are pre-
approved online in just a few minutes through their mobile device or on an in-store i-Pad. Once
the customer selects a vehicle, sales associates quickly work to maximize their buying potential.
Powered by an integrated sales and decision platform, the LOS dynamically assists sales
associates with down payment options, trade valuations, and the addition of any co-applicants.
All sales documents will be electronically generated, and the customer digitally signs and drives.
We are reducing the time it takes to complete the sale by as much as 50%, freeing up resources
we can dedicate to personalized service and the character lending nature of our model. We
continue to enhance our digital capabilities, developing an online customer account center for
payments, requesting service, and reporting accidents. This digital portal will help us stay
connected to customers and provide better vehicle service. All dealerships will be on the LOS
within the next few months, and our ERP software implementation is expected to be fully
completed by December 2023.
In summary, we believe the outlook for our company has never been more positive and are
confident of achieving our targets over the coming years. We have taken steps to ensure the
successful implementation of our initiatives and have formed a dedicated team, improved
internal processes, and established key performance indicators (KPIs) to measure our progress.
We will remain agile and adaptable, focused on our ability to navigate any challenges that may
arise while delivering strong results. Our investments in both best-in-class technology and a
wonderful team have prioritized value creation. We are well-positioned for growth, and always
seek long-term profitability over short-term gains. We are confident that our strategy will
translate into tangible results for our customers and shareholders, and we look forward to
sharing our success in the months and years ahead.
We would like to thank all our valued shareholders, customers, partners, and associates who
continue to work with us on this journey. Thank you for your continued support as we enter this
exciting period of growth.
Thank you,
Jeff Williams
Chief Executive Officer
Executive Officers
From left to right: Doug Campbell, President, Vickie Judy, Chief Financial Officer, Jeff Williams,
Chief Executive Officer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-14939
AMERICA’S CAR-MART, INC.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No)
Texas
63-0851141
1805 North 2nd Street, Suite 401
Rogers, Arkansas
(Address of principal executive offices)
72756
(Zip Code)
(479) 464-9944
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, par value $0.01 per share
Trading Symbol(s)
CRMT
Name of each exchange on which registered
NASDAQ Global Select Market
Securities registered pursuant to section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ˜
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth
company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Accelerated filer
Non-accelerated filer
Smaller reporting company Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in
the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates on October 31, 2022 was $397,198,739
(5,810,397 shares), based on the closing price of the registrant’s common stock on October 31, 2022 of $68.36.
There were 6,371,404 shares of the registrant’s common stock outstanding as of June 23, 2023.
Portions of the registrant’s Proxy Statement to be furnished to stockholders in connection with its 2023 Annual Meeting of Stockholders are
incorporated by reference in response to Part III of this report.
DOCUMENTS INCORPORATED BY REFERENCE
[This page intentionally left blank]
AMERICA’S CAR-MART, INC.
FORM 10-K
FOR FISCAL YEAR ENDED APRIL 30, 2023
TABLE OF CONTENTS
PART I
Item 1. Business.....................................................................................................................................................5
Item 1A. Risk Factors .......................................................................................................................................... 16
Item 2. Properties ................................................................................................................................................. 23
Item 3. Legal Proceedings ................................................................................................................................... 23
Item 4. Mine Safety Disclosure ........................................................................................................................... 23
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities .............................................................................................................................................................. 24
Item 6. [Reserved] ................................................................................................................................................ 25
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations .................. 25
Item 7A. Quantitative and Qualitative Disclosures about Market Risk ............................................................... 37
Item 8. Financial Statements and Supplementary Data ....................................................................................... 37
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .................. 65
Item 9A. Controls and Procedures ....................................................................................................................... 65
Item 9B. Other Information ................................................................................................................................. 68
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ................................................... 68
PART III
Item 10. Directors, Executive Officers and Corporate Governance .................................................................... 68
Item 11. Executive Compensation ....................................................................................................................... 68
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
.............................................................................................................................................................................. 68
Item 13. Certain Relationships and Related Transactions, and Director Independence ...................................... 69
Item 14. Principal Accounting Fees and Services ............................................................................................... 69
Item 15. Exhibits, Financial Statement Schedules.............................................................................................. 69
Item 16. Form 10-K Summary ............................................................................................................................ 73
PART IV
3
Forward-Looking Statements
PART I
This Annual Report on Form 10-K and the documents incorporated by reference in this Annual Report on
Form 10-K contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements address the Company’s future events, objectives, plans and goals,
as well as the Company’s intent, beliefs and current expectations regarding future operating performance and can
generally be identified by words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,”
“foresee,” and other similar words or phrases. Specific events addressed by these forward-looking statements may
include, but are not limited to:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
operational infrastructure investments;
same dealership sales and revenue growth;
customer growth;
gross profit margin percentages;
gross profit per retail unit sold;
business acquisitions;
technological investments and initiatives;
future revenue growth;
receivables growth as related to revenue growth;
new dealership openings;
performance of new dealerships;
interest rates;
future credit losses;
the Company’s collection results, including but not limited to collections during income tax refund
periods;
future supply and demand for used vehicles;
availability of used vehicle financing;
seasonality; and
the Company’s business, operating and growth strategies and expectations.
These forward-looking statements are based on the Company’s current estimates and assumptions and involve
various risks and uncertainties. As a result, you are cautioned that these forward-looking statements are not
guarantees of future performance, and that actual results could differ materially from those projected in these
forward-looking statements. Factors that may cause actual results to differ materially from the Company’s
projections include, but are not limited to:
•
•
•
•
•
•
•
•
•
•
•
general economic conditions in the markets in which the Company operates, including but not limited
to fluctuations in gas prices, grocery prices and employment levels;
the availability of quality used vehicles at prices that will be affordable to our customers, including the
impacts of changes in new vehicle production and sales;
the availability of credit facilities and access to capital through securitization financings or other sources
on terms acceptable to us to support the Company’s business;
the Company’s ability to underwrite and collect its contracts effectively;
competition;
dependence on existing management;
ability to attract, develop, and retain qualified general managers;
changes in consumer finance laws or regulations, including but not limited to rules and regulations that
have recently been enacted or could be enacted by federal and state governments;
the ability to keep pace with technological advances and changes in consumer behavior affecting our
business;
security breaches, cyber-attacks, or fraudulent activity;
the ability to identify and obtain favorable locations for new or relocated dealerships at reasonable cost;
4
•
•
the ability to successfully identify, complete and integrate new acquisitions; and
potential business and economic disruptions and uncertainty that may result from any future public
health crises and any efforts to mitigate the financial impact and health risks associated with such
developments.
The Company undertakes no obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the dates on which they are made.
Item 1. Business
Business and Organization
America’s Car-Mart, Inc., a Texas corporation initially formed in 1981 (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. 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.
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, 2023, the Company operated 156
dealerships located primarily in small cities throughout the South-Central United States.
Business Strategy
In general, it is the Company’s objective to continue to expand its business using the same business model
that has been developed and used by Car-Mart for over 40 years with enhancements to our technology and core
products to better serve our customers. This business strategy focuses on:
Collecting Customer Accounts. Collecting customer accounts is perhaps the single most important aspect
of operating an Integrated Auto Sales and Finance used car business and is a focal point for dealership level and
corporate office personnel on a daily basis. The Company measures and monitors the collection results of its
dealerships using internally developed delinquency and account loss standards. Substantially, all associate incentive
compensation is tied directly or indirectly to collection results. The Company has a vice president of collections
and support staff at the corporate level to work with field operators to improve credit results. This team monitors
efficiencies and the effectiveness of account representatives as they work to improve customer success rates. 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 19.30% in fiscal 2019 to 29.20% in fiscal 2023 (average of
23.74%). During fiscal 2023, credit losses continued to normalize to pre-pandemic levels, partially due to the
inflationary pressure on customers and increasing interest rates from federal monetary policy. See Item 1A, Risk
Factors, for further discussion.
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, and collecting the contracts it originates in accordance with established policies and procedures.
Approximately 50% of customers make their payments in person at one of the Company’s dealerships. 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. 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. The Company acquired three new dealerships during the year ending fiscal 2023 with 156 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. The Company has
successfully completed acquisitions in two 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’s average retail sales price was $18,080 per unit in fiscal 2023, compared to $16,372 in
fiscal 2022. Used vehicle pricing continued to increase due to the high demand and tight supply of used vehicles.
In general, the demand for quality, used vehicles has increased due to a shortage of new vehicles leading to inventory
constraints in both the new and used vehicle markets. Management expects continued pressure on the supply and
price of used vehicles for the near term. 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 46.3 months).
Operating in Smaller Communities. As of April 30, 2023, 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. 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. 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. By promoting from within, the Company believes it is able to train its associates
in the Car-Mart way of doing business, maintain the Company’s unique culture and develop the loyalty of its
associates by providing opportunities for advancement. 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. The Company has been
able to attract quality individuals via its General Manager Recruitment and Advancement team as well as other key
areas. Management has determined that it will be increasingly difficult to grow the Company without looking for
outside talent. 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. 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. 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. 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. These business strengths include:
Experienced and Motivated Management. The Company has a strong senior management team with
extensive experience in the automotive industry and expertise in understanding the unique needs and preferences
of subprime customers. The Company’s management team is driven to continuously innovate and adapt to changing
market dynamics, embrace technology, explore new avenues for growth and make a positive impact on customers’
lives. This extensive industry experience and strong motivation, coupled with strategic decision-making,
operational efficiency, and customer focus, enable the Company to tailor its operations to best serve its customers
and help drive value for the Company and solidify its position in the used car market.
Proven Business Practices. The Company’s operations are highly structured. 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. 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. 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 loan origination system and an enterprise
resource planning system are expected to be foundational in improving efficiencies and operational flexibility as
the Company grows. The Company monitors operating costs as a percentage of revenues, per customer served, and
per unit sold, 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. To the extent external capital is needed to fund growth,
the Company plans to draw on its existing credit facilities, or renewals or replacements of those facilities, and to
participate in the securitization market from time to time, when appropriate. The Company may also choose to
access other debt or equity markets if needed or if market conditions are favorable to pursue its growth and
acquisition strategies. Management will continue to scrutinize capital deployment to manage appropriate liquidity
and access to capital to support growth. As of April 30, 2023, the Company’s debt to equity ratio (revolving credit
facilities and non-recourse notes payable divided by total equity on the Consolidated Balance Sheet) was 1.28 to
1.0. Excluding the amount of debt equal to cash, the Company’s adjusted debt to equity ratio (a non-GAAP measure)
as of April 30, 2023 was 1.14 to 1.0, which the Company believes is lower than many of its competitors. For a
reconciliation of adjusted debt to equity ratio to the most directly comparable GAAP financial measure, see “Non-
GAAP Financial Measure” included in Part II, Item 7, Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
Significant Expansion Opportunities. The Company historically targets smaller communities in which
to locate its dealerships (i.e., populations from 20,000 to 50,000), but is also continuing to expand its operations in
larger cities such as Tulsa, Oklahoma; Lexington, Kentucky; Springfield, Missouri; Chattanooga and Knoxville,
Tennessee and Little Rock, Arkansas. The Company believes there are numerous suitable communities to expand
our physical footprint within the twelve states in which the Company currently operates and other contiguous states
to satisfy anticipated dealership growth for the next several years. 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. Each dealership is an operating segment with its results regularly reviewed by the
Company’s chief operating decision maker 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 in the Integrated Auto Sales and Finance segment
of the used car market. In this industry, the nature of the sale and the financing of the transaction, financing
processes, the type of customer and the methods used to distribute the Company’s products and services, including
the actual servicing of the contracts as well as the regulatory environment in which the Company operates, all have
similar characteristics. Each dealership is similar in nature and only engages in the selling and financing of used
vehicles. All individual dealerships have similar operating characteristics. As such, individual dealerships have been
aggregated into one reportable segment.
Dealership Organization. Dealerships operate on a decentralized basis. Each dealership is responsible for
selling vehicles, making credit decisions, and servicing and collecting the installment contracts it originates, with
assistance from the corporate office. Dealership-level financial statements are prepared by the corporate office on
a monthly basis and reviewed by various levels of management. Depending on the number of active customer
accounts, a dealership may have as few as three or as many as twenty-five full-time associates employed at that
location. Associate positions at a large dealership may include a general manager, assistant manager(s), office
manager, office clerk(s), service manager, purchasing agent, collections personnel, sales personnel, inventory
associates (detailers), and on-call drivers. Dealerships are generally open Monday through Saturday from 9:00 a.m.
to 6:00 p.m.
Dealership Locations and Facilities. Below is a summary of dealerships operating during the fiscal years
ended April 30, 2023, 2022 and 2021:
Dealerships at beginning of year
Dealerships opened or acquired
Dealerships closed
Dealerships at end of year
2023
154
3
(1)
156
Years Ended April 30,
2022
151
3
-
154
2021
148
3
-
151
Below is a summary of dealership locations by state as of April 30, 2023, 2022 and 2021:
Dealerships by State
Arkansas
Oklahoma
Missouri
Alabama
Texas
Kentucky
Georgia
Tennessee
Mississippi
Illinois
Indiana
Iowa
Total
As of April 30,
2022
38
30
18
16
13
12
9
8
5
3
1
1
154
2021
38
28
18
16
13
12
9
7
5
3
1
1
151
2023
37
30
18
16
14
12
9
10
5
3
1
1
156
8
Dealerships are located on leased or owned property between one and four acres in size. 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. 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. 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.
Generally, the Company purchases vehicles between 5 and 12 years of age with 70,000 to 140,000 miles
and pays between $7,000 and $15,000 per vehicle with an average cost of $10,000 per vehicle. The Company
focuses on providing basic transportation to its customers. The Company sells a variety of vehicles that include
primarily sport utility vehicles, trucks, and sedans. 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. As part of the strategy to obtain quality, affordable vehicles, the Company has formed relationships with
reconditioning companies to recondition vehicles, in particular repossessions and trades, in order to have access to
a larger quantity of and lower cost vehicles.
Selling, Marketing and Advertising. Dealerships generally maintain an inventory of 20 to 90 vehicles
depending on the size and maturity of the dealership and also the time of the year. Inventory turns over
approximately 7 times each year. Selling is done predominantly by the dealership manager, assistant manager,
manager trainee or sales associate. 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. 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. The APP product contractually obligates the Company to cancel the remaining amount owed on a
contract where the vehicle has been totaled, as defined in the plan, or the vehicle has been stolen. 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.
The Company has a 7-day vehicle exchange policy. 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’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.
For mature dealerships, a large percentage of sales are to repeat customers.
The Company primarily advertises using television, radio, digital and social media. In addition, the
Company periodically conducts promotional sales campaigns in an effort to increase sales or promote the brand.
The Company uses an outside marketing firm and recently hired a chief digital officer to oversee the Company’s
marketing efforts, enhance its brand strategy and broaden the Company’s usage of digital and social media channels.
9
Underwriting and Finance. The Company provides financing to substantially all of its customers who
purchase a vehicle at one of its dealerships. The Company only provides financing to its customers for the purchase
of its vehicles and related ancillary products, and the Company does not provide any type of financing to non-
customers. The Company’s installment sales contracts as of April 30, 2023, typically include down payments
ranging from 0% to 20% (average of 5.4%), terms ranging from 18 months to 69 months (average of 46.3 months),
and a fixed annual interest rate of 18.0% for contracts originating after early December 2022 (up from 16.5%) for
all states except Arkansas and Illinois. The interest rate for sales in Arkansas, which account for approximately
27.4% of the Company’s revenues, is subject to a usury cap of 17%, and therefore, these sales are originated at
16.5%. The interest rate for sales in Illinois ranges from 19.5% to 21.5%. The portfolio weighted average interest
rate is 16.7%.
The Company requires that payments be made on a weekly, bi-weekly, semi-monthly or monthly basis,
scheduled to coincide with the day the customer is paid by his or her employer, with 79% of payments being due
on either a weekly or bi-weekly basis. Upon 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, personal references and a budget itemizing the customer’s
monthly income and expenses. Certain information is then verified by Company personnel. After the verification
process, the dealership manager makes the decision to accept, reject or modify (perhaps obtain a greater down
payment or suggest a lower priced vehicle) the proposed transaction. In general, the dealership manager attempts
to assess the stability and character of the applicant. 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. The Company provides centralized support to the dealership manager in the form of
a proprietary credit scoring system used for monitoring and other supervisory assistance to assist with credit
decisions. Credit quality is monitored centrally by corporate office personnel 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. Approximately half of the Company’s customers make their payments in person at the dealership
where they purchased their vehicle; however, in an effort to make paying convenient for its customers, the Company
offers a variety of payment options. 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. 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. In addition, the vice president of collections
oversees the collections department and provides timely oversight and additional accountability on a consistent
basis. The Company believes that the timely response to past due accounts is critical to its collections success.
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 works diligently to keep its delinquency percentages low and not to repossess vehicles.
Accounts one to three days late are contacted by telephone or text message. Notes from each contact are
electronically maintained in the Company’s computer system. The Company centrally utilizes text messaging
notifications which allows customers to elect to receive payment reminders and late notices via text message.
The Company attempts to resolve payment delinquencies amicably prior to repossessing a vehicle. If a
customer becomes severely delinquent in his or her payments, and management determines that timely collection
of future payments is not probable, the Company will take steps to repossess the vehicle. Periodically, the Company
enters into contract modifications with its customers to extend or modify the payment terms. The Company only
enters into a contract modification or extension if it believes such action will increase the amount of monies the
Company will ultimately realize on the customer’s account and will increase the likelihood of the customer being
able to pay off the vehicle contract. At the time of modification, the Company expects to collect amounts due
including accrued interest at the contractual interest rate for the period of delay. No other concessions are granted
10
to customers, beyond the extension of additional time at the time of modification. Modifications are minor and are
made for pay day changes, minor vehicle repairs and other reasons. For those vehicles that are repossessed, the
majority are returned or surrendered by the customer on a voluntary basis. Other repossessions are performed by
Company personnel or third-party repossession agents. Depending on the condition of a repossessed vehicle, it is
either resold on a retail basis through a Company dealership or sold for cash on a wholesale basis, primarily through
physical or online auctions.
New Dealership Openings. Along with strategic dealership acquisitions, the Company continues to
explore opportunities for new dealership openings. When opening new dealerships, senior management, with the
assistance of the corporate office staff, will make decisions with respect to the communities in which to locate a
new dealership and the specific sites within those communities. New dealerships have historically been located in
the general proximity of existing dealerships to facilitate the corporate office’s oversight of the Company’s
dealerships. The Company intends to add new dealerships, subject to favorable operating performance of existing
dealerships and availability of qualified managers. Recently, the Company has opened new dealerships under
experienced top performing general managers and may continue to do so in order to grow and leverage the talents
of these experienced managers.
The Company’s approach with respect to new dealership openings has been one of gradual development.
The manager in charge of a new dealership is normally a recently promoted associate who was an assistant manager
at a larger dealership and in most cases participated in the formal manager-in-training program. The corporate office
provides significant resources and support with pre-opening and initial operations of new dealerships. Historically,
new dealerships have operated with a low level of inventory and personnel. As a result of the modest staffing level,
the new dealership manager performs a variety of duties (i.e., selling, collecting and administrative tasks) during
the early stages of his or her dealership’s operations. As the dealership develops and the customer base grows,
additional staff are hired. Some of the recent dealership openings have been in markets that support a higher volume
of sales and these dealerships have opened with a higher level of inventory and staffing to accommodate the higher
volumes.
Monthly sales levels at new dealerships are typically substantially less than sales levels at mature
dealerships. Over time, new dealerships gain recognition in their communities, and a combination of customer
referrals and repeat business generally facilitates sales growth. Historically, sales growth at new dealerships could
exceed 10% per year for a number of years, whereas mature dealerships typically experience annual sales growth
but at a lower percentage than new dealerships. Due to continual operational initiatives, the Company is able to
support higher sales levels, and recently the Company has raised its volume expectation level of new locations
somewhat as infrastructure improvements related to new dealership openings have improved.
New dealerships are generally provided with approximately $1.5 million to $2.5 million in capital from the
corporate office during the first few years of operation. These funds are used principally to fund receivables growth.
After this start-up period, new dealerships can typically begin generating positive cash flow, allowing for some
continuing growth in receivables without additional capital from the corporate office. As these dealerships become
cash flow positive, a decision is made by senior management to either increase the investment due to favorable
return rates on the invested capital, or to deploy capital elsewhere. This limitation of capital to new, as well as
existing, dealerships serves as an important operating discipline. Dealerships must be profitable in order to grow
and typically new dealerships can be profitable within the first year of opening.
Dealership Acquisitions. Since 2020, the Company has actively pursued strategic dealership acquisitions
to expand its market presence and enhance its business operations. Most recently, the Company continued its
expansion efforts by acquiring smaller used car dealerships in Tennessee and Texas. These acquisitions helped the
Company further strengthen its footprint and increase its market share. By strategically acquiring established
dealerships, the Company believes it can accelerate its growth and solidify its position as a key player in the used
car industry. The Company’s recent acquisitions have not only expanded the Company's geographic reach but also
allowed the Company to leverage the acquired dealerships' operational efficiencies and customer relationships,
leading to enhanced value for both the Company and its customers. Management continues to actively pursue
additional acquisitions, including in regions beyond the Company’s existing geographic footprint, and believes that
11
disruptions in the current competitive landscape will provide unique opportunities to acquire productive dealerships
in good markets managed by experienced owners and their staff.
Corporate Office Oversight and Management. The corporate office, based in Rogers, Arkansas, consists
of regional vice presidents, area operations managers, regional inventory purchasing directors, a sales director, a
vice president of collections, a vice president of inventory operations, a director of audit and compliance and
compliance auditors, a vice president of human resources, a director of general manager recruitment and
development, associate and management development personnel, accounting and management information systems
personnel, administrative personnel and senior management. 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
uses this information to compile Company-wide reports, plan dealership visits and prepare monthly financial
statements.
Periodically, area operations managers, regional vice presidents, compliance auditors, loss prevention
associates, and senior management visit the Company’s dealerships to inspect, review and comment on operations.
The corporate office provides the overall training plan and assists in training new managers and other dealership
level associates. Compliance auditors and loss prevention associates visit dealerships to ensure policies and
procedures are being followed and that the Company’s assets are being safe-guarded. In addition to financial results,
the corporate office uses delinquency and account loss standards and a point system to evaluate a dealership’s
performance. Also, bankrupt and legal action accounts and other accounts that have been written off at dealerships
are handled by the corporate office to allow dealership personnel time to focus on more current accounts.
The Company’s dealership managers meet monthly on an area, regional or Company-wide basis. At these
meetings, corporate office personnel provide training and recognize achievements of dealership managers. Near the
end of every fiscal year, the respective area operations manager, regional vice president and senior management
conduct “projection” meetings with each dealership manager. At these meetings, the year’s results are reviewed and
ranked relative to other dealerships, and both quantitative and qualitative goals are established for the upcoming
year. The qualitative goals may focus on staff development, effective delegation, and leadership and organization
skills. Quantitatively, the Company establishes unit sales goals and profit goals based on invested capital and,
depending on the circumstances, may establish delinquency, account loss or expense goals.
The corporate office is also responsible for establishing policy, maintaining the Company’s management
information systems, conducting compliance audits, orchestrating new dealership openings and setting the strategic
direction for the Company.
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. Integrated Auto Sales and Finance dealers sell and finance used cars to individuals that often have limited
credit histories or past credit problems. Integrated Auto Sales and Finance dealers typically offer their customers
certain advantages over more traditional financing sources, such as less restrictive underwriting guidelines, flexible
payment terms (including scheduling payments on a weekly or bi-weekly basis to coincide with a customer’s
payday), and the ability to make payments in person, an important feature to individuals who may not have a
checking account.
Used Car Financing. The used automobile financing industry is served by traditional lending sources such
as banks, savings and loans, and captive finance subsidiaries of automobile manufacturers, as well as by independent
finance companies and Integrated Auto Sales and Finance dealers. Many loans that flow through the more traditional
sources have historically ended up packaged in the securitization markets. Despite significant opportunities, many
12
of the traditional lending sources have not historically been consistent in providing financing to individuals with
limited credit histories or past credit problems. Management believes traditional lenders have historically avoided
this market because of its high credit risk and the associated collections efforts. Beginning in 2012, funding for the
deep subprime automobile market increased significantly and has remained elevated compared to historic levels,
likely due to the ultra-low interest rate environment combined with the historical credit performance of the used
automobile financing market during and after the recession of the prior decade. However, as a result of the recent
inflationary environment and increased funding costs, credit availability for used vehicle financing has tightened.
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.
Competition
The used automotive retail industry is fragmented and highly competitive. The Company competes
principally with other independent Integrated Auto Sales and Finance dealers, as well as 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 for both the purchase and resale of used
vehicles. The increased funding to the used automobile industry and the tight supply of used vehicles in our market
has led to increased competitive pressures and higher purchase and retail prices which have been the primary
contributors to the Company’s decision in recent periods to allow longer term lengths and slightly lower down
payments in connection with our customer financing contracts.
Management believes the principal competitive factors in the sale of its used vehicles include (i) the
availability of financing to consumers with limited credit histories or past credit problems, (ii) the breadth and
quality of vehicle selection, (iii) pricing, (iv) the convenience of a dealership’s location, (v) the option to purchase
a service contract and an accident protection plan, and (vi) customer service. Management believes that its
dealerships are not only competitive in each of these areas, but have some distinct advantages, specifically related
to the provision of strong customer service for a credit challenged consumer. The Company’s local face-to-face
presence combined with some centralized support through digital and phone allows it to serve customers at a higher
level by forming strong personal relationships.
Seasonality
Historically, the Company’s third fiscal quarter (November through January) has been the slowest period
for vehicle sales. Conversely, the Company’s first and fourth fiscal quarters (May through July and February
through April) have historically been the busiest times for vehicle sales. Therefore, the Company generally realizes
a higher proportion of its revenue and operating profit during the first and fourth fiscal quarters. The Company
expects this pattern to continue in future years.
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.
Regulation and Licensing
The Company is committed to a culture of compliance by promoting and supporting efforts to design,
implement, manage, and maintain compliance initiatives. The Company’s operations are subject to various federal,
state and local laws, ordinances and regulations pertaining to the sale and financing of vehicles. Under various state
laws, the Company’s dealerships must obtain a license in order to operate or relocate. These laws also regulate
advertising and sales practices. The Company’s financing activities are subject to federal laws such as truth-in-
lending and equal credit opportunity laws and regulations as well as state and local motor vehicle finance laws,
installment finance laws, usury laws and other installment sales laws. Among other things, these laws require that
the Company limit or prescribe terms of the contracts it originates, require specified disclosures to customers,
restrict collections practices, limit the Company’s right to repossess and sell collateral, and prohibit discrimination
against customers on the basis of certain characteristics including age, race, gender and marital status.
13
The Company’s consumer financing and collection activities are also subject to oversight by the federal
Consumer Financial Protection Bureau (“CFPB”), which has broad regulatory powers over consumer credit
products and services such as those offered by the Company. Under a CFPB rule adopted in 2015, the Company’s
finance subsidiary, Colonial, is deemed a “larger participant” in the automobile financing market and is therefore
subject to examination and supervision by the CFPB.
The states in which the Company operates impose limits on interest rates the Company can charge on its
installment contracts. 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.
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.
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.
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, 2023, the Company, including
its consolidated subsidiaries, employed a diverse associate base of approximately 2,260 fulltime associates. 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. Each of our dealerships is a locally operated
business, and our diversity must represent the communities in which we serve. The Company is an equal opportunity
employer that strives to provide an inclusive environment, including associates that represent a wide range of
backgrounds, cultures, and experiences. The Company’s hiring practices are designed to find and promote
candidates reflecting the various communities in which we operate. As of April 30, 2023, 52% of the Company’s
associates were women and 34% of our associates were racially or ethnically diverse.
Employee Safety and Health
Ensuring the safety of all associates is a critical priority for the Company. Associates are expected to stay
informed about safety initiatives and to report unsafe conditions to their supervisor. Suppliers are expected to ensure
that employees working on behalf of Car-Mart adhere to all of the Company’s health and safety policies,
requirements and regulations. 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. 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 Risk Manager is responsible for safety education
and training, and regularly reviews indicators and areas where risks and injuries can occur, helping to eliminate
hazards. General Managers at each dealership are responsible for safety at their location on a daily basis, and
members of the safety committee at our corporate office are trained on CPR and other emergency procedures and
regularly conduct drills for events such as a fire or tornado. We continue to follow the CDC COVID-19 guidelines
and established Company procedures to maintain facilities that are clean, safe, and sanitized.
14
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. 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. The Company also offers professional resources that promote associates’ mental health and general
well-being.
Talent and Development
The Company is committed to building a working environment and culture that attracts, develops and
retains motivated associates. The Company strives to provide associates with broader challenging opportunities, an
environment that encourages entrepreneurial thinking and the ability to develop their career. The success of our
growth strategy and the operation of an organization that supports dealerships throughout 12 states requires that we
continue to seek, attract, hire and retain top talent at all levels of the Company. We offer a competitive compensation
and benefits program, and an opportunity for our associates to grow personally and professionally, with an eye
toward retirement and financial planning.
The Company provides each associate with a comprehensive compensation package that is based on the
role he or she fills. Our compensation philosophy is based on performance, both individually and as a company.
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. 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’s Future Manager
training program allows associates to learn all facets of operating a Car-Mart store from vehicle inventory and
facility management to effective collection techniques, while acquiring leadership skills. 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. 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. The Company makes available on this website,
free of charge, access to its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K and all amendments to those reports, as well as proxy statements and other information the Company files with,
or furnishes to, the Securities and Exchange Commission (“SEC”) as soon as reasonably practicable after the
Company electronically submits this material to the SEC. 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,
2023:
Name
Jeffrey A. Williams………………..
Vickie D. Judy…... ……………….
Douglas Campbell………………...
Age
60
57
47
Position with the Company
Chief Executive Officer and Director
Chief Financial Officer
President
Jeffrey A. Williams has served as Chief Executive Officer of the Company since January 2018, President
of the Company from March 2016 until October 2022, and as a director since August 2011. Before becoming Chief
Executive Officer, Mr. Williams served as Chief Financial Officer of the Company since 2005. He also served as
Vice President Finance from 2005 to March 2016 and as Secretary of the Company from 2005 to May 2018. Mr.
Williams is a Certified Public Accountant, inactive, and prior to joining the Company, his experience included
approximately seven years in public accounting with Arthur Andersen & Co. and Coopers and Lybrand LLC in
Tulsa, Oklahoma and Dallas, Texas. His experience also includes approximately five years as Chief Financial
Officer and Vice President of Operations of Wynco, LLC, a nationwide distributor of animal health products.
Vickie D. 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 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.
Douglas Campbell has served as President of the Company since October 2022. Before joining the
company, Mr. Campbell was Senior Vice President, Head of Fleet Services for the Americas, at Avis Budget Group
(“Avis”) since June 2022, previously serving in roles as Head of Fleet Services for the Americas since June 2021
and Vice President, Remarketing for the Americas, at Avis from March 2018 to June 2021. Prior to joining Avis,
Mr. 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.
Item 1A. Risk Factors
The Company is subject to various risks. The following is a discussion of risks that could materially and
adversely affect the Company’s business, operating results, and financial condition.
Risks Related to the Company’s Business, Industry, and Markets
Recent and future disruptions in domestic and global economic and market conditions could have adverse
consequences for the used automotive retail industry in the future and may have greater consequences for the non-
prime segment of the industry.
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
16
spending levels, and consumer sentiment about the economy in general. Recent and future disruptions in domestic
and global economic and market conditions, including rising interest rates and higher grocery and gasoline, or
significant changes in the political environment (such as the ongoing military conflict between Ukraine and Russia)
and/or public policy, could adversely affect consumer demand or increase the Company’s costs, resulting in lower
profitability for the Company. Due to the Company’s focus on non-prime customers, its actual rate of delinquencies,
repossessions and credit losses on contracts could be higher under adverse economic conditions than those
experienced in the automotive retail finance industry in general.
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. 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. 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. 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.
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 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. 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. 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. Any future
decline in new car sales could further adversely affect the Company’s access to and costs of inventory. 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.
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 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 for both the
purchase and resale, which includes, in most cases, financing for the customer, of used vehicles. The Company’s
competitors may sell the same or similar makes of vehicles that Car-Mart offers in the same or similar markets at
competitive prices. Increased competition in the market, including new entrants to the market, could result in
increased wholesale costs for used vehicles and lower-than-expected vehicle sales and margins. Further, if any of
the Company’s competitors seek to gain or retain market share by reducing prices for used vehicles, the Company
would likely reduce its prices in order to remain competitive, which may result in a decrease in its sales and
profitability and require a change in its operating strategies. Increased competition on the financing side puts
pressure on contract structures and increases the risk for higher credit losses. More qualified applicants have more
financing options on the front-end, and if events adversely affecting the borrower occur after the sale, the increased
competition may tempt the borrower to default on their contract with the Company in favor of other financing
options, which in turn increases the likelihood of the Company not being able to save that account.
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The used automotive retail industry operates in a highly regulated environment with significant attendant
compliance costs and penalties for non-compliance.
The used automotive retail industry is subject to a wide range of federal, state, and local laws and
regulations, such as local licensing requirements and laws regarding advertising, vehicle sales, financing, and
employment practices. Facilities and operations are also subject to federal, state, and local laws and regulations
relating to environmental protection and human health and safety. The violation of these laws and regulations could
result in administrative, civil, or criminal penalties against the Company or in a cease and desist order. As a result,
the Company has incurred, and will continue to incur, capital and operating expenditures, and other costs of
complying with these laws and regulations. Further, over the past several years, private plaintiffs and federal, state,
and local regulatory and law enforcement authorities have increased their scrutiny of advertising, sales and finance
activities in the sale of motor vehicles. 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.
The Company’s business is geographically concentrated; therefore, the Company’s results of operations may be
adversely affected by unfavorable conditions in its local markets.
The Company’s performance is subject to local economic, competitive, and other conditions prevailing in
the twelve states where the Company operates. 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 27.4% of
revenues resulting from sales to Arkansas customers. The Company’s current results of operations depend
substantially on general economic conditions and consumer spending habits in these local markets. Any decline in
the general economic conditions or decreased consumer spending in these markets may have a negative effect on
the Company’s results of operations.
The Company’s growth strategy is dependent upon the following factors:
Favorable operating performance. Our ability to 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 open and operate or
acquire new locations.
Ability to successfully identify, complete and integrate new acquisitions. Part of our current growth strategy
includes strategic acquisitions of dealerships. We could have difficulty identifying attractive target
dealerships, completing the acquisition or integrating the acquired business’ assets, personnel and
operations with our own. 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 open new dealerships is subject to the availability of
suitable dealership sites in locations and on terms favorable to the Company. If and when the Company
decides to open new dealerships, the inability to acquire suitable real estate, either through lease or
purchase, at favorable terms could limit the expansion of the Company’s dealership base. In addition, if a
new dealership is unsuccessful and we are forced to close the dealership, we could incur additional costs if
we are unable to dispose of the property in a timely manner or on terms favorable to the Company. Any of
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these circumstances could have a material adverse effect on the Company’s expansion strategy and future
operating results.
Ability to attract and retain management for new dealerships. The success of new dealerships is dependent
upon the Company being able to hire and retain additional competent personnel. The market for qualified
employees in the industry and in the regions in which the Company operates is highly competitive. 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. 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. Any of these factors could potentially have a significant negative effect on the supply of vehicles
at appropriate prices available to the Company in future periods. 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. 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. In addition, new dealerships may experience higher than
anticipated credit losses, which may require the Company to incur additional costs to reduce future credit
losses or to close the underperforming locations altogether. Any of these circumstances could have a
material adverse effect on the Company’s future financial condition and operating results.
The Company’s business is subject to seasonal fluctuations.
Historically, the Company’s third fiscal quarter (November through January) has been the slowest period
for vehicle sales. Conversely, the Company’s first and fourth fiscal quarters (May through July and February
through April) have historically been the busiest times for vehicle sales. Therefore, the Company generally realizes
a higher proportion of its revenue and operating profit during the first and fourth fiscal quarters. The Company
expects this pattern to continue in future years.
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.
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
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 consequences of any future adverse public health
developments could have a material adverse effect on our business, sales, results of operations and financial
condition.
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
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origination of vehicle financing, and meet our financial obligations. 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.
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. Financing made to
borrowers who are restricted in their ability to obtain financing from traditional lenders generally entails a higher
risk of delinquency, default and repossession, and higher losses than financing made to borrowers with better credit.
Delinquency interrupts the flow of projected interest income and repayment of principal from a contract, and a
default can ultimately lead to a loss if the net realizable value of the automobile securing the contract is insufficient
to cover the principal and interest due on the contract or if the vehicle cannot be recovered. The Company’s
profitability depends, in part, upon its ability to properly evaluate the creditworthiness of non-prime borrowers and
efficiently service such contracts. 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. If the Company experiences
higher losses than anticipated, its financial condition, results of operations and business prospects could be
materially and adversely affected.
The Company’s allowance for credit losses may not be sufficient to cover actual credit losses, which could adversely
affect its financial condition and operating results.
When applicable, the Company has to recognize losses resulting from the inability of certain borrowers to
pay contracts and the insufficient realizable value of the collateral securing contracts. The Company maintains an
allowance for credit losses in an attempt to cover net credit losses expected over the remaining life of the contracts
in the portfolio at the measurement date. Additional credit losses will likely occur in the future and may occur at a
rate greater than the Company has experienced to date. The allowance for credit losses represents management’s
best estimate of lifetime expected losses based on reasonable and supportable forecasts, historical credit loss
experience, changes in contractual characteristics (i.e., average amount financed, term, and interest rates), and other
qualitative considerations, such as credit quality trends, collateral values, current and forecasted economic
conditions, underwriting and collections practices, concentration risk, credit review, and other external factors. This
evaluation is inherently subjective as it requires estimates of material factors that may be susceptible to significant
change. 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. At April 30, 2023 the Company increased its allowance for credit losses to 23.91% from 23.65% of
the principal balance of finance receivables, net of deferred revenue, primarily due to increases in historical losses
as a result of the ending of federal stimulus programs, continuing inflationary pressure on customers and increasing
interest rates from federal monetary policy. 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.
The Company’s success depends upon the continued contributions of its management teams and the ability to
attract and retain qualified employees.
The Company is dependent upon the continued contributions of its management teams. Because the
Company maintains a decentralized operation in which each dealership is responsible for buying and selling its own
vehicles, making credit decisions and collecting contracts it originates, the key employees at each dealership are
important factors in the Company’s ability to implement its business strategy. Consequently, the loss of the services
of key employees could have a material adverse effect on the Company’s results of operations. In addition, when
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the Company decides to open new dealerships, the Company will need to hire additional personnel. The market for
qualified employees in the industry and in the regions in which the Company operates is highly competitive and
may subject the Company to increased labor costs during periods of low unemployment or times of increased
competition for labor.
The Company’s business is dependent upon the efficient operation of its information systems.
The Company relies on its information systems in managing its sales, inventory, consumer financing, and
customer information effectively. The failure of the Company’s information systems to perform as designed, or the
failure to maintain and continually enhance or protect the integrity of these systems, could disrupt the Company’s
business, impact sales and profitability, or expose the Company to customer or third-party claims.
Security breaches, cyber-attacks or fraudulent activity could result in damage to the Company's operations or lead
to reputational damage.
Our information and technology systems are vulnerable to damage or interruption from computer viruses,
network failures, computer and telecommunications failures, infiltration by unauthorized persons and security
breaches, usage errors by our employees, power outages and catastrophic events such as fires, tornadoes, floods,
hurricanes and earthquakes. A security breach of the Company's computer systems could also interrupt or damage
its operations or harm its reputation. In addition, the Company could be subject to liability if confidential customer
information is misappropriated from its computer systems. Any compromise of security, including security breaches
perpetrated on persons with whom the Company has commercial relationships, that result in the unauthorized
release of its users’ personal information, could result in a violation of applicable privacy and other laws, significant
legal and financial exposure, damage to the Company's reputation, and a loss of confidence in the Company's
security measures, which could harm its business. Any compromise of security could deter people from entering
into transactions that involve transmitting confidential information to the Company's systems and could harm
relationships with the Company's suppliers, which could have a material adverse effect on the Company's business.
Actual or anticipated attacks may cause the Company to incur increasing costs, including costs to deploy additional
personnel and protection technologies, train employees, and engage third-party experts and consultants. Despite the
implementation of security measures, these systems may still be vulnerable to physical break-ins, computer viruses,
programming errors, attacks by third parties or similar disruptive problems. The Company may not have the
resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks.
Most of the Company's customers provide personal information when applying for financing. The Company
relies on encryption and authentication technology to provide security to effectively store and securely transmit
confidential information. 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.
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.
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. 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. 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. If
these systems fail to perform as designed or if we fail to respond effectively to consumer buying preferences or
21
keep pace with technological advances by our competitors, it could have a material adverse effect on our business,
financial condition and results of operations.
Changes in the availability or cost of capital and working capital financing could adversely affect the Company’s
growth and business strategies, and volatility and disruption of the capital and credit markets and adverse changes
in the global economy could have a negative impact on the Company’s ability to access the credit markets in the
future and/or obtain credit on favorable terms.
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.
On a long-term basis, the Company expects its principal sources of liquidity to consist of income from continuing
operations and borrowings under revolving credit facilities and/or term securitizations. Any adverse changes in the
Company’s ability to borrow under revolving credit facilities or by accessing the securitization market, or any
increase in the cost of such borrowings, would likely have a negative impact on the Company’s ability to finance
receivables growth which would adversely affect the Company’s growth and business strategies. Further, the
Company’s current credit facilities and non-recourse notes payable contain various reporting and/or financial
performance covenants. Any failure of the Company to comply with these covenants could have a material adverse
effect on the Company’s ability to implement its business strategy.
If the capital and credit markets experience disruptions and/or the availability of funds becomes restricted,
it is possible that the Company’s ability to access the capital and credit markets may be limited or available on less
favorable terms which could have an impact on the Company’s ability to refinance maturing debt or react to
changing economic and business conditions. In addition, if negative domestic or global economic conditions persist
for an extended period of time or worsen substantially, the Company’s business may suffer in a manner which could
cause the Company to fail to satisfy the financial and other restrictive covenants under its credit facilities.
The impact of climate-change related events, including efforts to reduce or mitigate the effects of climate change
and inclement weather can adversely impact the Company’s operating results.
The effects of climate change such as natural disasters or the occurrence of weather events, such as rain,
snow, wind, storms, hurricanes, or other natural disasters, which adversely affect consumer traffic at the Company’s
automotive dealerships, could negatively impact the Company’s operating results. Further, the pricing of used
vehicles is affected by, among other factors, consumer preferences, which may be impacted by consumer
perceptions of climate change and consumer efforts to mitigate or reduce climate change-related events by
purchasing vehicles that are viewed as more fuel efficient (including vehicles powered primarily or solely through
electricity). An increase in the supply or a decrease in the demand for used vehicles may impact the resale value of
the vehicles the Company sells. Moreover, the implementation of new or revised laws or regulations designed to
address or mitigate the potential impacts of climate change (including laws which may adversely impact the auto
industry in particular as a result of efforts to mitigate the factors contributing to climate change) could have a
significant impact on the Company. 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.
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.
Although shares of the Company’s common stock are traded on the NASDAQ Global Select Market, the
average daily trading volume in the Company’s common stock is less than that of other larger automotive retail
companies. 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
22
conditions over which the Company has no control. Given the average daily trading volume of the Company’s
common stock, the market price of the Company’s common stock may be subject to greater volatility than
companies with larger trading volumes as smaller transactions can more significantly impact the Company’s stock
price. Significant sales of the Company’s common stock in a brief period of time, or the expectation of these sales,
could cause a decline in the price of the Company’s common stock. The price of the Company’s common stock
may also be subject to wide fluctuations based upon the Company’s operating results, general economic and market
conditions, general trends and prospects for our industry, announcements by competitors, the Company’s ability to
achieve any long-term targets or performance metrics and other factors. Any such fluctuations could increase the
Company’s risk of being subject to securities class action litigation, which could result in substantial costs, divert
management’s attention and resources and have other material adverse impacts on the Company’s business.
Additionally, low trading volumes may limit a stockholder’s ability to sell shares of the Company’s common stock.
The Company currently does not intend to pay future dividends on its common stock.
The Company historically has not paid cash dividends on its common stock and currently does not
anticipate paying future cash dividends on its common stock. Any determination to pay future dividends and other
distributions in cash, stock, or property by the Company in the future will be at the discretion of the Company’s
Board of Directors and will be dependent on then-existing conditions, including the Company’s financial condition
and results of operations and contractual restrictions. 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.
Item 2. Properties
As of April 30, 2023, the Company leased approximately 79% 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. For additional
information regarding the Company’s properties, see “Operations-Dealership Locations and Facilities” under Item
1 above and “Contractual Payment Obligations” and “Off-Balance Sheet Arrangements” under Item 7 of Part II.
Item 3. Legal Proceedings
In the ordinary course of business, the Company has become a defendant in various types of legal
proceedings. While 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.
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PART II
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 23, 2023, there were approximately 977 shareholders of record. This number excludes
stockholders holding the Company’s common stock as “beneficial owners” under nominee security position listings.
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, 2018
and ending on April 30, 2023. The Company selected the customized peer group because the Hemscott Group 744
Index is no longer available.
The 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, 2018.
* $100 invested on 4/30/2018 in stock or index, including reinvestment of dividends.
Fiscal year ending April 30.
The dollar value at April 30, 2023 of $100 invested in the Company’s common stock on April 30, 2018
was $150.3, compared to $180.98 for the NASDAQ Market Index (U.S. Companies) and $241.12 for the Auto
Dealerships peer group.
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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. Payment of
cash dividends in the future will be determined by the Company's Board of Directors and will depend upon, among
other things, the Company's future earnings, operations, capital requirements and surplus, general financial
condition, contractual restrictions that may exist, and such other factors as the Board of Directors may deem
relevant. 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.
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. No shares of the Company’s common stock were purchased under the Company’s stock repurchase
program during the fourth quarter of fiscal 2023.
Item 6. [Reserved]
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.
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. 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. 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, 2023, the Company operated 156 dealerships
located primarily in small cities throughout the South-Central United States.
Car-Mart has been operating since 1981. Car-Mart has grown its revenues between approximately 4% and
32% per year over the last ten years (average 12.0%). Growth results from same dealership revenue growth and the
addition of new dealerships. Revenue increased 17.6% for the fiscal year ended April 30, 2023 compared to fiscal
2022 primarily due to a 10.4% increase in average retail sales price, a 4.9% increase in units sold and a 29.2%
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. 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. Revenues can also be affected by the macro-economic environment. Down payments, contract
term lengths and proprietary credit scoring are critical to helping customers succeed and are monitored closely by
corporate management at the point of sale. After the sale, collections, delinquencies and charge-offs are crucial
elements of the Company’s evaluation of its financial condition and results of operations and are monitored and
25
reviewed on a continuous basis. Management believes that developing and maintaining a relationship with its
customers and earning their repeat business is critical to the success and growth of the Company and can serve to
offset the effects of increased competition and negative macro-economic factors.
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 online sales experience. The Company, over recent years, has focused on providing
a good mix of vehicles in various price ranges to increase affordability for customers.
The purchase price the Company pays for its vehicles can also have a significant effect on revenues,
liquidity and capital resources. Because the Company bases its selling price on the purchase cost of the vehicle,
increases in purchase costs result in increased selling prices. As the selling price increases, it becomes more difficult
to keep the gross margin percentage and contract term in line with historical results because the Company’s
customers have limited incomes and their car payments must remain affordable within their individual budgets.
Decreases in the overall volume of new car sales, particularly domestic brands, lead to decreased supply and
generally increased prices in the used car market. Also, expansions or constrictions in consumer credit, as well as
general economic conditions, can have an overall effect on the demand and the resulting purchase cost of the types
of vehicles the Company purchases for resale.
The COVID-19 global pandemic and the resulting macroeconomic effects have negatively impacted the
availability and prices of the vehicles the Company purchases. Over the past three years, the reduction in new car
production and fewer off-lease vehicles have negatively impacted the availability of used vehicle inventory and
resulted in higher purchase costs. The Company constantly reviews and adjusts purchasing avenues in order to
obtain an appropriate flow of vehicles. While the Company anticipates that the availability of used vehicles will
remain constricted and keep purchase costs elevated in the near future, any decline in overall market pressures
affecting the availability and costs of used vehicles could result in lower inventory purchase costs and present an
opportunity for the Company to purchase slightly newer, lower mileage vehicle for its 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 credit losses as
a percentage of sales have ranged from approximately 19.30% in fiscal 2019 to 29.20% in fiscal 2023 (average of
23.74%). Credit loss results improved substantially in fiscal 2021 due to a lower frequency of losses and lower
severity of loss amounts relative to the principal balance as the CARES Act enhanced unemployment and stimulus
funds, combined with the Company’s commitment to working with customers, aided customers’ ability to make
their vehicle payments. The improvement in credit losses as a percentage of sales for fiscal 2021 was further
accelerated by the Company’s decision during the fourth quarter of fiscal 2021 to reduce the allowance for credit
losses back to 23.55% of finance receivables, net of deferred revenue, which resulted in a $14.2 million pretax
decrease in the provision for credit losses. 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. The fiscal year 2023
credit losses continued to normalize to pre-pandemic levels, partially driven by the lack of federal stimulus
payments in the current fiscal year as compared to prior fiscal years due to the expiration of the CARES Act and
the Consolidated Appropriations Act of 2021, and partially driven by the current macro-economic environment.
Based on the Company’s current analysis of credit losses, the allowance for credit losses as a percentage of finance
receivables, net of deferred revenue, increased from 23.57% at April 30, 2022 to 23.91% at April 30, 2023.
Historically, credit losses, on a percentage basis, tend to be higher at new and developing dealerships than
at mature dealerships. 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.
Normally more mature dealerships have more repeat customers and, on average, repeat customers are a better credit
risk than non-repeat customers. 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 gasoline, groceries and other staple items. Negative macro-economic issues, however, do not always
lead to higher credit loss results for the Company because the Company provides basic affordable transportation
which in many cases is not a discretionary expenditure for customers.
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The Company continuously looks for ways to operate more efficiently, improve its business practices and
adjust underwriting and collection procedures. The Company has a proprietary credit scoring system which enables
the Company to monitor the quality of contracts. Corporate office personnel monitor proprietary credit scores and
work with dealerships when the distribution of scores falls outside of prescribed thresholds. The Company also uses
credit reporting and the use of global positioning system (“GPS”) units on vehicles. Additionally, the Company has
placed significant focus on the collection area as the Company’s training department continues to spend significant
time and effort on collections improvements. The Company’s vice president of collections oversees the collections
area and provides timely oversight and additional accountability on a consistent basis. 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
approximately 40.4% in fiscal 2019 to 33.4% in fiscal 2023 (average of 38.0%). The Company’s gross margin is
based upon the cost of the vehicle purchased, with lower-priced vehicles typically having higher gross margin
percentages but lower gross profit dollars, and 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 gross margin percentage decreased
in fiscal 2023 to 33.4% from 36.4% in the prior fiscal year, while total gross profit per retail unit sold increased by
$72, primarily as a result of the Company selling on average a higher priced vehicle in fiscal 2023. The inflationary
environment during fiscal 2023 also contributed to the lower gross margin percentage due to increased costs of
vehicle parts, shop labor rates and transport services.
Hiring, training and retaining qualified associates is critical to the Company’s success. The Company’s
ability to add new dealerships and implement operating initiatives is dependent on having a sufficient number of
trained managers and support personnel. Excessive turnover, particularly at the dealership manager level, could
impact the Company’s ability to add new dealerships and to meet operational initiatives. The landscape for hiring
remains very competitive as business activity and workforce participation continue to adjust post-pandemic. The
Company has continued to add resources to recruit, train, and develop personnel, especially personnel targeted to
fill dealership manager positions. The Company expects to continue to invest in the development of its workforce.
Immaterial Corrections to Historical Financial Statements
Certain historical financial information presented in this Annual Report on Form 10-K has been revised to
correct immaterial errors in certain amounts reported in the Company’s prior financial statements related to the
classification of deferred revenue of ancillary products at the time an account is charged off and the calculation for
allowance for credit losses. Management has concluded that these corrections did not materially impact the
Company’s operating results or financial condition in any prior annual or interim period. See Note N to the
Condensed Consolidated Financial Statements for additional information.
27
Consolidated Operations
(Operating Statement Dollars in Thousands)
Years Ended April 30,
2023
2022
2021
% Change
2023
vs.
2022
2022
vs.
2021
As a % of Sales
2022
2021
2023
$ 1,209,279
196,219
1,405,498
$ 1,043,698
151,853
1,195,551
$ 799,129
110,545
909,674
15.9 %
29.2
17.6
30.6 %
37.4
31.4
100.0 %
16.2
116.2
100.0 %
14.5
114.5
100.0 %
13.8
113.8
805,873
176,696
352,860
38,312
5,602
663,631
156,130
238,054
10,919
4,033
361
1,379,704
149
1,072,916
479,153
130,855
153,835
6,820
3,719
(40)
774,342
21.4 %
13.2
48.2
250.9
38.9
-
28.6
38.5 %
19.3
54.7
60.1
8.4
66.6
14.6
29.2
3.2
0.5
63.6
15.0
22.8
1.0
0.4
-
38.6
-
114.1
-
102.8
60.0
16.4
19.3
0.9
0.5
-
97.1
Operating Statement:
Revenues:
Sales
Interest and other income
Total
Costs and expenses:
Cost of sales, excluding depreciation
shown below
Selling, general and administrative
Provision for credit losses
Interest expense
Depreciation and amortization
Loss (gain) on disposal of property
and equipment
Total
Income before income taxes
$
25,794
$
122,635
$ 135,332
2.1 %
11.8 %
16.9 %
Operating Data (Unaudited):
Retail units sold
Average dealerships in operation
Average units sold per dealership per month
Average retail sales price
Gross profit per retail unit sold
Same store revenue growth
Receivables average yield
63,584
155
34.2
18,080
6,344
16.6%
15.7%
$
$
60,595
152
33.2
16,372
6,272
30.0%
15.8%
$
$
56,806
150
31.6
13,464
5,633
18.7%
15.9%
$
$
4.9 %
2.0
3.0
10.4
1.1
6.7 %
1.3
5.1
21.6
11.3
Fiscal 2023 Compared to Fiscal 2022
Total revenues increased $209.9 million, or 17.6%, in fiscal 2023, as compared to revenue growth of 31.4%
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). 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.
Cost of sales, as a percentage of sales, increased to 66.6% compared to 63.6% in fiscal 2022, resulting in a
decrease in the gross margin percentage to 33.4% of sales in fiscal 2023 from 36.4% of sales in fiscal 2022. On a
dollar basis, our gross margin per retail unit sold increased by $72 in fiscal 2023 compared to fiscal 2022. The
average retail sales price for fiscal 2023 was $18,080, a $1,708 increase over the prior fiscal year, reflecting the
high demand for used cars, especially in the market we serve. As purchase costs increase, the margin between the
purchase cost and the sales price of the vehicles we sell generally narrows on a percentage basis because the
Company must offer affordable prices to our customers. Demand for the vehicles we purchase for resale has
remained high and the supply has continued to be restricted primarily due to lower levels of new car production.
The inflationary environment during fiscal 2023 also contributed to the lower gross margin percentage due to
increased costs of vehicle parts, shop labor rates and transport services.
Selling, general and administrative expenses, as a percentage of sales decreased to 14.6% in fiscal 2023
from 15.0% for fiscal 2022. Selling, general and administrative expenses are, for the most part, more fixed in nature.
During fiscal 2023 we continued investments in inventory procurement, technology and digital areas as well as
investing in key additions to our leadership team. In dollar terms, selling, general and administrative expenses
28
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 29.2% for fiscal 2023 compared to 22.8%
for fiscal 2022. 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. The stimulus payments during fiscal 2022 had positive impacts on collections
and net charge-off metrics, while in fiscal 2023, the absence of stimulus payments, added inflationary pressures and
the current macro-economic environment had a negative impact on collections and net charge-off metrics. Net
charge offs began to normalize to pre-pandemic levels in late fiscal 2022 and continued to normalize during fiscal
2023. The primary driver was an increased frequency of losses; however, the relative severity of losses also
increased.
Interest expense for fiscal 2023 as a percentage of sales increased to 3.2% in fiscal 2023 from 1.0% in fiscal
2022. 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.
Fiscal 2022 Compared to Fiscal 2021
Total revenues increased $285.9 million, or 31.4%, in fiscal 2022, as compared to revenue growth of 22.2%
in fiscal 2021, principally as a result of (i) revenue growth from dealerships that operated a full twelve months in
both fiscal years ($269.2 million), and (ii) revenue from stores opened or acquired during or after the year ended
April 30, 2021 ($16.8 million), partially offset by (iii) decreased revenue from dealerships closed during or after
the year ended April 30, 2021 ($86,000). The increase in revenue for fiscal 2022 is attributable to (i) a 21.6%
increase in average retail sales price, (ii) a 6.7% increase in retail units sold and (iii) a 37.4% increase in interest
and other income.
Cost of sales, as a percentage of sales, increased slightly to 63.6% compared to 60.0% in fiscal 2021,
resulting in a decrease in the gross margin percentage to 36.4% of sales in fiscal 2022 from 40.0% of sales in fiscal
2021. On a dollar basis, our gross margin per retail unit sold increased by $639 in fiscal 2022 compared to fiscal
2021. The average retail sales price for fiscal 2022 was $16,372, a $2,908 increase over the prior fiscal year,
reflecting the high demand for used cars, especially in the market we serve. As purchase costs increase, the margin
between the purchase cost and the sales price of the vehicles we sell generally narrows on a percentage basis because
the Company must offer affordable prices to our customers. Demand for the vehicles we purchase for resale
remained high during fiscal 2022 and the supply continued to be restricted due to lower repossessions, lower levels
of new car production and sales and additional demand due to stimulus money.
Selling, general and administrative expenses, as a percentage of sales decreased to 15.0% in fiscal 2022
from 16.4% for fiscal 2021. Selling, general and administrative expenses remained, for the most part, more fixed in
nature. In dollar terms, overall selling, general and administrative expenses increased $25.3 million from fiscal
2021. The increase was primarily focused on investments in our associates, especially building our customer
experience team and investing in procurement, combined with increased commissions due to higher net income.
Provision for credit losses as a percentage of sales increased to 22.8% for fiscal 2022 compared to 19.3%
for fiscal 2021. Net charge-offs as a percentage of average finance receivables increased to 18.3% for fiscal 2022
compared to 18.0% for the prior year. The stimulus payments during fiscal 2021 had positive impacts on collections
and net charge-off metrics. From a long-term historical perspective, the fiscal 2022 net charge-offs were much
improved and below historical levels despite the increase in the average retail sales price. The frequency of losses
increased compared to the prior year as credit losses began to normalize to pre-pandemic levels.
Interest expense as a percentage of sales increased slightly to 1.0% in fiscal 2022 from 0.9% in fiscal 2021.
The increase in interest expense is primarily due to the higher average borrowings in fiscal 2022 ($333.2 million in
fiscal 2022 compared to $220.7 million in fiscal 2021).
29
Financial Condition
The following table sets forth the major balance sheet accounts of the Company at April 30, 2023, 2022
and 2021 (in thousands):
Assets:
Finance receivables, net
Inventory
Income taxes receivable, net
Property and equipment, net(1)
Liabilities:
Accounts payable and accrued liabilities
Deferred revenue
Income taxes payable, net
Deferred income tax liabilities, net
Non-recourse notes payable, net
Revolving line of credit, net
2023
April 30,
2022
2021
$
1,073,764
109,290
9,259
61,682
$
863,674
115,302
274
45,412
$
632,270
82,263
-
34,719
60,802
120,469
-
39,315
471,367
167,231
52,685
92,491
-
30,449
395,986
44,670
49,486
56,810
150
21,698
-
225,924
(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 following table shows receivables growth compared to revenue growth during each of the past three
fiscal years. For fiscal year 2023, growth in finance receivables, net of deferred revenue, of 24.2% exceeded revenue
growth of 17.6%, due primarily to the increases in term lengths of our installment sales contracts as the Company
strives to keep payments affordable for our customers. The Company anticipates going forward that the growth in
finance receivables will generally continue to be slightly higher than overall revenue growth on an annual basis due
to the overall term length increases in our installment sales contracts in recent years. The average term for
installment sales contracts at April 30, 2023 was 46.3 months, compared to 42.9. months for April 30, 2022.
Years Ended April 30,
2022
2023
2021
Growth in finance receivables, net of deferred
revenue
Revenue growth
24.2%
17.6%
34.1%
31.4%
28.7%
23.7%
At fiscal year-end 2023, inventory decreased 5.2% ($6.0 million), compared to fiscal year-end 2022,
primarily due to a concerted effort to increase efficiencies in our inventory operations resulting in annualized
inventory turns of 7.2 compared to 6.7 for the previous year. 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, increased by approximately $16.3 million as of April 30, 2023 as compared
to fiscal 2022. We incurred approximately $22.3 million in expenditures during fiscal year 2023, primarily related
to new locations, relocations and finalizing our rebranding project. The increase to property and equipment, net,
was partially offset by depreciation expense of $5.6 million and disposals of approximately $454,000 in furniture
and equipment.
30
Accounts payable and accrued liabilities increased by approximately $8.1 million at April 30, 2023 as
compared to April 30, 2022 primarily due to higher accounts payable related to increased inventory and sales
activity.
Deferred revenue increased $28 million at April 30, 2023 over April 30, 2022, primarily resulting from the
increase in sales of the accident protection plan and service contract products, as well as the increased terms on the
service contracts.
Deferred income tax liabilities, net, increased approximately $8.9 million at April 30, 2023 as compared to
April 30, 2022, due primarily to the increase in finance receivables, net.
The Company had $471 million and $396 million of non-recourse notes payable outstanding related to
asset-backed term funding transactions for the periods ended April 30, 2023 and 2022, respectively.
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. 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 SOFR plus 2.75%.
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) income taxes, (iv) capital expenditures, (v) common
stock repurchases and (vi) other sources of financing, such as our recent issuance of asset-backed non-recourse
notes. At April 30, 2023, the Company had $167.2 million 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.
During fiscal 2023, the Company primarily utilized the proceeds of its April 2022 and January 2023 asset-backed
term funding transactions to fund the Company’s current receivables growth.
In fiscal 2023, the Company had a $172.5 million net increase in total debt, net of cash, used to contribute
to the funding of finance receivables growth of $210.1 million, net capital expenditures of $22.3 million and
common stock repurchases of $5.2 million. These investments reflect our commitment to providing the necessary
inventory and facilities to support a growing customer base.
31
Liquidity and Capital Resources
The following table sets forth certain historical information with respect to the Company’s Statements of
Cash Flows (in thousands):
2023
Years Ended April 30,
2022
Operating activities:
Net income
Provision for credit losses
Losses on claims for accident protection plan
Depreciation and amortization
Amortization of debt issuance costs
Stock based compensation
Deferred income taxes
Finance receivable originations
Finance receivable collections
Accrued interest on finance receivables
Inventory
Accounts payable and accrued liabilities
Deferred accident protection plan revenue
Deferred service contract revenue
Income taxes, net
Other(1)
Total
Investing activities:
Purchase of investments
Purchase of property and equipment(1)
Proceeds from sale of property and equipment
Total
Financing activities:
Debt facilities, net
Non-recourse debt, net
Change in cash overdrafts
Purchase of common stock
Dividend payments
Exercise of stock options, including
tax benefits and issuance of common stock
Total
$
20,432
352,860
25,107
5,602
5,461
5,314
8,866
(1,161,132)
434,458
(1,188)
133,047
8,621
17,150
24,542
(8,984)
(5,884)
(135,728)
(5,549)
(22,106)
84
(27,571)
(207,696)
400,176
-
(5,196)
(40)
1,502
188,746
$
95,014
238,054
21,871
4,033
775
5,496
8,750
(1,009,858)
417,796
(1,559)
51,057
5,167
21,850
30,645
(424)
$
2021
104,820
153,835
18,954
3,719
391
5,962
7,239
(762,717)
370,254
(269)
5,019
14,766
14,865
14,760
(3,691)
(7,845)
(119,178)
(1,719)
(53,812)
(1,574)
(15,796)
20
(17,350)
-
(8,952)
694
(8,258)
(186,037)
399,994
(1,802)
(34,698)
(40)
(1,195)
176,222
9,965
-
1,802
(10,616)
(40)
4,292
5,403
Increase (decrease) in cash, cash equivalents, and restricted cash
$
25,447
$
39,694
$
(56,667)
(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 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. Historically, most of the cash generated from
operations has been used to fund finance receivables growth, capital expenditures and common stock repurchases.
To the extent finance receivables growth, common stock repurchases and capital expenditures exceed income from
operations we historically increased our borrowings under our revolving credit facilities and most recently also
utilized the securitization market.
32
Cash flows from operations in fiscal 2023 compared to fiscal 2022 decreased 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. Finance receivables, net, increased by $210.1 million during fiscal 2023.
Cash flows from operations in fiscal 2022 compared to fiscal 2021 decreased primarily as a result of (i) an
increase in finance receivable originations and (ii) an increase in inventory, partially offset by increases in (iii)
finance receivable collections and (iv) deferred revenue. Finance receivables, net, increased by $231.4 million
during fiscal 2022.
The purchase price the Company pays for a vehicle has a significant effect on liquidity and capital resources.
Because the Company bases its selling price on the purchase cost for the vehicle, increases in purchase costs result
in increased selling prices. As the selling price increases, it generally becomes more difficult to keep the gross
margin percentage and contract term in line with historical results because the Company’s customers have limited
incomes and their car payments must remain affordable within their individual budgets. Several external factors can
negatively affect the purchase cost of vehicles. Decreases in the overall volume of new car sales, particularly
domestic brands, lead to decreased supply in the used car market. Also, constrictions in consumer credit, as well as
general economic conditions, can increase overall demand for the types of vehicles the Company purchases for
resale as used vehicles become more attractive than new vehicles in times of economic instability. A negative shift
in used vehicle supply, combined with strong demand, results in increased used vehicle prices and thus higher
purchase costs for the Company.
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, 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 have begun to soften but remain high by historical standards. 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 continuing strong wage increases for
our customers will cause affordability to improve gradually over the next couple of years.
The Company has devoted significant efforts to improving its purchasing processes to ensure adequate
supply at appropriate prices, including 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
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. Even with these efforts, the Company expects gross margin percentages to remain under
pressure over the near term.
The Company’s liquidity is also impacted by our credit losses. Macro-economic factors such as
unemployment levels and general inflation 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 groceries and gasoline, it
may impact their ability to make their car payments. The Company has made improvements to its business processes
within the last few years to strengthen controls and provide stronger infrastructure to support its collections efforts.
The Company continues to strive to reduce credit losses in spite of the current economic challenges and continued
competitive pressures by improving deal structures. Management continues to focus on improved execution at the
dealership level, specifically as related to working individually with customers concerning collection issues.
The Company’s collection results, credit losses and liquidity are also affected by the availability of funding
to the sub-prime auto industry. In recent years, increased competition resulting from the availability of funding to
the sub-prime auto industry has contributed to the Company reducing down payments and lengthening contract
terms for our customers, which added negative pressure to our collection percentages and credit losses and increased
our need for external sources of liquidity. During fiscal years 2022 and 2023, the availability of credit to the
Company’s customer base was somewhat dampened but remained near recent historical levels. The Company
believes that the amount of credit available, even with it tightening in 2023, for the sub-prime auto industry will
33
remain relatively consistent with levels in recent years, which management expects will contribute to continued
strong overall demand for most, if not all, of the vehicles the Company purchases for resale.
The Company has generally leased the majority of the properties where its dealerships are located. As of
April 30, 2023, the Company leased approximately 79% of its dealership properties. At April 30, 20223 the
Company had $82.2 million of operating lease commitments, including $13.3 million of non-cancelable lease
commitments under the lease terms, and $68.9 million of lease commitments for renewal periods at the Company’s
option that are reasonably assured. Of the $82.2 million total lease obligations, $46.5 million of these commitments
will become due in more than five years. The Company expects to continue to lease the majority of the properties
where its dealerships are located.
The Company’s revolving credit facilities generally restrict distributions by the Company to its
shareholders. The distribution limitations under the credit facilities allow the Company to repurchase the
Company’s stock so long as either: (a) the aggregate amount of such repurchases after September 30, 2021 does
not exceed $50 million, net of proceeds received from the exercise of stock options, and the total availability under
the credit facilities is equal to or greater than 20% of the sum of the borrowing bases, in each case after giving effect
to such repurchases (repurchases under this item are excluded from fixed charges for covenant calculations), or (b)
the aggregate amount of such repurchases does not exceed 75% of the consolidated net income of the Company
measured on a trailing twelve month basis; provided that immediately before and after giving effect to the stock
repurchases, at least 12.5% of the aggregate funds committed under the credit facilities remain available. 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.
At April 30, 2023, the Company had approximately $9.8 million of cash on hand and $121.4 million of
availability under its revolving credit facilities (see Note F to the Consolidated Financial Statements in Item 8). 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 and borrowings under its revolving
credit facilities. On a longer-term basis, the Company expects its principal sources of liquidity to consist of income
from operations, funding from asset-back securitization transactions, and borrowings under revolving credit
facilities or fixed interest term loans. The Company’s revolving credit facilities mature in September 2024 and the
Company expects that it will be able to renew or refinance its revolving credit facilities on or before the date they
mature. The Company also believes it could raise additional capital through the issuance of additional debt or equity
securities if necessary or if market conditions are favorable to pursue strategic opportunities.
The Company expects to use cash from operations and borrowings to (i) grow its finance receivables
portfolio, (ii) purchase fixed assets of approximately $12 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. The Company estimates that total interest payments
on its outstanding debt facilities as of April 30, 2023, are approximately $54.3 million with approximately $34.3
million in interest payable during fiscal 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.
Off-Balance Sheet Arrangements
The Company has two standby letters of credit relating to insurance policies totaling $2.9 million at April
30, 2023.
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.
34
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. Car-Mart of Arkansas routinely sells its
finance receivables to Colonial at what the Company believes to be fair market value and is able to take a tax
deduction at the time of sale for the difference between the tax basis of the receivables sold and the sales price.
These types of transactions, based upon facts and circumstances, have been permissible under the provisions of the
Internal Revenue Code as described in the Treasury Regulations. For financial accounting purposes, these
transactions are eliminated in consolidation and a deferred income tax liability has been recorded for this timing
difference. The sale of finance receivables from Car-Mart of Arkansas to Colonial provides certain legal protection
for the Company’s finance receivables and, principally because of certain state apportionment characteristics of
Colonial, also has the effect of reducing the Company’s overall effective state income tax rate. The actual
interpretation of the Regulations is in part a facts and circumstances matter. The Company believes it satisfies the
material provisions of the Regulations. Failure to satisfy those provisions could result in the loss of a tax deduction
at the time the receivables are sold and have the effect of increasing the Company’s overall effective income tax
rate as well as the timing of required tax payments.
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,
2023.
Critical Accounting Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the
United States of America requires the Company to make estimates and assumptions in determining the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from the Company’s estimates. The Company believes the most significant estimate made in the preparation
of the Consolidated Financial Statements in Item 8 relates to the determination of its allowance for credit losses,
which is discussed below. The Company’s accounting policies are discussed in Note B to the Consolidated Financial
Statements in Item 8.
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, 2023, the weighted average contract term was 46.3 months
with 36.3 months remaining. The allowance for credit losses at April 30, 2023 of $299.6 million, was 23.91% of
the principal balance in finance receivables of $1.4 billion, less unearned accident protection plan revenue of $53.1
million and unearned service contract revenue of $67.4 million. In the fourth quarter of fiscal 2023, the Company
increased the allowance for credit losses as a percentage of finance receivables from 23.57% to 23.91%.
The allowance for credit losses represents the Company’s expectation of future net charge-offs at the
measurement date. 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 for credit losses is reviewed at least quarterly by management
with any changes reflected in current operations.
The calculation of the allowance for credit losses uses the following primary factors:
The probability of default (“PD”) or the number of units repossessed or charged-off divided by the
number of units financed over the last five fiscal years (based on increments of 1, 1.5, 2, 3, 4, and 5 years).
35
Loss given at default (“LGD”) or the average net repossession and charge-off loss per unit during the last
18 months, segregated by the number of months since the contract origination date, and adjusted for the
expected average net charge-off per unit.
The timing of repossession and charge-off loss relative to the date of sale (i.e., how long it takes for a
repossession or charge-off to occur) for repossessions and charge-offs occurring during the last 18
months. The average number of months since the loan origination date, to charge off, over the last 18
months, is 12.3 months.
An adjustment is incorporated in calculating the adjusted historical average remaining net loss per unit, for
loans originated in the past 12 months to account for asset-specific adjustments, which include financing term,
amount financed, credit quality trends and delinquencies.
A historical loss rate is produced by this analysis, which is then adjusted by qualitative factors and to reflect
current and forecasted inflationary economic conditions over the Company’s reasonable and supportable forecast
of period of one year.
The Company considers qualitative macro-economic factors that would affect its customers’ non-
discretionary income, such as changes in inflation, which impact gasoline prices and prices for staple items, to
develop reasonable and supportable forecasts for the lifetime expected losses. These economic forecasts are utilized
alongside historical loss information in order to estimate expected losses in the portfolio over the following 12-
month period, at which point the Company will immediately revert to the point estimate produced by the Company’s
analysis of historical loss information to estimate expected losses from the portfolio for the remaining contractual
lives of its finance receivables.
Recent Accounting Pronouncements
Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board
(“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. 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.
Recently Issued Accounting Pronouncements Not Yet Adopted
In March 2022, the FASB issued an accounting pronouncement (ASU 2022-02) related to troubled debt
restructurings (“TDRs”) and vintage disclosures for financing receivables. The amendments in this update eliminate
the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancing
and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require
disclosure of current period gross write-offs by year of origination for financing receivables. The amendments in
this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those
fiscal years. We plan to adopt this pronouncement and make the necessary updates to our vintage disclosures for
the interim period beginning May 1, 2023, and aside from these disclosure changes.
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 present an adjusted debt to equity ratio, a
non-GAAP financial measure, as a supplemental measure of our financial condition. The adjusted debt to equity
ratio is defined as the ratio of total debt, net of cash, to total equity. We believe the debt, net of cash, to equity ratio
is a useful measure to monitor leverage and evaluate balance sheet risk. This measure should not be considered in
isolation or as a substitute for reported GAAP results because it excludes certain items as compared to similar
GAAP-based measures, and such measure may not be comparable to similarly-titled measures reported by other
companies. 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 anyone, single financial measure. The reconciliation
36
between the Company’s debt to equity ratio and debt, net of cash, to equity ratio for fiscal year ending April 30,
2023, is summarized in the table below.
April 30, 2023
Debt to Equity
Cash to Equity
Debt, net of Cash, to Equity
1.28
0.14
1.14
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Company is exposed to market risk on its financial instruments from changes in interest rates. In
particular, the Company has historically had exposure to changes in the federal primary credit rate and has exposure
to changes in the prime interest rate of its lender. The Company does not use financial instruments for trading
purposes but has in the past entered into an interest rate swap agreement to manage interest rate risk.
Interest rate risk. The Company’s exposure to changes in interest rates relates primarily to its debt
obligations. The Company is exposed to changes in interest rates as a result of its revolving credit facilities, and the
interest rates charged to the Company under its credit facilities fluctuate based on its primary lender’s base rate of
interest. The Company had an outstanding balance on its revolving line of credit of $167.2 million at April 30,
2023. The impact of a 1% increase in interest rates on this amount of debt would result in increased annual interest
expense of approximately $1.7 million and a corresponding decrease in net income before income tax.
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. The Company’s
finance receivables carry a fixed annual interest rate of 16.5% (prior to December 2022) to 18.0% (effective
December 2022) for all states except Arkansas (which is subject to a usury cap of 17%) and Illinois (where
dealerships originate at 19.5% to 21.5%), 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.
Item 8. Financial Statements and Supplementary Data
The following financial statements and accountant’s report are included in Item 8 of this Annual Report on
Form 10-K:
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248)
Consolidated Balance Sheets as of April 30, 2023 and 2022
Consolidated Statements of Operations for the years ended April 30, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for the years ended April 30, 2023, 2022 and 2021
Consolidated Statements of Equity for the years ended April 30, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
37
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
America’s Car-Mart, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of America’s Car-Mart, Inc. (a Texas corporation)
and subsidiaries (the “Company”) as of April 30, 2023 and 2022, the related consolidated statements of operations,
cash flows, and equity for each of the three years in the period ended April 30, 2023, and the related notes
(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of April 30, 2023 and 2022, and the results of its
operations and its cash flows for each of the three years in the period ended April 30, 2023, in conformity with
accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the Company’s internal control over financial reporting as of April 30, 2023, based on criteria
established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”), and our report dated June 26, 2023 expressed an
unqualified opinion.
Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Allowance for credit losses
As described further in Notes B and C to the consolidated financial statements, the Company recorded an allowance
for credit losses of $299.6 million on finance receivables of $1.4 billion as of April 30, 2023. Management estimates
the allowance for credit losses on finance receivables by applying a loss-rate method using historical credit loss
experience (both timing and severity of losses) and collateral values. The estimate is adjusted for current conditions
which include factors such as adjustments for changes in customer credit deterioration and customer delinquency
rates. The estimate is further adjusted for reasonable and supportable forecasts for the expected effects of
macroeconomic factors, such as the effects of current and forecasted inflation. We identified the allowance for credit
losses as a critical audit matter.
The principal considerations for our determination that the allowance for credit losses is a critical audit matter are
the significant judgments made by management in adjusting the historical loss experience to reflect current
conditions and the selection and measurement of factors to account for the reasonable and supportable forecast
38
period. Evaluating management’s conclusions involved a high degree of auditor judgment in performing our audit
procedures.
Our audit procedures related to the allowance for credit losses included the following, among others:
•
•
We tested the design and operating effectiveness of management’s review control over the allowance
for credit losses, which included the selection and measurement of adjustments related to customer
credit deterioration, customer delinquency rates as well as the expected effects from current and
forecasted inflation, on the allowance for credit losses.
We tested management’s process for determining the allowance for credit losses, which included the
selection and measurement of adjustments related to customer credit deterioration, customer
delinquency rates as well as the expected effects from current and forecasted inflation on the allowance
for credit losses.
We have served as the Company’s auditor since 1999.
/s/ GRANT THORNTON LLP
Tulsa, Oklahoma
June 26, 2023
39
Consolidated Balance Sheets
America’s Car-Mart, Inc.
(Dollars in thousands, except share and per share amounts)
Assets:
Cash and cash equivalents
Restricted cash
Accrued interest on finance receivables
Finance receivables, net
Inventory
Income taxes receivable, net
Prepaid expenses and other assets
Right-of-use asset
Goodwill
Property and equipment, net
April 30, 2023
April 30, 2022
$
9,796
58,238
6,115
1,073,764
109,290
9,259
21,429
59,142
11,716
61,682
$
6,916
35,671
4,926
863,674
115,302
274
15,070
58,828
8,623
45,412
Total Assets
$
1,420,431
$
1,154,696
Liabilities, mezzanine equity and equity:
Liabilities:
Accounts payable
Deferred accident protection plan revenue
Deferred service contract revenue
Accrued liabilities
Deferred income tax liabilities, net
Lease liability
Non-recourse notes payable, net
Revolving line of credit, net
Total liabilities
Commitments and contingencies (Note L)
Mezzanine equity:
Mandatorily redeemable preferred stock
Equity:
Preferred stock, par value $.01 per share, 1,000,000 shares authorized;
none issued or outstanding
Common stock, par value $.01 per share, 50,000,000 shares authorized;
13,701,468 and 13,642,185 issued at April 30, 2023 and April 30, 2022,
respectively, of which 6,373,404 and 6,371,977 were outstanding at
April 30, 2023 and April 30, 2022, respectively
Additional paid-in capital
Retained earnings
Less: Treasury stock, at cost, 7,328,064 and 7,270,208
shares at April 30, 2023 and April 30, 2022, respectively
Total stockholders' equity
Non-controlling interest
Total equity
$
27,196
53,065
67,404
33,606
39,315
62,300
471,367
167,231
921,484
400
-
137
109,929
685,802
(297,421)
498,447
100
498,547
$
20,055
43,936
48,555
32,630
30,449
61,481
395,986
44,670
677,762
400
-
136
103,113
665,410
(292,225)
476,434
100
476,534
Total Liabilities, mezzanine equity and equity
$
1,420,431
$
1,154,696
The accompanying notes are an integral part of these consolidated financial statements.
40
Consolidated Statements of Operations
America’s Car-Mart, Inc.
(Dollars in thousands except share and per share amounts)
2023
Years Ended April 30,
2022
2021
Revenues:
Sales
Interest and other income
Total revenues
Costs and expenses:
Cost of sales, excluding depreciation
Selling, general and administrative
Provision for credit losses
Interest expense
Depreciation and amortization
Loss (gain) on disposal of property and equipment
Total costs and expenses
Income before income taxes
Provision for income taxes
Net income
Less: Dividends on mandatorily redeemable
preferred stock
Net income attributable to common stockholders
Earnings per share:
Basic
Diluted
799,129
110,545
909,674
479,153
130,855
153,835
6,820
3,719
(40)
774,342
$
1,209,279
196,219
$
1,043,698
151,853
$
1,405,498
1,195,551
805,873
176,696
352,860
38,312
5,602
361
1,379,704
25,794
5,362
20,432
40
20,392
3.20
3.11
$
$
$
$
663,631
156,130
238,054
10,919
4,033
149
1,072,916
122,635
135,332
27,621
30,512
95,014
$
104,820
40
94,974
14.59
13.92
$
$
$
40
104,780
15.81
15.05
$
$
$
Weighted average number of shares outstanding:
Basic
Diluted
6,371,229
6,566,896
6,509,673
6,823,481
6,628,749
6,961,575
The accompanying notes are an integral part of these consolidated financial statements.
41
Consolidated Statements of Cash Flows
America’s Car-Mart, Inc.
(In thousands)
Operating activities:
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for credit losses
Losses on claims for accident protection plan
Depreciation and amortization
Amortization of debt issuance costs
Loss (gain) on disposal of property and equipment
Stock-based compensation
Deferred income taxes
Change in operating assets and liabilities:
Finance receivable originations
Finance receivable collections
Accrued interest on finance receivables
Inventory
Prepaid expenses and other assets
Accounts payable and accrued liabilities
Deferred accident protection plan revenue
Deferred service contract revenue
Income taxes, net
Net cash used in operating activities
Investing Activities:
Purchase of investments
Purchases of property and equipment
Proceeds from sale of property and equipment
Net cash used in investing activities
Financing Activities:
Exercise of stock options
Issuance of common stock
Purchase of common stock
Dividend payments
Debt issuance costs
Change in cash overdrafts
Issuances of non-recourse notes payable
Principal payments on notes payable
Proceeds from revolving credit facilities
Payments on revolving credit facilities
Net cash provided by financing activities
Increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash beginning of period
2023
Years Ended April 30,
2022
$
20,432
$
95,014
$
352,860
25,107
5,602
5,461
361
5,314
8,866
(1,161,132)
434,458
(1,188)
133,047
(6,245)
8,621
17,150
24,542
(8,984)
(135,728)
(5,549)
(22,106)
84
(27,571)
1,216
286
(5,196)
(40)
(2,263)
-
400,176
(327,276)
524,531
(402,688)
188,746
25,447
42,587
238,054
21,871
4,033
775
149
5,496
8,750
(1,009,858)
417,796
(1,559)
51,057
(7,994)
5,167
21,850
30,645
(424)
(119,178)
(1,574)
(15,796)
20
(17,350)
(1,488)
293
(34,698)
(40)
(6,108)
(1,802)
399,994
-
331,113
(511,042)
176,222
39,694
2,893
2021
104,820
153,835
18,954
3,719
391
(40)
5,962
7,239
(762,717)
370,254
(269)
5,019
(1,679)
14,766
14,865
14,760
(3,691)
(53,812)
-
(8,952)
694
(8,258)
4,034
258
(10,616)
(40)
(282)
1,802
-
(524)
73,337
(62,566)
5,403
(56,667)
59,560
Cash, cash equivalents, and restricted cash end of period
$
68,034
$
42,587
$
2,893
The accompanying notes are an integral part of these consolidated financial statements.
42
Consolidated Statements of Equity
America’s Car-Mart, Inc.
(Dollars in thousands, except share amounts)
For the Years Ended April 30, 2023, 2022 and 2021
Common Stock
Shares
Amount
Additional
Paid-In
Capital
Retained
Earnings
Treasury
Stock
Non-
Controlling
Interest
Total
Equity
Balance at April 30, 2020
13,478,733
$
135 $
88,559
$
465,656
$ (246,911)
$
100 $
307,539
Issuance of common stock
Stock options exercised
Purchase of 106,590 treasury shares
Stock based compensation
Dividends on subsidiary preferred stock
Net income
Balance at April 30, 2021
2,921
110,235
-
-
-
-
13,591,889
$
-
1
-
-
-
-
136 $
258
4,033
-
5,962
-
-
98,812
293
(1,488)
-
5,496
-
-
-
-
-
-
(40)
104,820
570,436
-
-
(10,616)
-
-
-
$ (257,527)
$
$
-
-
-
-
(40)
95,014
-
-
(34,698)
-
-
-
-
-
-
-
-
-
100 $
258
4,034
(10,616)
5,962
(40)
104,820
411,957
-
-
-
-
-
-
293
(1,488)
(34,698)
5,496
(40)
95,014
9,721
40,575
-
-
-
-
-
-
-
-
-
13,642,185
$
136 $
103,113
$
665,410
$ (292,225)
$
100 $
476,534
33,867
25,416
-
-
-
-
-
1
-
-
-
-
286
1,216
-
5,314
-
-
-
-
-
-
(40)
20,432
-
-
(5,196)
-
-
-
-
-
-
-
-
-
286
1,217
(5,196)
5,314
(40)
20,432
Issuance of common stock
Stock options exercised
Purchase of 304,204 treasury shares
Stock based compensation
Dividends on subsidiary preferred stock
Net income
Balance at April 30, 2022
Issuance of common stock
Stock options exercised
Purchase of 57,856 treasury shares
Stock based compensation
Dividends on subsidiary preferred stock
Net income
Balance at April 30, 2023
13,701,468
$
137 $
109,929
$
685,802
$ (297,421)
$
100 $
498,547
The accompanying notes are an integral part of these consolidated financial statements.
43
Notes to Consolidated Financial Statements
America’s Car-Mart, Inc.
A - Organization and Business
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 typically include the Company’s consolidated subsidiaries. The
Company’s operations are conducted principally 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. 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 difficulties. As of April 30, 2023, the Company operated 156 dealerships
located primarily in small cities throughout the South-Central United States.
B - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of America’s Car-Mart, Inc. and its subsidiaries.
All intercompany accounts and transactions have been eliminated.
Segment Information
Each dealership is an operating segment with its results regularly reviewed by the Company’s chief
operating decision maker 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 in the Integrated Auto Sales and Finance segment of the used car
market, also referred to as the Integrated Auto Sales and Finance industry. In this industry, the nature of the sale
and the financing of the transaction, financing processes, the type of customer and the methods used to distribute
the Company’s products and services, including the actual servicing of the contracts as well as the regulatory
environment in which the Company operates, all have similar characteristics. Each individual dealership is similar
in nature and only engages in the selling and financing of used vehicles. All individual dealerships have similar
operating characteristics. As such, individual dealerships have been aggregated into one reportable segment.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
Significant estimates include, but are not limited to, the Company’s allowance for credit losses.
Concentration of Risk
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 28.0% of revenues resulting from sales to Arkansas
customers.
As of April 30, 2023, and periodically throughout the year, the Company maintained cash in financial
institutions in excess of the amounts insured by the federal government. The cash is held in several highly rated
banking institutions. The Company regularly monitors its counterparty credit risk and mitigates exposure by limiting
the amount it invests in one institution.
44
Restrictions on Distributions/Dividends
The Company’s revolving credit facilities generally restrict distributions by the Company to its
shareholders. The distribution limitations under the credit facilities allow the Company to repurchase the
Company’s stock so long as either: (a) the aggregate amount of such repurchases after September 30, 2021 does
not exceed $50 million, net of proceeds received from the exercise of stock options, and the total availability under
the credit facilities is equal to or greater than 20% of the sum of the borrowing bases, in each case after giving effect
to such repurchases (repurchases under this item are excluded from fixed charges for covenant calculations), or (b)
the aggregate amount of such repurchases does not exceed 75% of the consolidated net income of the Company
measured on a trailing twelve month basis; provided that immediately before and after giving effect to the stock
repurchases, at least 12.5% of the aggregate funds committed under the credit facilities remain available. 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.
Cash Equivalents
The Company considers all highly liquid debt instruments purchased with original maturities of three
months or less to be cash equivalents.
Restricted Cash
Restricted cash is related to the financing and securitization transaction discussed below and are held by
the securitization trusts.
Restricted cash from collections on auto finance receivables includes collections of principal, interest, and
fee payments on auto finance receivables that are restricted for payment to holders of non-recourse notes payable
pursuant to the applicable agreements.
The restricted cash on deposit in reserve accounts is for the benefit of holders of non-recourse notes payable
and these funds are not expected to be available to the Company or its creditors. If the cash generated by the related
receivables in a given period was insufficient to pay the interest, principal, and other required payments, the balances
on deposit in the reserve accounts would be used to pay those amounts.
Restricted cash consists of the following for the years ending April 30, 2023 and April 30, 2022:
(In thousands)
April 30, 2023
April 30, 2022
Restricted cash from collections on auto finance receivables
Restricted cash on deposit in reserve accounts
Restricted Cash
Financing and Securitization Transactions
$
$
34,442
23,796
58,238
$
$
24,242
11,429
35,671
The Company utilizes term securitizations to provide long-term funding for a portion of the auto finance
receivables initially funded through the debt facilities. In these transactions, a pool of auto finance receivables is
sold to a special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The
securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and
the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables.
The Company is required to evaluate term securitization trusts for consolidation. In the Company’s role as
servicer, it has the power to direct the activities of the trust that most significantly impact the economic performance
of the trust. In addition, the obligation to absorb losses (subject to limitations) and the rights to receive any returns
45
of the trust, remain with the Company. Accordingly, the Company is the primary beneficiary of the trusts and is
required to consolidate them.
The Company recognizes transfers of auto finance receivables into the term securitization as secured
borrowings, which result in recording the auto finance receivables and the related non-recourse notes payable on
our consolidated balance sheet. These auto finance receivables can only be used as collateral to settle obligations
of the related non-recourse notes payable. The term securitization investors have no recourse to the Company’s
assets beyond the related auto finance receivables, the amounts on deposit in the reserve account, and the restricted
cash from collections on auto finance receivables. See Notes C and F for additional information on auto finance
receivables and non-recourse notes payable.
Finance Receivables, Repossessions and Charge-offs and Allowance for Credit Losses
The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These
installment sale contracts carry a weighted average interest rate of approximately 16.7% using the simple effective
interest method including any deferred fees. In December 2022, the Company changed the interest rate on new
originations of installment sale contracts to 18% (from 16.5%) in all states in which it operates, except for Arkansas
(remains at 16.5%) and Illinois (19.5% – 21.5%). Contract origination costs are not significant. The installment sale
contracts are not pre-computed contracts whereby borrowers are obligated to pay back principal plus the full amount
of interest that will accrue over the entire term of the contract. Finance receivables are collateralized by vehicles
sold and consist of contractually scheduled payments from installment contracts net of unearned finance charges
and an allowance for credit losses. Unearned finance charges represent the balance of interest receivable to be
earned over the entire term of the related installment contract, less the earned amount ($6.1 million at April 30,
2023 and $4.9 million at April 30, 2022 on the Consolidated Balance Sheets), and as such, have been reflected as a
reduction to the gross contract amount in arriving at the principal balance in finance receivables.
An account is considered delinquent when the customer is one day or more behind on their contractual
payments. While the Company does not formally place contracts on nonaccrual status, the immaterial amount of
interest that may accrue after an account becomes delinquent up until the point of resolution via repossession or
write-off, is reserved for against the accrued interest on the Consolidated Balance Sheets. Delinquent contracts are
addressed and either made current by the customer, which is the case in most situations, or the vehicle is repossessed
or written off if the collateral cannot be recovered quickly. Customer payments are set to match their payday with
approximately 79% of payments due on either a weekly or bi-weekly basis. The frequency of the payment due dates
combined with the general decline in the value of the collateral lead to prompt resolutions on problem accounts. At
April 30, 2023, 3.6% of the Company’s finance receivables balances were 30 days or more past due compared to
3.0% at April 30, 2022.
Substantially all of the Company’s automobile contracts involve contracts made to individuals with
impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders. Contracts
made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a
higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better
credit. At the time of originating a finance agreement, the Company requires customers to meet certain criteria that
demonstrate their intent and ability to pay for the financed principal and interest on the vehicle they are purchasing.
However, the Company recognizes that their customer base is at a higher risk of default given their impaired or
limited credit histories.
The Company strives to keep its delinquency percentages low, and not to repossess vehicles. Accounts one
to three days late are contacted by telephone or text messaging notifications. Notes from each contact are
electronically maintained in the Company’s computer system. The Company also utilizes text messaging
notifications that allows customers the option to receive due date reminders and late notifications, if applicable. The
Company attempts to resolve payment delinquencies amicably prior to repossessing a vehicle. If a customer
becomes severely delinquent in his or her payments, and management determines that timely collection of future
payments is not probable, the Company will take steps to repossess the vehicle.
46
Periodically, the Company enters into contract modifications with its customers to extend or modify the
payment terms. The Company only enters into a contract modification or extension if it believes such action will
increase the amount of money the Company will ultimately realize on the customer’s account and will increase the
likelihood of the customer being able to pay off the vehicle contract. At the time of modification, the Company
expects to collect amounts due including accrued interest at the contractual interest rate for the period of delay. No
other concessions are granted to customers, beyond the extension of additional time, at the time of modifications.
Modifications are minor and are made for payday changes, minor vehicle repairs and other reasons. For those
vehicles that are repossessed, the majority are returned or surrendered by the customer on a voluntary basis. Other
repossessions are performed by Company personnel or third-party repossession agents. Depending on the condition
of a repossessed vehicle, it is either resold on a retail basis through a Company dealership or sold for cash on a
wholesale basis primarily through physical or online auctions.
The Company takes steps to repossess a vehicle when the customer becomes delinquent in his or her
payments and management determines that timely collection of future payments is not probable. Accounts are
charged-off after the expiration of a statutory notice period for repossessed accounts, or when management
determines that the timely collection of future payments is not probable for accounts where the Company has been
unable to repossess the vehicle. For accounts with respect to which the vehicle was repossessed, the fair value of
the repossessed vehicle is charged as a reduction of the gross finance receivables balance charged-off. On average,
accounts are approximately 69 days past due at the time of charge-off. For previously charged-off accounts that are
subsequently recovered, the amount of such recovery is credited to the allowance for credit losses.
The Company maintains an allowance for credit losses on an aggregate basis at an amount it considers
sufficient to cover losses expected to be incurred on the portfolio at the measurement date. The Company accrues
an estimated loss for the amount it believes will not be collected. The allowance for credit losses represents
management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, historical
credit loss experience and qualitative considerations, such as 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 trends. The allowance for credit losses is periodically reviewed
by management with any changes reflected in current operations. The Company believes that it has given
appropriate consideration to all relevant factors and has made reasonable assumptions in determining the allowance
for credit losses.
The calculation of the allowance for credit losses uses the following primary factors:
The probability of default (“PD”) or the number of units repossessed or charged-off divided by the
number of units financed over the last five fiscal years (based increments of 1, 1.5, 2, 3, 4, and 5 years).
Loss given at default (“LGD”) or the average net repossession and charge-off loss per unit during the last
18 months, segregated by the number of months since the contract origination date, and adjusted for the
expected average net charge-off per unit.
The timing of repossession and charge-off loss relative to the date of sale (i.e., how long it takes for a
repossession or charge-off to occur) for repossessions and charge-offs occurring during the last 18
months. The average number of months since the loan origination date, to charge off, over the last 18
months, is 12.3 months.
An adjustment is incorporated in calculating the adjusted historical average remaining net loss per unit, for
loans originated in the past 12 months to account for asset-specific adjustments, which include financing term,
amount financed, credit quality trends and delinquencies.
A historical loss rate is produced by this analysis which is then adjusted by qualitative factors and to reflect
current and forecasted inflationary economic conditions over the Company’s reasonable and supportable forecast
period of one-year.
47
The Company considers qualitative macro-economic factors that would affect its customers non-
discretionary income, such as changes in inflation, which impact gasoline prices and prices for staple items, to
develop reasonable and supportable forecasts for the lifetime expected losses. These economic forecasts are utilized
alongside historical loss information in order to estimate expected losses in the portfolio over the following twelve-
month period, at which point the Company will immediately revert to the point estimate produced by the Company’s
analysis of historical loss information to estimate expected losses from the portfolio for the remaining contractual
lives of its finance receivables.
In most states, the Company offers retail customers who finance their vehicle the option of purchasing an
accident protection plan product as an add-on to the installment sale contract. This product contractually obligates
the Company to cancel the remaining principal outstanding for any contract where the retail customer has totaled
the vehicle, as defined by the product, or the vehicle has been stolen. The Company periodically evaluates
anticipated losses to ensure that if anticipated losses exceed deferred accident protection plan revenues, an
additional liability is recorded for such a difference. At April 30, 2023, anticipated losses did not exceed deferred
accident protection plan revenues. No such liability was required at April 30, 2023 or 2022.
Inventory
Inventory consists of used vehicles and is valued at the lower of cost or net realizable value on a specific
identification basis. Vehicle reconditioning costs are capitalized as a component of inventory. Repossessed vehicles
and trade-in vehicles are recorded at fair value, which approximates wholesale value. The cost of used vehicles sold
is determined using the specific identification method.
Goodwill
Goodwill reflects the excess of purchase price over the fair value of specifically identified net assets
purchased. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to
qualitative annual impairment tests at the Company’s year-end. The impairment tests are based on the comparison
of the fair value of the reporting unit to the carrying value of such unit. The implied goodwill is compared to the
carrying value of the goodwill to determine the impairment, if any. There was no impairment of goodwill during
fiscal 2023 or fiscal 2022.
The Company had $11.7 million and $8.6 million of goodwill for the periods ended April 30, 2023 and
2022, respectively. The increase of $3.1 million during the year ended April 30, 2023 was primarily due to the
acquisition of ongoing dealership assets during the current year and changes in the assessment of the fair value of
previous acquisitions.
Property and Equipment
Property and equipment are stated at cost. Expenditures for additions, remodels and improvements are
capitalized. Costs of repairs and maintenance are expensed as incurred. Leasehold improvements are amortized
over the shorter of the estimated life of the improvement or the lease period. The lease period includes the primary
lease term plus any extensions that are reasonably assured. Depreciation is computed principally using the straight-
line method generally over the following estimated useful lives:
Furniture, fixtures and equipment
Leasehold improvements
Buildings and improvements
3 to 7 years
5 to 15 years
18 to 39 years
Long-Lived Assets
Long-lived assets, such as property and equipment, capitalized internal-use software and operating lease
right-of-us assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying
48
amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for
possible impairment, the Company first compares the undiscounted cash flows expected to be generated by that
asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable
on an undiscounted cash flow basis, such assets are considered to be impaired, and the impairment is recognized to
the extent that the carrying value exceeds its fair value. There were no impairment charges recognized during any
of the periods presented.
Cloud Computing Implementation Costs
The Company enters into cloud computing service contracts to support its sales, inventory management,
and administrative activities. The Company capitalizes certain implementation costs for cloud computing
arrangements that meet the definition of a service contract. The Company includes these capitalized implementation
costs within Prepaid expenses and other assets on the Consolidated Balance Sheets. Once placed in service, the
Company amortizes these costs over the remaining subscription term to the same caption on the Consolidated
Statement of Operations as the related cloud subscription. Capitalized implementation costs for cloud computing
arrangements accounted for as service contracts were $9.0 million and $6.0 million as of April 30, 2023, and 2022,
respectively. Accumulated amortization of capitalized implementation costs for these arrangements was $136,709
and $50,888 as of April 30, 2023 and 2022, respectively.
Cash Overdraft
As checks are presented for payment from the Company’s primary disbursement bank account, monies are
automatically drawn against cash collections for the day and, if necessary, are drawn against one of its revolving
credit facilities. Any cash overdraft balance principally represents outstanding checks, net of any deposits in transit
that as of the balance sheet date had not yet been presented for payment. Any cash overdraft balance is reflected in
accrued liabilities on the Company’s Consolidated Balance Sheets.
Deferred Sales Tax
Deferred sales tax represents a sales tax liability of the Company for vehicles sold on an installment basis
in the states of Alabama and Texas. Under Alabama and Texas law, for vehicles sold on an installment basis, the
related sales tax is due as the payments are collected from the customer, rather than at the time of sale. Deferred
sales tax liabilities are reflected in accrued liabilities on the Company’s Consolidated Balance Sheets.
Income Taxes
Income taxes are accounted for under the liability method. Under this method, deferred income tax assets
and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates expected to apply in the years in which these differences are expected
to be recovered or settled.
Occasionally, the Company is audited by taxing authorities. These audits could result in proposed
assessments of additional taxes. The Company believes that its tax positions comply in all material respects with
applicable tax law; however, tax law is subject to interpretation, and interpretations by taxing authorities could be
different from those of the Company, which could result in the imposition of additional taxes.
The Company recognizes the financial statement benefit of a tax position only after determining that the
relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting
the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has
a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The
Company applies this methodology to all tax positions for which the statute of limitations remains open.
The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax
regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and
49
require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state
and local income tax examinations by tax authorities for the fiscal years before 2019.
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, 2023
and 2022, respectively.
Revenue Recognition
Revenues are generated principally from the sale of used vehicles, which in most cases includes a service
contract and an accident protection plan product, as well as interest income and late fees earned on finance
receivables. Revenues are net of taxes collected from customers and remitted to government agencies. Cost of
vehicle sales include costs incurred by the Company to prepare the vehicle for sale including license and title costs,
gasoline, transport services and repairs.
Revenues from the sale of used vehicles are recognized when the sales contract is signed, the customer has
taken possession of the vehicle and, if applicable, financing has been approved. Revenues from the sale of vehicles
sold at wholesale are recognized at the time the proceeds are received. Revenues from the sale of service contracts
are recognized ratably over the expected duration of the product. Service contract revenues are included in sales
and the related expenses are included in cost of sales. Accident protection plan revenues are initially deferred and
then recognized to income using the “Rule of 78’s” interest method over the life of the contract so that revenues are
recognized in proportion to the amount of cancellation protection provided. Accident protection plan revenues are
included in sales and related losses are included in cost of sales as incurred. Interest income is recognized on all
active finance receivables accounts using the simple effective interest method. Active accounts include all accounts
except those that have been paid-off or charged-off.
Sales consist of the following for the years ended April 30, 2023, 2022 and 2021:
Years Ended April 30,
2022
2021
(In thousands)
Sales – used autos
Wholesales – third party
Service contract sales
Accident protection plan revenue
$
2023
1,057,465
59,695
57,593
34,526
$
918,414
51,641
42,958
30,685
Total
$
1,209,279
$
1,043,698
$
$
708,431
34,286
30,733
25,679
799,129
At April 30, 2023 and 2022, finance receivables more than 90 days past due were approximately $3.9
million and $3.0 million, respectively. Late fee revenues totaled approximately $4.4 million, $3.1 million and $2.5
million for the fiscal years ended 2023, 2022 and 2021, respectively. Late fee revenue is recognized when collected
and is reflected within Interest and other income on the Consolidated Statements of Operations.
During the years ended April 30, 2023 and 2022, the Company recognized $26.8 million and $16.5 million
of revenues that were included in deferred service contract revenues for the years ended April 30, 2022 and 2021,
respectively.
Advertising Costs
Advertising costs are expensed as incurred and consist principally of television, radio, print media and
digital marketing costs. Advertising costs amounted to $5.8 million, $5.0 million and $2.9 million for the years
ended April 30, 2023, 2022 and 2021, respectively.
50
Employee Benefit Plans
The Company has 401(k) plans for all of its employees meeting certain eligibility requirements. The plans
provide for voluntary employee contributions and the Company matches 50% of employee contributions up to a
maximum of 6% of each employee’s compensation. The Company contributed approximately $1.2 million, $1.2
million, and $908,000 to the plans for the years ended April 30, 2023, 2022 and 2021, respectively.
The Company offers employees the right to purchase common shares at a 15% discount from market price
under the 2006 Employee Stock Purchase Plan which was approved by shareholders in October 2006. The Company
takes a charge to earnings for the 15% discount, included in stock-based compensation. Amounts for fiscal years
2023, 2022 and 2021 were not material individually or in the aggregate. A total of 200,000 shares were registered
and 129,254 remain available for issuance under this plan at April 30, 2023.
Earnings per Share
Basic earnings per share are computed by dividing net income attributable to common stockholders by the
average number of common shares outstanding during the period. Diluted earnings per share are computed by
dividing net income attributable to common stockholders by the average number of common shares outstanding
during the period plus dilutive common stock equivalents. The calculation of diluted earnings per share takes into
consideration the potentially dilutive effect of common stock equivalents, such as outstanding stock options and
non-vested restricted stock, which if exercised or converted into common stock would then share in the earnings of
the Company. In computing diluted earnings per share, the Company utilizes the treasury stock method and anti-
dilutive securities are excluded.
Stock-Based Compensation
The Company recognizes the cost of employee services received in exchange for awards of equity
instruments, such as stock options and restricted stock, based on the fair value of those awards at the date of grant
over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the fair
value of stock option awards. The Company may issue either new shares or treasury shares upon exercise of these
awards. Stock-based compensation plans, related expenses, and assumptions used in the Black-Scholes option
pricing model are more fully described in Note K. If an award contains a performance condition, expense is
recognized only for those shares for which it is considered reasonably probable as of the current period end that the
performance condition will be met. The Company accounts for forfeitures as they occur and records any excess tax
benefits or deficiencies from equity awards in the Consolidated Statements of Operations in the reporting period in
which the exercises occur. The Company recorded a discrete income tax benefit of approximately $558,000 and
$1.4 million during the years ended April 30, 2023 and 2022, respectively. As a result, the Company’s income tax
expenses and associated effective tax rate will be impacted by fluctuations in stock price between the grant dates
and exercise dates of equity awards.
Treasury Stock
The Company purchased 57,856, 304,204, and 106,590 shares of its common stock to be held as treasury
stock for a total cost of $5.2 million, $34.7 million and $10.6 million during the years ended April 30, 2023, 2023
and 2021, respectively. Treasury stock may be used for issuances under the Company’s stock-based compensation
plans or for other general corporate purposes. The Company has a reserve account of 10,000 shares of treasury
stock to secure outstanding service contracts issued in Iowa in accordance with the regulatory requirements of that
state and another reserve account of 14,000 shares of treasury stock for its subsidiary, ACM Insurance Company,
in accordance with the requirements of the Arkansas Department of Insurance.
Facility Leases
The Company’s leases primarily consist of operating leases related to retail stores, office space, and land.
For more information on financing obligations, see Note F.
51
The initial term for real property leases is typically 3 to 10 years. Most leases include one or more options
to renew, with renewal terms that can extend the lease term from 3 to 10 years or more. The Company includes
options to renew (or terminate) in the lease term, and as part of the right-of-use (“ROU”) asset and lease liability,
when it is reasonably certain that the options will be exercised. The weighted average remaining lease term as of
April 30, 2023 was 12.9 years.
The ROU asset and the related lease liability are initially measured at the present value of future lease
payments over the lease term. As most leases do not provide an implicit interest rate, the Company obtains a quote
for a collateralized debt obligation from a group of lenders each quarter to determine the present value of future
payments of leases commenced for that quarter. The weighted average discount rate as of April 30, 2023 was 4.40%.
The Company includes variable lease payments in the initial measurement of ROU assets and lease
liabilities only to the extent they depend on an index or rate. Changes in such indices or rates are accounted for in
the period the change occurs, and do not result in the remeasurement of the ROU asset or liability. The Company
is also responsible for payment of certain real estate taxes, insurance, and other expenses on leases. These amounts
are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability.
Non-lease components are generally accounted for separately from lease components. The Company’s leases do
not contain any material residual value guarantees or material restricted covenants.
Recent Accounting Pronouncements
Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board
(“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. 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.
Recently Issued Accounting Pronouncements Not Yet Adopted
In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards
Update (“ASU”) 2022-02, Financial Instruments – Credit Losses. The guidance changes the methodology for
measuring credit losses on financial instruments and the timing of when such losses are recorded. This guidance
will affect the Company’s vintage disclosures related to current-period gross write-offs by year of origination for
financing receivables. The amendments in this update are effective for fiscal years beginning after December 15,
2022. The company has concluded that there is no expected impact to the consolidated financial statements.
C - Finance Receivables, Net
The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These
installment sale contracts, which carry a fixed interest rate of 18.0% for all states except Arkansas (which is subject
to a usuary cap of 17%) and Illinois (where dealerships originate at 19.5% to 21.5%), are collateralized by the
vehicle sold and typically provide for payments over periods ranging from 18 to 69 months. The Company’s finance
receivables are defined as one segment and one class of loans, which is sub-prime consumer automobile contracts.
The level of risks in our financing receivables is managed as one homogeneous pool. The components of finance
receivables as of April 30, 2023, and 2022 are as follows:
52
(In thousands)
April 30, 2023
April 30, 2022
Gross contract amount
Less unearned finance charges
Principal balance
Less allowance for credit losses
$
1,752,149
(378,777)
1,373,372
(299,608)
$
1,378,803
(277,306)
1,101,497
(237,823)
Finance receivables, net
$
1,073,764
$
863,674
Auto finance receivables collateralizing the non-recourse notes payable related to the financing and
securitization transaction completed during the fiscal year 2023 and 2022 were $721.9 million and $550.3 million,
respectively.
Changes in the finance receivables, net for the years ended April 30, 2023, 2022 and 2021 are as follows:
(In thousands)
Years Ended April 30,
2023
2022
2021
Balance at beginning of period
Finance receivable originations
Finance receivable collections
Provision for credit losses
Losses on claims for accident protection plan
Inventory acquired in repossession and accident protection plan claims
$
$
863,674
1,161,132
(434,458)
(352,860)
(25,107)
(138,617)
632,270
1,009,859
(417,796)
(238,054)
(21,871)
(100,734)
$ 472,401
762,717
(370,254)
(153,835)
(18,954)
(59,805)
Balance at end of period
$ 1,073,764
$
863,674
$ 632,270
Changes in the finance receivables allowance for credit losses for the years ended April 30, 2023, 2022 and
2021 are as follows:
(In thousands)
2023
2022
2021
Years Ended April 30,
Balance at beginning of period
Provision for credit losses
Charge-offs, net of recovered collateral
Balance at end of period
$
237,823
352,860
(291,075)
$
299,608
$
$
177,267
238,054
(177,498)
237,823
$
$
148,781
153,835
(125,349)
177,267
Amounts recovered from previously written-off accounts were $2.5 million, $2.4 million, and $1.9 million
for the years ended April 30, 2023, 2022 and 2021, respectively.
As a result of improved credit losses during the fiscal year 2021, as well as the Company’s outlook for
projected losses, the Company decreased the allowance for credit losses in the fourth quarter of fiscal 2021 from
25.43% to 23.55%, resulting in a $14.2 million pre-tax decrease in the provision for credit losses The allowance for
credit losses remained basically flat at 23.57% at April 30, 2022. For the current year credit losses increased
primarily due to the ending of federal stimulus programs, continuing inflationary pressure on customers and
increasing interest rates from federal monetary policy, and in the fourth quarter of fiscal 2023, the Company
increased its allowance for credit losses to 23.91%.
Credit quality information for finance receivables is as follows:
53
(Dollars in thousands)
April 30, 2023
April 30, 2022
Current
3 - 29 days past due
30 - 60 days past due
61 - 90 days past due
> 90 days past due
Total
Principal
Balance
1,166,860
156,943
37,214
8,407
3,948
1,373,372
$
$
Percent of
Portfolio
84.96%
11.43%
2.71%
0.61%
0.29%
100.00%
Principal
Balance
958,808
109,873
22,477
7,360
2,979
1,101,497
$
$
Percent of
Portfolio
87.05%
9.97%
2.04%
0.67%
0.27%
100.00%
Accounts one and two days past due are considered current for this analysis, due to the varying payment
dates and variation in the day of the week at each period end. Delinquencies may vary from period to period based
on the average age of the portfolio, seasonality within the calendar year, the day of the week and overall economic
factors. The above categories are consistent with internal operational measures used by the Company to monitor
credit results.
Substantially all of the Company’s automobile contracts involve contracts made to individuals with
impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders. Contracts
made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a
higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better
credit. The Company monitors customer scores, contract term length, down payment percentages, and collections
for credit quality indicators.
Average total collected per active customer per month
Principal collected as a percent of average finance receivables
Average down-payment percentage
Average originating contract term (in months )
Portfolio weighted average contract term, including modifications (in months )
Twelve Months Ended
April 30,
$
2023
534
34.7%
5.4%
42.9
$
2022
513
43.5%
6.4%
40.2
April 30, 2023
46.3
April 30, 2022
42.9
Although total dollars collected per active customer increased 4.1% year over year, principal collections as
a percentage of average finance receivables were lower in fiscal 2023 compared to fiscal 2022 primarily due to the
average term increases. Overall collections have also been negatively impacted by the current inflationary
environment and lower overall income tax refunds for consumers in fiscal 2023. The portfolio weighted average
contract term increased primarily due to the increased average selling price, up $1,708 or 10.4%, from fiscal year
2022.
When customers apply for financing, the Company’s proprietary scoring models rely on the customers’
credit histories and certain application information to evaluate and rank their risk. The Company obtains credit
histories and other credit data that includes information such as number of different addresses, age of oldest record,
high risk credit activity, job time, time at residence and other factors. The application information that is used
includes income, collateral value and down payment. The scoring models yield credit grades that represent the
relative likelihood of repayment. Customers with the highest probability of repayment are 6 rated customers.
Customers assigned a lower grade are determined to have a lower probability of repayment. For loans that are
approved, the credit grade influences the terms of the agreement, such as the maximum amount financed, term
length and minimum down payment. After origination, credit grades are generally not updated.
The Company uses a combination of the initial credit grades and historical performance to monitor the
credit quality of the finance receivables on an ongoing basis, and the accuracy of the scoring model is validated
54
periodically. Loan performance is reviewed on a recurring basis to identify whether the assigned grades adequately
reflect the customers’ likelihood of repayment.
The following table presents a summary of finance receivables by credit quality indicator, as of April 30,
2023 segregated by customer score and year of origination.
(Dollars in thousands)
2023
2022
2021
2020
2019
Prior to
2019
Total
%
Customer Score by Fiscal Year of Origination
1-2
3-4
5-6
Total
$
$
38,743
294,972
563,581
897,296
$
$
12,983
105,101
254,945
373,029
$
$
2,736
24,982
66,436
94,154
$
$
329
1,698
5,390
7,417
$
$
32
243
687
962
$
$
6
137
371
514
$
$
54,829
427,133
891,410
1,373,372
4.0%
31.1%
64.9%
100.0%
The following table presents a summary of finance receivables by credit quality indicator, as of April 30,
2022 segregated by customer score and year of origination.
(Dollars in thousands)
2022
2021
2020
2019
2018
Prior to
2018
Total
%
Customer Score by Fiscal Year of Origination
1-2
3-4
5-6
Total
$
$
37,916
260,298
488,257
786,471
$
$
11,493
84,118
172,843
268,454
$
$
2,221
13,537
28,193
43,951
$
$
77
587
1,803
2,467
$
$
-
14
115
129
$
$
2
15
8
25
$
$
51,709
358,569
691,219
1,101,497
4.7%
32.5%
62.8%
100.0%
D - Property and Equipment
A summary of property and equipment is as follows:
(In thousands)
April 30, 2023
April 30, 2022
Land
Buildings and improvements
Furniture, fixtures and equipment(1)
Leasehold improvements
Construction in progress
Accumulated depreciation and amortization
$
12,386
20,894
18,989
47,315
7,176
(45,078)
$
11,749
13,876
10,163
36,392
14,234
(41,002)
Property and equipment, net(1)
$
61,682
$
45,412
(1) Property and equipment, net at April 30, 2022 reflects an immaterial reclassification of approximately $6.0 million of capitalized implementation costs related to a
cloud-computing arrangement that were reclassified to Prepaid expenses and other assets.
55
E - Accrued Liabilities
A summary of accrued liabilities is as follows:
(In thousands)
April 30, 2023
April 30, 2022
Employee compensation and benefits
Deferred sales tax (see Note B)
Reserve for accident protection plan claims
Fair value of contingent consideration
Other
Accrued liabilities
F – Debt
A summary of debt is as follows:
(In thousands)
Revolving line of credit
Debt issuance costs
Revolving line of credit, net
Non-recourse notes payable - 2022 Issuance
Non-recourse notes payable - 2023 Issuance
Debt issuance costs
Non-recourse notes payable, net
Total debt
Revolving Line of Credit
$
$
$
$
$
$
$
11,197
8,543
5,694
1,943
6,229
33,606
2023
168,516
(1,285)
167,231
134,137
338,777
(1,547)
471,367
638,598
$
$
$
$
$
$
$
12,865
7,388
4,761
3,544
4,072
32,630
2022
46,674
(2,004)
44,670
399,994
(4,008)
395,986
440,656
At April 30, 2023, the Company and its subsidiaries have $600.0 million of permitted borrowings under a
revolving line of credit. The revolving credit facilities are collateralized primarily by finance receivables and
inventory, are cross collateralized and contain a guarantee by the Company. Interest is payable monthly under the
revolving credit facilities with a scheduled maturity date of September 29, 2024. 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. The current applicable interest rate under the credit facilities is generally SOFR
plus 2.75%, with a minimum of 2.25% or for non-SOFR amounts the base rate of 8.25% at April 30, 2023 and
2.85% at April 30, 2022. The credit facilities contain various reporting and performance covenants including (i)
maintenance of certain financial ratios and tests, (ii) limitations on borrowings from other sources, (iii) restrictions
on certain operating activities and (iv) restrictions on the payment of dividends or distributions (see note B).
The Company was in compliance with the covenants at April 30, 2023. The amount available to be drawn
under the credit facilities is a function of eligible finance receivables and inventory; based upon eligible finance
receivables and inventory at April 30, 2023, the Company had additional availability of approximately $121.4
million under the revolving credit facilities.
56
Non-Recourse Notes Payable
The Company has issued two separate series of asset-backed non-recourse notes (known as the “2022
Issuance” and the “2023 Issuance”). The 2022 Issuance consists of $400.0 million in principal amount of non-
recourse asset-back notes issued in four classes with a weighted average fixed coupon rate of 5.14% per annum,
and the 2023 Issuance consists of $400.2 million in principal amount of non-recourse asset-back notes issued in
four classes with a weighted average fixed coupon rate of 8.68% per annum. Both issuances are collateralized by
auto loans directly originated by the Company. Credit enhancement for the non-recourse notes payable consists of
overcollateralization, a reserve account funded with an initial amount of not less than 2.0% of the pool balance,
excess interest on the auto finance receivables, and in some cases, the subordination of certain payments to
noteholders of less senior classes of notes. The timing of principal payments on the non-recourse notes payable is
based on the timing of principal collections and defaults on the related auto finance receivables. Notes payable
related to the term securitization transactions accrue interest predominately at fixed rates have scheduled maturities
through April 20, 2029 and January 22, 2030, respectively, but may mature earlier, depending upon repayment rate
of the underlying auto finance receivables. See Note B for additional information.
G – Fair Value Measurements
Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements defines fair value,
establishes a framework for measuring fair value and expands disclosures about fair value measurements.
ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The guidance also
establishes a fair value hierarchy that requires the use of observable inputs and minimizes the use of unobservable
inputs when measuring fair value. Topic 820 describes three levels of inputs that may be used to measure fair value:
Level 1 Inputs – Quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or
liabilities in active markets; quoted prices for similar assets or liabilities in markets that are not active;
or other inputs that are observable or can be corroborated by observable market data for substantially
the full term of the assets or liabilities.
Level 3 Inputs – Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities.
Because no market exists for certain of the Company’s financial instruments, fair value estimates are based
on judgments and estimates regarding yield expectations of investors, credit risk and other risk characteristics,
including interest rate and prepayment risk. These estimates are subjective in nature and involve uncertainties and
matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly
affect these estimates.
The methodology and assumptions utilized to estimate the fair value of the Company’s financial
instruments are as follows:
Financial Instrument
Valuation Methodology
Cash, cash equivalents, and
restricted cash
The carrying amount is considered to be a reasonable estimate of
fair value due to the short-term nature of the financial instruments
(Level 1).
Finance receivables, net
The Company estimated the fair value of its receivables at what a
third-party purchaser might be willing to pay. The Company has
had discussions with third parties and has bought and sold
portfolios and has had a third-party appraisal in October 2022 that
57
indicates a range of 34% to 39% discount to face would be a
reasonable fair value in a negotiated third-party transaction. The
sale of finance receivables from Car-Mart of Arkansas to Colonial
is made at a 38.5% discount. For financial reporting purposes
these sale transactions are eliminated (Level 2).
The carrying amount is considered to be a reasonable estimate of
fair value due to the short-term nature of the financial instrument
(Level 2).
The fair value approximates carrying value due to the variable
interest rates charged on the borrowings, which reprice frequently
(Level 2).
Accounts payable
Revolving line of credit
Non-recourse notes payable
The fair value was based upon inputs derived from prices for
similar instruments at period end (Level 2).
The estimated fair values, and related carrying amounts, of the financial instruments included in the
Company’s financial statements at April 30, 2023 and 2022 are as follows:
(In thousands)
Cash and cash equivalents
Restricted cash
Finance receivables, net
Accounts payable
Revolving line of credit
Non-recourse notes payable
H - Income Taxes
April 30, 2023
April 30, 2022
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
$ 9,796
58,238
1,073,764
27,195
167,231
471,367
$ 9,796
58,238
844,624
27,195
167,231
470,209
$ 6,916
35,671
863,674
20,055
44,670
395,986
$ 6,916
35,671
677,421
20,055
44,670
395,986
The provision for income taxes was as follows:
(In thousands)
Provision for income taxes
Current
Deferred
Total
2023
Years Ended April 30,
2022
2021
$
$
(3,504)
8,866
5,362
$
$
18,871
8,750
27,621
$
$
23,273
7,239
30,512
The provision for income taxes is different from the amount computed by applying the statutory federal
income tax rate to income before income taxes for the following reasons:
(In thousands)
Tax provision at statutory rate
State taxes, net of federal benefit
Tax benefit from option exercises
Other, net
Total
$
$
2023
Years Ended April 30,
2022
2021
$
$
25,753
3,679
(1,356)
(455)
27,621
$
$
28,420
4,060
(1,401)
(567)
30,512
5,417
774
(558)
(271)
5,362
58
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant
components of the Company’s deferred income tax assets and liabilities were as follows:
(In thousands)
Deferred income tax liabilities related to:
Finance receivables
Property and equipment
Goodwill
Total
Deferred income tax assets related to:
Accrued liabilities
Inventory
Share based compensation
State net operating loss
Deferred revenue
Total
Deferred income tax liabilities, net
Years Ended April 30,
2023
2022
$
$
47,486
3,262
281
51,029
3,051
204
4,634
164
3,661
11,714
39,315
$ 37,682
1,368
194
39,244
2,524
316
3,561
168
2,226
8,795
$ 30,449
I – Capital Stock
The Company is authorized to issue up to 50,000,000 shares of common stock, par value $0.01 per share,
and up to 1,000,000 shares of preferred stock, par value $0.01 per share. Each share of the Company’s common
stock has the same relative rights as, and is identical in all respects to, each other share of the Company’s common
stock. The shares of preferred stock may be issued in one or more series having such respective terms, rights and
preferences as are designated by the Board of Directors. The Company has not issued any preferred stock.
A subsidiary of the Company has issued 500,000 shares of $1.00 par value preferred stock which carries
an 8% cumulative dividend. The Company’s subsidiary can redeem the preferred stock at any time at par value plus
any unpaid dividends. After April 30, 2017, a holder of 400,000 shares of the subsidiary preferred stock can require
the Company’s subsidiary to redeem such stock for $400,000 plus any unpaid dividends.
J – Weighted Average Shares Outstanding
Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings
per share were as follows:
Weighted average shares outstanding-basic
Dilutive options and restricted stock
2023
6,371,229
195,667
Years Ended April 30,
2022
6,509,673
313,808
2021
6,628,749
332,826
Weighted average shares outstanding-diluted
6,566,896
6,823,481
6,961,575
Antidilutive securities not included:
Options
Restricted Stock
K – Stock-Based Compensation Plans
315,625
15,231
120,000
4,784
152,500
2,479
The Company has stock-based compensation plans available to grant non-qualified stock options, incentive
stock options and restricted stock to employees, directors and certain advisors of the Company. The current stock-
59
based compensation plans being utilized at April 30, 2023 are the Amended and Restated Stock Option Plan and
the Amended and Restated Stock Incentive Plan. The Company recorded total stock-based compensation expense
for all plans of approximately $5.3 million ($4.1 million after tax effects), $5.5 million ($4.2 million after tax
effects) and $6.0 million ($4.6 million after tax effects) for the years ended April 30, 2023, 2022 and 2021,
respectively. Tax benefits were recognized for these costs at the Company’s overall effective tax rate, excluding
discrete income tax benefits related to excess benefits on share-based compensation.
Stock Option Plan
The Company has options outstanding under a stock option plan approved by the shareholders, the
Amended and Restated Stock Option Plan. The shareholders of the Company approved the Amended and Restated
Stock Option Plan (the “Restated Option Plan”) on August 5, 2015, which extended the term of the Stock Option
Plan to June 10, 2025 and increased the number of shares of common stock reserved for issuance under the plan by
an additional 300,000 shares to 1,800,000 shares. On August 29, 2018, the shareholders of the Company approved
an amendment to the Restated Option Plan increasing the number of shares of common stock reserved for issuance
under the plan by an additional 200,000 shares to 2,000,000 shares. On August 26, 2020, the shareholders of the
Company approved an amendment to the Restated Option Plan increasing the number of shares of common stock
reserved for issuance under the plan by an additional 200,000 shares to 2,200,000 shares. On August 30, 2022, the
shareholders of the Company approved an amendment to the Restated Option Plan increasing the number of shares
of common stock reserved for issuance under the plan by an additional 185,000 shares to 2,385,000 shares. The
Restated Option Plan provides for the grant of options to purchase shares of the Company’s common stock to
employees, directors and certain advisors of the Company at a price not less than the fair market value of the stock
on the date of grant and for periods not to exceed ten years. Options outstanding under the Company’s stock option
plans expire in the calendar years 2022 through 2033.
Minimum exercise price as a percentage of fair market value at date of grant
Last expiration date for outstanding options
Shares available for grant at April 30, 2023
Restated Option Plan
100%
February 20, 2033
260,000
The aggregate intrinsic value of outstanding options at April 30, 2023 and 2022 was $9.1 million and $8.4
million, respectively.
The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing
model based on the assumptions in the table below.
Expected term (years)
Risk-free interest rate
Volatility
Dividend yield
2023
Years Ended April 30,
2022
5.5
3.60%
55%
-
5.5
0.86%
51%
-
2021
5.5
0.36%
50%
-
The expected term of the options is based on evaluations of historical and expected future employee exercise
behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates
approximately equal to the expected life at the grant date. Volatility is based on the historical volatility of the
Company’s common stock. The Company has not historically issued dividends and does not expect to do so in the
foreseeable future.
There were 140,000 options granted during fiscal 2023 and 30,000 granted during each of 2022 and fiscal
2021. The grant-date fair value of options granted during fiscal 2023, 2022 and 2021 was $5.1 million, $2.1 million
60
and $2.0 million, respectively. The options were granted at fair market value on the date of grant. Generally, options
vest after three to five years, except for options issued to directors which are immediately vested at date of grant.
The following is an aggregate summary of the activity in the Company’s stock option plans from April 30,
2020 to April 30, 2023:
Outstanding at April 30, 2020
Granted
Exercised
Cancelled
Outstanding at April 30, 2021
Granted
Exercised
Cancelled
Outstanding at April 30, 2022
Granted
Exercised
Cancelled
Outstanding at April 30, 2023
Number
of
Options
667,750
30,000
(131,350)
-
566,400
30,000
(94,000)
(1,000)
501,400
140,000
(28,000)
-
613,400
Exercise
Price
per Share
$ 65.95
$ 24.69 to $ 99.05
$ 150.83
$ 24.37 to $ 150.83
$ 41.86
$ 61.02 to $ 94.59
$ 44.52 to $ 53.02
Proceeds
on
Exercise
(in thousands)
45,777
1,979
(6,730)
-
41,026
4,525
(6,276)
(42)
39,232
9,687
(1,439)
-
47,480
$
$
$
$
Weighted Average
Exercise Price per
Share
$
$
$
$
68.55
65.95
51.24
72.43
150.83
66.76
41.86
78.25
69.19
51.38
77.41
Stock option compensation expense on a pre-tax basis was $3.7 million ($2.9 million after tax effects), $4.5
million ($3.4 million after tax effects) and $3.9 million ($3.0 million after tax effects) for the years ended April 30,
2023, 2022 and 2021, respectively. As of April 30, 2023, the Company had approximately $3.8 million of total
unrecognized compensation cost related to unvested options that are expected to vest. These options have a weighted
average remaining vesting period of 1.1 years.
The Company had the following options exercised for the periods indicated. The impact of these cash
receipts is included in financing activities in the accompanying Consolidated Statements of Cash Flows.
(Dollars in thousands)
2023
2022
2021
Years Ended April 30,
Options Exercised
Cash Received from Options Exercised
Intrinsic Value of Options Exercised
28,000
1,216
1,412
$
$
94,000
591
7,124
$
$
$
$
131,350
5,120
7,894
During the year ended April 30, 2023, there were 5,000 options exercised through net settlements in
accordance with plan provisions, wherein the shares issued were reduced by 2,584 shares to satisfy the exercise
price to acquire 2,416 shares.
As of April 30, 2023, there were 303,400 vested and exercisable stock options outstanding with an
aggregate intrinsic value of $4.4 million and a weighted average remaining contractual life of 5.6 years and a
weighted average exercise price of $82.89.
Stock Incentive Plan
On August 5, 2015, the shareholders of the Company approved the Amended and Restated Stock Incentive
Plan (the “Restated Incentive Plan”), which extended the term of the Company’s Stock Incentive Plan to June 10,
2025. On August 29, 2018, the shareholders of the Company approved an amendment to the Restated Stock
Incentive Plan that increased the number of shares of common stock that may be issued under the Restated Incentive
Plan by 100,000 shares to 450,000. For shares issued under the Stock Incentive Plan, the associated compensation
61
expense is generally recognized equally over the vesting periods established at the award date and is subject to the
employee’s continued employment by the Company.
The following is a summary of the activity in the Company’s Stock Incentive Plan:
Unvested shares at April 30, 2020
Shares granted
Shares vested
Shares cancelled
Unvested shares at April 30, 2021
Shares granted
Shares vested
Shares cancelled
Unvested shares at April 30, 2022
Shares granted
Shares vested
Shares cancelled
Unvested shares at April 30, 2023
Number
of
Shares
Weighted Average
Grant Date
Fair Value
184,828
7,690
-
(500)
192,018
11,287
(6,500)
(15,691)
181,114
40,470
(29,500)
(10,301)
181,783
$
$
$
$
49.71
98.43
-
35.00
51.70
121.17
39.14
59.99
55.76
68.78
35.31
69.14
61.22
The fair value at vesting for Awards under the stock incentive plan was $11.1 million, $10.1 million, and
$9.9 million in fiscal 2023, 2022 and 2021, respectively.
The Company recorded compensation cost of approximately $1.6 million ($1.2 million after tax effects),
$981,000 ($749,000 after tax effects) and $1.1 million ($878,000 after tax effects) related to the Restated Incentive
Plan during the years ended April 30, 2023, 2022 and 2021, respectively. As of April 30, 2023, the Company had
$5.9 million of total unrecognized compensation cost related to unvested awards granted under the Restated
Incentive Plan, which the Company expects to recognize over a weighted-average remaining period of 3.9 years.
L - Commitments and Contingencies
Letter of Credit
The Company has two standby letters of credit relating to insurance policies totaling $2,850,000 at April 30,
2023.
Facility Leases
The Company leases certain dealership and office facilities under various non-cancelable operating leases.
Dealership leases are generally for periods from three to five years and contain multiple renewal options. As of
April 30, 2023, the aggregate rentals due under such leases, including renewal options that are reasonably assured,
were as follows:
62
Years Ending
April 30,
Amount
(In thousands)
2024
2025
2026
2027
2028
Thereafter
Total undiscounted operating lease payments
Less: imputed interest
Present value of operating lease liabilities
$
$
7,782
7,770
7,232
6,720
6,137
46,546
82,187
19,887
62,300
The $82.2 million of operating lease commitments includes $13.3 million of non-cancelable lease
commitments under the lease terms, and $68.9 million of lease commitments for renewal periods at the Company’s
option that are reasonably assured. For the years ended April 30, 2023, 2022 and 2021, rent expense for all operating
leases amounted to approximately $9.0 million, $8.0 million and $8.0 million, respectively.
Litigation
In the ordinary course of business, the Company has become a defendant in various types of legal
proceedings. The Company does not expect the final outcome of any of these actions, individually or in the
aggregate, to have a material adverse effect on the Company’s financial position, annual results of operations or
cash flows. The results of legal proceedings cannot be predicted with certainty, however, and an unfavorable
resolution of one or more of these legal proceedings could have a material adverse effect on the Company’s financial
position, annual results of operations or cash flows.
Related Finance Company
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. Car-Mart of Arkansas routinely sells its
finance receivables to Colonial at what the Company believes to be fair market value and is able to take a tax
deduction at the time of sale for the difference between the tax basis of the receivables sold and the sales price.
These types of transactions, based upon facts and circumstances, have been permissible under the provisions of the
Internal Revenue Code as described in the Treasury Regulations. For financial accounting purposes, these
transactions are eliminated in consolidation, and a deferred income tax liability has been recorded for this timing
difference. The sale of finance receivables from Car-Mart of Arkansas to Colonial provides certain legal protection
for the Company’s finance receivables and, principally because of certain state apportionment characteristics of
Colonial, also has the effect of reducing the Company’s overall effective state income tax rate. The actual
interpretation of the regulations is in part a facts and circumstances matter. The Company believes it satisfies the
material provisions of the regulations. Failure to satisfy those provisions could result in the loss of a tax deduction
at the time the receivables are sold and have the effect of increasing the Company’s overall effective income tax
rate as well as the timing of required tax payments.
63
M - Supplemental Cash Flow Information
Supplemental cash flow disclosures for the years ended April 30, 2023, 2022 and 2021 are as follows:
(in thousands)
Supplemental disclosures:
Interest paid
Income taxes paid, net
Non-cash transactions:
Inventory acquired in repossession and accident protection plan claims
Net settlement option exercises
Right-of-use assets obtained in exchange for operating lease liabilities
Right-of-use assets obtained in exchange for operating lease liabilities through acquisitions
127,035
223
2,307
-
Years Ended April 30,
2023
2022
2021
$
36,605
5,480
$
10,421
19,238
84,096
5,685
3,176
-
$
7,029
26,964
50,868
1,616
2,510
-
N – Correction of an Immaterial Error in Previously Issued Financial Statements
Subsequent to the issuance of our interim financial statements for the period ended July 31, 2022, certain
immaterial errors were identified and have been corrected in our historical information related to the classification
of deferred revenue of ancillary products at the time an account is charged off and the calculation for allowance for
credit losses. The amount of deferred revenue related to ancillary products for a customer account that is charged
off has historically been recognized as sales revenue at the time of charge-off because the performance obligations
for the deferred revenue are no longer required to be delivered by the Company at the time of charge-off. It was
determined that this amount should be recorded as a reduction to customer accounts receivable at the time of charge-
off, thus reducing the amounts historically reported in sales revenue, net charge-offs, the provision for credit losses
and the allowance for credit losses as well as the corresponding deferred tax liability. As a result, certain amounts
for sales revenue, provision for credit losses, charge-offs, net of collateral recovered, the allowance for credit losses
and other related amounts have been revised from the amounts previously reported to correct these errors.
Management has evaluated the materiality of these corrections to its prior period financial statements from a
quantitative and qualitative perspective and has concluded that this change was not material to any prior annual or
interim period.
The effects of the corrections to each of the individual affected line items in our Consolidated Balance
Sheets and Consolidated Statements of Operations were as follows (in thousands):
(In thousands)
As Previously Reported
April 30, 2022
Corrections
As Corrected
Finance receivables, net
Deferred income tax liabilities, net
Retained earnings
$
854,290
28,233
658,242
$
9,384
2,216
7,168
$
863,674
30,449
665,410
O – Subsequent Events
None.
64
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer,
has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of April 30, 2023.
Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that
as of April 30, 2023, the Company’s disclosure controls and procedures were effective to provide reasonable
assurance that information required to be disclosed by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules
and forms, and that such information is accumulated and communicated to management, including the Company’s
Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), to
allow timely decisions regarding required disclosure.
Remediation of Material Weakness in Internal Control over Financial Reporting
A material weakness 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 the annual or interim financial
statements will not be prevented or detected on a timely basis. In connection with the preparation of the Company’s
consolidated financial statements for the three and six months ended October 31, 2022, management identified an
error in the historical credit loss input in the Company’s current expected credit losses (“CECL”) analysis for
determining the Company’s allowance for credit losses. Management evaluated the materiality of these corrections
to its prior period financial statements from a quantitative and qualitative perspective and concluded that this change
was not material to the Company’s operating results or financial condition in any prior annual or interim period.
However, management concluded and disclosed that at October 31, 2022, a material weakness existed in the
Company’s internal control over financial reporting related to the lack of precision of management’s review control
around the historical inputs and results in the Company’s current CECL analysis for determining the Company’s
allowance for credit losses, including a reduction in technical accounting expertise and lack of segregation of duties
among certain processes and control owners due to recent staffing turnover.
In order to remediate the material weakness that led to the Company’s inability to identify errors in the
Company’s CECL analysis for calculating the allowance for credit losses, management hired a new Senior Director
of Finance and Reporting in January 2023 to fill the vacated position and expanded the technical accounting
expertise within the financial reporting group. Management also implemented third-party software and engaged
third-party advisory services to assist in supporting management’s analysis and processes, as well as further
strengthen the precision of management’s review controls on the CECL analysis.
During the fourth quarter of fiscal 2023, the Company completed its testing of the implemented controls.
Based on the foregoing remediation activities and testing of controls, management concluded that the material
weakness has been fully remediated.
Inherent Limitations on Effectiveness of Controls
The Company’s disclosure controls and procedures and internal control over financial reporting are
designed to provide reasonable assurance of achieving their desired objectives. Management recognizes that a
control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of
their inherent limitations, disclosure controls and procedures and internal control over financial reporting may not
65
prevent or detect all errors or misstatements. Therefore, even those systems determined to be effective can provide
only reasonable assurance with respect to financial statement preparation and presentation.
Management’s Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal
control over financial reporting is designed to provide reasonable assurance regarding the reliability of the
Company’s financial reporting and the preparation of financial statements for external purposes in accordance with
U.S. generally accepted accounting principles.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of
April 30, 20232. In making this assessment, management used the criteria set forth in The 2013 Internal Control-
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
Based on management’s assessment, management believes that the Company maintained effective internal
control over financial reporting as of April 30, 2023.
The Company’s independent registered public accounting firm independently assessed the effectiveness of
the Company’s internal control over financial reporting and has issued their report on the effectiveness of the
Company’s internal control over financial reporting at April 30, 20232. That report appears below.
66
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
America’s Car-Mart, Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of America’s Car-Mart, Inc. (a Texas corporation) and
subsidiaries (the “Company”) as of April 30, 2023, based on criteria established in the 2013 Internal Control—
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of April 30, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework
issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended April 30,
2023, and our report dated June 26, 2023 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and performing such other procedures as
we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ GRANT THORNTON LLP
Tulsa, Oklahoma
June 26, 2023
67
Changes in Internal Control over Financial Reporting
Except as described above, there were no changes in the Company’s internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s last
fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal
control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Except as to information with respect to executive officers which is contained in a separate heading under
Part I, Item 1 of this Form 10-K, the information required by Items 10 through 14 of this Form 10-K is, pursuant to
General Instruction G (3) of Form 10-K, incorporated by reference herein from the Company's definitive proxy
statement to be filed pursuant to Regulation 14A for the Company's Annual Meeting of Stockholders to be held in
August 2023 (the “Proxy Statement”). The Company will, within 120 days of the end of its fiscal year, file with the
SEC a definitive proxy statement pursuant to Regulation 14A.
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item will be contained in the Proxy Statement and such information is
incorporated herein by reference. Information regarding the executive officers of the Company is set forth under
the heading "Executive Officers of the Registrant" in Part I, Item 1 of this report.
Item 11. Executive Compensation
The information required by this item will be contained in the Proxy Statement and such information is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information required by this item will be contained in the Proxy Statement and such information is
incorporated herein by reference.
The Company’s equity compensation plans consist of the Amended and Restated Stock Incentive Plan, the
Amended and Restated Stock Option Plan and the 2006 Employee Stock Purchase Plan. These plans have been
approved by the stockholders.
68
The following table sets forth information regarding outstanding options and shares reserved for future
issuance under the foregoing plans as of April 30, 2023:
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
Weighted-average
exercise price of
outstanding options,
warrants and rights
Plan Category
(a)
(b)
Number of securities
remaining available for future
issuance under equity
compensation plans (excluding
shares reflected in column (a))
(c) (1)
Equity compensation plans
approved by the stockholders
Equity compensation plans
not approved by the stockholders
613,400
$77.41
450,498
-
-
-
(1)
Includes 61,244 shares available for issuance under the Amended and Restated Stock Incentive Plan, 260,000 shares under the
Amended and Restated Stock Option Plan and 129,254 shares under the 2006 Employee Stock Purchase Plan.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be contained in the Proxy Statement and such information is
incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
The information required by this item will be contained in the Proxy Statement and such information is
incorporated herein by reference.
Item 15. Exhibits, Financial Statement Schedules
(a)1. Financial Statements
PART IV
The financial statements required by this item are listed in Item 8, “Financial Statements and Supplementary
Data”.
(a)2. Financial Statement Schedules
The financial statement schedules are omitted since the required information is not present, or is not present
in amounts sufficient to require submission of the schedules, or because the information required is included in the
Consolidated Financial Statements and Notes thereto.
69
(a)3. Exhibits
The following is a list of exhibits filed as part of this Annual Report on Form 10-K.
Exhibit
Number
Description of Exhibit
3.1
3.2
3.3
4.1
4.2
4.3
Articles of Incorporation of the Company, as amended (Incorporated by reference to Exhibits
4.1-4.8 to the Company's Registration Statement on Form S-8 filed with the SEC on November
16, 2005 (File No. 333-129727)).
Amended and Restated Bylaws of the Company dated December 4, 2007. (Incorporated by
reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter
ended October 31, 2007, filed with the SEC on December 7, 2007).
Amendment No. 1 to the Amended and Restated Bylaws of the Company dated February 18,
2014. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-
K filed with the SEC on February 19, 2014).
Description of Securities (Incorporated by reference to Exhibit 4.1 to the Company’s Annual
Report on Form 10-K for the year ended April 30, 2021, filed with the SEC on July 2, 2021).
Indenture, dated April 27, 2022, by and between ACM Auto Trust 2022-1 and Wilmington
Trust, National Association, as Indenture Trustee (Incorporated by reference to Exhibit 4.1 to
the Company’s Current Report on Form 8-K filed with the SEC on May 3, 2022.)
Indenture, dated January 31, 2023, by and between ACM Auto Trust 2023-1 and Wilmington
Trust, National Association, as Indenture Trustee. (Incorporated by reference to Exhibit 4.1
to the Company’s Current Report on Form 8-K filed with the SEC on February 6, 2023).
10.1*
Amended and Restated Stock Incentive Plan (Incorporated by reference to Appendix A to the
Company’s Proxy Statement on Schedule 14A filed with the SEC on June 23, 2015).
10.1.1*
Amendment to Amended and Restated Stock Incentive Plan (Incorporated by reference to
Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September
4, 2018).
10.2*
Amended and Restated Stock Option Plan (Incorporated by reference to Appendix B to the
Company’s Proxy Statement on Schedule 14A filed with the SEC on June 23, 2015).
10.2.1*
Amendment to Amended and Restated Stock Option Plan (Incorporated by reference to Exhibit
10.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 4, 2018).
10.2.2*
10.2.3*
Amendment to Amended and Restated Stock Option Plan (Incorporated by reference to Exhibit
10.3 to the Company’s Current Report on Form 8-K filed with the SEC on August 31, 2020).
Option Agreement for Amended and Restated Stock Option Plan, dated August 5, 2015,
between America’s Car-Mart, Inc., a Texas corporation, and William H. Henderson
(Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed
with the SEC on August 10, 2015).
10.2.4*
Option Agreement for Amended and Restated Stock Option Plan, dated August 5, 2015,
between America’s Car-Mart, Inc., a Texas corporation, and William H. Henderson
70
10.3*
10.4.1*
10.4.2*
10.5*
10.6*
10.7*
10.8*
10.9
10.10.1
10.10.2
(Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed
with the SEC on August 10, 2015).
Form of Indemnification Agreement between the Company and certain officers and directors
of the Company. (Incorporated by reference to the Company's Quarterly Report on Form 10-
Q for the quarter ended July 31, 1993) (filed in paper format).
Employment Agreement, dated as of February 27, 2020, between America’s Car-Mart, Inc.,
an Arkansas corporation, and Jeffrey A. Williams (Incorporated by reference to Exhibit 10.1
to the Company’s Current Report on Form 8-K filed with the SEC on March 4, 2020).
Employment Agreement, dated as of September 6, 2022, between America’s Car Mart, Inc.,
an Arkansas corporation, and Douglas Campbell (Incorporated by reference to Exhibit 10.1
to the Company’s Report on Form 8-K filed with the SEC on September 26, 2022).
America’s Car-Mart, Inc. Nonqualified Deferred Compensation Plan (Incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC
on October 10, 2014).
Change in Control Agreement, dated as of June 1, 2021, between America’s Car Mart, Inc., an
Arkansas corporation, and Vickie D. Judy (Incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed with the SEC on June 7, 2021).
Change in Control Agreement, dated as of June 1, 2021, between America’s Car Mart, Inc., an
Arkansas corporation, and Leonard L. Walthall (Incorporated by reference to Exhibit 10.2 to
the Company’s Current Report on Form 8-K filed with the SEC on June 7, 2021).
Retirement and Transition Agreement, dated as of January 1, 2018, between America’s Car-
Mart, Inc. and William H. Henderson (Incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed with the SEC on January 11, 2018).
Third Amended and Restated Loan and Security Agreement dated September 30, 2019, among
America’s Car-Mart, Inc., a Texas corporation, as Parent; Colonial Auto Finance, Inc., an
Arkansas corporation, America’s Car Mart, Inc., an Arkansas corporation, and Texas Car-
Mart, Inc., a Texas corporation, as Borrowers; and certain financial institutions, as Lenders,
with BMO Harris Bank, N.A., as Agent, Lead Arranger and Book Manager (Incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC
on October 1, 2019).
Amendment No. 1 to Third Amended and Restated Loan and Security Agreement dated
October 27, 2020, among America’s Car-Mart, Inc., a Texas corporation, as Parent; Colonial
Auto Finance, Inc., an Arkansas corporation, America’s Car Mart, Inc., an Arkansas
corporation, and Texas Car-Mart, Inc., a Texas corporation, as Borrowers; and certain financial
institutions, as Lenders, with BMO Harris Bank, N.A., as Agent, Lead Arranger and Book
Manager (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form
8-K filed with the SEC on November 4, 2020).
Amendment No. 2 to Third Amended and Restated Loan and Security Agreement dated
February 10, 2021, among America’s Car-Mart, Inc., a Texas corporation, as Parent; Colonial
Auto Finance, Inc., an Arkansas corporation, America’s Car Mart, Inc., an Arkansas
corporation, and Texas Car-Mart, Inc., a Texas corporation, as Borrowers; and certain financial
institutions, as Lenders, with BMO Harris Bank, N.A., as Agent, Lead Arranger and Book
Manager (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form
8-K filed with the SEC on February 16, 2021).
71
10.10.3
10.10.4
10.10.5
10.11
10.12
10.13
10.14
14.1
21.1
23.1
31.1
Amendment No. 3 to Third Amended and Restated Loan and Security Agreement dated
September 29, 2021, among America’s Car-Mart, Inc., a Texas corporation, as Parent; Colonial
Auto Finance, Inc., an Arkansas corporation, America’s Car Mart, Inc., an Arkansas
corporation, and Texas Car-Mart, Inc., a Texas corporation, as Borrowers; and certain financial
institutions, as Lenders, with BMO Harris Bank, N.A., as Agent, Lead Arranger and Book
Manager (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form
8-K filed with the SEC on September 30, 2021).
Amendment No. 4 to Third Amended and Restated Loan and Security Agreement dated April
22, 2022, among America’s Car-Mart, Inc., a Texas corporation, as Parent; Colonial Auto
Finance, Inc., an Arkansas corporation, America’s Car Mart, Inc., an Arkansas corporation,
and Texas Car-Mart, Inc., a Texas corporation, as Borrowers; and certain financial institutions,
as Lenders, with BMO Harris Bank, N.A., as Agent, Lead Arranger and Book Manager
(Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed
with the SEC on April 27, 2022).
Amendment No. 5 to Third Amended and Restated Loan and Security Agreement and Limited
Waiver dated February 22, 2023, among America’s Car-Mart, Inc., a Texas corporation, as
Parent; Colonial Auto Finance, Inc., an Arkansas corporation, America’s Car Mart, Inc., an
Arkansas corporation, and Texas Car-Mart, Inc., a Texas corporation, as Borrowers; and
certain financial institutions, as Lenders, with BMO Harris Bank, N.A., as Agent, Lead
Arranger, and Book Manager. (Incorporated by reference to Exhibit 10.6 to the Company’s
Current Report on Form 8-K filed with the SEC on March 1, 2023).
Purchase Agreement, dated April 27, 2022, by and between Colonial Auto Finance, Inc. and
ACM Funding, LLC (Incorporated by reference to Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed with the SEC on May 3, 2022.)
Sale and Servicing Agreement, dated April 27, 2022, by and between ACM Auto Trust 2022-
1, ACM Funding, LLC, America’s Car Mart, Inc., and Wilmington Trust, National
Association, as Indenture Trustee, Backup Servicer, Calculation Agent, and Paying Agent
(Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K/A
filed with the SEC on May 4, 2022).
https://www.sec.gov/Archives/edgar/data/799850/000117184322006233/exh_101.htmPurchase
Agreement, dated January 31, 2023, by and between Colonial Auto Finance, Inc. and ACM
Funding, LLC. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report
on Form 8-K filed with the SEC on February 6, 2023).
Sale and Servicing Agreement, dated January 31, 2023, by and between ACM Auto Trust
2023-1, ACM Funding, LLC, America’s Car Mart, Inc. and Wilmington Trust, National
Association, as Indenture Trustee, Backup Servicer, Calculation Agent, and Paying Agent.
(Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
filed with the SEC on February 6, 2023).
Code of Business Conduct and Ethics. (Incorporated by reference to Exhibit 14.1 to the
Company’s Current Report on Form 8-K filed with the SEC on July 22, 2016)
Subsidiaries of America’s Car-Mart, Inc.
Consent of Independent Registered Public Accounting Firm
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)
72
31.2
32.1
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-
14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Labels Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (embedded within the Inline XBRL Document)
Indicates management contract or compensatory plan or arrangement covering executive officers or
*
directors of the Company.
Item 16. Form 10-K Summary
Not applicable.
73
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Dated: June 26, 2023
AMERICA’S CAR-MART, INC.
By: /s/ Vickie D. Judy
Vickie D. Judy
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
/s/ Jeffrey A. Williams
Jeffrey A. Williams
/s/ Vickie D. Judy
Vickie D. Judy
/s/ Joshua G. Welch
Joshua G. Welch
/s/ Ann G. Bordelon
Ann G. Bordelon
/s/ Julia K. Davis
Julia K. Davis
/s/ Daniel J. Englander
Daniel J. Englander
/s/ William H. Henderson
William H. Henderson
/s/ Dawn C. Morris
Dawn C. Morris
Date
June 26, 2023
Chief Executive Officer
and Director
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial and Accounting Officer)
June 26, 2023
Chairman of the Board
June 26, 2023
June 26, 2023
June 26, 2023
June 26, 2023
June 26, 2023
June 26, 2023
Director
Director
Director
Director
Director
74
Exhibit 21.1
Subsidiaries of America’s Car-Mart, Inc.
Crown Delaware Investments Corp. (a Delaware corporation)
America’s Car Mart, Inc. (an Arkansas Corporation)
Colonial Auto Finance, Inc. (an Arkansas Corporation)
ACM Funding, LLC (a Delaware limited liability company)
ACM Auto Trust 2022-1 (a Delaware statutory trust)
ACM Auto Trust 2023-1 (a Delaware statutory trust)
Colonial Underwriting, Inc. (an Arkansas Corporation)
Texas Car-Mart, Inc. (a Texas corporation)
Auto Finance Investors, Inc. (a Texas corporation)
ACM Insurance Company (an Arkansas corporation)
1045 Sunshine LLC (a Missouri limited liability company)
75
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our reports dated June 26, 2023, with respect to the consolidated financial statements and internal
control over financial reporting included in the Annual Report of America’s Car-Mart, Inc. on Form 10-K for the year
ended April 30, 2023. We consent to the incorporation by reference of said reports in the Registration Statements of
America’s Car-Mart, Inc. on Forms S-8 (File Nos. 333-139270, 333-139269, 333-208414, 333-208416, 333-227856, and
333-227857).
/s/ GRANT THORNTON LLP
Tulsa, Oklahoma
June 26, 2023
76
Exhibit 31.1
Certification
1.
2.
3.
4.
I, Jeffrey A. Williams, certify that:
I have reviewed this Annual Report on Form 10-K for the period ended April 30, 2023 of America’s Car-Mart, Inc.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions):
(a)
(b)
June 26, 2023
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
/s/ Jeffrey A. Williams
Jeffrey A. Williams
Chief Executive Officer
(Principal Executive Officer)
77
Exhibit 31.2
Certification
1.
2.
3.
4.
I, Vickie D. Judy, certify that:
I have reviewed this Annual Report on Form 10-K for the period ended April 30, 2023 of America’s Car-Mart, Inc.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions):
(a)
(b)
June 26, 2023
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
/s/ Vickie D. Judy
Vickie D. Judy
Chief Financial Officer
(Principal Financial Officer)
78
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K for the period ended April 30, 2023 of America’s Car-Mart, Inc.
(the “Company”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned,
Jeffrey A. Williams, Chief Executive Officer of the Company, and Vickie D. Judy, Chief Financial Officer of the Company,
certify in our capacities as officers of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:
(1)
(2)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended; and
The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
By: /s/ Jeffrey A. Williams
Jeffrey A. Williams
Chief Executive Officer
June 26, 2023
By: /s/ Vickie D. Judy
Vickie D. Judy
Chief Financial Officer
June 26, 2023
79
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America’s Car-Mart, Inc.
America’s Car-Mart, Inc.
2023 Annual Report
CORPORATE INFORMATION
CORPORATE INFORMATION
Corporate Headquarters
Corporate Headquarters
80
80
(479) 464-9944
(479) 464-9944
Annual Meeting
Annual Meeting
The annual meeting of stockholders will be held
The annual meeting of stockholders will be held
at America’s Car-Mart Corporate Headquarters,
at America’s Car-Mart Corporate Headquarters,
1805 N 2nd St, Suite 401, Rogers, Arkansas
1805 N 2nd St, Suite 401, Rogers, Arkansas
72756 at 10:00 a.m. Central Time on
72756 at 10:00 a.m. Central Time on
9
Wednesday, August 25, 2021.
2021.
Tuesday, August 2 ,99 2023
Transfer Agent and Registrar
Transfer Agent and Registrar
Securities Transfer Corporation
Securities Transfer Corporation
2901 N Dallas Parkway, Suite 380
2901 N Dallas Parkway, Suite 380
Plano, Texas 75093
Plano, Texas 75093
Independent Public Accountants
Independent Public Accountants
Grant Thornton, LLP
Grant Thornton, LLP
Tulsa, Oklahoma
Tulsa, Oklahoma
Board of Directors
Board of Directors
Joshua G. Welch
Joshua G. Welch
Chairman of the Board
Chairman of the Board
Managing Partner
Managing Partner
Vicuna Capital I, LP
Vicuna Capital I, LP
Jeffrey A. Williams
Jeffrey A. Williams
Chief Executive Officer
d Chief Executive Officer
America’s Car-Mart, Inc.
America’s Car-Mart, Inc.
Ann G. Bordelon
Ann G. Bordelon
Executive
Vice
and Administration
e and Administration
University of Arkansas
University of Arkansas
Vice
Chancellor
Chancellor
for
for
Finance
Financ
Ray C. Dillon
Ray C. Dillon
Julia K. Davis
Executive
Retired Execurive Vice President and
Retired Chief Executive Officer
Retired Chief Executive Officer
Chief Information Officer R1RCM
Deltic Timber Corporation
Deltic Timber Corporation
Daniel J. Englander
Managing Partner, Ursula Investors
Daniel J. Englander
Managing Partner, Ursula Investors
William H. (“Hank”) Henderson
Retired Chief Executive Officer
America’s Car-Mart, Inc.
William H. (“Hank”) Henderson
Retired Chief Executive Officer
America’s Car-Mart, Inc.
Dawn Morris
Dawn C. Morris
Founder and Chief Executive Officer
Founder and Chief Executive Officer
Growth Partners Group, LLC
Growth Partners Group, LLC
Executive Officers
Executive Officers
Jeffrey A. Williams
Jeffrey A. Williams
Chief Executive Officer
d Chief Executive Officer
Vickie D. Judy
Chief Financial Officer
Vickie D. Judy
Chief Financial Officer
Douglas W. Campbell
President
in twelve states,
America’s Car-Mart currently operates
America’s Car-Mart currently operates 156 dealerships in twelve states,
America’s Car-Mart currently operates
with headquarters in Rogers, Arkansas.
in twelve states,
America’s Car-Mart currently operates
with headquarters in Rogers, Arkansas.
with headquarters in Rogers, Arkansas.
with headquarters in Rogers, Arkansas.
Corporate Headquarters
Corporate Headquarters
Corporate Headquarters
1805 N 2nd St, Suite 401
Corporate Headquarters
1805 N 2nd St, Suite 401
1805 N 2nd St, Suite 401
Rogers, Arkansas 72756
1805 N 2nd St, Suite 401
Rogers, Arkansas 72756
Rogers, Arkansas 72756
Phone: (479) 464-9944
Rogers, Arkansas 72756
Phone: (479) 464-9944
Phone: (479) 464-9944
Fax: (479) 273-7556
Phone: (479) 464-9944
Fax: (479) 273-7556
Fax: (479) 273-7556
Fax: (479) 273-7556
www.car-mart.com
www.car-mart.com
www.car-mart.com
www.car-mart.com
ALABAMA (16)
Albertville
ALABAMA (16)
ALABAMA (16)
Albertville
Albertville
Anniston
ALABAMA (16)
Albertville
Anniston
Anniston
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Prattville
Troy
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Troy
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Tuscaloosa
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Tuscaloosa
Tuscaloosa
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ARKANSAS (38)
Arkadelphia
ARKANSAS (37)
ARKANSAS (37)
Arkadelphia
Arkadelphia
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ARKANSAS (38)
Arkadelphia
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Clarksville
Conway (2)
Conway (2)
El Dorado
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El Dorado
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Fayetteville (2)
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Fayetteville (2)
Fayetteville (2)
Fort Smith
Fayetteville (2)
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Millidgeville
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Rome
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Valdosta
Woodstock
Valdosta
Woodstock
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ILLINOIS (3)
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ILLINOIS (3)
ILLINOIS (3)
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INDIANA (1)
Evansville
INDIANA (1)
INDIANA (1)
Evansville
Evansville
INDIANA (1)
Evansville
IOWA (1)
Burlington
IOWA (1)
IOWA (1)
Burlington
Burlington
IOWA (1)
Burlington
KENTUCKY (12)
g Green (2)
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MISSISSIPPI (5)
Columbus
MISSISSIPPI (5)
MISSISSIPPI (5)
Columbus
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Sedalia
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Springfield (2)
Sedalia
Springfield (2)
Springfield (2)
West Plains
Springfield (2)
West Plains
West Plains
Warrensburg
West Plains
Warrensburg
Warrensburg
Warrensburg
OKLAHOMA (28)
Ada
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Tulsa (2)
Tulsa (2)
TENNESSEE (7)
Chattanooga
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Chattanooga
Chattanooga
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Johnson City
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Madison
Madison
Tullahoma
Madison
Knoxvilles
Tullahom
Knoxville (2)a
Tullahoma
TEXAS (13)
Corsicana
TEXAS (13)
TEXAS (13)
Corsicana
Corsicana
Greenville
TEXAS (14)
Corsicana
Greenville
Greenville
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Longview
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BR03062T-0723-10K