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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

                                   ----------

                                    
FORM 10-K


[X]      
ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

        For the fiscal year ended:                    Commission file number:
              APRIL 30, 2002                                 0-14939



                            

For the fiscal year ended:
April 30, 2004
Commission file number:
0-14939
AMERICA'S CAR-MART, INC.
             (Exact
(Exact name of registrant as specified in its charter)

                   TEXAS                                                                               63-0851141
(State
Texas
(State or other jurisdiction of incorporation or organization)                            (I.R.S.
63-0851141
(I.R.S. Employer Identification No.)
1501 SOUTHEAST WALTON BLVD.Southeast Walton Blvd., SUITESuite 213, BENTONVILLE, ARKANSAS
                    (AddressBentonville, Arkansas
(Address of principal executive offices)
72712
                                   (Zip
(Zip Code)
(479) 464-9944
              (Registrant's
(Registrant's telephone number, including area code)
    Securities registered pursuant to Section 12(b) of the Act: None
    Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01 parper share
    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 Xý No ---    ---o
    Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]o
    Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ý No o
    As of July 17, 2002the last business day of the registrant's most recently completed second fiscal quarter (October 31, 2003), the aggregate market value of the votingregistrant's common stock (based upon a closing price of $30.85) held by non-affiliates (all persons other than executive officers, directors and holder's of 5%10% or more of the Registrant's common stock) of the Registrant
(4,713,441 shares)(5,933,561shares) was $53,261,883.$183,050,357.
    As of July 17, 20027, 2004 there were 7,009,3947,799,091 shares of the Registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:
Documents Incorporated by Reference:
    Portions of the Registrant's definitive Proxy Statement for its Annual Meeting of Stockholders to be held in 20022004 are incorporated by reference into Part III of this report, with the exception of information regarding executive officers required under Item 10 of Part III, which information is included in Part I, Item 1.

PART I

ITEM 1. BUSINESS


FORWARD-LOOKING STATEMENTS
Forward-Looking Statements
    This Annual Report on Form 10-K contains numerous "forward-looking statements" within the meaning of the Private Securities Litigation Securities Reform Act of 1995. These forward lookingforward-looking statements address ourthe Company's future objectives, plans and goals, as well as ourthe Company's intent, beliefs and current expectations regarding future operating performance, and can generally be identified by words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "foresee," and other similar words or phrases. Specific events addressed by these forward lookingforward-looking statements include, but are not limited to:

         o        
•
opening new stores at the rate of 12%8% to 16%14% per year;

         o        financing growth from profits;

         o

•
the continuation of Car-Mart's consistency in earnings and history
                  of growth;

         o        the Company's financial leverage ratio declining;

         o same store revenue growth; and

         o        

•
revenue growth of approximately 16% to 17% in fiscal 2005;

•
receivables growth approximately equal to sales growth;

•
the Company's business and growth strategies.strategies;

•
financing growth primarily from profits; and

•
having adequate liquidity to satisfy its capital needs.
    These forward-looking statements are based on ourthe 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 whichthat may cause actual results to differ materially from ourthe Company's projections include those risks described elsewhere in this report, as well as:

         o
•
the availability of lines ofa credit facility for the Company's business;

         o        

•
the Company's ability to effectively underwrite and collect installmentits loans;

         o        

•
competition;

         o        

•
dependence on existing management;

         o        

•
changes in lending laws or regulations; and

         o        

•
general economic conditions in the markets in which the Company operates, including fluctuations in employment levels.


BUSINESS AND ORGANIZATION
    The Company undertakes no obligation to publicly 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 formerly Crown Group, Inc.
("Corporate" or the(the "Company"), is a holding company that operatesthe largest publicly held automotive dealerships through its subsidiaries that focusretailer in the United States focused exclusively on the "Buy Here/Pay Here" segment of the used car market. References to the Company typically 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. ("Colonial") subsidiaries.. Collectively, Car-Mart of


Arkansas and Colonial are collectively referred to herein as "Car-Mart". As of April 30, 2002 theThe Company operated 55
stores located primarily in small citiessells older model used vehicles and rural locations throughout the
South-Central United States. The Company provides financing for substantially all of its customers. Many of the Company's customers many of whom mayhave limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems. In addition, atAs of April 30, 2002,2004, the Company also owned (i) an 80% interestoperated 70 stores located primarily in Concorde Acceptance Corporation ("Concorde"), a prime and sub-prime mortgage
lender, and (ii) a 50% interest in Precision IBC, Inc. ("Precision"), a firm
specializing insmall cities throughout the sale and rental of intermediate bulk containers.South-Central United States.
    In October 2001, the Company made the decision to sell all of its operating subsidiaries except Car-Mart, and relocate its corporate headquarters to Bentonville, Arkansas where Car-Mart is based. Accordingly,As a result of this decision, all of the Company's other operating subsidiaries were sold and their operating results of Concorde and Precision,
as well as the operating results of (i) Smart Choice Automotive Group, Inc.
("Smart Choice"), the Company's 70% owned subsidiary that was written-off in
October 2001, and (ii) CG Incorporated, S.A. de C.V. ("Crown El Salvador") and
Home Stay Lodges I, Ltd. ("Home Stay") that were sold in a prior fiscal year,
arehave been included in discontinued operations. In May 2002 theThe Company sold its 50% interest in Precision for $3.8 million
in cash, andlast remaining discontinued operation in July 20022002. Discontinued operations are described in Note P in the Company sold its 80% interest in Concorde for $3.0
million in cash. In addition, at closing, Concorde repaid all of its $2.1
million in outstanding borrowings from the Company.



                                       2


BUSINESS STRATEGYaccompanying consolidated financial statements.
Business Strategy
    In general, it is the Company's objective to continue to expand its Buy Here/Pay Here used car operation using the same business model that has been developed by Car-Mart over the last 2123 years. This business strategy will focusfocuses on:

     o    CONTROLLED ORGANIC GROWTH. The Company will continue to expand its
          operation by increasing unit sales at existing dealerships
•
Collecting Customer Accounts.    Collecting customer accounts is perhaps the single most important aspect of operating a Buy Here/Pay Here used car business and opening
          new dealerships. The Company believes it can comfortably open new
          stores at the rate of 12% to 16% per annumis a focal point for the foreseeable future.
          The Company plans to open seven new dealerships during fiscal 2003.
          The Company has no plans or intentions to acquire existing dealerships
          of other operators.

     o    SELLING BASIC TRANSPORTATION. The Company will continue to focusstore level and corporate office personnel on selling basic and affordable transportation to its customers. In
          general,a daily basis. Periodically, the Company does not sell luxury cars, sports cars or SUV's.
          The average sales price of retail vehicles sold bymeasures and monitors the Company during
          fiscal 2002 was about $5,900. By selling vehicles in this price range
          the Company is able to keep the termscollection results of its installmentstores using internally developed delinquency and repossession standards. Substantially all associate incentive compensation is tied directly or indirectly to collection results. Over the last nine years, Car-Mart's annual credit losses as a percentage of sales contracts short (generally less than 24 months), and the customer is
          more ablehave been relatively stable ranging from a low of 17.0% to afford his or her payments.

     o    OPERATING IN SMALLER COMMUNITIES. The majoritya high of the Company's
          dealerships are located in cities and towns with a population of
          50,000 or less (median of about 27,500)21.3%. The Company believes that by
          operating in these smaller communities it experiences better
          collection results ascan continue to be successful provided it maintains its customers are more stable in their
          employment and place of residence, and are easier to locate in the
          event their loan becomes delinquent. Further, the Company believes
          that operating costs (ie. salaries, rent, advertising) are lower in
          smaller communities than in major metropolitan areas.

     o    MAINTAINING A DECENTRALIZED OPERATION.credit losses within or below its historical credit loss range.

•
Maintaining a Decentralized Operation.    The Company's dealerships will continue to operate on a decentralized basis. Each store is responsible for buying (with the assistance of a corporate office buyer) and selling its own vehicles, making credit decisions and collecting the loans it originates in accordance with established policies and procedures. Most customers make their payments in person at one of the Company's dealerships. This decentralized structure is complemented by the oversight and involvement of generalcorporate office management (district and regional
          managers, purchasing and accounts directors, accounting, MIS and
          senior management), and the maintenance of centralized financial controls.

     o    CULTIVATING CUSTOMER RELATIONSHIPS.controls, including an internal compliance staff.

•
Expanding Through Controlled Organic Growth.    The Company will continue to expand its operations by increasing revenues at existing dealerships and opening new dealerships. The Company expects to open new stores at the rate of 8% to 14% per annum for the foreseeable future. The Company currently has no plans to acquire existing dealerships of other Buy Here/Pay Here operators.

•
Selling Basic Transportation.    The Company will continue to focus on selling basic and affordable transportation to its customers. In general, the Company generally does not sell luxury cars or sports cars. Most vehicles are sold at prices between $5,000 and $8,500, with an average retail sales price of approximately $6,500 in fiscal 2004. By selling vehicles in this price range the Company is able to keep the terms of its installment sales contracts short (average of 25 months), while requiring relatively low payments.

•
Operating in Smaller Communities.    The majority of the Company's dealerships are located in cities and towns with a population of 50,000 or less. The Company believes that by operating in smaller communities it experiences better collection results as its customers are more stable in their employment and place of residence, and are easier to locate in the event their loans become delinquent. Further, the Company believes that operating costs, such as salaries, rent and advertising, are lower in smaller communities than in major metropolitan areas.

•
Promoting from Within.    It has been the Company's practice to attempt to hire honest and hardworking individuals to fill entry level positions, nurture and develop these associates, and attempt to fill the vast majority of its managerial positions from within the Company. By promoting from within, the Company believes it is better 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.

•
Cultivating Customer Relationships.    The Company believes that developing and maintaining a relationship with its customers is critical to the success of the Company. ApproximatelyAs much as 40% of its sales at mature stores are made to repeat customers, and an additional 10% to 15% of sales result from customer referrals. Furthermore, byBy 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 loan with the Company. The Company is in a position to cultivate these relationships as the majority of its customers make their payments in person at one of the Company's dealerships on a weekly or bi-weekly basis.

     o    COLLECTING CUSTOMER ACCOUNTS. Collecting customer accounts is perhaps
          the single most important aspect of operating a Buy Here/Pay Here used
          car business and is a focal point for store level and general office
          personnel on a daily basis. Periodically, the Company measures and
          monitors the collection results of its stores using internally
          developed delinquency and repossession standards. Substantially all
          associate incentive compensation is tied directly or indirectly to
          collection results. Over the last seven years, Car-Mart's annual
          credit losses as a percentage of sales have been relatively stable
          ranging from a low of 17.0% to a high of 20.2%.
Business Strengths
    The Company believes that it can continue to be successful provided it maintains its credit
          losses within or below its historical credit loss range.

     o    PROMOTING FROM WITHIN. It has been the Company's practice to hire
          honest and hardworking individuals to fill entry level positions,
          nurture and develop these associates, and attempt to fill all of its
          managerial positions from within the Company. By hiring individuals at
          the entry level, the Company believes it is better able to train its
          associates in the Car-Mart way of doing business, and maintain the
          Company's unique culture and the intense loyalty of its associates.


BUSINESS STRENGTHS

     We believe Car-Mart possesses a number of strengths, or advantages, that distinguish usit from most of ourits competitors. These business strengths include:

     o    CONSISTENCY IN EARNINGS AND HISTORY OF GROWTH. Over the last seven
          fiscal years Car-Mart has increased its revenues
•
Experienced and profits at
          compound annual growth rates of 19.6% and 21.7%, respectively. All of
          Car-Mart's growth has been organic, that is through the opening of new
          stores and increasing revenues and earnings at existing stores. Over
          this seven year period Car-Mart's net income as a percentage of
          revenue has been fairly consistent. In six of the last seven years,
          net income as a percentage of revenue has ranged between 8.6% and
          9.6%. We expect Car-Mart's consistency in earnings and history of
          growth to continue.

     o    EXPERIENCED AND INCENTIVIZED MANAGEMENT. Car-Mart's senior management
          team hasIncentivized Management.    The Company's executive officers have an average tenure of 15 years. Many of Car-Mart's store managers have been with the Company of 18 years. For stores
          opened three orfor more years, the average store manager tenure is ninethan ten years. Each store manager is compensated, at least in part (some entirely), based upon the net income of his or her store. A significant portion of the compensation of Car-Mart senior management is incentive based.



                                       3


     o    PROVEN BUSINESS PRACTICES.

•
Proven Business Practices.    The Company's operations are highly structured. While stores are operated on a decentralized basis, the Company has established policies, procedures and business practices for virtually every aspect of a store's operation. Detailed operating manuals are available to assist the store manager and office and collections personnel in performing their daily tasks. As a result, each store is operated in a uniform manner. Above the store level,
          generalFurther, corporate office district managers and regional managerspersonnel monitor the stores' operations through weekly visits and a number of daily, weekly and monthly communications and reports. For the last three fiscal year ended
          April 30, 2002, allyears, each of the Company's stores operated profitably.

     o    SIGNIFICANT EXPANSION OPPORTUNITIES. As of April 30, 2002, the Company
          operated 55 stores in seven states, with 30 of these stores located in
          Arkansas. The Company targets smaller communities to locate its
          dealerships (ie. populations from 20,000 to 50,000), but has had
          success in medium sized cities (ie. Tulsa, Oklahoma and Little Rock,
          Arkansas). The Company believes there are numerous suitable
          communities within the seven states in which the Company currently
          operates to satisfy anticipated store growth for the next several
          years, not to mention suitable locations outside the Company's current
          market area.

     o    NO NEW CAPITAL REQUIRED / LOW LEVERAGE. The Company does not expect it
          will need to raise any new capital in order to facilitate its expected
          growth for the foreseeable future. The Company expects to fund
          substantially all of its growth from net income generated from
          operations. As of April 30, 2002, the Company's debt to equity ratio
          was .8 to 1.0, which is substantially lower than a number of other
          public auto retailers. The Company expects its financial leverage
          ratio to decline for the next several years, as net income builds
          equity and debt either decreases or remains relatively constant.

     o    LOW COST OPERATOR.

•
Low Cost Operator.    The Company has structured its store and generalcorporate office operations to minimize operating costs. The number of associates employed at the store level is dictated by the number of active customer accounts each store services. Associate compensation is standardized for each store position. Other operating costs are closely monitored and scrutinized. Technology is utilized to maximize efficiency. The Company believes its operating costs as a percentage of revenue, or per unit sold, areis among the lowest (or the lowest) in the industry.


OPERATIONS

     o    STORE ORGANIZATION.

•
Well Capitalized / Limited External Capital Required for Growth.    As of April 30, 2004, the Company's debt to equity ratio was 0.27 to 1.0, which the Company believes is lower than the majority of its competitors. Further, the Company believes it can fund the majority of its planned growth from net income generated from operations. Of the external capital that may be needed to fund growth, the Company plans to draw on its existing revolving credit facility, or a renewal or replacement of that facility.

•
Significant Expansion Opportunities.    The Company generally targets smaller communities to locate its dealerships (i.e., populations from 20,000 to 50,000), but has had success in larger cities such as Tulsa, Oklahoma and Little Rock, Arkansas. The Company believes there are numerous suitable communities within the seven states in which the Company currently operates to satisfy anticipated store growth for the next several years. During fiscal 2005, the Company plans to add dealership locations principally in Texas, Oklahoma and Missouri.
Operations
•
Store Organization.    Stores are operated on a decentralized basis. Each store is responsible for the buying (with the assistance of a corporate office buyer) and selling of vehicles, making credit decisions, and servicing and collecting the installment loans it originates. Stores also maintain their own records write checks
          and make daily deposits. Store levelStore-level financial statements are prepared by the generalcorporate office on a monthly basis. Depending on the number of active customer accounts, a store may have as littlefew as two or as many as 20 associates employed at that location. Associate positions at a large store may include a store manager, assistant store manager, manager trainee, office manager, assistant office manager, service manager, buyer, collections personnel, salesmen and lot attendants. Stores are open Monday through Saturday from 9:00 a.m. to 6:00 p.m. The Company has both regular and satellite stores. Satellite stores are similar to regular stores, except that they tend to be smaller, sell fewer vehicles and their financial performance is not captured in a stand alone financial statement, but rather is included in the financial results of the sponsoring regular store.

     o    STORE LOCATION AND FACILITIES.

•
Store Location and Facilities.    Below is a summary of stores opened during the fiscal years ended April 30, 2002, 20012004, 2003 and 2000:


                                                     Years Ended April 30,
                                               2002           2001           2000
                                            ----------     ----------     ----------

         Beginning stores                           47             40             33
         New stores opened                           8              7              7
                                            ----------     ----------     ----------

             Ending stores                          55             47             40
                                            ==========     ==========     ==========
2002:

 
 
Years Ended April 30,

 
 
2004
 
2003
 
2002
Stores at beginning of year
 
64
 
55
 
47
New stores opened
 
7
 
9
 
8
Stores closed
 
(1
)
 
 
 
 
 
 
 
 
Stores at end of year
 
70
 
64
 
55
 
 
 
 
    Below is a summary of store locations by state as of April 30, 2002,
          20012004, 2003 and 2000:


                                                        As of April 30,
         Stores by State                       2002           2001           2000
         ---------------                    ----------     ----------     ----------

         Arkansas                                   30             29             28
         Oklahoma                                    9              9              8
         Kentucky                                    7              2             --
         Missouri                                    5              3              2
         Texas                                       2              2              2
         Kansas                                      1              1             --
         Indiana                                     1              1             --
                                            ----------     ----------     ----------

             Total                                  55             47             40
                                            ==========     ==========     ==========



                                       4
2002:
Stores by State
 
As of April 30,

 
2004
 
2003
 
2002
Arkansas
 
32
 
33
 
30
Oklahoma
 
13
 
13
 
9
Texas
 
10
 
4
 
2
Kentucky
 
7
 
7
 
7
Missouri
 
6
 
5
 
5
Kansas
 
1
 
1
 
1
Indiana
 
1
 
1
 
1
 
 
 
 
 
Total
 
70
 
64
 
55
 
 
 
 
    Stores are typically located in smaller communities. As of April 30, 2002,2004, approximately 70%75% of the Company's stores were located in cities with populations of less than 50,000. Stores are located on leased or owned property between one and three acres in size. When opening a new store the Company will typically use an existing structure on the property to conduct business, or leasepurchase a portable facility while business at the new location develops. Once the store
          is established, the Company often will construct its prototype store
          facility of 4,500These facilities typically range in size from 3,000 to 5,000 square feet at an average cost of $250,000.
          Recently, the Company purchased a few modular facilities at a much
          lower cost per square foot than its prototype store facility, and may,
          in the future, use modular facilities as its preferred permanent store
          facility structure.

     o    PURCHASING.feet.
•
Purchasing.    The Company purchases vehicles primarily through wholesalers and new car dealers. Occasionally the Company will purchase vehicles from auctions. The majority of vehicle purchasing is performed by the Company's buyers, although certain store managers are authorized to purchase vehicles. On average, a buyer will purchase vehicles for three stores. Buyers report to the store manager, or managers, for whom they buy. Buyers also reportbuy and to a regional purchasing director who monitorsdirector. The regional purchasing directors monitor the quantity and quality of vehicles purchased and comparescompare the cost of similar vehicles purchased among different buyers.
    Generally, the Company's buyers purchase vehicles between four and ten years of age with 60,000 to 120,000125,000 miles, and pay between $2,000$2,500 and $5,000 per vehicle. The Company focuses on providing basic transportation to its customers. The Company generally does not purchase sports cars or luxury cars, or sport utility vehicles.cars. Some of the more popular vehicles the Company sells include the Ford Taurus and Escort, Chevrolet CorsicaLumina and Lumina, Oldsmobile Cutlas and Achieva, andCavalier, Dodge Neon, Pontiac Grand Am.Am and Oldsmobile Cutlass. The Company also sells a number of trucks. Buyers inspect and test-drive every vehicle they purchase. Buyers attempt to purchase vehicles that require little or no repair as the Company has limited facilities to repair or recondition vehicles.

     o    SELLING, MARKETING AND ADVERTISING. Each store maintains
•
Selling, Marketing and Advertising.    Stores generally maintain an inventory of 15 to 75 vehicles depending on the maturity of the dealership. Inventory turns over approximately 12-14 times each year. The selling price of the Company's vehicles typically ranges between $2,500$5,000 and $8,500, with an average of $5,900.approximately $6,500 in fiscal 2004. Selling is done principally by the store manager, assistant manager, manager trainee or sales associate. Sales associates are paid a commission for sales that they make in addition to an hourly wage. Sales are made on an "as is" basis; however, customers are given an option to purchase a 4four month or 4,000 mile service contract for $345 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 and mark-up percentages on parts. The majority of the Company's customers elect to purchase a service contract when purchasing a vehicle.
    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 theirhis 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. Approximately 10% to 15% of the Company's sales result from customer referrals. The Company recognizes repeat customers with silver, gold and platinum plaques representing the purchase of five, ten and fifteen vehicles, respectively. Such certificatesThese plaques are prominently displayed at the dealership where the vehicles were purchased. For mature dealerships, approximatelyas much as 40% of its sales are to repeat customers.
    The Company primarily advertises in local newspapers, on billboards and on the radio. In addition, periodically the Company conducts promotional sales campaigns in order to increase sales.

     o    UNDERWRITING AND FINANCE.
•
Underwriting and Finance.    The Company provides financing for substantially all of its customers who purchase a vehicle at one of its stores. The Company does not provide financing to others, nor does it purchase retail installment contracts originated by others. The Company's installment sales contracts typically include down payments ranging from 0% to 17% (average of 9%7%), terms ranging from 12 months to 3036 months (average of 2225 months), and annual interest charges ranging from 6% to 19% (average of 9%11%), and require. The Company requires that payments be made on a weekly, bi-weekly, semi-monthly or monthly basis to coincide with the day the customer is paid by his or her employer. Upon the customer and the Company coming toreaching 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 detailed budget itemizing the customers'customer's monthly income and expenses. Certain information is then verified by Company personnel. After the verification process, the store manager makes the decision to accept, reject, or modify (perhaps obtain a greater down payment or require an acceptable co-buyer) the proposed transaction. In general, the store manager attempts to assess the stability and character of the applicant. The store manager who makes the credit decision is ultimately responsible for collecting the loan, and his or her compensation is directly affected byrelated to the collection results of his or her store.

     o    COLLECTIONS.

•
Collections.    All of the Company's retail installment contracts are serviced by Company personnel at the store level. The majority of the Company's customers make their payments in person at the store where they purchased their vehicle, although some customers mailsend their payments tothrough the store.mail. Each store closely monitors theirits customer accounts using the Company's proprietary receivables and collections software that stratifies past due accounts by the number of days past due. The Company believes that the timely response to past due accounts is critical to its collections success. Below is a summary of
          accounts 30 days or more past due as a percentage of all accounts as
          of April 30, 2002, 2001 and 2000:


                                                             As of April 30,
                                                  2002            2001            2000
                                               ----------      ----------      ----------


         Accounts 30 days or more past due            2.8%            3.4%            3.8%




                                       5
    The Company has established standards with respect to the percentage of accounts one and two weeks past due, the percentage of accounts three or more weeks past due, and for larger stores, 21-30 days past due, 31-60 days past due and 61 plus days past due (delinquency standards), and the percentage of accounts where the vehicle was repossessed that month (repossession standard). Store personnel (excluding the store manager) are paid a monthly bonus based upon growth in receivables at their store (similar to growth in same store revenues). This bonus is paid only if the store has met its delinquency and repossession standards for the month.
    The Company works very hard to keep its delinquency percentages low, and not to repossess vehicles. Accounts one day late are sent a notice in the mail. Accounts three days late are contacted by phone.telephone. Notes from each phonetelephone contact are electronically maintained in the Company's computer system. If a customer becomes seriouslyseverely 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. While
          the Company works very hard at keeping its delinquency percentages
          low, the Company also works very hard not to repossess vehicles. The Company goes to great lengthsattempts to amicably resolve payment delinquencies prior to repossessing a vehicle. Periodically, the Company enters into contract modifications with its customers to extend the time upon which the customer's payments are due. 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. 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 store, or sold for cash to a wholesaler.

     o    NEW STORE OPENINGS.
•
New Store Openings.    The Company plans to add stores at the rate of 12%8% to 16%14% per year. For fiscal year 2003, the Company plans to open seven
          new stores representing a 13% increase. Senior management, with the assistance of the generalcorporate office staff, makes decisions with respect to the communities in which to locate a new store and the specific sites within those communities. New stores are typically located in the general proximity of existing stores to facilitate the generalcorporate office's oversight of the Company's stores.
    The Company's approach with respect to new store openings is one of gradual development. The manager in charge of a new store is normally a recently promoted associate who was an assistant manager at a larger store or a manager trainee at a larger store.trainee. The facility may be of a portablemodular nature or an existing structure. New stores operate with a low level of inventory and personnel. As a result of

the modest staffing level, the new store manager performs a variety of duties (ie.(i.e., selling, collecting, and administrative tasks) during the early stages of his or her store's operations. As the store develops and the customer base grows, additional staff is hired.
    Monthly sales levels at new stores are substantially less than sales levels at mature stores. Over time new stores gain recognition in their communities, and a combination of customer referrals and repeat business generally facilitate strong sales growth. Sales growth at new stores can exceed 20% per year for a number of years. Mature stores typically experience annual sales growth, but at a much lower levelpercentage than new stores.
    New stores utilize approximately $250,000are provided with up to $300,000 in capital from the corporate office during the first six to eight months of operation. This cash isThese funds are used principally to fund receivables growth. After this six orto eight month start-up period, new stores typically become cash flow positive. NewThat is, receivables growth is funded from store profits rather than additional borrowings from the corporate office. This limitation of capital to new, as well as existing, stores tendserves as an important operating discipline. Essentially, stores must be profitable in order to begrow. Typically, new stores are profitable within a few months of opening.

     o    GENERAL OFFICE OVERSIGHT AND MANAGEMENT.
•
Corporate Office Oversight and Management.    The generalcorporate office, based in Bentonville, Arkansas, consists of districtarea operations managers, regional vice presidents, regional purchasing directors, a vice president of purchasing, compliance auditors, area collection managers purchasing, accounts and compliance directors,trainers, a vice president of collections, accounting and management information systems personnel, administrative personnel and senior management. The generalcorporate office monitors and oversees store operations. The Company's stores transmit and submit operating and financial information and reports to the generalcorporate office on a daily, weekly and monthly basis. This information includes cash receipts and disbursements, inventory and receivables levels, receivables agings and sales and repossession data. The generalcorporate office uses this information to compile Company-wide reports, plan store visits and prepare monthly financial statements.
    Periodically, districtarea operations managers, regional managers, accountsvice presidents, compliance auditors and compliance directorssenior management visit the Company's stores to inspect, review and comment on operations. OftentimesOften, the generalcorporate office assists in training new managers and other store level associates. In addition to financial results, the generalcorporate office uses standards (delinquencydelinquency and repossession)repossession standards and a point system to evaluate a store's performance.

               On a monthly basis the
    The Company's store managers meet eithermonthly on a
          district,an area, regional or Company-wide basis. At these meetings generalcorporate office personnel provide training and recognize achievements of store managers. Near the end of every fiscal year the respective districtarea operations manager, regional managervice president and senior management conduct "projection" meetings with each store manager. At these meetings the year's results are reviewed and ranked relative to other stores, and both quantitative and qualitative goals are established for the upcoming year. The qualitative goals may focus on staff development, effective delegation, organization skills and sometimes personal matters. Quantitatively, the Company always establishes a receivables growth target (which is similar to a revenue growth target) and, depending on the circumstances, may establish delinquency, repossession, or expense goals.
    The generalcorporate office is also responsible for establishing policy, maintaining the Company's management information system, conducting compliance audits, orchestrating new store openings and setting the direction for the Company.


INDUSTRY

          USED CAR SALES.
Industry
•
Used Car Sales.    The market for used car sales in the United States is significant and has steadily increased over the past five



                                       6


          years.significant. For calendar 2000,2003, industry analysts estimated used vehicle sales in the United States were
          approximately $367 billion, with the sub-prime segment of used vehicle
          sales contributing approximately $147at $366 billion. Management believes the
          factors that have led to growth in this industry include (i)
          substantial increases in new car prices, which have made new cars less
          affordable to the average consumer, (ii) the greater reliability and
          durability of used cars resulting from the production of higher
          quality cars, and (iii) the increasing number of vehicles coming off
          lease programs in recent years. Many industry analysts expect these
          trends to continue, leading to further expansion of the used car sales
          market. Used car retail sales typically occur through franchised new car dealerships that sell used cars or independent used car dealerships. The Company isoperates in the sub-primeBuy Here/Pay Here segment of the independent used car sales and finance market. This segment is serviced primarily by
          numerous small independent used car dealerships thatBuy Here/Pay Here dealers sell and finance
          the sale of used cars to individuals with limited or damaged credit histories ("Buy Here/Pay Here" dealers).or past credit problems. Buy Here/Pay Here dealers typically offer their customers certain advantages over more traditional financing sources, such as broader and more flexible underwriting guidelines, flexible payment terms (including prorating
          customerscheduling payments due within one month into several smaller payments
          and scheduling paymentson a weekly or bi-weekly basis to coincide with a customer's pay days)payday), and the ability to make payments in person, an important feature to individuals who may not have a checking account or are otherwise
          unable to make payments by the due date through the mail because of
          the timing of paychecks.

          USED CAR FINANCING.account.

•
Used Car Financing.    The used automobile financing industry is the
          third-largest consumer finance market in the country, after mortgage
          debt and revolving credit card debt. Growth in automobile financing
          has been fueled by increasing prices of both new and used cars, which
          has forced more buyers to seek financing when purchasing a car. This 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 Buy Here/Pay Here dealers. In general, the industry is categorized
          according to the type of car sold (new versus used) and the credit
          characteristics of the borrower.

               Despite significant opportunities, many of the traditional lending sources do not consistently provide financing to the sub-prime
          consumer finance market.individuals with limited credit histories or past credit problems. Management believes traditional lenders avoid this market because of its high credit risk and the associated collection efforts. Many of the estimated 54,000 independent used car
          dealers are not able to obtain debt financing from traditional lending
          sources such as banks, credit unions, or major finance companies. Many
          of these dealers typically finance their operations through the sale
          of contract receivables at a discount.


COMPETITION

Competition
    The used automotive retailing industry is highly competitive and fragmented. Presently there are an estimated 22,000 franchised automobile
dealers and 54,000 independent used vehicle dealers. Although there are a number
of large public companies that sell used (as well as new) vehicles, such as Car
Max and AutoNation, Inc., management believes these operators do not provide
significant competition for the Company as they tend to sell higher priced
vehicles to consumers with stronger credit histories. The Company competes principally with other independent Buy Here/Pay Here dealers, and to a lesser degree with (i) the used vehicle retail operations of franchised automobile dealerships, (ii) independent used vehicle dealers, and (iii) individual
consumersindividuals who sell used vehicles in private transactions. The Company competes for both the supplypurchase and resale of used vehicles.
    Management believes the principal competitive factors in the sale of its used vehicles include (i) the availability of financing to consumers with limited or damaged 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 (v)(vi) customer service. Management believes that its dealerships are competitive in each of these areas.


REGULATION AND LICENSING
Regulation and Licensing
    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 truth-in-lending and equal credit opportunity 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 collection 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.
    The states in which the Company operates impose limits on interest rates the Company can charge on its loans. These limits are generally based on either (i) a specified margin above the federal discountprimary credit rate, (ii) the age of the vehicle, or (iii) statute.a fixed rate. 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.




                                       7


DISCONTINUED OPERATIONS

     In October 2001, the Company made the decision to sell all of its
subsidiaries except Car-Mart, and relocate its corporate headquarters to
Bentonville, Arkansas where Car-Mart is based. Accordingly, the operating
results of Concorde (a prime and sub-prime mortgage lender) and Precision (a
firm specializing in the sale and rental of intermediate bulk containers), as
well as the operating results of (i) Smart Choice (used vehicle sales and
finance), the Company's 70% subsidiary that was written-off in October 2001, and
(ii) Crown El Salvador (gaming) and Home Stay (lodging) that were sold in a
prior fiscal year, are included in discontinued operations. See Note R of the
accompanying consolidated financial statements.

     At April 30, 2002 the Company owned an 80% interest in Concorde and a 50%
interest in Precision. In May 2002 the Company sold its 50% interest in
Precision for $3.8 million in cash, and in July 2002 the Company sold its 80%
interest in Concorde for $3.0 million in cash. In addition, at closing, Concorde
repaid all of its $2.1 million in outstanding borrowings from the Company.


EMPLOYEES
Employees
    As of April 30, 20022004 the Company, including its consolidated subsidiaries, employed approximately 450700 persons full time. None of the Company's employees are covered by a collective bargaining agreement and the Company believes that its relations with its employees are good.


EXECUTIVE OFFICERS

Executive Officers
    The executive officers of the Company are as follows:

         NAME                               AGE    POSITION WITH THE COMPANY
         ----                               ---    -------------------------


         Edward R. McMurphy ...........     51     
Name
Age
Position with the Company
Tilman J. Falgout, III
55
Chairman of the Board,

         Nan R. Smith .................     62     Vice Chairman of the Board

         Tilman J. Falgout, III .......     53 Chief Executive Officer, General Counsel and Director

William H. Henderson .........     39


40


Vice Chairman of the Board, President and Director

Mark D. Slusser ..............     44     


46


Chief Financial Officer Vice President Finance and Secretary

Eddie L. Hight ...............     39     


41


Chief Operating Officer


EDWARD R. MCMURPHY,
Tilman J. Falgout, III has served as Chairman of the Board of the Company since its
inception in 1983. From 1984 until May 2002 Mr. McMurphy has served as the
Company's Chief Executive Officer and President. From 1979 to June 1986, Mr.
McMurphy served as President of Marion Properties, Inc., a real estate
development company and former parent of the Company from July 1984 to June
1986.

NAN R. SMITH, has served as Vice Chairman of the Board of the Company since May 2002 and as a director since January 2002. From 1999 until May 2002, Ms. Smith
served as President of Car-Mart (the Company's wholly-owned operating
subsidiary). From 1981 through 1998, Ms. Smith served as Chief Operating Officer
of Car-Mart.

TILMAN J. FALGOUT, III, has served as2004, Chief Executive Officer of the Company since May 2002, General Counsel since 1995 and a director of the Company since 1992. From 1995 until May 2002, Mr. Falgout also served as Executive Vice President of the Company. From 1978 through June 1995, Mr. Falgout was a partner in the law firm of Stumpf & Falgout, Houston, Texas.

WILLIAM
William H. HENDERSON,Henderson has served as Vice Chairman of the Board since May 2004 and as President of the Company since May 2002. From 1999 until May 2002, Mr. Henderson served as Chief Operating Officer of Car-Mart (the Company's wholly-owned operating subsidiary).Car-Mart. From 19871992 through 1998, Mr. Henderson served as General Manager of Car-Mart. From 1987 to 1992, Mr. Henderson primarily held a numberthe positions of positions at Car-Mart including StoreDistrict Manager and Regional Manager.

MARKManager at Car-Mart.
Mark D. SLUSSER,Slusser has served as Chief Financial Officer of the Company since 1989 and as Secretary since 1990. From 1981 until joining the Company, Mr. Slusser held various positions with Ernst & Young LLP including Senior Manager.

EDDIE
Eddie L. HIGHT,Hight has served as Chief Operating Officer of the Company since May 2002. From 1984 until May 2002, Mr. Hight held a number of positions at Car-Mart (the Company's wholly-owned operating subsidiary) including Store Manager and Regional Manager.



                                       8


ITEM
Item 2.    PROPERTIESProperties
    As of April 30, 20022004 the Company leased substantially allapproximately 80% of its facilities, including dealerships and the Company's generalcorporate offices. These facilities are located principally in the states of Arkansas, Oklahoma, Texas, Kentucky and Missouri. The Company's general administrativecorporate offices are located in approximately 6,0008,000 square feet of leased space in Bentonville, Arkansas.

ITEM
Item 3.    LEGAL PROCEEDINGSLegal Proceedings
    In February 2001 and May 2002, the Company was added as a defendant in two similar actions which were originally filed in December 1998 against approximately twenty defendants (the "Defendants") by Astoria Entertainment, Inc. ("Astoria"). One action was filed in the Civil District Court for the Parish of Orleans, Louisiana (the "State Claims") and the other was filed in the United States District Court for the Eastern District of Louisiana (the "Federal Claims"). In these actions, Astoria alleges the Defendants conspired to eliminate Astoria from receiving one of the fifteen riverboat gaming licenses that were awarded by the State of Louisiana in 1993 and 1994, at a time when a former subsidiary of the Company was involved in riverboat gaming in Louisiana. Astoria seeks unspecified damages including lost profits. In August 2001, the Federal court dismissed all of the Federal Claims with prejudice. A motion to dismiss the State Claims is pending before the state district court of appeals. The Company believes the State Claims are without merit and intends to vigorously contest liability in this matter.
    Further, in the ordinary course of business, the Company has become a defendant in various types of other legal proceedings. Although the Company cannot determine at this time the amount of exposure from these ordinary course of business lawsuits, if any, management 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, results of operations or cash flows.

ITEM
Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSSubmission of Matters to a Vote of Security Holders
    No matters were submitted to a vote of security holders of the Company during the fourth quarter ended April 30, 2002.

                                     2004.


PART II

ITEM
Item 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERSMarket for Registrant's Common Equity and Related Stockholder Matters
    The Company's common stock is authorized for quotationtraded on the NASDAQ National Market under the NASDAQ symbol CRMT. The following table sets forth, by fiscal quarter, the high and low closing salesales prices reported by NASDAQ for the Company's common stock for the periods indicated.

                                         Fiscal 2002               Fiscal 2001
                                      High         Low          High         Low
                                    --------     --------     --------     --------


         First quarter              $   3.85     $   3.55     $   5.50     $   4.75
         Second quarter                 4.50         3.50         5.50         4.44
         Third quarter                  7.88         3.50         5.00         3.63
         Fourth quarter                15.00         6.60         4.19         3.51
 
 
Fiscal 2004        

 
Fiscal 2003        

 
 
High
 
Low
 
High
 
Low
First quarter
 
$
19.00
 
$
14.88
 
$
16.99
 
$
10.70
Second quarter
 
 
33.80
 
 
19.22
 
 
14.45
 
 
9.80
Third quarter
 
 
37.38
 
 
24.25
 
 
14.89
 
 
10.80
Fourth quarter
 
 
34.29
 
 
25.05
 
 
15.00
 
 
11.40
    As of July 15, 2002,June 7, 2004, there were approximately 1,2751,160 stockholders of record. This number excludes individual stockholders holding stock under nominee security position listings.
    Since its inception the Company has paid no dividends on its common stock. The Company currently intends to follow a policy of retaining earnings to finance future growth. Payment of 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's revolving credit facility prohibits distributions from Car-Mart to the Company beyond the repayment of an intercompany loan from the Company to Car-Mart ($8.5 million at April 30, 2004). Thus, the Company is limited in the amount of dividends or other distributions it can make to its shareholders without the consent of its lender.
    In January 2002, the Company issued a warrant to purchase 40,000 shares of its common stock at an exercise price of $5.00 per share to Epoch Financial Group, Inc. ("Epoch"), a firm that provides investor relations services. In January 2003, the Company issued a warrant to purchase 5,000 shares of its common stock at an exercise price of $13.04 per share to Epoch. In July 2003 and April 2004, the Company issued warrants to purchase 10,000 and 2,500 shares of its common stock at exercise prices of $17.75 and $27.35 per share, respectively, to Epoch. During fiscal 2003 and fiscal 2004, the Company issued 12,331 and 10,650 shares of its common stock, respectively, pursuant to partial exercises of the warrants held by Epoch.
In March 2002 the Company acquired all of the remaining shares of Car-Mart common stock it did not previously own from the Car-Mart minority shareholders by issuing 146,518 shares of the Company's common stock (valued at approximately $1.4 million) and paying approximately $1.6 million in cash. The
    As discussed in Note J to the consolidated financial statements contained herein, the Company is
relying upon an exemption from registration as specified in Section 4 (2)presently has three stock option plans that provide for the issuance of shares of the Securities ActCompany's common stock upon the exercise of 1933.



                                       9


ITEMoutstanding stock options. As of April 30, 2004, there were a total of 338,927 shares of common stock subject to issuance upon the exercise of outstanding stock options at a weighted-average exercise price of $7.44 per share. Further, at April 30, 2004, there were an additional 77,745 shares of the Company's common stock set aside for future option grants pursuant to the Company's stock option plans. At April 30, 2004, the Company also had stock purchase warrants outstanding covering a total of 42,000 shares of common stock at an average exercise price of $9.80 per share.


Item 6.    SELECTED FINANCIAL DATASelected Financial Data
    The financial data set forth below was derived from the audited consolidated financial statements of the Company and should be read in conjunction with the consolidated financial statements and related notes thereto, and Management's Discussion and Analysis of Financial Condition and Results of Operations contained elsewhere herein. (In thousands, except per share amounts.)

                                                                         Years Ended April 30,
                                                   2002            2001           2000           1999           1998
                                                ----------      ----------     ----------     ----------     ----------


     Revenues                                   $  127,924      $  106,754     $   90,970     $   30,007     $    3,251

     Income (loss) from continuing              $   (1,136)     $    7,362     $   13,277     $   18,193     $      244
     operations

     Net income (loss)                          $  (14,306)     $    5,963     $   14,836     $   17,508     $      367

     Diluted EPS - continuing operations        $     (.17)     $      .92     $     1.38     $     1.75     $      .02


     Total assets                               $  128,142      $  302,520     $  294,008     $  170,003     $   92,203
     Total debt                                 $   39,792      $   41,584     $   37,319     $   33,835     $       --
     Stockholders' equity                       $   52,813      $   58,932     $   58,867     $   53,059     $   35,051
     Shares outstanding                              6,944           6,980          8,248         10,097          9,434


ITEM
 
 
Years Ended April 30,

 
 
2004
 
2003
 
2002 (a)
 
2001
 
2000 (b)
Revenues
 
$
176,184
 
$
154,885
 
$
127,924
 
$
106,754
 
$
90,970
Income (loss) from continuing operations
 
$
15,639
 
$
13,569
 
$
(1,136
)
$
7,362
 
$
13,277
Net income (loss)
 
$
15,804
 
$
14,075
 
$
(14,306
)
$
5,963
 
$
14,836
Diluted EPS – continuing operations
 
$
1.96
 
$
1.73
 
$
(.17
)
$
.92
 
$
1.38

Total assets

 

$

117,241

 

$

101,841

 

$

128,142

 

$

302,520

 

$

294,008
Total debt
 
$
22,534
 
$
25,968
 
$
39,792
 
$
41,584
 
$
37,319
Stockholders' equity
 
$
84,577
 
$
65,961
 
$
52,813
 
$
58,932
 
$
58,867
Shares outstanding
 
 
7,758
 
 
7,208
 
 
6,944
 
 
6,980
 
 
8,248
(a)
–  Fiscal 2002 includes after tax charges totaling $10.7 million pertaining to (i) non-cash stock option compensation ($6.3 million), (ii) the write-down of certain emerging technology/Internet investments and equipment ($2.6 million), and (iii) severance and office closing costs in connection with the decision to relocate the Company's corporate headquarters to Bentonville, Arkansas ($1.8 million) where Car-Mart is based.

(b)
–  Fiscal 2000 includes an after tax gain on the sale of securities of $7.0 million.

Item 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONSManagement'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 appearing elsewhere in this annual report.


OVERVIEW
Overview
    America's Car-Mart, Inc., a Texas corporation formerly Crown Group, Inc.
("Corporate" or the(the "Company"), is a holding company that operatesthe largest publicly held automotive dealerships through its subsidiaries that focusretailer in the United States focused exclusively on the "Buy Here/Pay Here" segment of the used car market. References to the Company typically 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. ("Colonial") subsidiaries.. Collectively, Car-Mart of Arkansas and Colonial are collectively
referred to herein as "Car-Mart". As of April 30, 2002 theThe Company operated 55
stores located primarily in small citiessells older model used vehicles and rural locations throughout the
South-Central United States. The Company provides financing for substantially all of its customers. Many of the Company's customers manyhave limited financial resources and would not qualify for conventional financing as a result of whom have limited credit histories or past credit problems. In addition, atAs of April 30, 2002,2004, the Company also owned (i) an 80% interestoperated 70 stores located primarily in Concorde Acceptance Corporation ("Concorde"), a prime and sub-prime mortgage
lender, and (ii) a 50% interest in Precision IBC, Inc. ("Precision"), a firm
specializing insmall cities throughout the sale and rental of intermediate bulk containers.South-Central United States.
    In October 2001, the Company made the decision to sell all of its operating subsidiaries except Car-Mart, and relocate its corporate headquarters to Bentonville, Arkansas where Car-Mart is based. Accordingly,As a result of this decision, all of the Company's other operating subsidiaries were sold and their operating results of Concorde and Precision,
as well as the operating results of (i) Smart Choice Automotive Group, Inc.
("Smart Choice"), the Company's 70% owned subsidiary that was written-off in
October 2001, and (ii) CG Incorporated, S.A. de C.V. ("Crown El Salvador") and
Home Stay Lodges I, Ltd. ("Home Stay") that were sold in a prior fiscal year,
arehave been included in discontinued operations. Discontinued operations (seeare described in Note R toP in the accompanying consolidated financial statements)statements.
    Car-Mart has been operating since 1981. Car-Mart has grown its revenues at a compound annual rate of 19% over the last eight years. Finance receivables tend to grow at about the same rate as revenues. Growth results from same store revenue growth and the addition of new stores. Revenue growth in fiscal 2004 (14%) was lower than the Company's historical average partially as a result of selling more lower-priced vehicles and a slower pace of opening new stores. The Company expects revenues to increase about 16-17% in fiscal 2005.
    The Company's primary focus is on collections. Each store handles its own collections with supervisory involvement of the corporate office. Over the last nine years Car-Mart's credit losses as a percentage of sales have ranged between approximately 17% and 21%. In May 2002Credit losses in fiscal 2004 were on the high end of the range (21.3%) partially as a result of selling more lower-priced vehicles. Lower-priced vehicles tend to have more mechanical difficulties that result in a higher level of repossessions. Late in fiscal 2004 the Company sold its 50% interestsubstantially reduced the sale of lower-priced vehicles. The Company expects credit losses, as a percentage of sales, to decrease in Precision for $3.8 millionfiscal 2005 as compared to fiscal 2004.
    The Company's gross margins as a percentage of sales have been fairly consistent from year to year. Over the last nine years Car-Mart's gross margins as a percentage of sales have ranged between approximately 43% and 48%. Gross margins as a percentage of sales in cash, and in July 2002fiscal 2004 were on the Company sold its 80% interest in Concorde for $3.0
million in cash. In addition, at closing Concorde repaid all of its $2.1 million
in outstanding borrowings from the Company.



                                       10


RESULTS OF CONTINUING OPERATIONS

     Operating results are presented for the continuing operationshigh end of the Company by business segment forrange (47.7%) partially as a result of selling more lower-priced vehicles. The Company's gross margins are set based upon the years ended April 30, 2002, 2001 and 2000.
The segments include Car-Mart and Corporate operations. A summarycost of the vehicle purchased with lower-priced vehicles having higher gross margin percentages. As a result of the Company's decision late in fiscal 2004 to substantially reduce the sale of lower-priced vehicles, the Company expects gross margins, as a percentage of sales, to decrease in fiscal 2005 as compared to fiscal 2004.
    Hiring, training, and retaining qualified associates are a continuing operations by business segmentfocus for the years ended April
30, 2002, 2001Company. The rate at which the Company adds new stores is oftentimes limited by the number of trained managers the Company has at its disposal. In fiscal 2005, the Company intends to add resources to increase its ability to train new store managers and 2000 is as follows:

                                  CONSOLIDATED
                                 (IN THOUSANDS)


                                                 Revenues                                  Pretax Income (Loss)
                                ------------------------------------------      ------------------------------------------

                                           Years Ended April 30,                           Years Ended April 30,
                                   2002            2001            2000            2002            2001            2000
                                ----------      ----------      ----------      ----------      ----------      ----------


     Car-Mart                   $  127,417      $  105,706      $   89,382      $   19,336      $   16,375      $   13,562
     Corporate                         838           1,524           2,290         (17,134)         (3,484)          7,773
     Eliminations                     (331)           (476)           (702)             --              --              --
                                ----------      ----------      ----------      ----------      ----------      ----------

           Consolidated         $  127,924      $  106,754      $   90,970      $    2,202      $   12,891      $   21,335
                                ==========      ==========      ==========      ==========      ==========      ==========


2002 VS. 2001corporate office management personnel.



Consolidated Operations
(Operating Statement Dollars in Thousands)
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
 
 
 
 
Years Ended April 30,
 
As a % of Sales
 
 
 
2004
vs.
2003
 
2003
vs.
2002
 
 
 
2004
 
2003
 
2002
 
2004
 
2003
 
2002
 
Operating Statement:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales
 
$
163,589
 
$
145,014
 
$
118,642
 
12.8
%
22.2
%
100.0
%
100.0
%
100.0
%
 
Interest income
 
 
12,595
 
 
9,871
 
 
9,282
 
27.6
 
6.3
 
7.7
 
6.8
 
7.8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
176,184
 
 
154,885
 
 
127,924
 
13.8
 
21.1
 
107.7
 
106.8
 
107.8
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales
 
 
85,510
 
 
77,073
 
 
62,965
 
10.9
 
22.4
 
52.3
 
53.1
 
53.1
 
 
Selling, gen and admin
 
 
29,671
 
 
27,417
 
 
22,326
 
8.2
 
22.8
 
18.1
 
18.9
 
18.8
 
 
Provision for credit losses
 
 
34,767
 
 
26,897
 
 
23,136
 
29.3
 
16.3
 
21.3
 
18.5
 
19.5
 
 
Interest expense
 
 
1,114
 
 
1,686
 
 
3,022
 
(33.9
)
(44.2
)
.7
 
1.2
 
2.5
 
 
Depreciation and amort
 
 
321
 
 
299
 
 
284
 
7.4
 
5.3
 
.2
 
.2
 
.2
 
 
Stock option compensation
 
 
 
 
 
 
 
 
7,329
 
 
 
 
 
 
 
 
 
6.2
 
 
Restructuring charge
 
 
 
 
 
 
 
 
2,732
 
 
 
 
 
 
 
 
 
2.3
 
 
Write-down of invest/equip
 
 
 
 
 
 
 
 
3,928
 
 
 
 
 
 
 
 
 
3.3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
151,383
 
 
133,372
 
 
125,722
 
13.5
 
NM
 
92.5
 
92.0
 
106.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax income
 
$
24,801
 
$
21,513
 
$
2,202
 
15.3
 
NM
 
15.2
 
14.8
 
1.9
 
 
 
 
 
 
 
 
 
 
 
 
 
NM—Not meaningful.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail units sold
 
 
24,281
 
 
22,022
 
 
18,658
 
10.3
%
18.0
%
 
 
 
 
 
 
 
Average stores in operation
 
 
67.0
 
 
61.2
 
 
52.5
 
9.5
 
16.6
 
 
 
 
 
 
 
 
Average units sold per store
 
 
362
 
 
360
 
 
355
 
.7
 
1.4
 
 
 
 
 
 
 
 
Average retail sales price
 
$
6,506
 
$
6,386
 
$
6,126
 
1.9
 
4.2
 
 
 
 
 
 
 
 
Same store revenue growth
 
 
9.8
%
 
15.5
%
 
14.1
%
 
 
 
 
 
 
 
 
 
 
 
Receivables avg interest rate
 
 
10.3
%
 
9.4
%
 
10.4
%
 
 
 
 
 
 
 
 
 
 
2004 Compared to 2003
    Revenues increased $21.2$21.3 million, or 19.8%13.8%, in fiscal 2002 versus2004 as compared to fiscal 20012003 principally as a result of (i) revenue growth from stores that operated a full 12twelve months in both periods ($12.512.3 million, or 14.1%9.8%), (ii) revenue growth from stores opened during fiscal 20012003 or stores that opened or closed a satellite location during fiscal 2004 or fiscal 2003 ($5.1 million), and (iii) revenues from stores opened during fiscal 2004 ($3.9 million).
    Same store revenue growth slowed to 9.8% in fiscal 2004 from 15.5% in fiscal 2003 principally as a result of a smaller increase in the average retail sales price in fiscal 2004 (1.9%) as compared to fiscal 2003 (4.2%), and more conservative underwriting practices beginning in the fourth quarter of fiscal 2004. The slowing of growth in the average retail sales price stems from a decision at the beginning of fiscal 2004 to sell a higher percentage of lower-priced vehicles. Although lower-priced vehicles have higher gross margin percentages, and are more affordable than higher-priced vehicles, selling lower-priced vehicles has a negative impact on revenue growth, and, as discussed below, loans on lower-priced vehicles have higher charge-off experience than loans on higher-priced vehicles. As a result of the negative impact on revenue growth and the higher charge-off experience, during the fourth quarter of fiscal 2004 the Company decided to substantially reduce its purchase and sale of lower-priced vehicles and began purchasing and selling slightly higher-priced vehicles.
    Revenue growth slowed to 13.8% in fiscal 2004 as compared to 21.1% in fiscal 2003 principally as a result of (i) the lower same store revenue growth discussed above, (ii) fewer new lot openings in fiscal 2004 (seven new lots opened, one satellite lot closed) as compared to


fiscal 2003 (nine new lots opened), and (iii) the timing of new lot openings in fiscal 2004 as compared to fiscal 2003 (lot openings in fiscal 2004 occurred later in the year as compared to fiscal 2003). Presently, the Company plans to open eight new stores in fiscal 2005.
    Cost of sales as a percentage of sales decreased to 52.3% in fiscal 2004 as compared to 53.1% in fiscal 2003. The decrease was principally the result of (i) selling a higher percentage of lower-priced vehicles during the first nine months of fiscal 2004 (lower-priced vehicles have higher gross margin percentages than higher-priced vehicles), (ii) the Company's decision in late December 2003 to raise prices by about $200, or 3%, on most of the vehicles it sells, and (iii) encouraging store managers to more closely adhere to the Company's pricing matrix and not to use their discretionary authority to discount the sales price of vehicles.
    Selling, general and administrative expense as a percentage of sales decreased to 18.1% in fiscal 2004 as compared to 18.9% in fiscal 2003. The decrease was principally the result of (i) lower compensation expense at its Irving, Texas office in connection with the relocation of the Company's principal headquarters from Irving, Texas to Bentonville, Arkansas during fiscal 2003, and (ii) lower compensation expense in connection with a change in the senior management bonus program, partially offset by higher insurance and advertising costs.
    Provision for credit losses as a percentage of sales increased to 21.3% in fiscal 2004 as compared to 18.5% in fiscal 2003. The increase was primarily the result of higher charge-offs as a percentage of sales and an increase of the Company's allowance for credit losses as a percentage of finance receivable principal balances. As discussed above, the Company believes the increase in charge-offs was partially attributable to a decision at the beginning of fiscal 2004 to sell a higher percentage of lower-priced vehicles. Lower-priced vehicles have higher margins on a percentage basis and are more affordable to the Company's customers. However, historical data indicates that loans on lower-priced vehicles have higher charge-off experience than loans on higher-priced vehicles. As a result of the negative impact on revenue growth (as discussed above) and higher than normal charge-off experience, during the fourth quarter of fiscal 2004, the Company decided to substantially reduce its purchase and sale of lower-priced vehicles and began purchasing and selling slightly higher-priced vehicles.
    In February 2004 the Company formally adopted additional delinquency standards for its larger stores. The additional delinquency standards prescribe the percentage of accounts at larger stores that can be 21-30 days past due, 31-60 days past due and over 60 days past due. Previously, the Company only had delinquency standards for accounts one and two weeks past due and three or more weeks past due. As a result of the tightening of its delinquency standards, at April 30, 2004 the percentage of accounts over 30 days past due had been reduced to 3.0%, from 3.9% at April 30, 2003. The Company believes that in the long run the adoption of the additional delinquency standards will assist the Company in reducing charge-offs, as well as maintaining the percentage of accounts over 30 days past due at historically lower levels. With the additional delinquency standards, store managers and collection personnel are motivated (monthly store team bonuses are tied to meeting delinquency and repossession standards) to address severely past due accounts on a more timely basis, which management believes will result in more accounts being "saved", rather than charged-off.
    As a result of the higher charge-offs discussed above, the Company determined it was necessary to increase its overall allowance for credit losses. During fiscal 2004, the Company increased its allowance for credit losses by 120 basis points, from 18.25% of finance receivable principal balances at April 30, 2003, to 19.45% of finance receivable principal balances at April 30, 2004.
    Interest expense as a percentage of sales decreased to .7% in fiscal 2004 as compared to 1.2% in fiscal 2003. The decrease was principally the result of (i) a decrease in the rate charged on the Company's revolving credit facility (the rate was reduced by 50 basis points in November 2003), and (ii) a lower level of borrowings relative to the sales volume of the Company.
2003 Compared to 2002
    Revenues increased $27.0 million, or 21.1%, in fiscal 2003 as compared to fiscal 2002 principally as a result of (i) revenue growth from stores that operated a full twelve months in both periods ($15.8 million, or 15.5%), (ii) revenue growth from stores opened during fiscal 2002 or stores that added a satellite location during fiscal 20022003 or fiscal 20012002 ($5.06.8 million), and (iii) revenues from stores opened during fiscal 20022003 ($4.14.8 million). Pretax, partially offset by a decrease in other interest income decreased by $10.7
million, or 82.9%, principally($.4 million).
    Interest income as a percentage of sales decreased 1.0% to 6.8% in fiscal 2003 from 7.8% in fiscal 2002. The decrease was principally the result of a decrease in the maximum interest rate that can be charged on Arkansas originated loans. Interest charged on Arkansas originated loans is limited to the federal primary credit rate plus 5.0%. As of April 30, 2003, approximately 69% of the Company's finance receivables were originated in Arkansas.
    Cost of sales as a percentage of sales was 53.1% in both fiscal 2003 and fiscal 2002.


    Selling, general and administrative expense as a percentage of sales increased to 18.9% in fiscal 2003 as compared to 18.8% in fiscal 2002. The increase was principally the result of (i) changing the staffing policy at the store level in the middle of fiscal 2002 including (i) a $7.3
million non-cash stock optionsuch that more personnel are employed at the same number of active customer accounts (store staffing levels are based compensation charge, a $2.7 million
restructuring chargeupon the number of active customer accounts), (ii) creating several new positions at the corporate office in the middle of fiscal 2002 to assist in managing the Company's growing business, and a $3.9 million write-down of investments and equipment
at Corporate, with no comparable charge or write-down in fiscal 2001,(iii) higher insurance costs, partially offset by a reduction in compensation and office expenses at its Irving, Texas office in connection with the relocation of the Company's principal headquarters from Irving, Texas to Bentonville, Arkansas during fiscal 2003.
    Provision for credit losses as a percentage of sales decreased to 18.5% in fiscal 2003 as compared to 19.5% in fiscal 2002. The decrease was principally the result of (i) increased staffing at the store and corporate office levels, and (ii) higher pretax earnings at Car-Mart ($3.0 million).improvements in the Company's underwriting and collection practices.
    Interest expense as a percentage of sales decreased to 1.2% in fiscal 2003 as compared to 2.5% in fiscal 2002. The decrease was principally the result of (i) a decrease in the prime interest rate (interest charged on the Company's revolving credit facility fluctuates with the prime interest rate), and (ii) a lower level of borrowings relative to the sales volume of the Company.
    During fiscal 2002 the Company recorded a $7.3 million non-cash charge related to stock option based compensation. The charge pertains to the Company's 1997 stock option plan which contained a "cashless" exercise feature. Due to such cashless exercise feature, options granted under the plan were characterized as "variable" options under generally accepted accounting principles asprinciples. Under variable options. This resulted in
compensation charges to reflectoption accounting, changes in the market value of the Company's common stock.stock generally result in charges or credits to stock-based compensation with an offsetting entry to additional paid-in capital. In order to avoid future stock option based compensation charges or credits, effective May 1, 2002 the Company rescinded the cashless exercise provision of its 1997 Plan.
    Also during fiscal 2002, the Company recorded a $2.7 million restructuring charge (severance and office closing costs) in connection with the decision to relocate its corporate headquarters from Irving, Texas to Bentonville, Arkansas andArkansas. Further, during fiscal 2002, the Company wrote-down the carrying value of two emerging technology/Internet investments and certain equipment by $3.9 million that were deemed to be impaired. 2001 VS. 2000

     Revenues increased $15.8 million, or 17.4%, in fiscal 2001 versus fiscal
2000 principally asThe emerging technology/Internet investments were made a result of (i) revenue growth from stores that operated a
full 12 months in both periods ($7.5 million, or 12.7%), (ii) revenue growth
from stores opened during fiscal 2000 or stores that added a satellite location
during fiscal 2001 or fiscal 2000 ($5.1 million), and (iii) revenues from stores
opened during fiscal 2001 ($3.7 million). Pretax income decreased by $8.4
million, or 39.6%, principally as a result of (i) fiscal 2000 including a $10.7
million gain on the sale of Casino Magic Neuquen with no similar gain in fiscal
2001, partially offset by (ii) higher pretax earnings at Car-Mart ($2.8
million).



                                       11


                                    CAR-MART
                     (INCOME STATEMENT DOLLARS IN THOUSANDS)



                                                                             % Change
                                                                      ----------------------
                                                                        2002          2001                As a % of Sales
                                        Years Ended April 30,            vs            vs        ----------------------------------
                                    2002        2001        2000        2001          2000         2002         2001         2000
                                  --------    --------    --------    --------      --------     --------     --------     --------

Revenues:
  Sales                           $118,642    $ 97,848    $ 82,916        21.3%         18.0%       100.0%       100.0%       100.0%
  Interest income                    8,775       7,858       6,466        11.7          21.5          7.4          8.0          7.8
                                  --------    --------    --------                               --------     --------     --------
      Total                        127,417     105,706      89,382        20.5          18.3        107.4        108.0        107.8
                                  --------    --------    --------                               --------     --------     --------

Costs and expenses:
  Cost of sales                     62,965      53,412      45,383        17.9          17.7         53.1         54.6         54.7
  Selling, gen and admin            19,354      14,950      12,960        29.5          15.4         16.3         15.3         15.6
  Provision for credit loss         23,036      17,215      14,104        33.8          22.1         19.4         17.6         17.0
  Interest expense                   2,564       3,613       3,239       (29.1)         11.5          2.2          3.7          3.9
  Depreciation and amort               162         141         134        14.9           5.2           .1           .1           .2
                                  --------    --------    --------                               --------     --------     --------
      Total                        108,081      89,331      75,820        21.0          17.8         91.1         91.3         91.4
                                  --------    --------    --------                               --------     --------     --------

      Pretax income               $ 19,336    $ 16,375    $ 13,562        18.1          20.7         16.3         16.7         16.4
                                  ========    ========    ========                               ========     ========     ========


Operating Data:
  Retail units sold                 18,658      15,659      13,852        19.2%         13.0%
  Average stores in operation         52.5        44.6        37.9        17.7%         17.6%
  Average units sold per store         355         351         365         1.2%         (3.9)%
  Average retail sales price      $  5,898    $  5,855    $  5,599          .7%          4.6%
  Same store revenue growth           14.1%       12.7%       15.4%


2002 VS. 2001

     Revenues increased $21.7 million, or 20.5%, in fiscal 2002 versus fiscal
2001 principally as a result of (i) revenue growth from stores that operated a
full 12 months in both periods ($12.5 million, or 14.1%), (ii) revenue growth
from stores opened during fiscal 2001 or stores that added a satellite location
during fiscal 2002 or fiscal 2001 ($5.0 million), and (iii) revenues from stores
opened during fiscal 2002 ($4.1 million).

     Cost of sales as a percentage of sales decreased 1.5%few years prior to 53.1% in fiscal
2002 from 54.6% in fiscal 2001. The decrease was principally the result of the Company's decision in October 2001 to raise vehicle prices, thereby improving gross margins. The
Company made the decision to raise prices after making significant improvements
in the price it pays when purchasing vehicles. During fiscal 2002 the Company
created and filled two Regional Purchasing Director positions. These individuals
used the Company's purchasing database to standardize the price paid for similar
vehicles, and have been actively involved with each buyer to improve their
vehicle purchases.

     Selling, general and administrative expense as a percentage of sales
increased 1.0% to 16.3% in fiscal 2002 from 15.3% in fiscal 2001. The increase
was principally the result of (i) creating several new positions at the general
office level to assist in managing the Company's business, and (ii) higher
personnel costs at the store level.

     Provision for credit loss as a percentage of sales increased 1.8%, to 19.4%
in fiscal 2002 from 17.6% in fiscal 2001. The Company believes the increase was
principally the result of (i) a general slowdown in the economy during fiscal
2002 as compared to fiscal 2001, and (ii) a failure to timely add sufficient
staff to enable the general office to adequately address the more difficult
collection environment during the first nine months of fiscal 2002. In response
to the need for additional general office staff, in mid-fiscal 2002 six new
positions were created and filled at the general office (Regional Accounts
Directors, Regional Purchasing Directors and Regional Compliance Directors) to
assist in managing the Company's growing business.

     Interest expense as a percentage of sales decreased 1.5%, to 2.2% in fiscal
2002 from 3.7% in fiscal 2001. The decrease was principally the result of (i) a
decrease in the prime interest rate (ie. interest chargedfocus exclusively on the Company's
revolving credit facility fluctuates with the prime interest rate),business of Car-Mart.
Liquidity and (ii) a
lower level of borrowings relative to the sales volume of the Company.

2001 VS. 2000

     Revenues increased $16.3 million, or 18.3%, in fiscal 2001 versus fiscal
2000 principally as a result of (i) revenue growth from stores that operated a
full 12 months in both periods ($7.5 million, or 12.7%), (ii) revenue growth
from stores opened during fiscal



                                       12


2001 or stores that added a satellite location during fiscal 2001 or fiscal 2000
($5.1 million), and (iii) revenues from stores opened during fiscal 2001 ($3.7
million).

     Cost of sales as a percentage of sales was virtually unchanged between
fiscal 2001 (54.6%) and fiscal 2000 (54.7%).

     Selling, general and administrative expense as a percentage of sales
decreased .3% to 15.3% in fiscal 2001 from 15.6% in fiscal 2000. The decrease
was principally the result of (i) lower personnel costs as a percentage of sales
in fiscal 2001 as compared to fiscal 2000, as sales growth at mature stores
outpaced growth in payroll costs at those stores, and (ii) lower rent as a
percentage of sales in fiscal 2001 as compared to fiscal 2000, as sales at
existing stores grew while rent at those stores is fixed.

     Provision for credit loss as a percentage of sales increased .6%, to 17.6%
in fiscal 2001 from 17.0% in fiscal 2000. The Company cannot identify with
certainty any specific reason for the increase. The increase may have been
caused by a slightly more difficult economic environment, or a slight shift in
emphasis by store managers towards sales growth and away from credit quality and
collections.

     Interest expense as a percentage of sales decreased .2%, to 3.7% in fiscal
2001 from 3.9% in fiscal 2000. The decrease was principally the result of (i) a
decrease in the prime interest rate (ie. interest charged on the Company's
revolving credit facility fluctuates with the prime interest rate), and (ii) a
lower level of borrowings relative to the sales volume of the Company.


                                    CORPORATE
                                 (IN THOUSANDS)



                                                                     Years Ended April 30,
                                                             2002            2001            2000
                                                          ----------      ----------      ----------

         Revenues:
             Interest income                              $      838      $    1,524      $    2,290
                                                          ----------      ----------      ----------
                 Total                                           838           1,524           2,290
                                                          ----------      ----------      ----------

         Costs and expenses:
             Selling, general and admin                        2,972           3,784           4,678
             Provision for credit loss                           100
             Interest expense                                    789             878             788
             Depreciation and amort                              122             346             296
             Stock option compensation                         7,329
             Restructuring charge                              2,732
             Write-down of investment/equip                    3,928
                                                          ----------      ----------      ----------
                 Total                                        17,972           5,008           5,762
                                                          ----------      ----------      ----------

         Other income:
             Equity in unconsol. subsidiaries                                                    507
             Gain on sale of CMN                                                              10,738
                                                          ----------      ----------      ----------
                 Total                                                                        11,245
                                                          ----------      ----------      ----------

                 Pretax income (loss)                     $  (17,134)     $   (3,484)     $    7,773
                                                          ==========      ==========      ==========


2002 VS. 2001

     Interest income decreased $.7 million to $.8 million in fiscal 2002 versus
$1.5 million in fiscal 2001. The decrease was principally due to a lower level
of notes receivable outstanding during fiscal 2002 as compared to fiscal 2001.
Selling, general and administrative expense decreased $.8 million to $3.0
million in fiscal 2002 from $3.8 million in fiscal 2001, a decrease of 21.5%.
The decrease was principally the result of lower compensation expense resulting
from reductions in corporate office bonuses and the size of the corporate office
staff. The staff was reduced in anticipation of the planned relocation of the
Company's corporate headquarters from Irving, Texas to Bentonville, Arkansas
where Car-Mart is based. The Company's corporate headquarter relocation was
completed in July 2002.

     During fiscal 2002 the Company recorded a $7.3 million non-cash charge
related to stock option based compensation. The charge pertains to the Company's
1997 stock option plan which contained a "cashless" exercise feature. Due to
such cashless feature, options granted under the plan were characterized under
generally accepted accounting principles as variable options. This resulted in
compensation charges to reflect changes in the market value of the Company's
common stock. In order to avoid future stock option based compensation charges
or credits, effective May 1, 2002 the Company rescinded the cashless exercise
provision of its 1997 Plan. Also during fiscal 2002, the Company recorded a $2.7
million restructuring charge (severance and office closing costs) in connection
with the decision to relocate its corporate headquarters to Bentonville,
Arkansas and wrote-down the carrying value of two emerging technology/Internet
investments and certain equipment by $3.9 million that were deemed to be
impaired.



                                       13


2001 VS. 2000

     Interest income decreased $.8 million to $1.5 million in fiscal 2001 versus
$2.3 million in fiscal 2000. The decrease was principally due to a lower level
of notes receivable outstanding during fiscal 2001 as compared to fiscal 2000.
Selling, general and administrative expense decreased $.9 million to $3.8
million in fiscal 2001 from $4.7 million in fiscal 2000, a decrease of 19.1%.
The decrease was principally the result of lower compensation expense resulting
from lower earnings of the Company. The Company's executive bonus plan was tied
directly to the profitability of the Company, which decreased during fiscal
2001. The decrease in earnings was principally the result of fiscal 2000
including (i) a $10.7 million gain on the sale of Casino Magic Neuquen ("CMN")
with no similar gain in fiscal 2001, and (ii) equity in earnings of
unconsolidated subsidiaries being eliminated in connection with the sale of CMN
in fiscal 2000.


RESULTS OF DISCONTINUED OPERATIONS

     Operating results are presented below for the discontinued operations of
the Company for the fiscal years ended April 30, 2002, 2001 and 2000. These
discontinued operations include the following subsidiaries for the periods
indicated.


                                                                             Number of Months Included
                                       Month           Month              in Discontinued Operations for
                                      Company         Company                the Years Ended April 30,
                                     Acquired         Sold or       -------------------------------------------
            Subsidiary               or Formed       Disposed          2002            2001            2000
            ----------              -----------     -----------     -----------     -----------     -----------

         Smart Choice                     12-99           10-01               6              12               5
         Paaco(1)                          2-98           10-01               6              12              12
         Precision                         2-98            5-02              12              12              12
         Concorde                          6-97            7-02              12              12              12
         Crown El Salvador                 2-99            4-01              --              12              12
         Home Stay                         5-98           12-99              --              --               7


(1)  In connection with the Company's purchase of a 70% interest in Smart Choice
     in December 1999, the Company contributed Paaco into Smart Choice and at
     that point Paaco became a wholly-owned subsidiary of Smart Choice.
     References to Smart Choice typically include Paaco.


                                                                    Years Ended April 30,
                                                             2002            2001            2000
                                                          ----------      ----------      ----------


         Revenues                                         $  104,069      $  236,837      $  147,996
         Operating expenses                                  107,474         238,881         143,834
         Write-down of Smart Choice assets                    39,294
         Loss in excess of the Company's basis               (19,349)
                                                          ----------      ----------      ----------

                 Pretax income (loss)                     $  (23,350)     $   (2,044)     $    4,162
                                                          ==========      ==========      ==========


2002 VS. 2001

     Revenues decreased $132.8 million, or 56.1%, in fiscal 2002 compared with
fiscal 2001 principally as a result of only including six months of Smart Choice
and Paaco operating results in fiscal 2002 compared to twelve months in fiscal
2001. Effective October 31, 2001 the Company's investment in Smart Choice/Paaco
was reduced to zero and thereafter the Company ceased to include Smart
Choice/Paaco's operating results in its discontinued operations.

     Pretax loss for the Company's discontinued operations was $23.4 million for
fiscal 2002 compared with a $2.0 million pretax loss for fiscal 2001. The $21.4
million increase in loss was principally the result of a $39.3 million
write-down of Smart Choice assets, partially offset by a $19.3 million credit
which represents losses at Smart Choice in excess of the Company's basis in its
Smart Choice/Paaco investment.

     Once the Company's investment in Smart Choice was reduced to zero, no
additional losses were recorded by the Company to reflect losses at Smart
Choice. The $39.3 million write-down pertains to certain Smart Choice assets
(finance receivables, property and equipment, deferred tax assets and goodwill)
that were deemed to be impaired in connection with the foreclosure by Finova
(Smart Choice's senior lender) of certain Florida Finance Group (Smart Choice's
principal Florida-based operating subsidiary) assets and the winding-down of the
Florida Finance Group's operations (see Note R to the accompanying consolidated
financial statements). In addition, the Florida Finance Group's provision for
credit loss and selling, general and administrative expenses did not decrease
proportionately with its decrease in revenues.



                                       14


2001 VS. 2000

     Revenues increased $88.8 million, or 60.0%, in fiscal 2001 compared with
fiscal 2000 principally as a result of (i) including Smart Choice in the
Company's operations for twelve months in fiscal 2001 versus only five months
during fiscal 2000 ($61.0 million), and (ii) growth in Paaco's revenues ($28.3)
stemming largely from the opening of additional stores.

     Pretax loss for the Company's discontinued operations was $2.0 million for
fiscal 2001 compared with $4.2 million pretax income for fiscal 2000, a decrease
of $6.2 million. The decrease was principally the result of lower pretax
earnings at Smart Choice ($8.4 million), partially offset by an increase in
pretax earnings at Paaco ($2.8 million). Smart Choice's $8.4 million decrease
was principally the result of (i) the provision for credit loss increasing to
37.8% of sales in fiscal 2001 from 31.0% in fiscal 2000 ($5.3 million), (ii)
cost of sales increasing to 59.5% of sales in fiscal 2001 from 57.5% in fiscal
2000 ($1.5 million), and (iii) a decrease in the average interest rate charged
on Smart Choice finance receivables. Paaco's $2.8 million increase in pretax
earnings was principally the result of (i) increased revenues and (ii) a lower
provision for credit loss as a percentage of sales (13.4% in fiscal 2001 versus
15.9% in fiscal 2000), which is believed to be attributable to (a) selling a
higher quality vehicle, and (b) providing a greater level of service.


LIQUIDITY AND CAPITAL RESOURCESCapital Resources
    The following table sets forth certain historical information with respect to the Company's statements of cash flows (in thousands):

                                                                                     Years Ended April 30,
                                                                             2002            2001            2000
                                                                          ----------      ----------      ----------

         Operating activities:
             Income (loss) from continuing operations                     $   (1,136)     $    7,362      $   13,277
             Net finance receivables growth                                  (13,110)        (11,369)         (9,433)
             Stock option based compensation                                   7,329
             Gain on sale of CMN                                                                             (10,738)
             Other                                                             7,658          (3,050)         (2,299)
                                                                          ----------      ----------      ----------
                 Total                                                           741          (7,057)         (9,193)
                                                                          ----------      ----------      ----------

         Investing activities:
             Purchase of property and equipment                               (1,346)           (688)           (460)
             Note collections from discontinued subsidiaries                   1,427           3,223
             Other                                                            (1,610)          1,289           7,688
                                                                          ----------      ----------      ----------
                 Total                                                        (1,529)          3,824           7,228
                                                                          ----------      ----------      ----------

         Financing activities:
             Proceeds from revolving credit facility, net                      2,524           2,265           2,326
             Purchase of common stock                                         (1,013)         (5,125)         (5,844)
             Other                                                              (211)             61
                                                                          ----------      ----------      ----------
                 Total                                                         1,300          (2,799)         (3,518)
                                                                          ----------      ----------      ----------

                 Cash provided by (used in) continuing operations         $      512      $   (6,032)     $   (5,483)
                                                                          ==========      ==========      ==========
 
 
Years Ended April 30,

 
 
 
2004
 
2003
 
2002
 
Operating activities:
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
 
$
15,639
 
$
13,569
 
$
(1,136
)
 
Finance receivables, net
 
 
(12,325
)
 
(16,279
)
 
(13,110
)
 
Stock option based compensation
 
 
 
 
 
 
 
 
7,329
 
 
Other
 
 
676
 
 
10,573
 
 
7,658
 
 
 
 
 
 
 
 
Total
 
 
3,990
 
 
7,863
 
 
741
 
 
 
 
 
 
Investing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchase of property and equipment and other
 
 
(1,399
)
 
(2,168
)
 
(1,394
)
 
Note collections from discontinued operations
 
 
 
 
 
2,079
 
 
1,427
 
 
Sale of discontinued operations
 
 
 
 
 
6,795
 
 
 
 
 
Purchase of minority interest
 
 
 
 
 
 
 
 
(1,562
)
 
 
 
 
 
 
 
Total
 
 
(1,399
)
 
6,706
 
 
(1,529
)
 
 
 
 
 
Financing activities:
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facility, net
 
 
(3,434
)
 
(6,323
)
 
2,524
 
 
Repayment of other debt
 
 
 
 
 
(7,500
)
 
(325
)
 
Purchase of common stock
 
 
(1,646
)
 
(2,689
)
 
(1,013
)
 
Exercise of stock options and warrants
 
 
2,584
 
 
1,497
 
 
114
 
 
 
 
 
 
 
 
Total
 
 
(2,496
)
 
(15,015
)
 
1,300
 
 
 
 
 
 
 
 

Cash provided by (used in) continuing operations

 

$

95

 

$

(446

)

$

512

 
 
 
 
 
 

    The Company generates cash flow from income from continuing operations. Most or all of this cash is used to fund finance receivables growth. To the extent finance receivables growth exceeds income from continuing operations, generally the Company increases its borrowings under its revolving credit facility. For the most part, the Company's growth is self-funded.
    At April 30, 20022004 the Company had (i) $1.2$1.1 million of cash on hand and had
an additional $4.7$17.0 million of availability onunder its $37.0$39.5 million revolving credit facility, (ii) a $7.6 million federal income tax refund receivable stemming
principally from the Company's loss on Smart Choice, and (iii) $1.5 million of
other receivables. In May 2002 the Company sold its 50% interest in Precision
for $3.8 million in cash and in July 2002 the Company sold its 80% interest in
Concorde for $3.0 million in cash. In addition, at closing, Concorde repaid all
of its $2.1 million in outstanding borrowings from the Company. The majority of
this cash was used to reduce debt.facility.
    On a short-term basis, the Company's principal sources of liquidity include (i) income from continuing operations (ii)and borrowings from its revolving credit facility, (iii) the sale of discontinued subsidiaries, (iv) a federal income tax
refund receivable, and (v) other receivables.facility. On a longer-term basis, the Company expects its principal sources of liquidity to include (i)consist of income from continuing operations and (ii) borrowings from a revolving credit facility. Further, while the Company has no present plans to issue debt or equity securities, the Company believes, if necessary, it could raise additional capital through the issuance of such securities.
    The Company expects to use cash to (i) grow its finance receivables portfolio in direct proportion withby approximately the expected growth insame percentage that its sales levels,grow, (ii) purchase property and equipment of approximately $2 million in the next twelve months in connection with opening new stores and refurbishing existing stores, and (iii) to the extent excess cash is available, (iii)
reduce debt. Over the last three fiscal yearsIn addition, from time to time the Company used approximately $12
million inmay use cash to purchaserepurchase its common stock. Going forward, the Company does
not expect to purchase its common stock at this level.



                                       15


     The Company expects to fund substantially all of its growth from income
generated from operations. Further, the Company expects its financial leverage
ratio to decline for the next several years, as net income builds equity and
debt either decreases or remains relatively constant.
    The Company's revolving credit facility matures in December 2003.April 2006. The Company expects that it will be able to renew or refinance its revolving credit facility on or before the scheduled maturity date. The Company believes it will have adequate liquidity to satisfy its capital needs for the foreseeable future.


CRITICAL ACCOUNTING POLICIES
Contractual Payment Obligations
    The following is a summary of the Company's contractual obligations as of April 30, 2004 (in thousands):
 
 
Payments Due by Period
Contractual Obligations
 
Total
 
Less Than 1 Year
 
1-3 Years
 
3-5 Years
 
More Than 5 Years
Debt
 
$
22,534
 
$
-
 
$
22,534
 
$
-
 
$
-
Operating leases
 
 
2,310
 
 
1,407
 
 
768
 
 
135
 
 
-
 
 
 
 
 
 
 
Total
 
$
24,844
 
$
1,407
 
$
23,302
 
$
135
 
$
-
 
 
 
 
 
 
Impact of Inflation
    Inflation has not historically been a significant factor impacting the Company's results.
Off-Balance Sheet Arrangements
    The Company has entered into operating leases for approximately 80% of its store and office facilities. Generally these leases are for periods of three to five years and usually contain multiple renewal options. The Company expects to continue to lease the majority of its store and office facilities under arrangements substantially consistent with the past. Other than its operating leases, the Company is not party to any off-balance sheet arrangements 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 is material to investors.
Critical Accounting Policies
    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 reportedreporting period. Actual results could differ from the Company's estimates. The Company believes the most significant estimate made in the preparation of the accompanying consolidated financial statements relates to the determination of its allowance for credit losses. Belowlosses, which is a discussion of
thediscussed below. The Company's accounting policy concerning such allowance. Other accounting policies are discloseddiscussed in Note B in the accompanying consolidated financial statements.


    The Company maintains an allowance for credit losses at a level it considers sufficient to cover anticipated losses in the collection of its finance receivables. The allowance for credit losses is determined based primarily upon a
review of (i) historical andcredit loss experience, with consideration given to recent credit lossesloss trends and (ii)changes in loan characteristics (i.e., average amount financed and term), delinquency levels, collateral values, economic conditions, underwriting and collection practices, and management's expectations of future credit losses. Judgment is necessary to determine the finance
receivable portfolio,proper weight to place on certain quantitative and takes into consideration (iii)non-quantitative information such as changes in underwriting and collection practices, economic conditions and trends, and collateral values. The allowance forcredit loss trends. Further, there is no certainty that future credit losses is periodically
reviewed by management with any changes reflected in current operations. Itwill resemble historical credit losses. Consequently, it is at least reasonably possible that actual credit losses maycould be materially different from the recorded allowance for credit losses.


SEASONALITYlosses if future conditions are materially different from the future conditions assumed by the Company, or if management improperly weights current credit loss information.
Seasonality
    The Company's automobile sales and finance business is seasonal in nature. In such business, theThe Company's third fiscal quarter (November through January) is historically the slowest period for car and truck sales. Many of the Company's operating expenses such as administrative personnel, rent and insurance are fixed and cannot be reduced during periods of decreased sales. Conversely, the Company's fourth fiscal quarter (February through April) is historically the busiest time for car and truck sales as many of the Company's customers use income tax refunds as a down payment on the purchase of a vehicle. ITEMFurther, the Company experiences seasonal fluctuations in its finance receivable credit losses. As a percentage of sales, the Company's first and fourth fiscal quarters tend to have lower credit losses (averaging 17.8% over the last eight years), while its second and third fiscal quarters tend to have higher credit losses (averaging 19.7% over the last eight years).
Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKQuantitative 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 exposure to changes in the federal primary credit rate and the prime interest rate of its lender. The Company does not use financial instruments for trading purposes or to manage interest rate risk. 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 bearinginterest-bearing notes payable. DecreasesAs described below, a decrease in market interest rates could eventuallywould generally have an adverse effect on the Company's profitability.

     Financial
    The Company's financial instruments consist of fixed rate finance receivables and fixed and variable rate notes payable. The Company's finance receivables generally bear interest at fixed rates ranging from 6% to 19%. These finance receivables generally have remaining maturities from one to 3036 months. A majority of theThe Company's borrowings contain variable interest rates that fluctuate with market interest rates (ie.(i.e., the rate charged on the Company's revolving credit facility)facility fluctuates with the prime interest rate of its lender). However, interest rates charged on finance receivables originated in the State of Arkansas are limited to the federal discountprimary credit rate (1.25%(2.0% at April 30, 2002)2004) plus 5.0%. Typically, the Company charges interest on its Arkansas loans at or near the maximum rate allowed by law. Thus, while the interest rates charged on the Company's loans do not fluctuate once established, new loans originated in Arkansas are set at a spread above the federal discountprimary credit rate which fluctuates.does fluctuate. At April 30, 20022004, approximately 72%66% of the Company's finance receivables were originated in Arkansas. Assuming that this percentage is held constant for future loan originations, the long-term effect of decreases in the federal discountprimary credit rate couldwould generally have a negative effect on the profitability of the Company. This is the case because the amount of interest income lost on Arkansas originated loans would likely exceed the amount of interest expense saved on the Company's variable rate borrowings.borrowings (assuming the prime interest rate of its lender decreases by the same percentage as the decrease in the federal primary credit rate). The initial impact on profitability resulting from a decrease in the federal discountprimary credit rate isand the rate charged on its variable interest rate borrowings would be positive, as the immediate interest expense savings outweighswould outweigh the loss of interest income on new loan originations. However, as the amount of new loans originated at the lower interest rate exceedsincreases to an amount in excess of the amount of variable interest rate borrowings, the effect on profitability becomeswould become negative.



                                       16
    The table below illustrates the estimated impact whichthat hypothetical changes in the federal discountprimary credit rate couldwould have on the Company's continuing pretax earnings. The calculations assume (i) the increase or decrease in the federal discountprimary credit rate remains in effect for two years, (ii) the increase or decrease in the federal discountprimary credit rate results in a like increase or decrease in the rate charged on the Company's variable rate borrowings, (iii) the principal amount of finance receivables ($92.1128.7 million) and variable interest rate borrowings ($32.3


($22.5 million), and the percentage of Arkansas originated finance receivables (72%(66%), remain constant during the periods, and (iv) the Company's historical collection and charge-off experience continues throughout the periods.

                                         Year 1                 Year 2
                                        Increase               Increase
          Increase (Decrease)          (Decrease)             (Decrease)
           in Interest Rates       in Pretax Earnings     in Pretax Earnings
          -------------------      ------------------     ------------------
                                     (in thousands)         (in thousands)

                  +2%                 $    23                $    616
                  +1%                      12                     308
                  -1%                     (12)                   (308)
                  -2%                     (23)                   (616)



ITEM
Increase (Decrease)
in Interest Rates
 
Year 1
Increase (Decrease)
in Pretax Earnings
 
Year 2
Increase (Decrease)
in Pretax Earnings
 
 
 
(in thousands)

 
(in thousands)

 
+2
%
$
407
 
$
1,165
 
+1
%
 
203
 
 
583
 
-1
%
 
(203
)
 
(583
)
-2
%
 
(407
)
 
(1,165
)
    A similar calculation and table was prepared at April 30, 2003. The calculation and table were materially consistent with the information provided above.
Item 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAFinancial Statements and Supplementary Data
    The following financial statements and accountant's report are included in Item 8 of this report:
    Report of Independent CertifiedRegistered Public AccountantsAccounting Firm
    Consolidated Balance Sheets as of April 30, 20022004 and 20012003
    Consolidated Statements of Operations for the fiscal years ended April 30, 2002, 20012004, 2003 and 20002002
    Consolidated Statements of Cash Flows for the fiscal years ended April 30, 2002, 20012004, 2003 and 20002002
    Consolidated Statements of Stockholders' Equity for the fiscal years ended April 30, 2002, 20012004, 2003 and 20002002
    Notes to Consolidated Financial Statements



                                       17


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Report of Independent Registered Public Accounting Firm
Stockholders and Board of Directors
America's Car-Mart, Inc.
    We have audited the accompanying consolidated balance sheets of America's Car-Mart, Inc., as of April 30, 20022004 and 2001,2003, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended April 30, 2002.2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
    We conducted our audits in accordance with auditingthe standards generally
accepted inof the United States of America.Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
    In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of America's Car-Mart, Inc. as of April 30, 20022004 and 2001,2003, and the consolidated results of its operations and its consolidated cash flows for each of the three years in the period ended April 30, 20022004, in conformity with accounting principles generally accepted in the United States of America.
Grant Thornton LLP
Dallas, Texas
June 21, 2002, except the third paragraph of Note A as to which the date is July
17, 2002.




                                       18


CONSOLIDATED BALANCE SHEETS                             AMERICA'S CAR-MART, INC.


8, 2004


                                                                                     April 30, 2002     April 30, 2001
                                                                                     --------------     --------------

Assets:
    Cash and cash equivalents                                                        $    1,229,920     $      718,134
    Income tax receivable                                                                 7,627,362
    Notes and other receivables, net                                                      1,457,013          4,441,391
    Finance receivables, net                                                             75,079,603         61,969,879
    Inventory                                                                             3,540,538          3,013,293
    Prepaid and other assets                                                                251,729            359,395
    Investments                                                                             252,456          3,473,761
    Deferred tax assets, net                                                                119,052          5,401,487
    Property and equipment, net                                                           2,626,711          4,233,443
    Assets of subsidiaries held for sale                                                 35,957,978        218,909,333
                                                                                     --------------     --------------

                                                                                     $  128,142,362     $  302,520,116
                                                                                     ==============     ==============

Liabilities and stockholders' equity:
    Accounts payable                                                                 $    1,984,918     $    1,942,261
    Accrued liabilities                                                                   6,282,639          3,565,981
    Income taxes payable                                                                                     4,987,609
    Revolving credit facilities                                                          32,291,957         29,767,688
    Other notes payable                                                                   7,500,000         11,816,000
    Liabilities of subsidiaries held for sale                                            27,269,661        190,655,389
                                                                                     --------------     --------------
          Total liabilities                                                              75,329,175        242,734,928
                                                                                     --------------     --------------

    Minority interests                                                                                         852,935

    Commitments and contingencies

    Stockholders' 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;
            6,944,325 issued and outstanding (6,980,367 at April 30, 2001)                   69,444             69,804
       Additional paid-in capital                                                        31,261,985         23,075,677
       Retained earnings                                                                 21,481,758         35,786,772
                                                                                     --------------     --------------
           Total stockholders' equity                                                    52,813,187         58,932,253
                                                                                     --------------     --------------

                                                                                     $  128,142,362     $  302,520,116
                                                                                     ==============     ==============
Consolidated Balance Sheets
America's Car-Mart, Inc.
 
 
April 30, 2004
 
April 30, 2003
Assets:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
1,128,349
 
$
783,786
 
Income tax receivable
 
 
 
 
 
161,816
 
Other receivables
 
 
509,752
 
 
647,872
 
Finance receivables, net
 
 
103,683,660
 
 
91,358,935
 
Inventory
 
 
5,975,292
 
 
4,056,027
 
Prepaid expenses and other assets
 
 
387,641
 
 
353,014
 
Property and equipment, net
 
 
5,556,757
 
 
4,479,132
 
 
 

 

 

$

117,241,451

 

$

101,840,582
 
 
 

Liabilities and stockholders' equity:

 

 

 

 

 

 
 
Accounts payable
 
$
2,122,927
 
$
2,084,472
 
Accrued liabilities
 
 
5,544,988
 
 
6,664,313
 
Income taxes payable
 
 
845,044
 
 
 
 
Deferred tax liabilities, net
 
 
1,616,896
 
 
1,162,704
 
Revolving credit facility
 
 
22,534,120
 
 
25,968,220
 
 
 
 
 
 
Total liabilities
 
 
32,663,975
 
 
35,879,709
 
 
 
 

Commitments and contingencies

 

 

 

 

 

 
 

Stockholders' 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;
7,757,841 issued and outstanding (7,207,963 at April 30, 2003)
 
 
77,578
 
 
72,080
 
 
Additional paid-in capital
 
 
33,138,765
 
 
30,332,106
 
 
Retained earnings
 
 
51,361,133
 
 
35,556,687
 
 
 
 
 
 
Total stockholders' equity
 
 
84,577,476
 
 
65,960,873
 
 
 

 

 

$

117,241,451

 

$

101,840,582
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.



                                       19


CONSOLIDATED STATEMENTS OF OPERATIONS                   AMERICA'S CAR-MART, INC.




                                                                                       Years Ended April 30,
                                                                            2002                2001                2000
                                                                       --------------      --------------      --------------

Revenues:
    Sales                                                              $  118,641,750      $   97,847,926      $   82,916,479
    Interest and other income                                               9,282,085           8,905,729           8,054,071
                                                                       --------------      --------------      --------------
                                                                          127,923,835         106,753,655          90,970,550
                                                                       --------------      --------------      --------------

Costs and expenses:
    Cost
Consolidated Statements of sales                                                          62,965,215          53,412,400          45,382,809
    Selling, general and administrative                                    22,326,241          18,733,825          17,638,009
    Provision for credit losses                                            23,135,926          17,214,750          14,104,163
    Interest expense                                                        3,022,156           4,014,781           3,325,027
    Depreciation and amortization                                             283,641             486,648             430,291
    Stock option based compensation                                         7,328,554
    Restructuring charge                                                    2,732,106
    Write-down of investments and equipment                                 3,927,631
                                                                       --------------      --------------      --------------
                                                                          125,721,470          93,862,404          80,880,299
                                                                       --------------      --------------      --------------

Other income:
    Equity in earnings of unconsolidated subsidiaries                                                                 506,775
    Gain on sale of Casino Magic Neuquen                                                                           10,737,832
                                                                       --------------      --------------      --------------
                                                                                                                   11,244,607
                                                                       --------------      --------------      --------------

        Income (loss) from continuing operations
            before taxes and minority interests                             2,202,365          12,891,251          21,334,858

Provision for income taxes                                                  2,789,412           5,216,367           7,972,583
Minority interests                                                            548,330             313,089              85,480
                                                                       --------------      --------------      --------------

        Income (loss) from continuing operations                           (1,135,377)          7,361,795          13,276,795

Discontinued operations:
    Income (loss) from discontinued operations,
      net of taxes and minority interests                                 (13,169,637)         (1,403,693)          1,436,356
    Gain on sale of discontinued operation,
      net of taxes                                                                                  4,726             123,268
                                                                       --------------      --------------      --------------

        Income (loss) from discontinued operations                        (13,169,637)         (1,398,967)          1,559,624
                                                                       --------------      --------------      --------------

        Net income (loss)                                              $  (14,305,014)     $    5,962,828      $   14,836,419
                                                                       ==============      ==============      ==============

Basic earnings (loss) per share:
        Continuing operations                                          $         (.17)     $          .96      $         1.44
        Discontinued operations                                                 (1.94)               (.19)                .17
                                                                       --------------      --------------      --------------
            Total                                                      $        (2.11)     $          .77      $         1.61
                                                                       ==============      ==============      ==============

Diluted earnings (loss) per share:
        Continuing operations                                          $         (.17)     $          .92      $         1.38
        Discontinued operations                                                 (1.94)               (.18)                .16
                                                                       --------------      --------------      --------------
            Total                                                      $        (2.11)     $          .74      $         1.54
                                                                       ==============      ==============      ==============

Weighted average number of shares outstanding:
        Basic                                                               6,795,461           7,697,239           9,216,184
        Diluted                                                             6,795,461           8,015,834           9,621,328
Operations
America's Car-Mart, Inc.
 
 
Years Ended April 30,

 
 
 
2004
 
2003
 
2002
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Sales
 
$
163,589,076
 
$
145,014,142
 
$
118,641,750
 
 
Interest and other income
 
 
12,594,611
 
 
9,870,805
 
 
9,282,085
 
 
 
 
 
 
 
 
 
176,183,687
 
 
154,884,947
 
 
127,923,835
 
 
 
 
 
 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 
 
Cost of sales
 
 
85,510,497
 
 
77,073,294
 
 
62,965,215
 
 
Selling, general and administrative
 
 
29,670,849
 
 
27,417,225
 
 
22,326,241
 
 
Provision for credit losses
 
 
34,766,496
 
 
26,896,608
 
 
23,135,926
 
 
Interest expense
 
 
1,113,840
 
 
1,685,774
 
 
3,022,156
 
 
Depreciation and amortization
 
 
321,053
 
 
299,203
 
 
283,641
 
 
Stock option based compensation
 
 
 
 
 
 
 
 
7,328,554
 
 
Restructuring charge
 
 
 
 
 
 
 
 
2,732,106
 
 
Write-down of investments and equipment
 
 
 
 
 
 
 
 
3,927,631
 
 
 
 
 
 
 
 
 
151,382,735
 
 
133,372,104
 
 
125,721,470
 
 
 
 
 
 
 
 

Income from continuing operations before taxes and minority interests

 

 

24,800,952

 

 

21,512,843

 

 

2,202,365

 

Provision for income taxes

 

 

9,161,506

 

 

7,944,100

 

 

2,789,412

 
Minority interests
 
 
 
 
 
 
 
 
548,330
 
 
 
 
 
 
 
 

Income (loss) from continuing operations

 

 

15,639,446

 

 

13,568,743

 

 

(1,135,377

)

Discontinued operations:

 

 

 

 

 

 

 

 

 

 
 
Income (loss) from discontinued operations, net of taxes and minority interests
 
 
165,000
 
 
375,318
 
 
(13,169,637
)
 
Gain on sale of discontinued operations, net of taxes
 
 
 
 
 
130,868
 
 
 
 
 
 
 
 
 
 
 

Income (loss) from discontinued operations

 

 

165,000

 

 

506,186

 

 

(13,169,637

)
 
 
 
 
 
 
 

Net income (loss)

 

$

15,804,446

 

$

14,074,929

 

$

(14,305,014

)
 
 
 
 
 

Basic earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 
 
Continuing operations
 
$
2.07
 
$
1.93
 
$
(.17
)
 
Discontinued operations
 
 
.02
 
 
.08
 
 
(1.94
)
 
 
 
 
 
 
 
Total
 
$
2.09
 
$
2.01
 
$
(2.11
)
 
 
 
 
 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 
 
Continuing operations
 
$
1.96
 
$
1.73
 
$
(.17
)
 
Discontinued operations
 
 
.02
 
 
.07
 
 
(1.94
)
 
 
 
 
 
 
 
Total
 
$
1.98
 
$
1.80
 
$
(2.11
)
 
 
 
 
 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

 
 
Basic
 
 
7,545,964
 
 
7,015,992
 
 
6,795,461
 
 
Diluted
 
 
7,963,426
 
 
7,828,744
 
 
6,795,461
 
The accompanying notes are an integral part of these consolidated financial statements.



                                       20


CONSOLIDATED STATEMENTS OF CASH FLOWS                   AMERICA'S CAR-MART, INC.



                                                                                       Years Ended April 30,
                                                                       ------------------------------------------------------
                                                                            2002                2001                2000
                                                                       --------------      --------------      --------------

Operating activities:
  Net income (loss)                                                    $  (14,305,014)     $    5,962,828      $   14,836,419
  Add: (Income) loss from discontinued operations                          13,169,637           1,398,967          (1,559,624)
                                                                       --------------      --------------      --------------
      Income (loss) from continuing operations                             (1,135,377)          7,361,795          13,276,795

Adjustments to reconcile income (loss) from continuing
operations to net cash provided by (used in)
      operating activities:
      Depreciation and amortization                                           283,641             486,648             430,291
      Deferred income taxes                                                 5,282,435          (1,880,146)         (2,309,765)
      Provision for credit losses                                          23,135,926          17,214,750          14,104,163
      Stock option based compensation                                       7,328,554
      Write-down
Consolidated Statements of investments and equipment                               3,927,631
      Minority interests                                                      548,330             313,089              85,480
      Equity in earnings of unconsolidated subsidiaries                                                              (506,775)
      Gain on sale of Casino Magic Neuquen                                                                        (10,737,832)
      Accretion of purchase discount                                                              (29,095)           (473,918)
      Changes in operating assets and liabilities:
          Receivables                                                      (1,807,511)            325,028          (1,527,032)
          Finance receivable originations                                (108,035,124)        (88,872,082)        (74,285,237)
          Finance receivable collections                                   66,504,977          55,707,950          47,502,589
          Inventory acquired in repossession                                5,384,497           4,609,140           3,719,226
          Inventory                                                          (527,245)           (670,274)           (170,173)
          Prepaids and other assets                                           197,346             151,436          (1,371,171)
          Accounts payable and accrued liabilities                          4,401,486              39,525           1,241,995
          Income taxes payable                                             (4,748,553)         (1,814,650)          1,828,736
                                                                       --------------      --------------      --------------
              Net cash provided by (used in) operating activities             741,013          (7,056,886)         (9,192,628)
                                                                       --------------      --------------      --------------

Investing activities:
  Purchase of property and equipment                                       (1,345,733)           (688,130)           (460,387)
  Sale of equipment                                                            29,024
  Collections from (advances to) subsidiaries held for sale                 1,426,697           3,223,393          (2,013,599)
  Purchase of subsidiary minority interest                                 (1,562,027)
  Purchase of discontinued subsidiary                                                                              (5,338,741)
  Sale of subsidiaries                                                                          2,259,468
  Purchase of investments                                                     (77,206)           (970,615)         (2,028,034)
  Sale of investments and other                                                                                    17,068,812
                                                                       --------------      --------------      --------------
              Net cash provided by (used in) investing activities          (1,529,245)          3,824,116           7,228,051
                                                                       --------------      --------------      --------------

Financing activities:
  Sale of common stock                                                        113,498              60,937
  Purchase of common stock                                                 (1,012,749)         (5,124,894)         (5,844,111)
  Proceeds from revolving credit facility, net                              2,524,269           2,265,074           2,326,020
  Repayments of other debt                                                   (325,000)
                                                                       --------------      --------------      --------------
              Net cash provided by (used in) financing activities           1,300,018          (2,798,883)         (3,518,091)
                                                                       --------------      --------------      --------------

Cash provided by (used in) continuing operations                              511,786          (6,031,653)         (5,482,668)
Cash provided by (used in) discontinued operations                          1,045,298          (1,618,315)          2,415,443
                                                                       --------------      --------------      --------------

Increase (decrease) in cash and cash equivalents                            1,557,084          (7,649,968)         (3,067,225)
Cash and cash equivalents at: Beginning of period                           2,193,342           9,843,310          12,910,535
                                                                       --------------      --------------      --------------

                              End of period                                 3,750,426           2,193,342           9,843,310
Less: Cash and cash equivalents of discontinued operations                 (2,520,506)         (1,475,208)         (3,093,523)
                                                                       --------------      --------------      --------------

      Cash and cash equivalents of continuing operations               $    1,229,920      $      718,134      $    6,749,787
                                                                       ==============      ==============      ==============
Flows
America's Car-Mart, Inc.
 
 
Years Ended April 30,

 
 
 
2004
 
2003
 
2002
 
Operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
15,804,446
 
$
14,074,929
 
$
(14,305,014
)
 
Subtract: Income (loss) from discontinued operations
 
 
165,000
 
 
506,186
 
 
(13,169,637
)
 
 
 
 
 
 
 
Income (loss) from continuing operations
 
 
15,639,446
 
 
13,568,743
 
 
(1,135,377
)
 
Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
321,053
 
 
299,203
 
 
283,641
 
 
 
Deferred income taxes
 
 
454,192
 
 
1,281,756
 
 
5,282,435
 
 
 
Stock option based compensation
 
 
 
 
 
 
 
 
7,328,554
 
 
 
Write-down of investments and equipment
 
 
 
 
 
 
 
 
3,927,631
 
 
 
Minority interests
 
 
 
 
 
 
 
 
548,330
 
 
 
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in finance receivables, net:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finance receivable originations
 
 
(151,379,959
)
 
(131,447,487
)
 
(108,035,124
)
 
 
 
 
Finance receivable collections
 
 
97,366,670
 
 
82,645,614
 
 
66,504,977
 
 
 
 
 
Provision for credit losses
 
 
34,766,496
 
 
26,896,608
 
 
23,035,926
 
 
 
 
 
Inventory acquired in repossession
 
 
6,922,068
 
 
5,625,933
 
 
5,384,497
 
 
 
 
 
 
 
 
 
 
 
Subtotal finance receivables
 
 
(12,324,725
)
 
(16,279,332
)
 
(13,109,724
)
 
 
 

Income tax and other receivables

 

 

299,936

 

 

8,844,959

 

 

(1,707,511

)
 
 
 
Inventory
 
 
(1,919,265
)
 
(515,489
)
 
(527,245
)
 
 
 
Prepaid expenses and other assets
 
 
41,373
 
 
182,250
 
 
197,346
 
 
 
 
Accounts payable and accrued liabilities
 
 
(1,080,870
)
 
481,228
 
 
4,401,486
 
 
 
 
Income taxes payable
 
 
2,559,044
 
 
 
 
 
(4,748,553
)
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
 
3,990,184
 
 
7,863,318
 
 
741,013
 
 
 
 
 
 

Investing activities:

 

 

 

 

 

 

 

 

 

 
 
Purchase of property and equipment and other assets
 
 
(1,398,678
)
 
(2,167,703
)
 
(1,393,915
)
 
Note collections from discontinued operations
 
 
 
 
 
2,078,661
 
 
1,426,697
 
 
Purchase of subsidiary minority interest
 
 
 
 
 
 
 
 
(1,562,027
)
 
Sale of discontinued operations
 
 
 
 
 
6,795,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) investing activities
 
 
(1,398,678
)
 
6,705,958
 
 
(1,529,245
)
 
 
 
 
 

Financing activities:

 

 

 

 

 

 

 

 

 

 
 
Exercise of stock options and warrants
 
 
2,583,517
 
 
1,497,119
 
 
113,498
 
 
Purchase of common stock
 
 
(1,646,360
)
 
(2,688,792
)
 
(1,012,749
)
 
Proceeds from (repayments of) revolving credit facility, net
 
 
(3,434,100
)
 
(6,323,737
)
 
2,524,269
 
 
Repayments of other debt
 
 
 
 
 
(7,500,000
)
 
(325,000
)
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
 
 
(2,496,943
)
 
(15,015,410
)
 
1,300,018
 
 
 
 
 
 

Cash provided by (used in) continuing operations

 

 

94,563

 

 

(446,134

)

 

511,786

 
Cash provided by (used in) discontinued operations
 
 
250,000
 
 
(2,520,506
)
 
1,045,298
 
 
 
 
 
 

Increase (decrease) in cash and cash equivalents

 

 

344,563

 

 

(2,966,640

)

 

1,557,084

 
Cash and cash equivalents at:    Beginning of period
 
 
783,786
 
 
3,750,426
 
 
2,193,342
 
 
 
 
 
 

                                                     End of period

 

 

1,128,349

 

 

783,786

 

 

3,750,426

 
Less: Cash and cash equivalents of discontinued operations
 
 
 
 
 
 
 
 
(2,520,506
)
 
 
 
 
 

          Cash and cash equivalents of continuing operations

 

$

1,128,349

 

$

783,786

 

$

1,229,920

 
 
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.



                                       21


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY         AMERICA'S CAR-MART, INC.




                                                              For the Years Ended April 30, 2002, 2001 and 2000

                                                                                  Additional                           Total
                                                      Common Stock                 Paid-In           Retained
Consolidated Statements of Stockholders' Shares            Amount           Capital           Earnings          Equity
                                             ------------      ------------      ------------      ------------    -------------


Balance at April 30, 1999                      10,096,842      $    100,968      $ 37,970,391      $ 14,987,525     $ 53,058,884

    Stock warrants exercised                        2,000                20               (20)                                --
    Purchase agreement amendment                 (670,311)           (6,703)       (3,177,274)                        (3,183,977)
    Purchase of common stock                   (1,180,769)          (11,807)       (5,832,304)                        (5,844,111)
    Net income                                                                                       14,836,419       14,836,419
                                             ------------      ------------      ------------      ------------     ------------

Balance at April 30, 2000                       8,247,762            82,478        28,960,793        29,823,944       58,867,215

    Stock options exercised                        25,000               250            60,687                             60,937
    Purchase of common stock                   (1,122,225)          (11,222)       (5,113,672)                        (5,124,894)
    Stock received in Precision sale             (170,170)           (1,702)         (832,131)                          (833,833)
    Net income                                                                                        5,962,828        5,962,828
                                             ------------      ------------      ------------      ------------     ------------

Balance at April 30, 2001                       6,980,367            69,804        23,075,677        35,786,772       58,932,253

    Issuance of common stock                      146,518             1,466         1,446,123                          1,447,589
    Purchase of common stock                     (266,758)           (2,668)       (1,010,081)                        (1,012,749)
    Stock options exercised                        84,198               842           112,656                            113,498
    Stock warrant issued                                                               70,000                             70,000
    Tax benefit of options exercised                                                  239,056                            239,056
    Stock option based compensation                                                 7,328,554                          7,328,554
    Net loss                                                                                        (14,305,014)     (14,305,014)
                                             ------------      ------------      ------------      ------------     ------------

Balance at April 30, 2002                       6,944,325      $     69,444      $ 31,261,985      $ 21,481,758     $ 52,813,187
                                             ============      ============      ============      ============     ============
America's Car-Mart, Inc.
 
 
For the Years Ended April 30, 2004, 2003 and 2002


 
 
 
Common Stock

 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Total
Stockholders'
Equity
 
 
 
Shares
 
Amount
 
Balance at April 30, 2001
 
6,980,367
 
$
69,804
 
$
23,075,677
 
$
35,786,772
 
$
58,932,253
 
 

Issuance of common stock

 

146,518

 

 

1,466

 

 

1,446,123

 

 

 

 

 

1,447,589

 
 
Stock options exercised
 
84,198
 
 
842
 
 
112,656
 
 
 
 
 
113,498
 
 
Stock warrants issued
 
 
 
 
 
 
 
70,000
 
 
 
 
 
70,000
 
 
Purchase of common stock
 
(266,758
)
 
(2,668
)
 
(1,010,081
)
 
 
 
 
(1,012,749
)
 
Tax benefit of options exercised
 
 
 
 
 
 
 
239,056
 
 
 
 
 
239,056
 
 
Stock option based compensation
 
 
 
 
 
 
 
7,328,554
 
 
 
 
 
7,328,554
 
 
Net loss
 
 
 
 
 
 
 
 
 
 
(14,305,014
)
 
(14,305,014
)
 
 
 
 
 
 
 
Balance at April 30, 2002
 
6,944,325
 
 
69,444
 
 
31,261,985
 
 
21,481,758
 
 
52,813,187
 
 

Stock options/warrants exercised

 

490,400

 

 

4,904

 

 

1,492,215

 

 

 

 

 

1,497,119

 
 
Stock warrant issued
 
 
 
 
 
 
 
15,000
 
 
 
 
 
15,000
 
 
Purchase of common stock
 
(226,762
)
 
(2,268
)
 
(2,686,524
)
 
 
 
 
(2,688,792
)
 
Tax benefit of options exercised
 
 
 
 
 
 
 
249,430
 
 
 
 
 
249,430
 
 
Net income
 
 
 
 
 
 
 
 
 
 
14,074,929
 
 
14,074,929
 
 
 
 
 
 
 
 
Balance at April 30, 2003
 
7,207,963
 
 
72,080
 
 
30,332,106
 
 
35,556,687
 
 
65,960,873
 
 

Stock options/warrants exercised

 

618,478

 

 

6,185

 

 

2,577,332

 

 

 

 

 

2,583,517

 
 
Stock warrants issued
 
 
 
 
 
 
 
76,000
 
 
 
 
 
76,000
 
 
Purchase of common stock
 
(68,600
)
 
(687
)
 
(1,645,673
)
 
 
 
 
(1,646,360
)
 
Tax benefit of options exercised
 
 
 
 
 
 
 
1,799,000
 
 
 
 
 
1,799,000
 
 
Net income
 
 
 
 
 
 
 
 
 
 
15,804,446
 
 
15,804,446
 
 
 
 
 
 
 
 

Balance at April 30, 2004

 

7,757,841

 

$

77,578

 

$

33,138,765

 

$

51,361,133

 

$

84,577,476

 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.


                                       22


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              AMERICA'S CAR-MART, INC.



Notes to Consolidated Financial Statements
America's Car-Mart, Inc.
A - ORGANIZATION AND BUSINESSOrganization and Business
    America's Car-Mart, Inc., a Texas corporation formerly Crown Group, Inc.
("Corporate" or the(the "Company"), is a holding company that operatesthe largest publicly held automotive dealerships through its subsidiaries that focusretailer in the United States focused exclusively on the "Buy Here/Pay Here" segment of the used car market. References to the Company typically 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. ("Colonial") subsidiaries.. Collectively, Car-Mart of Arkansas and Colonial are collectively
referred to herein as "Car-Mart". As of April 30, 2002 theThe Company operated 55
stores located primarily in small citiessells older model used vehicles and rural locations throughout the
South-Central United States. The Company provides financing for substantially all of its customers. Many of the Company's customers many of whom mayhave limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems. In addition, atAs of April 30, 2002,2004, the Company also owned (i) an 80% interestoperated 70 stores located primarily in Concorde Acceptance Corporation ("Concorde"), a prime and sub-prime mortgage
lender, and (ii) a 50% interest in Precision IBC, Inc. ("Precision"), a firm
specializing insmall cities throughout the sale and rental of intermediate bulk containers.South-Central United States.
    In October 2001, the Company made the decision to sell all of its operating subsidiaries except Car-Mart, and relocate its corporate headquarters to Bentonville, Arkansas where Car-Mart is based. Accordingly,As a result of this decision, all of the Company's other operating subsidiaries were sold and their operating results of Concorde and Precision,
as well as the operating results of (i) Smart Choice Automotive Group, Inc.
("Smart Choice"), the Company's 70% owned subsidiary that was written-off in
October 2001, and (ii) CG Incorporated, S.A. de C.V. ("Crown El Salvador") and
Home Stay Lodges I, Ltd. ("Home Stay") that were sold in a prior fiscal year,
arehave been included in discontinued operations (see Note R). Similarly, the assets and
liabilities of Concorde and Precision are included in "Assets of subsidiaries
held for sale" and "Liabilities of subsidiaries held for sale", respectively, in
the accompanying consolidated balance sheet at April 30, 2002 (Concorde,
Precision and Smart Choice at April 30, 2001).

     In May 2002 theoperations. The Company sold its 50% interest in Precision for $3.8 million
in cash, andit last remaining discontinued operation in July 2002 the Company sold its 80% interest2002. Discontinued operations are described in Concorde for $3.0
million in cash. In addition, at closing Concorde repaid all of its $2.1 million
in outstanding borrowings from the Company.

Note P.
B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of Significant Accounting Policies
Principles of Consolidation
    The consolidated financial statements include the accounts of America's Car-Mart, Inc. and all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated.
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 amount 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.
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 Arkansas, Oklahoma, Texas, Kentucky and Kentucky.Missouri, with approximately 66% of sales made to customers residing in Arkansas. Periodically, the Company maintains cash in financial institutions in excess of the amounts insured by the federal government. The Company's revolving credit facility matures in April 2006. The Company expects that it will be able to renew or refinance such credit facility on or before the scheduled maturity date.
Restrictions on Subsidiary Distributions/Dividends
    The Company's revolving credit facility prohibits distributions from Car-Mart to the Company beyond the repayment of an intercompany loan from the Company to Car-Mart ($8.5 million at April 30, 2004). At April 30, 2004, the Company's assets (excluding its $73.0 million equity investment in Car-Mart) consisted of $.4 million in cash, $2.7 million in other assets and an $8.5 million receivable from Car-Mart. Thus, the Company is limited in the amount of dividends or other distributions it can make to its shareholders without the consent of its lender. Beginning in February 2003, Car-Mart assumed substantially all of the operating costs of the Company.
Cash Equivalents
    The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. Cash equivalents generally consist of interest-bearing money market accounts.
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. Finance receivables 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 income remaining from the capitalization of the total interest to be earned over the term of the related installment contract. An account is considered delinquent when a contractually scheduled payment has not been received by the scheduled payment date. At April 30, 2004, 3.0% of the Company's finance receivable balances were 30 days or more past due.

    The Company takes steps to repossess a vehicle when the customer becomes severely 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 timely collection of future payments is not probable for accounts where the Company has been unable to repossess the vehicle.
    The Company maintains an allowance for credit losses at a level it considers sufficient to cover anticipatedestimated losses in the collection of its finance receivables. The allowance for credit losses is based primarily upon historical and recent credit loss experience, a periodic analysis of the portfolio,with consideration given to changes in loan characteristics (i.e., average amount financed and term), delinquency levels, collateral values, economic conditions, underwriting and trendscollection practices, and collateral values.management's expectations of future credit losses. The allowance for credit losses is periodically reviewed by management with any changes reflected in current operations. ItAlthough it is at least reasonably possible that events or circumstances could occur in the future that are not presently foreseen which could cause actual credit losses mayto be materially different from the recorded allowance for credit losses, 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.
Inventory
    Inventory consists of used vehicles and is valued at the lower of cost or market on a specific identification basis. Vehicle reconditioning costs are capitalized as a component of inventory. Repossessed vehicles are recorded at the lower of cost or market, which approximates wholesale value. The cost of used vehicles sold is determined using the specific identification method.



                                       23


Investments

     Investments are carried at the lower of cost or market. At April 30, 2002,
investments consisted of a 7% ownership interest in Monarch Venture Partners'
Fund I, L.P. ("Monarch"), a private venture capital fund focusing on the
investment in Internet related or emerging technology companies. At April 30,
2001 investments consisted of (i) a 7% ownership interest in Monarch, and (ii)
an 8% ownership interest in Mariah Vision(3), Inc., a software developer
specializing in three-dimensional graphic design. As discussed in Note M, the
carrying values of these investments were written-down during the fiscal year
ended April 30, 2002 (see Note M).

Property and Equipment
    Property and equipment are stated at cost. Expenditures for additions, renewals and improvements are capitalized. Costs of repairs and maintenance are expensed as incurred. Depreciation is computed principally using the straight-line method over the following estimated useful lives:
Furniture, fixtures and equipment
  3 to  107 years
Leasehold improvements
  5 to 39 years
Buildings
18 to 39 years
    Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amountvalues of the impaired assets exceed the fair value of thesuch assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
Income Taxes
    Income taxes are accounted for under the liability method. Under this method, deferred 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 temporary differences are expected to be recovered or settled.
Revenue Recognition

     Interest
    Revenues are generated principally from the sale of used vehicles, which in most cases includes a service contract, and interest income and late fees earned on finance receivables is recognized using the interest
method. Revenuereceivables.
    Revenues from the sale of used vehicles is recognized when the sales contract is signed, and the customer has taken possession of the vehicle.

vehicle and, if applicable, financing has been approved. Revenues from the sale of service contracts are recognized ratably over the four month service contract period. Service contract revenues are included in sales. Interest income is recognized on all active finance receivable accounts using the interest method. Late fees are recognized when collected and are included in interest income.
Advertising Costs
    Advertising costs are expensed as incurred and consist principally includeof radio and print media marketing costs. Advertising costs amounted to $964,000,
$788,000$1,616,000, $1,349,000 and $640,000$964,000 for the years ended April 30, 2004, 2003 and 2002, 2001 and 2000,
respectively.

Stock Option
Employee Benefit Plan
    The Company accountshas a 401(k) plan for all of its stock optionemployees meeting certain eligibility requirements. The plan in accordance with the
provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accountingprovides for Stock Issued to Employees",voluntary employee contributions and related interpretations. Prior to May 1,
2002, certain of the Company's options were subject to variable option
accounting as a result of containing a "cashless" exercise feature. Under
variable option accounting, changes in the market value of the Company's common
stock generally result in charges or credits to stock-based compensation with an
offsetting entry to additional paid-in capital. Effective May 1, 2002, the Company rescindedmatches 50% of employee contributions up to a maximum of 2% of each employee's compensation. The

Company contributed approximately $142,000, $117,000 and $149,000 to the cashless exercise feature of its stock options (see Note
J).

plan for the years ended April 30, 2004, 2003 and 2002, respectively.
Earnings (Loss) Per Share
    Basic earnings (loss) per share is computed by dividing net income (loss) by the average number of common shares outstanding during the period. Diluted earnings per share takes into consideration the potentially dilutive effect of common stock equivalents, such as outstanding stock options and warrants, 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 Option Plan
    The Company accounts for its stock option plan in accordance with the provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Prior to May 1, 2002, certain of the Company's options were subject to variable option accounting as a result of containing a "cashless" exercise feature. Under variable option accounting, changes in the market value of the Company's common stock generally result in charges or credits to stock-based compensation with an offsetting entry to additional paid-in capital. Effective May 1, 2002, the Company rescinded the cashless exercise feature of its stock options (see Note L).
    Had the Company determined compensation cost on the date of grant based upon the fair value of its stock options under SFAS No. 123, the Company's pro forma net income (loss) and earnings (loss) per share would be as follows using the Black-Scholes option-pricing model with the assumptions detailed below. The estimated weighted average fair value of options granted using the Black-Scholes option-pricing model was $8.68, $6.37 and $3.00 per share for the years ended April 30, 2004, 2003 and 2002, respectively.
 
 
Years Ended April 30,

 
 
 
2004
 
2003
 
2002
 
Reported net income (loss)
 
$
15,804,446
 
$
14,074,929
 
$
(14,305,014
)
Less fair value compensation cost, net of tax
 
 
(42,966
)
 
(307,621
)
 
—
 
 
 
 
 
 
 

Pro forma net income (loss)

 

$

15,761,480

 

$

13,767,308

 

$

(14,305,014

)
 
 
 
 
 

Basic earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 
 
As reported
 
$
2.09
 
$
2.01
 
$
(2.11
)
 
Pro forma
 
$
2.09
 
$
1.96
 
$
(2.11
)

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 
 
As reported
 
$
1.98
 
$
1.80
 
$
(2.11
)
 
Pro forma
 
$
1.98
 
$
1.76
 
$
(2.11
)

Assumptions:

 

 

 

 

 

 

 

 

 

 
 
Expected dividend yield
 
 
0.0
%
 
0.0
%
 
0.0
%
 
Risk-free interest rate
 
 
4.3
%
 
4.5
%
 
5.0
%
 
Expected volatility
 
 
50.0
%
 
50.0
%
 
50.0
%
 
Expected life
 
 
5 years
 
 
5 years
 
 
5 years
 
Recent Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board ("FASB") issued
    Statement of Financial Accounting Standards No. 141149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS 141"No. 149"), "Business
Combinations", which eliminates the pooling method of accounting was issued in April 2003 and is effective for business
combinations initiatedcontracts entered into or modified after June 30, 2001. In addition,2003. SFAS 141 addresses theNo. 149 amends and clarifies financial accounting and reporting of derivatives, including derivative instruments embedded in other contracts, and for intangible assetshedging activities under SFAS 133, "Accounting for Derivative Instruments and goodwill acquired in a business
combination.Hedging Activities." The Company adoptedadoption of SFAS 141 effective May 1, 2001. Such adoptionNo. 149 did not have any impact on the Company's financial position, or results of operations.

     In July 2001, the FASB issuedoperations or cash flows.
    Statement of Financial Accounting Standards No. 142150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity" ("SFAS 142"150"), "Goodwill and Intangible Assets", which revises the
accounting for purchased goodwill and intangible assets. Under SFAS 142,
goodwill and intangible assets with indefinite lives will no longer be
amortized, but will be tested for impairment annually, and was issued in the event of an
impairment indicator. SFAS 142May 2003 and is effective for fiscal years beginningfinancial instruments entered into or modified after December 15, 2001,May 31, 2003. SFAS 150 establishes standards for classification and measurement of certain financial instruments with earliercharacteristics of both liabilities and equity. The adoption permitted. The Company adoptedof SFAS 142
effective May 1, 2001. Such adoptionNo. 150 did not have any impact on the continuingCompany's financial position, results of operations of the Company.

     In August 2001, the FASB issued Statement ofor cash flows.


    Financial Accounting Standards Board ("FASB") Interpretation No. 14446, "Consolidation of Variable Interest Entities," an Interpretation of APB No. 50 ("SFAS 144"FIN 46"), "Accounting was issued in January 2003 and was amended in December 2003. FIN 46 is effective in February 2003 for the Impairment of Long-Lived Assets",
whichall new variable interest entities created or acquired. For variable interest entities created or acquired before February 2003, FIN 46 is effective in February 2004. FIN 46 requires a single accounting model to be used for long-lived assets to be
sold and broadens the presentation of discontinued operations to include a
"component of an entity" (rather than a segmentconsolidation of a business). A component of
anvariable interest entity comprises operations and cash flows that can be clearly distinguished,
operationally and for financial reporting purposes,



                                       24


from the restif a company's variable interest absorbs a majority of the entity. A component of an entity that is classified as held
for sale,entity's losses or has been disposed of, is presented asreceives a discontinued operation if
the operations and cash flowsmajority of the component will be (or have been) eliminated
from the ongoing operationsentity's expected residual returns, or both. The adoption of the entity and the entity willFIN 46 did not have any significant continuing involvement inimpact on the operations of the component.

     The Company adopted SFAS 144 effective August 1, 2001. Consequently, the
operatingCompany's financial position, results of Concorde and Precision, which were held for sale at April
30, 2002 (and sold after year end), as well as the operating results of Smart
Choice, which was written-off in October 2001, are included in discontinued
operations. Assets and liabilities of Concorde and Precision are included in
"Assets of subsidiaries held for sale" and "Liabilities of subsidiaries held for
sale", respectively, at April 30, 2002 (Concorde, Precision and Smart Choice at
April 30, 2001) (see Note R).

operations or cash flows.
Reclassifications
    Certain prior year amounts in the accompanying financial statements have been reclassified to conform to the fiscal 20022004 presentation. In particular, the
operating results of Crown El Salvador, which was sold in April 2001, and Home
Stay, which was sold in December 1999, were not included in discontinued
operations in the prior fiscal periods due to the relatively insignificant size
of their operations. However, in the current fiscal period, as the Company has
other discontinued operations, the operating results of Crown El Salvador and
Home Stay have been reclassified to discontinued operations for all periods
presented.

C - FINANCE RECEIVABLESFinance Receivables
    The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts typically include interest rates ranging from 6% to 19% per annum, are collateralized by the vehicle sold and provide for payments over periods ranging from 12 to 3036 months. The components of finance receivables as of April 30, 20022004 and 20012003 are as follows:

                                                           April 30,
                                                     2002              2001
                                                 ------------      ------------


         Gross contract amount                   $ 99,675,260      $ 83,439,089
         Unearned finance charges                  (7,553,048)       (7,402,428)
         Allowance for credit losses              (17,042,609)      (14,066,782)
                                                 ------------      ------------

                                                 $ 75,079,603      $ 61,969,879
                                                 ============      ============
 
 
April 30,

 
 
 
2004
 
2003
 
Gross contract amount
 
$
140,169,258
 
$
121,013,893
 
Unearned finance charges
 
 
(11,449,631
)
 
(9,259,863
)
Allowance for credit losses
 
 
(25,035,967
)
 
(20,395,095
)
 
 
 
 

 

 

$

103,683,660

 

$

91,358,935

 
 
 
 
 
    Changes in the finance receivables allowance for credit losses for the years ended April 30, 2002, 20012004, 2003 and 20002002 are as follows:

                                                               Years Ended April 30,
                                                     2002              2001              2000
                                                 ------------      ------------      ------------


         Balance at beginning of year            $ 14,066,782      $ 11,492,611      $  9,458,241
         Provision for credit losses               23,035,926        17,214,750        14,104,163
         Net charge-offs                          (20,060,099)      (14,640,579)      (12,069,793)
                                                 ------------      ------------      ------------

              Balance at end of year             $ 17,042,609      $ 14,066,782      $ 11,492,611
                                                 ============      ============      ============
 
 
Years Ended April 30,

 
 
 
2004
 
2003
 
2002
 
Balance at beginning of year
 
$
20,395,095
 
$
17,042,609
 
$
14,066,782
 
Provision for credit losses
 
 
34,766,496
 
 
26,896,608
 
 
23,035,926
 
Net charge-offs
 
 
(30,125,624
)
 
(23,544,122
)
 
(20,060,099
)
 
 
 
 
 
 

Balance at end of year

 

$

25,035,967

 

$

20,395,095

 

$

17,042,609

 
 
 
 
 
 
D - PROPERTY AND EQUIPMENTProperty and Equipment
    A summary of property and equipment as of April 30, 20022004 and 20012003 is as follows:

                                                                          April 30,
                                                                    2002              2001
                                                                ------------      ------------


         Land and buildings                                     $  1,562,393      $    650,191
         Furniture, fixtures and equipment                           939,557         3,826,051
         Leasehold improvements                                    1,147,597           871,390
         Less accumulated depreciation and amortization           (1,022,836)       (1,114,189)
                                                                ------------      ------------

                                                                $  2,626,711      $  4,233,443
                                                                ============      ============




                                       25
 
 
April 30,

 
 
 
2004
 
2003
 
Land
 
$
2,002,927
 
$
1,621,841
 
Buildings and improvements
 
 
1,770,244
 
 
1,142,980
 
Furniture, fixtures and equipment
 
 
707,818
 
 
630,065
 
Leasehold improvements
 
 
2,034,481
 
 
1,844,191
 
Less accumulated depreciation and amortization
 
 
(958,713
)
 
(759,945
)
 
 
 
 

 

 

$

5,556,757

 

$

4,479,132

 
 
 
 
 

E - ACCRUED LIABILITIESAccrued Liabilities
    A summary of accrued liabilities as of April 30, 20022004 and 20012003 is as follows:

                                                           April 30,
                                                     2002             2001
                                                 ------------     ------------


         Compensation                            $  2,573,579     $  2,189,645
         Interest                                     163,211           50,374
         Severance and office closing               2,519,606               --
         Service contracts                          1,013,035          798,407
         Other                                         13,208          527,555
                                                 ------------     ------------

                                                 $  6,282,639     $  3,565,981
                                                 ============     ============
 
 
April 30,

 
 
2004
 
2003
Compensation
 
$
2,196,977
 
$
3,520,548
Interest
 
 
87,770
 
 
101,214
Cash overdraft
 
 
1,068,743
 
 
1,145,112
Deferred revenue
 
 
1,312,509
 
 
1,269,430
Subsidiary redeemable preferred stock
 
 
500,000
 
 
100,000
Other
 
 
378,989
 
 
528,009
 
 
 

 

 

$

5,544,988

 

$

6,664,313
 
 
 
F - DEBTRevolving Credit Facility
    A summary of debtrevolving credit facility as of April 30, 20022004 and 20012003 is as follows:

                                                  Revolving Credit Facilities
     -------------------------------------------------------------------------------------------------------------------
                                  Facility          Interest                                     Balance at
             Lender                Amount             Rate            Maturity        April 30, 2002     April 30, 2001
     -----------------------    --------------    --------------    --------------    ---------------    ---------------

     Bank of Oklahoma           $ 37 million      Prime + .50%        Dec 2003         $ 32,291,957
     Bank of America            $ 35 million      Prime + .88%        Jan 2002                             $ 29,767,688

                                                          Other Notes Payable
     -------------------------------------------------------------------------------------------------------------------
                                  Facility          Interest                                      Balance at
             Lender                Amount             Rate            Maturity        April 30, 2002     April 30, 2001
     -----------------------    -------------     --------------    ------------      ---------------    ---------------

     Individuals/Trusts              N/A          8.50%               Jan 2004        $     7,500,000    $     7,500,000
     Bank of America                 N/A          8.00%               Sep 2001                                 2,316,000
     Regions Bank                    N/A          Prime + .50%        May 2001                                 2,000,000
                                                                                      ---------------    ---------------

                                                                                      $     7,500,000    $    11,816,000
                                                                                      ===============    ===============
Revolving Credit Facility
Lender
 
Facility
Amount
 
Interest
Rate
 
 
 
Balance at April 30,

 
Maturity
 
2004
 
2003
Bank of Oklahoma
 
$
39.5 million
 
Prime
 
Apr 2006
 
$
22,534,120
 
$
25,968,220
    The Company's revolving credit facility is primarily collateralized by substantially all the assets of the Company including finance receivables and inventory. Interest is payable monthly or quarterly on
all of the Company's debt and the principal balances arebalance is due at the maturity of the facilities.facility. Interest is charged at the bank's prime lending rate per annum (4.00% at April 30, 2004). Prior to November 30, 2003, interest was charged at the bank's prime lending rate plus .5% (4.75% at April 30, 2003). The Company's revolving credit facility contains 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. The amount available to be drawn under the Company's revolving credit facility is a function of eligible finance receivables. Based upon eligible finance receivables at April 30, 2002,2004, the Company could have drawn an additional $4.7$17.0 million under suchthe facility.



                                       26

G - INCOME TAXESIncome Taxes
    The provision (benefit) for income taxes for the fiscal years ended April 30, 2002, 20012004, 2003 and 20002002 was as follows:

                                                                       Years Ended April 30,
                                                              2002              2001              2000
                                                          ------------      ------------      ------------


         Provision (benefit) for income taxes
                Current                                   $ (2,493,023)     $  7,096,513      $ 10,282,348
               Deferred                                      5,282,435        (1,880,146)       (2,309,765)
                                                          ------------      ------------      ------------

                                                          $  2,789,412      $  5,216,367      $  7,972,583
                                                          ============      ============      ============
 
 
Years Ended April 30,

 
 
 
2004
 
2003
 
2002
 
Provision (benefit) for income taxes
 
 
 
 
 
 
 
 
 
 
 
Current
 
$
8,707,314
 
$
6,662,344
 
$
(2,493,023
)
 
Deferred
 
 
454,192
 
 
1,281,756
 
 
5,282,435
 
 
 
 
 
 

 

 

$

9,161,506

 

$

7,944,100

 

$

2,789,412

 
 
 
 
 
 
    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:

                                                                                   Years Ended April 30,
                                                                         2002              2001              2000
                                                                     ------------      ------------      ------------


         Tax provision at statutory rate                             $    770,828      $  4,383,025      $  7,467,200
         State taxes, net of federal benefit                              348,050           917,114           734,586
         Non deductible portion of stock option compensation            1,234,226
         Adjustment of estimated tax accrual                              360,215
         Equity in earnings of unconsolidated subsidiaries                                                   (177,371)
         Other, net                                                        76,093           (83,772)          (51,832)
                                                                     ------------      ------------      ------------

                                                                     $  2,789,412      $  5,216,367      $  7,972,583
                                                                     ============      ============      ============
 
 
Years Ended April 30,

 
 
2004
 
2003
 
2002
Tax provision at statutory rate
 
$
8,680,333
 
$
7,529,495
 
$
770,828
State taxes, net of federal benefit
 
 
707,104
 
 
672,377
 
 
348,050
Non deductible portion of stock option compensation
 
 
 
 
 
 
 
 
1,234,226
Adjustment to estimated tax accrual
 
 
 
 
 
 
 
 
360,215
Other, net
 
 
(225,931
)
 
(257,772
)
 
76,093
 
 
 
 

 

 

$

9,161,506

 

$

7,944,100

 

$

2,789,412
 
 
 
 
    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 tax assets and liabilities as of April 30, 20022004 and 20012003 were as follows:

                                                                               April 30,
                                                                         2002             2001
                                                                     ------------     ------------


         Deferred tax assets:
               Reserves                                              $  2,742,233     $    338,013
               Finance receivables                                                       5,375,830
               Stock options                                            1,017,035          418,385
               State operating loss carryforwards                         185,156
               Other                                                      104,719           67,082
                                                                     ------------     ------------
                          Total                                         4,049,143        6,199,310
                                                                     ------------     ------------

         Deferred tax liabilities:
               Finance receivables                                      2,176,421
               Subsidiary basis                                         1,161,824
               Property and equipment                                                      204,702
               Other                                                      591,846          593,121
                                                                     ------------     ------------
                          Total                                         3,930,091          797,823
                                                                     ------------     ------------

                          Deferred tax assets, net                   $    119,052     $  5,401,487
                                                                     ============     ============




                                       27
 
 
 
 
April 30,

 
 
 
 
2004
 
2003
Deferred tax liabilities related to:
 
 
 
 
 
 
 
 
 
Finance receivables
 
 
 
$
2,644,076
 
$
2,798,360
 
Other
 
 
 
 
21,377
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
2,665,453
 
 
2,798,360
 
 
 
 
 

Deferred tax assets related to:

 

 

 

 

 

 

 

 
 
Liability reserves
 
 
 
 
688,390
 
 
1,356,710
 
Other
 
 
 
 
360,167
 
 
278,946
 
 
 
 
 
 
 
Total
 
 
 
 
1,048,557
 
 
1,635,656
 
 
 
 
 
 
 

Deferred tax liabilities, net

 

 

 

$

1,616,896

 

$

1,162,704
 
 
 
 
 

H - CAPITAL STOCKCapital Stock
    In March 2002 the Company acquired all of the remaining shares of Car-Mart common stock it did not previously own from the Car-Mart minority shareholders by issuing 146,518 shares of the Company's common stock (valued at approximately $1.4 million) and paying approximately $1.6 million in cash. The Company is authorized to issue up to one million shares of $.01 par value preferred stock in one or more series having such respective terms, rights and preferences as are designated by the Board of Directors. NoThe 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 a 6% cumulative dividend. The Company's subsidiary can redeem the preferred stock at any time at par value plus any unpaid dividends. After April 30, 2007, 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. The subsidiary preferred stock has been issued.

included in accrued liabilities.
I - WEIGHTED AVERAGE SHARES OUTSTANDINGWeighted Average Shares Outstanding
    Weighed average shares outstanding which is used in the calculation of basic and diluted earnings (loss) per share was as follows for the years ended April 30, 2002, 20012004, 2003 and 2000:


                                                                      Years Ended April 30,
                                                              2002             2001             2000
                                                          ------------     ------------     ------------


         Average shares outstanding - basic                  6,795,461        7,697,239        9,216,184
               Dilutive options                                                 318,595          405,144
                                                          ------------     ------------     ------------

         Average shares outstanding - diluted                6,795,461        8,015,834        9,621,328
                                                          ============     ============     ============

         Antidilutive securities not included:
               Options                                       1,361,680          445,000          432,500
                                                          ============     ============     ============

               Warrants                                         57,500               --               --
                                                          ============     ============     ============
2002:
 
 
Years Ended April 30,

 
 
2004
 
2003
 
2002
Average shares outstanding — basic
 
7,545,964
 
7,015,992
 
6,795,461
 
Dilutive options and warrants
 
417,462
 
812,752
 
 
 
 
 
 

Average shares outstanding — diluted

 

7,963,426

 

7,828,744

 

6,795,461
 
 
 
 
Antidilutive securities not included:
 
 
 
 
 
 
 
Options and warrants
 
4,375
 
45,000
 
1,419,180
 
 
 
 

J - STOCK OPTIONS AND WARRANTS

Stock Options and Warrants
Stock Options
    Since inception, the shareholders of the Company have approved three stock option plans including the 1986 Incentive Stock Option Plan ("1986 Plan"), the 1991 Non-Qualified Stock Option Plan ("1991 Plan") and the 1997 Stock Option Plan ("1997 Plan"). While previously granted options remain outstanding, no additional option grants may be made under the 1986 and 1991 Plans. The 1997 Plan sets aside 1,000,000 shares of the Company's common stock to be grantedfor grants 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.grant and for periods not to exceed ten years. At April 30, 20022004 and 20012003 there were 138,32077,745 and 157,50084,145 shares of common stock available for grant, respectively, under the 1997 Plan, respectively.Plan. Options granted under the Company's stock option Plansplans expire in the calendar years 20032005 through 2012.2013. The following is an aggregate summary of the activity in the Company's stock option plans from April 30, 19992001 to April 30, 2002:


                                                   Number            Exercise            Proceeds        Weighted Average
                                                     of                Price                on            Exercise Price
                                                   Shares            per Share           Exercise           per Share
                                               --------------      --------------     --------------     ----------------


         Outstanding at April 30, 1999              1,445,000      $0.41 to $7.38     $    5,546,952      $         3.84
             Granted                                   32,500      $4.38 to $5.81            160,156      $         4.93
                                               --------------                         --------------

         Outstanding at April 30, 2000              1,477,500      $0.41 to $7.38          5,707,108      $         3.86
             Granted                                   12,500               $5.00             62,500      $         5.00
             Exercised                                (25,000)              $2.44            (60,937)     $         2.44
             Canceled                                  (5,000)              $ .66             (3,281)     $          .66
                                               --------------                         --------------

         Outstanding at April 30, 2001              1,460,000      $0.41 to $7.38          5,705,390      $         3.91
             Granted                                   89,180      $3.75 to $9.88            804,473      $         9.02
             Exercised                               (155,000)     $0.41 to $7.38           (604,140)     $         3.90
             Canceled                                 (32,500)     $2.44 to $7.38           (141,406)     $         4.35
                                               --------------                         --------------

         Outstanding at April 30, 2002              1,361,680      $0.41 to $9.88     $    5,764,317      $         4.23
                                               ==============                         ==============




                                       28
2004:
 
 
Number
of
Shares
 
Exercise
Price
per Share
 
Proceeds
on
Exercise
 
Weighted
Average Exercise
Price per Share
Outstanding at April 30, 2001
 
1,460,000
 
$    .41 to $  7.38
 
$
5,705,390
 
$
3.91
 
Granted
 
89,180
 
    3.75 to    9.88
 
 
804,473
 
 
9.02
 
Exercised
 
(155,000
)
      .41 to    7.38
 
 
(604,140
)
 
3.90
 
Canceled
 
(32,500
)
    2.44 to    7.38
 
 
(141,406
)
 
4.35
 
 
 
 
 
 
 
 

Outstanding at April 30, 2002

 

1,361,680

 

      .41 to    9.88

 

 

5,764,317

 

 

4.23
 
Granted
 
57,500
 
  13.08 to  13.15
 
 
755,600
 
 
13.14
 
Exercised
 
(475,500
)
      .41 to    9.88
 
 
(1,497,119
)
 
3.15
 
Canceled
 
(3,325
)
    9.88 to  13.08
 
 
(40,850
)
 
12.29
 
 
 
 
 
 
 
 

Outstanding at April 30, 2003

 

940,355

 

    2.44 to  13.15

 

 

4,981,948

 

 

5.30
 
Granted
 
7,500
 
17.75
 
 
133,125
 
 
17.75
 
Exercised
 
(607,828
)
    2.44 to  13.15
 
 
(2,583,517
)
 
4.25
 
Canceled
 
(1,100
)
9.88
 
 
(10,869
)
 
9.88
 
 
 
 
 
 
 
 

Outstanding at April 30, 2004

 

338,927

 

$  3.87 to $17.75

 

$

2,520,687

 

$

7.44
 
 
 
 
 
 
 
 
    As of April 30, 2004, 2003 and 2002 all stock options were exercisable.exercisable with the exception of options to purchase 10,000, 20,000 and 0 shares, respectively, at $13.15 per share. The non-exercisable options become fully exercisable in 2005. A summary of stock options outstanding as of April 30, 20022004 is as follows:

                                                              Weighted Average
                            Range of                              Remaining             Weighted
                            Exercise            Number        Contractual Life          Average
                             Prices           of Shares           (in years)         Exercise Price
                         --------------      -----------      ----------------       --------------


                         $0.41 to $4.38          895,000                4.22                 $3.19
                         $5.00 to $9.88          466,680                7.18                 $6.24
                                             -----------

                         $0.41 to $9.88        1,361,680                5.23                 $4.23
                                             ===========


     The Company applies the provisions of APB Opinion No. 25 in accounting for
the issuance of stock options. The estimated weighted average fair value of
options granted was $3.00, $1.50 and $1.50 per share for the fiscal years ended
April 30, 2002, 2001 and 2000, respectively. Had the Company determined
compensation cost on the date of grant based upon the fair value of its stock
options under SFAS No. 123, the Company's pro forma income (loss) and earnings
(loss) per share would be as follows using the Black Scholes valuation model
with the assumptions detailed below:


                                                                            Years Ended April 30,
                                                               2002                 2001                2000
                                                          --------------       --------------      --------------


         Pro forma net income (loss)                      $  (14,305,014)      $    5,950,453      $   14,804,732

         Pro forma earnings (loss) per share:
               Basic                                      $        (2.11)      $          .77      $         1.61
               Diluted                                    $        (2.11)      $          .74      $         1.54

         Assumptions:
               Dividend yield                                        0.0%                 0.0%                0.0%
               Risk-free interest rate                               5.0%                 5.5%                6.0%
               Expected volatility                                  50.0%                50.0%               50.0%
               Expected life                                     5 years              5 years             5 years
Range of
Exercise
Prices
 
Number
of Shares
 
Weighted Average
Remaining
Contractual Life
 
Weighted
Average
Exercise Price
$
3.88 to $  5.50
 
211,932
 
3.23 years
 
$
4.89
 
  9.88 to  17.75
 
126,995
 
8.03            
 
 
11.69
 
 
 
 
 
 
 
 

 

 

 

338,927

 

5.03 years

 

$

7.44
 
 
 
 
 
 
 
 
Warrants

     In January 2002, the Company issued a warrant to purchase 40,000 shares of
the Company's common stock at $5.00 per share in connection with engaging a new
investor relations firm.
    As of April 30, 20022004 the Company had stock purchase warrants outstanding to purchase 57,50042,000 shares at prices ranging from $3.75 to $5.00$27.35 per share. All of the warrants are presently exercisable and expire between 2006 and 2007.

Stock Option Based Compensation

     Prior to May 1, 2002, the Company's 1997 Plan contained a "cashless"
exercise feature which allowed option holders to use the "in-the-money" value of
the option as payment for a portion or all of the exercise price of the option.
Accordingly, the options granted under the 1997 Plan have been accounted for as
variable options. Under variable option accounting, changes in the market value
of the Company's common stock generally result in charges or credits to
stock-based compensation with an offsetting entry to additional paid-in capital.
For2009. During the fiscal yearyears ended April 30, 2004, 2003 and 2002, the Company recorded $7.3 million of
stock option based compensation expense. Other periods did not have significant
stock-based compensation charges or credits.

     In orderissued warrants to avoid future stock option based compensation charges or credits
(which can result in volatile earnings fluctuations), effective May 1, 2002 the
Company rescinded the cashless exercise provisionpurchase 12,500, 5,000 and 57,500 shares of its 1997 Plan.



                                       29
common stock, which had weighted-average grant-date fair values of $6.08, $3.00 and $1.22 per share, respectively.

K - COMMITMENTS AND CONTINGENCIES

Commitments and Contingencies
Facility Leases
    The Company leases used car salescertain dealership and office facilities and equipment under various operating leases. Dealership leases are generally for periods from three to five years and contain multiple renewal options. As of April 30, 20022004 the aggregate rentals due under such non-cancelable operating leases with remaining lease terms in excess of one year were as follows:

                                             Years Ending
                                               April 30,                   Amount
                                             ------------             ---------------


                                                 2003                 $     1,575,759
                                                 2004                       1,383,734
                                                 2005                         838,894
                                                 2006                          80,166
                                                 2007                          36,000
                                              Thereafter                       12,250
                                                                      ---------------

                                                                      $     3,926,803
                                                                      ===============
Years Ending
April 30,
 
Amount
2005
 
$
1,406,698
2006
 
 
449,773
2007
 
 
318,640
2008
 
 
89,235
2009
 
 
45,600
Thereafter
 
 
—
 
 

 

 

$

2,309,946
 
 
    For the years ended April 30, 2002, 20012004, 2003 and 20002002 rent expense for all operating leases amounted to approximately $1,905,000, $1,765,000 and $1,581,000, $1,427,000respectively.
Litigation
    In February 2001 and $1,266,000, respectively.

Other ContingenciesMay 2002, the Company was added as a defendant in two similar actions which were originally filed in December 1998 against approximately twenty defendants (the "Defendants") by Astoria Entertainment, Inc. ("Astoria"). One action was filed in the Civil District Court for the Parish of Orleans, Louisiana (the "State Claims") and the other was filed in the United States District Court for the Eastern District of Louisiana (the "Federal Claims"). In these actions, Astoria alleges the Defendants conspired to eliminate Astoria from receiving one of the fifteen riverboat gaming licenses that were awarded by the State of Louisiana in 1993 and 1994, at a time when a former subsidiary of the Company was involved in riverboat gaming in Louisiana. Astoria seeks unspecified damages including lost profits. In August 2001, the Federal court dismissed all of the Federal Claims with prejudice. A motion to dismiss the State Claims is pending before the state district court of appeals. The Company believes the State Claims are without merit and intends to vigorously contest liability in this matter.
    Further, in the ordinary course of business, the Company has become a defendant in various types of other legal proceedings. Although the Company cannot determine at this time the amount of the ultimate exposure from these ordinary course of
business lawsuits, if any, management 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, results of operations or cash flows.

L - RESTRUCTURING CHARGEFiscal 2002 Charges
    The Company recorded the following charges during the fiscal year ended April 30, 2002:
 
 
Fiscal
2002
Stock option based compensation
 
$
7,328,554
Restructuring charge
 
 
2,732,106
Write-down of investments and equipment
 
 
3,927,631
Stock Option Based Compensation
    Prior to May 1, 2002, the Company's 1997 Stock Option Plan contained a "cashless" exercise feature which allowed option holders to use the "in-the-money" value of the option as payment for a portion or all of the exercise price of the option. Due to such cashless feature, options granted under the plan were characterized as "variable" options under accounting principles generally accepted in the United States of America. Under variable option accounting, changes in the market value of the Company's common stock generally result in charges or credits to stock-based compensation with an offsetting entry to additional paid-in capital. Accordingly, for the fiscal year ended April 30, 2002, the Company recorded a $7.3 million non-cash charge related to stock option based compensation.
    In order to avoid future stock option based compensation charges or credits (which can result in volatile earnings fluctuations), effective May 1, 2002 the Company rescinded the cashless exercise provision of its 1997 Plan.
Restructuring Charge
    As discussed in Note R,P, in October 2001, the Company made the decision to sell all of its operating subsidiaries except Car-Mart and relocate its corporate headquarters to Bentonville, Arkansas where Car-Mart is based. As a result, the Company recorded severance ($2.6 million) and office closing costs ($.1 million) totaling $2.7 million during the fiscal year ended April 30, 2002. As
Write-Down of April
30, 2002, $212,500Investments and Equipment
    Prior to the Company's decision in October 2001 to sell all of severance costsits operating subsidiaries except Car-Mart, the Company had been paid.

M - WRITE-DOWN OF INVESTMENTS AND EQUIPMENTa history of making investments in a variety of different businesses, including investments in early-stage emerging technology/Internet concerns. During the fiscal year ended April 30, 2002, financing for early-stage emerging technology/Internet investments, such as the Company's investment in Monarch Venture Partners' Fund I, L.P. ("Monarch") and Mariah Vision 3, Inc. ("Mariah"), became increasingly difficult to obtain. The adverse conditions in the capital markets, combined with poor operating results and prospects of Mariah and some of Monarch's portfolio companies, caused the Company to consider whether its carrying values of Mariah and Monarch were impaired. After review and analysis, the Company wrote-down the carrying value of Mariah and Monarch and Mariah a total of $3.3 million. In addition, during fiscal 2002 the Company wrote down the value of certain equipment as follows:


                                                   Year
                                                  Ended
                                                 April 30,
                                                   2002
                                               ------------


         Monarch                               $  1,648,511
         Mariah                                   1,650,000
         Equipment                                  629,120
                                               ------------

                                               $  3,927,631
                                               ============
prior to its sale by $.6 million.
    The Company's remaining investment in Monarch and Mariah at April 30, 20022004, which is carried at the lower of cost or market, was $252,456$293,811 and $0, respectively, and is included in "Investments""Prepaid and other assets" in the accompanying consolidated balance sheet.



                                       30
M - Related Party Transactions
    During fiscal 2002, the Company paid an outside director $16,719 as a fee in connection with certain consulting services related to its used car sales and finance business.
    During fiscal 2004, 2003 and 2002, the Company paid Dynamic Enterprises, Inc. ("Dynamic") approximately $225,000 per year for the lease of six dealership locations. During those periods an officer of Dynamic was also a director of the Company.

N - FAIR VALUE OF FINANCIAL INSTRUMENTSFair Value of Financial Instruments
    The table below summarizes information about the fair value of financial instruments included in the Company's financial statements at April 30, 20022004 and 2001:


                                                       April 30, 2002                    April 30, 2001
                                               -----------------------------     -----------------------------
                                                 Carrying           Fair           Carrying           Fair
                                                  Value            Value            Value            Value
                                               ------------     ------------     ------------     ------------


         Cash and cash equivalents             $  1,229,920     $  1,229,920     $    718,134     $    718,134
         Finance receivables, net                75,079,603       69,091,659       61,969,879       58,871,385
         Revolving credit facilities             32,291,957       32,291,957       29,767,688       29,767,688
         Other notes payable                      7,500,000        7,500,000       11,816,000       11,816,000
2003:
 
 
April 30, 2004
 
April 30, 2003
 
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
Cash and cash equivalents
 
$
1,128,349
 
$
1,128,349
 
$
783,786
 
$
783,786
Finance receivables, net
 
 
103,683,660
 
 
96,539,720
 
 
91,358,935
 
 
83,815,523
Revolving credit facility
 
 
22,534,120
 
 
22,534,120
 
 
25,968,220
 
 
25,968,220
    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 normal costs of administration of
finance receivables 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 and cash equivalents
The carrying amount is considered to be a reasonable estimate of fair value.

Finance receivables, net


The fair value was estimated based on
                                             management's knowledgeupon discussions with a third party purchaser of sales of other finance receivables, portfolios within the
                                             sub-prime auto industry.

         and discussions with other valuation personnel.

Revolving credit facilities         facility


The fair value approximates carrying value due to the variable interest rates charged on the borrowings.

         Other notes payable                 The fair value approximates carrying value
                                             as the interest rates charged on such debt
                                             approximates market.
O - RELATED PARTY TRANSACTIONS

     During fiscal 2002, 2001 and 2000, the Company paid an outside director
$16,719, $81,140 and $30,000, respectively, as a fee in connection with certain
consulting services related to its used car sales and finance business.

     During fiscal 2002, 2001 and 2000, the Company paid Dynamic Enterprises,
Inc. ("Dynamic") approximately $225,000 per year for the lease of six dealership
locations. A director of the Company is also an officer of Dynamic.




                                       31


P - BUSINESS SEGMENTS

     Operating results and other financial data are presented for the continuing
operations of the Company by business segmentSupplemental Cash Flow Information
    Supplemental cash flow disclosures for the years ended April 30, 2002, 20012004, 2003 and 2000. The segments include Car-Mart and Corporate operations. The
Company's continuing operations and other financial data by business segment for
the years ended April 30, 2002 2001 and 2000 are as follows (in thousands):


                                                              Year Ended April 30, 2002
                                             ------------------------------------------------------------
                                              Car-Mart        Corporate      Eliminations    Consolidated
                                             -----------     -----------     ------------    ------------

Revenues:
    Sales                                    $   118,642                                      $   118,642
    Interest income                                8,775     $       838      $      (331)          9,282
                                             -----------     -----------      -----------     -----------
          Total                                  127,417             838             (331)        127,924
                                             -----------     -----------      -----------     -----------

Costs and expenses:
    Cost of sales                                 62,965                                           62,965
    Selling, general and admin                    19,354           2,972                           22,326
    Provision for credit losses                   23,036             100                           23,136
    Interest expense                               2,564             789             (331)          3,022
    Depreciation and amortization                    162             122                              284
    Stock option based compensation                                7,329                            7,329
    Restructuring charge                                           2,732                            2,732
    Write-down of investments/equip.                               3,928                            3,928
                                             -----------     -----------      -----------     -----------
          Total                                  108,081          17,972             (331)        125,722
                                             -----------     -----------      -----------     -----------

          Income (loss) before taxes
              and minority interests         $    19,336     $   (17,134)     $        --     $     2,202
                                             ===========     ===========      ===========     ===========

Capital expenditures                         $     1,306     $       940      $        --     $     2,246
                                             ===========     ===========      ===========     ===========

Total assets                                 $    81,745     $    66,323
                                             ===========     ===========

                                                                     Year Ended April 30, 2001
                                                 ----------------------------------------------------------------
                                                   Car-Mart        Corporate        Eliminations     Consolidated
                                                 ------------     ------------      ------------     ------------

Revenues:
    Sales                                        $     97,848                                        $     97,848
    Interest income                                     7,858     $      1,524      $       (476)           8,906
                                                 ------------     ------------      ------------     ------------
          Total                                       105,706            1,524              (476)         106,754
                                                 ------------     ------------      ------------     ------------

Costs and expenses:
    Cost of sales                                      53,412                                              53,412
    Selling, general and admin                         14,950            3,784                             18,734
    Provision for credit losses                        17,215                                              17,215
    Interest expense                                    3,613              878              (476)           4,015
    Depreciation and amortization                         141              346                                487
                                                 ------------     ------------      ------------     ------------
          Total                                        89,331            5,008              (476)          93,863
                                                 ------------     ------------      ------------     ------------

          Income (loss) before taxes
              and minority interests             $     16,375     $     (3,484)     $         --     $     12,891
                                                 ============     ============      ============     ============

Capital expenditures                             $        636     $         67      $         --     $        703
                                                 ============     ============      ============     ============

Total assets                                     $     72,890     $     71,832
                                                 ============     ============



                                       32

                                                                          Year Ended April 30, 2000
                                                       ---------------------------------------------------------------
                                                         Car-Mart        Corporate       Eliminations     Consolidated
                                                       ------------     ------------     ------------     ------------

Revenues:
    Sales                                              $     82,916                                       $     82,916
    Interest income                                           6,466     $      2,290     $       (702)           8,054
                                                       ------------     ------------     ------------     ------------
          Total                                              89,382            2,290             (702)          90,970
                                                       ------------     ------------     ------------     ------------

Costs and expenses:
    Cost of sales                                            45,383                                             45,383
    Selling, general and admin                               12,960            4,678                            17,638
    Provision for credit losses                              14,104                                             14,104
    Interest expense                                          3,239              788             (702)           3,325
    Depreciation and amortization                               134              296                               430
                                                       ------------     ------------     ------------     ------------
          Total                                              75,820            5,762             (702)          80,880
                                                       ------------     ------------     ------------     ------------

Other income:
    Equity in unconsolidated of subsidiaries                                     507                               507
    Gain on sale of CMN                                                       10,738                            10,738
                                                       ------------     ------------     ------------     ------------
                                                                              11,245                            11,245
                                                       ------------     ------------     ------------     ------------

          Income before taxes
              and minority interests                   $     13,562     $      7,773     $         --     $     21,335
                                                       ============     ============     ============     ============

Capital expenditures                                   $        169     $      1,449     $         --     $      1,618
                                                       ============     ============     ============     ============

Total assets                                           $     58,976     $     77,052
                                                       ============     ============


Qfollows:
 
 
Years Ended April 30,

 
 
2004
 
2003
 
2002
Interest paid
 
$
1,101,715
 
$
1,715,524
 
$
2,773,843
Income taxes paid (refunded), net
 
 
5,986,433
 
 
(1,400,091
)
 
5,396,204
Note issued in the purchase of property and equipment
 
 
 
 
 
 
 
 
900,000
Stock issued to acquire Car-Mart minority interest
 
 
 
 
 
 
 
 
1,447,589

P - SUPPLEMENTAL CASH FLOW INFORMATION

     Supplemental cash flow disclosures for the fiscal years ended April 30,
2002, 2001 and 2000 are as follows:


                                                                              Years Ended April 30,
                                                                     2002             2001             2000
                                                                 ------------     ------------     ------------


Interest paid                                                    $  2,773,843     $  3,790,713     $  3,108,766
Income taxes paid, net                                              5,396,204        8,910,947        8,671,298
Notes issued in the purchase of property and equipment                900,000           15,000        1,158,000
Value of securities received in sale of 50% of Precision                               833,833
Note received in sale of Crown El Salvador                                             554,213
Stock issued to acquire Car-Mart minority interest                  1,447,589




                                       33


R - DISCONTINUED OPERATIONSDiscontinued Operations
    In October 2001 the Company made the decision to sell all of its operating subsidiaries except Car-Mart, and relocate its corporate headquarters to Bentonville, Arkansas where Car-Mart is based. This decision was based on management's desire to separate the highly profitable and modestly leveraged operations of Car-Mart from the operating losses or lower level of profitability and highly leveraged operations of the Company's other operating subsidiaries. In addition, it is management's belief that the Company's ownership of businesses in a variety of different industries may have created confusion within the investment community, possibly making it difficult for investors to analyze and properly value the Company's common stock. In May 2002 the Company sold its remaining 50% interest in Precision IBC, Inc. ("Precision") for $3.8 million in cash. In July 2002 the Company sold its 80% interest in Concorde Acceptance Corporation ("Concorde") for $3.0 million in cash. In addition, at closing, Concorde
repaid allAs a result of its $2.1 million in outstanding borrowings fromthese two sales, the Company.Company no longer operates any business other than Car-Mart.
    As a result of the Company's decision, operating results from its non Car-Mart operating subsidiaries have been reclassified to discontinued operations for all periods presented. Below isDiscontinued operations include the operations of Concorde through June 2002, Precision through April 2002 and Smart Choice Automotive Group, Inc. ("Smart Choice") through October 2001. Discontinued operations for the year ended April 30, 2004 reflect a summarynegotiated settlement of the number of months each of these
subsidiaries operating results are included in discontinued operationsamounts due from a former subsidiary of the Company for the years ended April 30, 2002, 2001 and 2000:


                                                                          Number of Months Included
                                      Month           Month            in Discontinued Operations for
                                     Company         Company              the Years Ended April 30,
                                     Acquired        Sold or      ----------------------------------------
            Subsidiary              or Formed       Disposed         2002           2001           2000
         -----------------          ----------     ----------     ----------     ----------     ----------

         Smart Choice(1)                 12-99          10-01              6             12              5
         Paaco(1)                         2-98          10-01              6             12             12
         Precision                        2-98           5-02             12             12             12
         Concorde                         6-97           7-02             12             12             12
         Crown El Salvador                2-99           4-01             --             12             12
         Home Stay                        5-98          12-99             --             --              7


     1 - Paaco became a wholly-owned subsidiary of Smart Choice in December 1999
when the Company exchanged its 85% interest in Paaco and certain other
consideration for a 70% interest in Smart Choice. In January 2001 certain
Florida-based subsidiaries of Smart Choice (the "Florida Finance Group") became
over-advanced on their revolving credit facility with Finova Capital Corporation
("Finova"). In November 2001 this loan default culminated in certain Florida
Finance Group assets being sold in a foreclosure sale conducted by Finova. As a
result of the foreclosure and concurrent cessation of the Florida Finance
Group's operations, Smart Choice wrote-down its assets by approximately $39
million rendering it insolvent. Separately, the Company entered into a
settlement agreement with Finova that resulted in the Company paying Finova $1
million in exchange for Finova unconditionally releasing the Company from its $5
million guaranty of the Florida Finance Group's and Paaco's obligations to
Finova. As a result of these transactions and operating losses at Smart Choice,
the Company's investment in Smart Choice, which totaled $17.6 million at April
30, 2001, was written off as of October 31, 2001. In addition, as a result of
revised subordination language that requires Finova to be paid in full prior to
the Company receiving any note payments from Paaco, the Company fully reserved
its $1.6 million receivable from Paaco as of October 31, 2001. The write-off of
the Company's investment in Smart Choice and the loss resulting from the $1
million guaranty payment to Finova and related tax benefits, are included in
discontinued operations. In March 2002 the Company sold its 70% interest in
Smart Choice for a nominal sum.had been previously written-off. A summary of the Company's discontinued operations for the years ended April 30, 2002, 20012004, 2003 and 20002002 is as follows (in thousands):

                                                                      Years Ended April 30,
                                                               2002            2001            2000
                                                            ----------      ----------      ----------


     Revenues                                               $  104,069      $  236,837      $  147,996
     Operating expenses                                        107,474         238,881         143,834
     Write-down of Smart Choice assets                          39,294
     Loss in excess of the Company's basis                     (19,349)
                                                            ----------      ----------      ----------

         Income (loss) before taxes
           and minority interests                              (23,350)         (2,044)          4,162

     Provision (benefit) for income taxes                       (5,742)           (459)          2,133
     Minority interests (benefit)                               (4,438)           (181)            593
                                                            ----------      ----------      ----------

         Income (loss) from discontinued operations         $  (13,170)     $   (1,404)     $    1,436
                                                            ==========      ==========      ==========




                                       34


     A summary
 
 
Years Ended April 30,

 
 
 
2004
 
2003
 
2002
 
Revenues
 
$
—
 
$
3,058
 
$
104,069
 
Operating expenses
 
 
 
 
 
2,306
 
 
107,474
 
Write-down of Smart Choice assets, net
 
 
(250
)
 
 
 
 
19,945
 
 
 
 
 
 
 
Income (loss) before taxes and minority interests
 
 
250
 
 
752
 
 
(23,350
)

Provision (benefit) for income taxes

 

 

85

 

 

283

 

 

(5,742

)
Minority interests (benefit)
 
 
 
 
 
94
 
 
(4,438
)
 
 
 
 
 
 

Income (loss) from discontinued operations

 

$

165

 

$

375

 

$

(13,170

)
 
 
 
 
 
Q - Quarterly Results of assets and liabilities of subsidiaries held for sale as of
April 30, 2002 and 2001 is as follows (in thousands):


                                                                        April 30,
                                                                   2002            2001
                                                                ----------      ----------


         Assets of subsidiaries held for sale:
             Mortgage loans held for sale, net                  $   28,172      $   16,200
             Finance receivables, net                                              149,656
             Inventory                                                               7,980
             Property and equipment, net                               680          12,783
             Deferred tax asset, net                                   234          15,902
             Other                                                   6,872          16,388
                                                                ----------      ----------

                                                                $   35,958      $  218,909
                                                                ==========      ==========

         Liabilities of subsidiaries held for sale:
             Accounts payable and accrued liabilities           $    3,822      $   13,255
             Deferred sales tax                                                      4,963
             Revolving credit facilities                            23,238         160,294
             Notes payable to the Company                            2,079           6,112
             Other notes payable                                                     7,495
             Minority interests                                        210           4,648
                                                                ----------      ----------
                                                                    29,349         196,767

             Less:  Notes payable to the Company                    (2,079)         (6,112)
                                                                ----------      ----------

                                                                $   27,270      $  190,655
                                                                ==========      ==========


     As of April 30, 2002 and 2001 the Company's equity investment in businesses
held for sale was as follows (in thousands):


                                                                          April 30,
                                                                    2002             2001
                                                                ------------     ------------


         Smart Choice                                           $         --     $     17,591
         Concorde                                                      2,838            1,354
         Precision                                                     3,771            3,197
                                                                ------------     ------------

                                                                $      6,609     $     22,142
                                                                ============     ============




                                       35


S - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)Operations (unaudited)
    A summary of the Company's quarterly results of operations for the years ended April 30, 20022004 and 20012003 is as follows (in thousands)thousands, except per share information):

                                                                          Year Ended April 30, 2002
                                                   First         Second              Third            Fourth
                                                  Quarter        Quarter            Quarter           Quarter              Total
                                                 ----------     ----------         ----------        ----------         ----------


Revenues                                         $   30,539     $   31,768         $   30,921        $   34,696         $  127,924
Income (loss) from continuing operations              1,963         (2,153)(1)            231(2)         (1,177)(2)         (1,136)
Net income (loss)                                     1,194        (14,967)               538            (1,071)           (14,306)
Continuing earnings (loss) per share:
    Basic                                               .29           (.32)               .03              (.17)              (.17)
    Diluted                                             .28           (.32)               .03              (.17)              (.17)

                                                                       Year Ended April 30, 2001
                                                   First          Second         Third         Fourth
                                                  Quarter        Quarter        Quarter        Quarter          Total
                                                 ----------     ----------     ----------     ----------     ----------


Revenues                                         $   24,463     $   25,772     $   26,740     $   29,779     $  106,754
Income from continuing operations                     1,706          1,562          1,789          2,305          7,362
Net income                                            2,767          1,550            996            650          5,963
Continuing earnings per share:
    Basic                                               .21            .20            .24            .32            .96
    Diluted                                             .20            .19            .23            .31            .92


     (1)  In
 
 
Year Ended April 30, 2004
 
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Total
Revenues
 
$
43,310
 
$
43,315
 
$
41,853
 
$
47,706
 
$
176,184
Income from continuing operations
 
 
4,379
 
 
3,815
 
 
2,810
 
 
4,635
 
 
15,639
Net income
 
 
4,544
 
 
3,815
 
 
2,810
 
 
4,635
 
 
15,804
Continuing earnings per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
.60
 
 
.51
 
 
.37
 
 
.60
 
 
2.07
 
Diluted
 
 
.55
 
 
.48
 
 
.35
 
 
.58
 
 
1.96
 
 
Year Ended April 30, 2003
 
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Total
Revenues
 
$
36,097
 
$
38,278
 
$
38,300
 
$
42,210
 
$
154,885
Income from continuing operations
 
 
3,437
 
 
3,100
 
 
3,284
 
 
3,748
 
 
13,569
Net income
 
 
3,687
 
 
3,356
 
 
3,284
 
 
3,748
 
 
14,075
Continuing earnings per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
.49
 
 
.44
 
 
.47
 
 
.53
 
 
1.93
 
Diluted
 
 
.43
 
 
.40
 
 
.42
 
 
.48
 
 
1.73

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    None
Item 9A.    Controls and Procedures
    Under the second quarter of fiscal 2002supervision and with the Company recorded a $2.3
          million after tax charge related to the write-down of certain
          investments and equipment, and a $1.8 million after tax charge related
          to the relocationparticipation of the Company's corporate headquartersmanagement, including the Company's Chief Executive Officer and severance pay.

     (2)  InChief Financial Officer, the thirdCompany has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this annual report on Form 10-K, and, based on their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no significant changes in the Company's internal controls over financial reporting that occurred during the fourth quarter of fiscal 20022004 that materially affected, or are reasonably likely to materially affect, the Company recorded
          non-recurring and non-cash after tax charges of $2.0 million and $4.3
          million, respectively, related to stock option based compensation.




                                       36


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None

                                    Company's internal control over financial reporting.

PART III
    Except as to information with respect to executive officers which is contained in a separate heading under Item 1 to this Form 10-K, the information required by Part IIIItems 10-14 of Form 10-K is, pursuant to General Instruction G(3) of Form 10-K, incorporated by reference 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 2002.2004 (the "Proxy Statement"). The Company will, within 120 days of the end of its fiscal year, file with the Securities and Exchange Commission a definitive proxy statement pursuant to Regulation 14A.

ITEM
Item 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTDirectors and Executive Officers of the Registrant
    The information concerning directors and executive officers of the
registrantrequired by this item is set forth in the Proxy Statement to be delivered to stockholders
in connection with the Company's Annual Meeting of Stockholders to be held in
2002 (the "Proxy Statement") under the headings "Election"Proposals to be Voted on—Election of Directors" and
"Compliance with Directors," "Ownership of Common Stock—Section 16(a) Beneficial Ownership Reporting Compliance" and "Corporate Governance and Board Matters—Code of the Securities Exchange Act of 1934,"Ethics" which information is incorporated herein by reference. The name, age and position of
eachInformation regarding the executive officerofficers of the Company is set forth under the heading "Executive Officers" in Item 1 of this report.

ITEM
Item 11.    EXECUTIVE COMPENSATIONExecutive Compensation
    The information concerning executive compensationrequired by this item is set forth in the 2002 Proxy Statement under the heading "Executive Compensation," which information is incorporated herein by reference.

ITEM
Item 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

     The information concerning security ownership of certain beneficial owners
and management is set forth in the 2002 Proxy Statement under the heading
"SecuritySecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    The information required by this item is set forth in the Proxy Statement under the headings "Ownership of Common Stock" and "Equity Compensation Plan Information," which information is incorporated herein by reference.

ITEM
Item 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSCertain Relationships and Related Transactions
    The information concerning certain relationships and related transactionsrequired by this item is set forth in the 2002 Proxy Statement under the heading "Certain"Related Party Transactions," which information is incorporated herein by reference.

                                     PART IV

ITEM
Item 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1).  FINANCIAL STATEMENTS AND ACCOUNTANT'S REPORTPrincipal Accountant Fees and Services
    The following financial statementsinformation required by this item is set forth in the Proxy Statement under the heading "Principal Accountant Fees and accountant's report are included
in Item 8 of this report:

                  Report of Independent Certified Public Accountants

                  Consolidated Balance Sheets as of April 30, 2002 and 2001

                  Consolidated Statements of Operations for the fiscal years
                  ended April 30, 2002, 2001 and 2000

                  Consolidated Statements of Cash Flows for the fiscal years
                  ended April 30, 2002, 2001 and 2000

                  Consolidated Statements of Stockholders' Equity for the fiscal
                  years ended April 30, 2002, 2001 and 2000

                  Notes to Consolidated Financial Statements



                                       37


(a)(2).  FINANCIAL STATEMENT SCHEDULES

         Schedule I - Condensed Financial Information of America's Car-Mart,
         Inc. (Parent Company Only)

         The other financial statement schedules are omitted since the requiredServices," which 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 statementsincorporated herein by reference.



PART IV
Item 15.    Exhibits, Financial Statement Schedules and notes
         thereto.

(a)(3).  EXHIBITS

Reports on Form 8-K

EXHIBIT
NUMBER   DESCRIPTION OF EXHIBIT
- -------  ----------------------
(a)(1)
Financial Statements and Accountant's Report



The following financial statements and accountant's report are included in Item 8 of this report:





Report of Independent Registered Public Accounting Firm





Consolidated Balance Sheets as of April 30, 2004 and 2003





Consolidated Statements of Operations for the years ended April 30, 2004, 2003 and 2002





Consolidated Statements of Cash Flows for the years ended April 30, 2004, 2003 and 2002





Consolidated Statements of Stockholders' Equity for the years ended April 30, 2004, 2003 and 2002





Notes to Consolidated Financial Statements

(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.

(a)(3)


Exhibits


Exhibit
Number
Description of Exhibit
3.1
Articles of Incorporation of the Company (formerly SKAI, Inc.).(3)
3.1.1
Articles of Merger of the Company and SKAI, Inc. filed with the Secretary of State of the State of Alabama on September 29, 1989.(3)
3.1.2
Articles of Merger of the Company and SKAI, Inc. filed with the Secretary of State of the State of Texas on October 10, 1989.(3)
3.1.3
Articles of Amendment filed with the Secretary of State of the State of Texas on October 7, 1993.(8)
3.1.4
Articles of Amendment filed with the Secretary of State of the State of Texas on October 5, 1994.(8)
3.1.5
Articles of Amendment filed with the Secretary of State of the State of Texas on October 2, 1997.(12)

(11)
3.1.6
Articles of Amendment filed with the Secretary of State of the State of Texas on March 20, 2002.(1)

(13)
3.2
By-Laws dated August 24, 1989.(4)
4.1
Specimen stock certificate.(9)
4.2
Agented Revolving Credit Agreement dated December 18, 2001 by and between America's Car-Mart, Inc. and Colonial Auto Finance, Inc. as borrowers, and Bank of Oklahoma, N.A., Bank of Arkansas, N.A., Superior Federal Bank, Great Southern Bank, Community Bank and Arkansas State Bank as lenders.(13)

(12)
4.2.1
Amendment dated November 30, 2003 to Agented Revolving Credit Agreement dated December 18, 2001 by and between the Company as borrower, and Bank of Oklahoma and certain other banks as lenders.(15)
10.1
1986 Incentive Stock Option Plan.(2)
10.1.1
Amendment to 1986 Incentive Stock Option Plan adopted September 27, 1990.(5)
10.2
1991 Non-Qualified Stock Option Plan.(6)
10.3
1997 Stock Option Plan.(11)

(10)
10.4
Form of Indemnification Agreement between the Company and certain officers and directors of the Company.(7)
10.5     Form of Severance Agreement
Employment agreement dated July 2, 1996May 1, 2003 by and between the Company and Edward R. McMurphy, T.J. Falgout, IIIWilliam H. Henderson.(14)
10.6
Employment agreement dated May 1, 2003 by and Mark D. Slusser.(10)

between the Company and Eddie Lee Hight.(14)
14.1
Code of Business Conduct and Ethics.(1)

21.1
Subsidiaries of America's Car-Mart, Inc.(1)
23.1
Consent of Independent CertifiedRegistered Public Accountants.Accounting Firm.(1)

23.2     Report of Independent Certified Public Accountants on Financial
         Statement Schedule.(1)

24.1
Power of Attorney of Edward R. McMurphy.William H. Henderson.(1)
24.2
Power of Attorney of Tilman J. Falgout, III.(1)
24.3
Power of Attorney of J. David Simmons.(1)
24.4
Power of Attorney of Robert J. Kehl.(1)
24.5
Power of Attorney of Nan R. Smith.Carl E. Baggett.(1)

24.6     Power
31.1
Certification pursuant to Section 302 of Attorneythe Sarbanes-Oxley Act of Bennie M. Bray.2002.(1)
31.2
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1)
32.1
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1)




                                       38


- ----------

(1)
Filed herewith.

(2)
Previously filed as an Exhibit to the Company's Registration Statement on Form 10, as amended, (No. 0-14939) and incorporated herein by reference.

(3)
Previously filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended October 31, 1989 and incorporated herein by reference.

(4)
Previously filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended April 30, 1990 and incorporated herein by reference.

(5)
Previously filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended April 30, 1991 and incorporated herein by reference.

(6)
Previously filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended April 30, 1992 and incorporated herein by reference.

(7)
Previously filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended July 31, 1993 and incorporated herein by reference.

(8)
Previously filed as an Exhibit to the Company's Registration Statement on Form S-1, as amended, initially filed with the Securities and Exchange Commission on May 31, 1994 (No. 33-79484) and incorporated herein by reference.

(9)
Previously filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended April 30, 1994 and incorporated herein by reference.

(10)     Previously filed as an Exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended January 31, 1997 and incorporated
         herein by reference.

(11)     
Previously filed as an Exhibit to the Company's Registration Statement on Form S-8, as amended, initially filed with the Securities and Exchange Commission on October 20, 1997 (No. 333-38475) and incorporated herein by reference.

(12)     

(11)
Previously filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended April 30, 1998 and incorporated herein by reference.

(13)     

(12)
Previously filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended January 31, 2002 and incorporated herein by reference.

(b) REPORTS ON FORM 8-K

During

(13)
Previously filed as an Exhibit to the fiscal quarterCompany's Annual Report on Form 10-K for the year ended April 30, 2002 and incorporated herein by reference.

(14)
Previously filed as an Exhibit to the Company did not file any
reportsCompany's Quarterly Report on Form 8-K.



                                       39
10-Q for the quarter ended July 31, 2003 and incorporated herein by reference.

(15)
Previously filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended October 31, 2003 and incorporated herein by reference.

(b)
Reports on Form 8-K



During the fiscal quarter ended April 30, 2004 the Company furnished the following reports on Form 8-K:



(1) - Form 8-K, dated February 13, 2004, reporting under Item 12 the issuance by the Company of a press release announcing an adjustment to the Company's earnings guidance for the fiscal quarter ended January 31, 2004.



(2) - Form 8-K, dated March 5, 2004, reporting under Item 12 the issuance by the Company of a press release announcing earnings for the fiscal quarter ended January 31, 2004.


SIGNATURES
    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.

                                                AMERICA'S CAR-MART, INC.

Dated:   July 18, 2002              By: /s/ Tilman J. Falgout, III
                                        ----------------------------------------
                                             Tilman J. Falgout, III
                                             Chief Executive Officer
                                             (principal executive officer)

Dated:   July 18, 2002              By: /s/ Mark D. Slusser
                                        ----------------------------------------
                                             Mark D. Slusser
                                             Vice President Finance and Chief
                                             Financial Officer
                                             (principal financial and accounting
                                             officer)

AMERICA'S CAR-MART, INC.

Dated: July 7, 2004


By:


/s/    Tilman J. Falgout, III
        Tilman J. Falgout, III
        Chief Executive Officer
        (principal executive officer)

Dated: July 7, 2004


By:


/s/    Mark D. Slusser
        Mark D. Slusser
        Vice President Finance and Chief Financial Officer
        (principal financial and accounting officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
              ---------                                     -----                                      ----
*
Chairman of the Board, Chief Executive Officer and Director
July 18, 2002
- --------------------------------------
Edward R. McMurphy

                   7, 2004
Tilman J. Falgout, III

*


Vice Chairman of the Board,                         July 18, 2002
- --------------------------------------
President and Director
Nan R. Smith

                   *                            Chief Executive Officer                            


July 18, 2002
- --------------------------------------          and 7, 2004
William H. Henderson

*


Director
Tilman J. Falgout, III

                   *                            Director                                           


July 18, 2002
- --------------------------------------
7, 2004
J. David Simmons

*


Director


July 18, 2002
- --------------------------------------
7, 2004
Robert J. Kehl

*


Director


July 18, 2002
- --------------------------------------
Bennie M. Bray

7, 2004
Carl E. Baggett
*By /s/
/s/ Mark D. Slusser
    ----------------------------------
     
Mark D. Slusser
As Attorney-in-Fact
Pursuant to Powers of
Attorney filed herewith




                                       40


                                   SCHEDULE I
           CONDENSED FINANCIAL INFORMATION OF AMERICA'S CAR-MART, INC.
                             (PARENT COMPANY ONLY)


                            CONDENSED BALANCE SHEETS




EXHIBIT INDEX

                                                                     April 30,
                                                            -----------------------------
                                                                2002             2001
                                                            ------------     ------------

Assets:
    Cash
Exhibit
Number
Description of Exhibit
14.1
Code of Business Conduct and cash equivalents                               $    969,505     $    252,773
    Investments                                                  252,456        3,473,761
    Income tax receivable                                      8,432,846
    Receivables from subsidiaries                              3,578,661       10,611,644
    Investment in subsidiaries                                49,792,865       43,752,260
    Goodwill, net                                                               6,767,585
    Other                                                      3,296,656        6,973,699
                                                            ------------     ------------

                                                            $ 66,322,989     $ 71,831,722
                                                            ============     ============

Liabilities and stockholders' equity:
    Accounts payable and accrued liabilities                $  2,674,510     $    853,265
    Payables to subsidiaries                                   3,335,292
    Income taxes payable                                                          230,204
    Debt                                                       7,500,000       11,816,000
                                                            ------------     ------------
        Total liabilities                                     13,509,802       12,899,469
                                                            ------------     ------------

    Stockholders' equity                                      52,813,187       58,932,253
                                                            ------------     ------------

                                                            $ 66,322,989     $ 71,831,722
                                                            ============     ============


                       CONDENSED STATEMENTS OF OPERATIONS


                                                                                    Years Ended April 30,
                                                                       ------------------------------------------------
                                                                           2002              2001              2000
                                                                       ------------      ------------      ------------

Revenues:
    Interest income                                                    $     76,781      $    356,795      $    262,613
    Interest income from subsidiaries                                       760,239         1,166,973         2,028,413
                                                                       ------------      ------------      ------------
                                                                            837,020         1,523,768         2,291,026
                                                                       ------------      ------------      ------------

Costs and expenses:
    Selling, general and administrative                                   2,972,029         3,783,916         4,677,799
    Provision for credit losses                                             100,000
    Interest expense                                                        788,427           877,245           788,375
    Depreciation and amortization                                           122,016           345,738           296,472
    Stock option based compensation                                       7,328,554
    Restructuring charge                                                  2,732,106
    Write-down of investments and equipment                               3,927,631
                                                                       ------------      ------------      ------------
                                                                         17,970,763         5,006,899         5,762,646
                                                                       ------------      ------------      ------------

Other income (expense):
    Equity in earnings of Car-Mart                                       11,577,366         9,660,926         8,143,808
    Equity in earnings (loss) of discontinued subsidiaries              (13,169,637)       (1,398,967)        1,559,624
    Equity in earnings of unconsolidated subsidiaries                                                           506,775
    Gain on sale of Casino Magic Neuquen                                                                     10,737,832
                                                                       ------------      ------------      ------------
                                                                         (1,592,271)        8,261,959        20,948,039
                                                                       ------------      ------------      ------------

        Income (loss) before income taxes                               (18,726,014)        4,778,828        17,476,419
Provision (benefit) for income taxes                                     (4,421,000)       (1,184,000)        2,640,000
                                                                       ------------      ------------      ------------

        Net income (loss)                                              $(14,305,014)     $  5,962,828      $ 14,836,419
                                                                       ============      ============      ============



The accompanying notes are an integral part of this condensed financial
information.



                                       41


                             SCHEDULE I (CONTINUED)
                 AMERICA'S CAR-MART, INC. (PARENT COMPANY ONLY)
                       CONDENSED STATEMENTS OF CASH FLOWS



                                                                                    Years Ended April 30,
                                                                       ------------------------------------------------
                                                                           2002              2001              2000
                                                                       ------------      ------------      ------------

Operating activities:
   Net income (loss)                                                   $(14,305,014)     $  5,962,828      $ 14,836,419
   Adjustments to reconcile net income (loss) to
   net cash used by operating activities:
      Depreciation and amortization                                         122,016           345,738           296,472
      Write-down of investments and equipment                             3,927,631
      Stock option based compensation                                     7,328,554
      Provision for credit losses                                           100,000
      Deferred income taxes                                              (2,076,215)          148,885          (554,791)
      (Gain) loss on sale of assets                                                             2,503            11,189
      Gain on sale of securities                                                                            (10,737,832)
      Equity in earnings of unconsolidated subsidiaries                                                        (506,775)
      Equity in earnings of Car-Mart                                    (11,577,366)       (9,660,926)       (8,143,808)
      Equity in earnings of discontinued subsidiaries                    13,169,637         1,398,967        (1,559,624)
      Changes in assets and liabilities, net of transactions:
          Other                                                             884,178           317,526        (1,171,157)
          Accounts payable and accrued liabilities                        1,821,245          (922,748)          527,267
          Income taxes payable                                             (230,204)       (5,116,616)        3,302,886
                                                                       ------------      ------------      ------------
             Net cash used by operating activities                         (835,538)       (7,523,843)       (3,699,754)
                                                                       ------------      ------------      ------------


Investing activities:
    Purchase of property and equipment                                      (39,967)          (51,660)         (291,427)
    Sale of property and equipment                                           29,024
    Purchase of investments and securities                                  (77,206)         (970,615)       (2,028,034)
    Sale of securities                                                                                       16,762,325
    Repayments from (advances to) subsidiaries, net                       4,426,697         5,799,678        (6,723,832)
    Sale of 50% of Precision                                                                2,229,468
    Sale of Crown El Salvador                                                                  30,000
    Dividends and note collections from CMN                                                                     306,487
    Purchase of subsidiary minority interest                             (1,562,027)
    Purchase of discontinued subsidiary                                                                      (5,338,741)
                                                                       ------------      ------------      ------------
             Net cash provided by investing activities                    2,776,521         7,036,871         2,686,778
                                                                       ------------      ------------      ------------


Financing activities:
    Issuance of stock                                                       113,498            60,937
    Repayment of debt                                                      (325,000)
    Purchase of common stock                                             (1,012,749)       (5,124,894)       (5,844,111)
                                                                       ------------      ------------      ------------
             Net cash used by financing activities                       (1,224,251)       (5,063,957)       (5,844,111)
                                                                       ------------      ------------      ------------


Increase (decrease) in cash and cash equivalents                            716,732        (5,550,929)       (6,857,087)
Cash and cash equivalents at: Beginning of year                             252,773         5,803,702        12,660,789
                                                                       ------------      ------------      ------------

                              End of year                              $    969,505      $    252,773      $  5,803,702
                                                                       ============      ============      ============



The accompanying notes are an integral part of this condensed financial
information.



                                       42


                             SCHEDULE I (CONTINUED)
                 AMERICA'S CAR-MART, INC. (PARENT COMPANY ONLY)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


A - GUARANTY

     America's Car-Mart, Inc. (the "Company") has made the following guaranty
     with respect to its subsidiaries:


                                                     Amount
                                    Facility        Drawn at         Maximum
                    Debtor           Amount       April 30, 2002    Guarantee
                    ------          --------      --------------    ---------

                   Car-Mart         37,000,000      32,291,957      10,000,000


B - ELIMINATION OF BALANCES AND TRANSACTIONS WITH SUBSIDIARIES

     As of April 30, 2002 and 2001 the following balances were eliminated in the
     consolidated financial statements of the Company:


                                                               April 30,
                                                      -----------------------------
                                                          2002             2001
                                                      ------------     ------------

         Receivables from subsidiaries                $  3,578,661     $ 10,611,644
         Investments in subsidiaries                    49,792,865       43,752,260


     For the years ended April 30, 2002, 2001 and 2000 interest income in the
     amounts of $330,579, $475,651 and $702,472, respectively, was eliminated in
     the consolidated financial statements of the Company.

C - DEBT

     A summary of debt as of April 30, 2002 and 2001 is as follows:



                                    Interest                       Primary              Balance at April 30,
                      Lender           Rate         Maturity      Collateral          2002               2001
               ------------------   -----------     --------      ----------     --------------     --------------


               Individuals/Trusts       8.50%       Jan 2004      Unsecured      $    7,500,000     $    7,500,000
               Bank of America          8.00%       Sep 2001      Equipment                              2,316,000
               Regions Bank         Prime + .5%     May 2001         Land                                2,000,000
                                                                                 --------------     --------------

                                                                                 $    7,500,000       $ 11,816,000
                                                                                 ==============       ============


     A summary of future minimum principal payments required under the
aforementioned debt as of April 30, 2002 is as follows:


             Years Ending
               April 30,                Amount
             ------------          ----------------


                 2003              $             --
                 2004                     7,500,000
                                   ----------------

                                   $      7,500,000
                                   ================


D - RECLASSIFICATIONS

     Certain prior year amounts in the accompanying financial statements have
been reclassified to conform to the fiscal 2002 presentation.



                                       43


                                  EXHIBIT INDEX


EXHIBIT
NUMBER          DESCRIPTION OF EXHIBIT
- -------         ----------------------


3.1.6    Articles of Amendment filed with the Secretary of State of the State of
         Texas on March 20, 2002.

Ethics.
21.1
Subsidiaries of America's Car-Mart, Inc.
23.1
Consent of Independent CertifiedRegistered Public Accountants.

23.2     Report of Independent Certified Public Accountants on Financial
         Statement Schedule.

Accounting Firm.
24.1
Power of Attorney of Edward R. McMurphy.

William H. Henderson.
24.2
Power of Attorney of Tilman J. Falgout, III.
24.3
Power of Attorney of J. David Simmons.
24.4
Power of Attorney of Robert J. Kehl.
24.5
Power of Attorney of Nan R. Smith.

24.6     PowerCarl E. Baggett.
31.1
Certification pursuant to Section 302 of Attorneythe Sarbanes-Oxley Act of Bennie M. Bray.
2002.
31.2
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




                                       44