America's Car-Mart Reports Revenue Decline but Net Income Improvement for Six Months Ended October 31, 2024

America’s Car-Mart, Inc. reported a decline in financial performance for the six months ended October 31, 2024, with total revenues of $695.0 million, down 4.3% from $726.6 million in the same period last year. The decrease was primarily attributed to a 9.3% drop in retail units sold, which totaled 28,175 vehicles, compared to 31,074 in the prior year. However, the average retail sales price increased by 3.9% to $19,650, and interest income rose by 5.3% to $122.0 million, partially offsetting the revenue decline. The company reported a net income of $4.1 million, a significant improvement from a net loss of $23.3 million in the previous year.

In terms of operational changes, America’s Car-Mart completed the acquisition of Texas Auto Center in June 2024 for $13.5 million, which included $3.5 million in contingent consideration. This acquisition added two dealership locations in Texas, contributing to the company’s expansion strategy. The company also implemented a new loan origination system across 145 of its 154 dealerships, aimed at improving credit application processes and enhancing collection efforts. The average number of dealerships remained stable at 154, with a focus on improving vehicle quality and customer experience.

The company’s balance sheet showed total assets of $1.575 billion as of October 31, 2024, an increase from $1.478 billion at the end of the previous fiscal year. Finance receivables, net, rose to $1.133 billion, up from $1.099 billion, while inventory increased to $122.1 million from $107.5 million. The allowance for credit losses was reported at $336.7 million, representing 24.72% of the principal balance in finance receivables. The company’s provision for credit losses decreased by 15.9% compared to the previous year, reflecting improved performance in contracts underwritten through the new loan origination system.

Looking ahead, America’s Car-Mart is focused on enhancing its operational efficiencies and managing gross margins. The company anticipates that the growth in finance receivables will outpace revenue growth due to longer contract terms. The company has also initiated discussions with lenders to extend its revolving line of credit, which is set to mature in September 2025. Management believes that maintaining strong banking relationships and leveraging the securitization market will be crucial for future liquidity and operational stability. The company plans to continue investing in its workforce and technology to support its growth objectives.