Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Jan. 31, 2024 | Mar. 08, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 0-14939 | |
Entity Registrant Name | AMERICA’S CAR-MART, INC. | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 63-0851141 | |
Entity Address, Address Line One | 1805 North 2nd Street, Suite 401 | |
Entity Address, City or Town | Rogers | |
Entity Address, State or Province | AR | |
Entity Address, Postal Zip Code | 72756 | |
City Area Code | 479 | |
Local Phone Number | 464-9944 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CRMT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 6,392,098 | |
Entity Central Index Key | 0000799850 | |
Current Fiscal Year End Date | --04-30 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Jan. 31, 2024 | Apr. 30, 2023 |
Cash and cash equivalents | $ 4,239 | $ 9,796 |
Restricted cash | 90,350 | 58,238 |
Accrued interest on finance receivables | 7,370 | 6,115 |
Finance receivables, net | 1,085,772 | 1,063,460 |
Inventory | 109,313 | 109,290 |
Income tax receivable, net | 814 | 9,259 |
Prepaid expenses and other assets | 30,786 | 26,039 |
Right-of-use asset | 62,906 | 59,142 |
Goodwill | 14,504 | 11,716 |
Property and equipment, net | 60,893 | 61,682 |
Total Assets | 1,466,947 | 1,414,737 |
Liabilities: | ||
Accounts payable | 25,868 | 27,196 |
Accrued liabilities | 26,985 | 27,912 |
Deferred income tax liabilities, net | 20,348 | 39,315 |
Lease liability | 65,864 | 62,300 |
Non-recourse notes payable, net | 684,688 | 471,367 |
Revolving line of credit, net | 55,374 | 167,231 |
Total liabilities | 997,540 | 915,790 |
Commitments and Contingencies | ||
Mezzanine equity: | ||
Mandatorily redeemable preferred stock | 400 | 400 |
Equity: | ||
Preferred stock, par value $.01 per share, 1,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, par value $.01 per share, 50,000,000 shares authorized; 13,722,938 and 13,701,468 issued at January 31, 2024 and April 30, 2023, respectively, of which 6,391,061 and 6,373,404 were outstanding at January 31, 2024 and April 30, 2023, respectively | 137 | 137 |
Additional paid-in capital | 112,574 | 109,929 |
Retained earnings | 653,953 | 685,802 |
Less: Treasury stock, at cost, 7,331,877 and 7,328,064 shares at January 31, 2024 and April 30, 2023, respectively | (297,757) | (297,421) |
Total stockholders' equity | 468,907 | 498,447 |
Non-controlling interest | 100 | 100 |
Total equity | 469,007 | 498,547 |
Total Liabilities, Mezzanine Equity and Equity | 1,466,947 | 1,414,737 |
Payment Protection Plan [Member] | ||
Liabilities: | ||
Deferred revenue | 51,139 | 53,065 |
Service Contract [Member] | ||
Liabilities: | ||
Deferred revenue | $ 67,274 | $ 67,404 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Jan. 31, 2024 | Oct. 31, 2023 | Apr. 30, 2023 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred Stock, Shares Authorized (in shares) | 1,000,000 | 1,000,000 | |
Preferred Stock, Shares Issued (in shares) | 0 | 0 | |
Preferred Stock, Shares Outstanding (in shares) | 0 | 0 | |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.01 | $ 0.01 | |
Common Stock, Shares Authorized (in shares) | 50,000,000 | 50,000,000 | |
Common Stock, Shares, Issued (in shares) | 13,722,938 | 13,701,468 | |
Common Stock, Shares, Outstanding (in shares) | 6,391,061 | 6,373,404 | |
Treasury Stock, Common, Shares (in shares) | 7,331,877 | 7,328,064 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Sales | $ 240,401 | $ 274,276 | $ 854,170 | $ 869,775 |
Interest and other income | 59,213 | 51,063 | 175,051 | 143,690 |
Total revenues | 299,614 | 325,339 | 1,029,221 | 1,013,465 |
Costs and expenses: | ||||
Cost of sales | 158,250 | 181,823 | 560,692 | 578,547 |
Selling, general and administrative | 43,562 | 44,737 | 134,895 | 130,881 |
Provision for credit losses | 89,582 | 85,650 | 321,300 | 250,719 |
Interest expense | 16,731 | 9,765 | 47,587 | 25,460 |
Depreciation and amortization | 1,712 | 1,537 | 5,101 | 3,997 |
Loss on disposal of property and equipment | (119) | (68) | (359) | (320) |
Total costs and expenses | 309,956 | 323,580 | 1,069,934 | 989,924 |
(Loss) Income before taxes | (10,342) | 1,759 | (40,713) | 23,541 |
Provision for income taxes | (1,800) | 251 | (8,894) | 5,197 |
Net (loss) income | (8,542) | 1,508 | (31,819) | 18,344 |
Less: Dividends on mandatorily redeemable preferred stock | (10) | (10) | (30) | (30) |
Net (loss) income attributable to common stockholders | $ (8,552) | $ 1,498 | $ (31,849) | $ 18,314 |
Earnings per share: | ||||
Basic (in dollars per share) | $ (1.34) | $ 0.24 | $ (4.99) | $ 2.87 |
Diluted (in dollars per share) | $ (1.34) | $ 0.23 | $ (4.99) | $ 2.79 |
Weighted average number of shares used in calculation: | ||||
Basic (in shares) | 6,393,080 | 6,370,031 | 6,386,997 | 6,370,732 |
Diluted (in shares) | 6,393,080 | 6,536,785 | 6,386,997 | 6,562,214 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Operating Activities: | ||
Net (loss) income | $ (31,819) | $ 18,344 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Provision for credit losses | 321,300 | 250,719 |
Losses on claims for accident protection plan | 24,480 | 17,717 |
Depreciation and amortization | 5,101 | 3,997 |
Amortization of debt issuance costs | 3,988 | 4,187 |
Loss on disposal of property and equipment | 359 | 320 |
Impairment of goodwill | 212 | 0 |
Stock based compensation | 2,882 | 4,154 |
Deferred income taxes | (18,967) | 6,884 |
Excess tax benefit from share based compensation | 213 | 206 |
Change in operating assets and liabilities: | ||
Finance receivable originations | (794,477) | (841,445) |
Loan origination costs | (39) | 10 |
Finance receivable collections | 324,703 | 308,671 |
Accrued interest on finance receivables | (1,255) | (1,323) |
Inventory | 103,451 | 76,933 |
Prepaid expenses and other assets | (3,734) | (4,990) |
Accounts payable and accrued liabilities | (5,824) | 6,760 |
Income taxes, net | 8,232 | (6,632) |
Net cash used in operating activities | (63,172) | (123,956) |
Investing Activities: | ||
Purchase of investments | (4,815) | (5,499) |
Purchase of property and equipment | (4,864) | (19,002) |
Proceeds from sale of property and equipment | 350 | 84 |
Net cash used in investing activities | (9,329) | (24,417) |
Financing Activities: | ||
Exercise of stock options | (455) | 1,216 |
Issuance of common stock | 218 | 222 |
Purchase of common stock | (336) | (5,196) |
Dividend payments | (30) | (30) |
Change in cash overdrafts | 2,183 | 3,795 |
Debt issuance costs | (5,892) | (2,001) |
Issuances of non-recourse notes payable | 610,340 | 400,176 |
Payments on non-recourse notes payable | (394,450) | (209,327) |
Proceeds from revolving line of credit | 406,844 | 381,825 |
Payments on revolving line of credit | (519,366) | (399,424) |
Net cash provided by financing activities | 99,056 | 171,256 |
Increase (decrease) in cash, cash equivalents, and restricted cash | 26,555 | 22,883 |
Cash, cash equivalents, and restricted cash beginning of period | 68,034 | 42,587 |
Cash, cash equivalents, and restricted cash end of period | 94,589 | 65,470 |
Accident Protection Plan [Member] | ||
Change in operating assets and liabilities: | ||
Deferred accident protection plan revenue | (1,926) | 13,987 |
Service Contract [Member] | ||
Change in operating assets and liabilities: | ||
Deferred accident protection plan revenue | $ (130) | $ 17,565 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock, Common [Member] | Noncontrolling Interest [Member] | Total |
Balance (in shares) at Apr. 30, 2022 | 13,642,185 | |||||
Balance at Apr. 30, 2022 | $ 136 | $ 103,113 | $ 665,410 | $ (292,225) | $ 100 | $ 476,534 |
Issuance of common stock (in shares) | 30,484 | |||||
Issuance of common stock | $ 1 | 84 | 0 | 0 | 0 | 85 |
Stock options exercised (in shares) | 23,000 | |||||
Stock options exercised | $ 0 | 1,216 | 0 | 0 | 0 | 1,216 |
Purchase of treasury shares | 0 | 0 | 0 | (5,196) | 0 | (5,196) |
Stock based compensation | 0 | 1,978 | 0 | 0 | 0 | 1,978 |
Dividends on subsidiary preferred stock | 0 | 0 | (10) | 0 | 0 | (10) |
Net (loss) income | 0 | 0 | 13,697 | 0 | 0 | 13,697 |
Purchase of treasury shares | 0 | 0 | 0 | 5,196 | 0 | 5,196 |
Dividends on subsidiary preferred stock | $ 0 | 0 | 10 | 0 | 0 | 10 |
Balance (in shares) at Jul. 31, 2022 | 13,695,669 | |||||
Balance at Jul. 31, 2022 | $ 137 | 106,391 | 679,097 | (297,421) | 100 | 488,304 |
Balance (in shares) at Apr. 30, 2022 | 13,642,185 | |||||
Balance at Apr. 30, 2022 | $ 136 | 103,113 | 665,410 | (292,225) | 100 | 476,534 |
Net (loss) income | 18,344 | |||||
Balance (in shares) at Jan. 31, 2023 | 13,698,095 | |||||
Balance at Jan. 31, 2023 | $ 137 | 108,704 | 683,724 | (297,421) | 100 | 495,244 |
Balance (in shares) at Jul. 31, 2022 | 13,695,669 | |||||
Balance at Jul. 31, 2022 | $ 137 | 106,391 | 679,097 | (297,421) | 100 | 488,304 |
Issuance of common stock (in shares) | 1,235 | |||||
Issuance of common stock | $ 0 | 64 | 0 | 0 | 0 | 64 |
Stock based compensation | 0 | 820 | 0 | 0 | 0 | 820 |
Dividends on subsidiary preferred stock | 0 | 0 | (10) | 0 | 0 | (10) |
Net (loss) income | 0 | 0 | 3,139 | 0 | 0 | 3,139 |
Dividends on subsidiary preferred stock | $ 0 | 0 | 10 | 0 | 0 | 10 |
Balance (in shares) at Oct. 31, 2022 | 13,696,904 | |||||
Balance at Oct. 31, 2022 | $ 137 | 107,275 | 682,226 | (297,421) | 100 | 492,317 |
Issuance of common stock (in shares) | 1,191 | |||||
Issuance of common stock | $ 0 | 73 | 0 | 0 | 0 | 73 |
Stock based compensation | 0 | 1,356 | 0 | 0 | 0 | 1,356 |
Dividends on subsidiary preferred stock | 0 | 0 | (10) | 0 | 0 | (10) |
Net (loss) income | 0 | 0 | 1,508 | 0 | 0 | 1,508 |
Dividends on subsidiary preferred stock | $ 0 | 0 | 10 | 0 | 0 | 10 |
Balance (in shares) at Jan. 31, 2023 | 13,698,095 | |||||
Balance at Jan. 31, 2023 | $ 137 | 108,704 | 683,724 | (297,421) | 100 | 495,244 |
Balance (in shares) at Apr. 30, 2023 | 13,701,468 | |||||
Balance at Apr. 30, 2023 | $ 137 | 109,929 | 685,802 | (297,421) | 100 | 498,547 |
Issuance of common stock (in shares) | 2,921 | |||||
Issuance of common stock | $ 0 | 78 | 0 | 0 | 0 | 78 |
Stock options exercised (in shares) | 6,493 | |||||
Stock options exercised | $ 0 | (455) | 0 | 0 | 0 | (455) |
Purchase of treasury shares | 0 | 0 | 0 | (68) | 0 | (68) |
Stock based compensation | 0 | 2,451 | 0 | 0 | 0 | 2,451 |
Dividends on subsidiary preferred stock | 0 | 0 | (10) | 0 | 0 | (10) |
Net (loss) income | 0 | 0 | 4,186 | 0 | 0 | 4,186 |
Purchase of treasury shares | 0 | 0 | 0 | 68 | 0 | 68 |
Dividends on subsidiary preferred stock | $ 0 | 0 | 10 | 0 | 0 | 10 |
Balance (in shares) at Jul. 31, 2023 | 13,710,882 | |||||
Balance at Jul. 31, 2023 | $ 137 | 112,003 | 689,978 | (297,489) | 100 | 504,729 |
Balance (in shares) at Apr. 30, 2023 | 13,701,468 | |||||
Balance at Apr. 30, 2023 | $ 137 | 109,929 | 685,802 | (297,421) | 100 | 498,547 |
Net (loss) income | (31,819) | |||||
Balance (in shares) at Jan. 31, 2024 | 13,722,938 | |||||
Balance at Jan. 31, 2024 | $ 137 | 112,574 | 653,953 | (297,757) | 100 | 469,007 |
Balance (in shares) at Jul. 31, 2023 | 13,710,882 | |||||
Balance at Jul. 31, 2023 | $ 137 | 112,003 | 689,978 | (297,489) | 100 | 504,729 |
Issuance of common stock (in shares) | 849 | |||||
Issuance of common stock | $ 0 | 65 | 0 | 0 | 0 | 65 |
Dividends on subsidiary preferred stock | 0 | 0 | (10) | 0 | 0 | (10) |
Net (loss) income | 0 | 0 | (27,463) | 0 | 0 | (27,463) |
Stock based compensation | 0 | (712) | 0 | 0 | 0 | (712) |
Dividends on subsidiary preferred stock | $ 0 | 0 | 10 | 0 | 0 | 10 |
Balance (in shares) at Oct. 31, 2023 | 13,711,731 | |||||
Balance at Oct. 31, 2023 | $ 137 | 111,356 | 662,505 | (297,489) | 100 | 476,609 |
Issuance of common stock (in shares) | 11,207 | |||||
Issuance of common stock | $ 0 | 75 | 0 | 0 | 0 | 75 |
Purchase of treasury shares | 0 | 0 | 0 | (268) | 0 | (268) |
Stock based compensation | 0 | 1,143 | 0 | 0 | 0 | 1,143 |
Dividends on subsidiary preferred stock | 0 | 0 | (10) | 0 | 0 | (10) |
Net (loss) income | 0 | 0 | (8,542) | 0 | 0 | (8,542) |
Purchase of treasury shares | 0 | 0 | 0 | 268 | 0 | 268 |
Dividends on subsidiary preferred stock | $ 0 | 0 | 10 | 0 | 0 | 10 |
Balance (in shares) at Jan. 31, 2024 | 13,722,938 | |||||
Balance at Jan. 31, 2024 | $ 137 | $ 112,574 | $ 653,953 | $ (297,757) | $ 100 | $ 469,007 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Unaudited) (Parentheticals) | 3 Months Ended |
Jul. 31, 2022 shares | |
Treasury Stock, Shares, Acquired (in shares) | 57,856 |
Note A - Organization and Busin
Note A - Organization and Business | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | A Organization and Business America’s Car-Mart, Inc., a Texas corporation (the “Company”), is one of the largest publicly held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. References to the Company typically include the Company’s consolidated subsidiaries. The Company’s operations are principally conducted through its two |
Note B - Summary of Significant
Note B - Summary of Significant Accounting Policies | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | B Summary of Significant Accounting Policies General The accompanying condensed consolidated balance sheet as of April 30, 2023, which has been derived from audited financial statements, and the unaudited interim condensed financial statements as of January 31, 2024 and 2023, have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended January 31, 2024 are not necessarily indicative of the results that may be expected for the year ending April 30, 2024. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended April 30, 2023. Principles of Consolidation The condensed consolidated financial statements include the accounts of America’s Car-Mart, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated. Segment Information Each dealership is an operating segment with its results regularly reviewed by the Company’s chief operating decision maker in an effort to make decisions about resources to be allocated to the segment and to assess its performance. Individual dealerships meet the aggregation criteria for reporting purposes under the current accounting guidance. The Company operates in the Integrated Auto Sales and Finance segment of the used car market, also referred to as the Integrated Auto Sales and Finance industry. In this industry, the nature of the sale and the financing of the transaction, financing processes, the type of customer and the methods used to distribute the Company’s products and services, including the actual servicing of the contracts as well as the regulatory environment in which the Company operates, all have similar characteristics. Each individual dealership is similar in nature and only engages in the selling and financing of used vehicles. All individual dealerships have similar operating characteristics. As such, individual dealerships have been aggregated into one Reclassifications Accident protection plan (“APP”) reserves in the amount of approximately $11.0 million and Wholesales Sales of $3.7 million in the prior year financial statements were reclassified to conform with the current year presentation. For the year ended April 30, 2023, APP reserves of $5.7 million were reclassed out of accrued liabilities to reserve against finance receivables and $5.3 million of estimated APP insurance receivables were reclassed out of finance receivables to prepaid expenses and other assets. For the nine months ended January 31, 2023, $3.7 million of Wholesales sales were reclassed out of Wholesales – third party sales to Cost of Goods Sold. The reclassification had no effect on the prior year net income or shareholder’s equity. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant estimates include the Company’s allowance for credit losses. Concentration of Risk The Company provides financing in connection with the sale of substantially all of its vehicles. These sales are made primarily to customers residing in Alabama, Arkansas, Georgia, Illinois, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee, and Texas, with approximately 27% of current period revenues resulting from sales to Arkansas customers. As of January 31, 2024, and periodically throughout the period, the Company maintained cash in financial institutions in excess of the amounts insured by the federal government. The cash is held in several highly rated banking institutions. The Company regularly monitors its counterparty credit risk and mitigates exposure by limiting the amount it invests in one institution. Restrictions on Distributions / Dividends The Company’s revolving credit facilities generally restrict distributions by the Company to its shareholders. The distribution limitations under the credit facilities allow the Company to repurchase the Company’s stock so long as either: (a) the aggregate amount of such repurchases after September 30, 2021 does not exceed $50 million, net of proceeds received from the exercise of stock options, and the total availability under the credit facilities is equal to or greater than 20% of the sum of the borrowing bases, in each case after giving effect to such repurchases (repurchases under this item are excluded from fixed charges for covenant calculations), or (b) the aggregate amount of such repurchases does not exceed 75% of the consolidated net income of the Company measured on a trailing twelve month basis; provided that immediately before and after giving effect to the Company’s stock repurchases, at least 12.5% of the aggregate funds committed under the credit facilities remain available. Thus, although the Company does routinely repurchase stock, the Company is limited in its ability to pay dividends or make other distributions to its shareholders without the consent of the Company’s lenders. Cash Equivalents The Company considers all highly liquid debt instruments purchased with original maturities of three months or less to be cash equivalents. Restricted Cash Restricted cash is related to the financing and securitization transaction discussed below and is held by the securitization trust. Restricted cash from collections on auto finance receivables includes collections of principal, interest, and late fee payments on auto finance receivables that are restricted for payment to holders of non-recourse notes payable pursuant to the applicable agreements. The restricted cash on deposit in reserve accounts is for the benefit of holders of non-recourse notes payable, and these funds are not expected to be available to the Company or its creditors. If the cash generated by the related receivables in a given period was insufficient to pay the interest, principal, and other required payments, the balances on deposit in the reserve accounts would be used to pay those amounts. Restricted cash consisted of the following at January 31, 2024 and April 30, 2023: (In thousands) January 31, 2024 April 30, 2023 Restricted cash from collections on auto finance receivables $ 45,381 $ 34,442 Restricted cash on deposit in reserve accounts 44,969 23,796 Restricted Cash $ 90,350 $ 58,238 Financing and Securitization Transactions The Company utilizes term securitizations to provide long-term funding for a portion of the auto finance receivables initially funded through the debt facilities. In these transactions, a pool of auto finance receivables is sold to a special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables. The Company is required to evaluate term securitization trusts for consolidation. In the Company’s role as servicer for each securitization, it possesses non-substantive voting rights and has the power to direct the activities of the trust that most significantly impact the economic performance of the trust. In addition, the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trust, remain with the Company. Accordingly, the Company is the primary beneficiary of the trust and is required to consolidate it. The Company recognizes transfers of auto finance receivables into the term securitization as secured borrowings, which results in recording the auto finance receivables and the related non-recourse notes payable on our consolidated balance sheet. These auto finance receivables can only be used as collateral to settle obligations of the related non-recourse notes payable. The term securitization investors have no recourse to the Company’s assets beyond the related auto finance receivables, the amounts on deposit in the reserve account, and the restricted cash from collections on auto finance receivables. See Notes C and F for additional information on auto finance receivables and non-recourse notes payable. Finance Receivables, Repossessions and Charge-offs and Allowance for Credit Losses The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts carry a weighted average interest rate of approximately 16.9% using the simple effective interest method including any deferred fees. In December 2023, the Company increased the interest rate on new originations of installment sale contracts to 18.25% (from 18.0%) 21.5%) 23.0%) An account is considered delinquent when the customer is three days or more behind on their contractual payments. While the Company does not formally place contracts on nonaccrual status, the immaterial amount of interest that may accrue after an account becomes delinquent up until the point of resolution via repossession or write-off is reserved for against the accrued interest on the Condensed Consolidated Balance Sheets. Delinquent contracts are addressed and either made current by the customer, which is the case in most situations, or the vehicle is repossessed or written off if the collateral cannot be recovered after 90 days. Customer payments are set to match their payday with approximately 78% of payments due on either a weekly or bi-weekly basis. The frequency of the payment due dates combined with the declining value of collateral lead to prompt resolutions on problem accounts. On January 31, 2024, 3.3% of the Company’s finance receivable balances were 30 days or more past due, compared to 3.6% at April 30, 2023. Substantially all of the Company’s installment sale contracts involve contracts made to individuals with impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders. Contracts made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better credit. At the time of originating an installment sale contract, the Company requires customers to meet certain criteria that demonstrate their intent and ability to pay for the financed principal and interest on the vehicle they are purchasing. However, the Company recognizes that their customer base is at a higher risk of default given their impaired or limited credit histories. The Company strives to keep its delinquency percentages low, and not to repossess vehicles. Accounts one to three days late are contacted by telephone or text messaging notifications. Notes from each contact are electronically maintained in the Company’s computer system. The Company also utilizes text messaging notifications that allow customers the option to receive due date reminders and late notifications, if applicable. The Company attempts to resolve payment delinquencies amicably prior to repossessing a vehicle. If a customer becomes severely delinquent in his or her payments, and management determines that timely collection of future payments is not probable, the Company will take steps to repossess the vehicle. Periodically, the Company enters into contract modifications with its customers to extend or modify the payment terms. The Company only enters into a contract modification or extension if it believes such action will increase the amount of money the Company will ultimately realize on the customer’s account and will increase the likelihood of the customer being able to pay off the installment sale contract. At the time of modification, the Company expects to collect amounts due including accrued interest at the contractual interest rate for the period of delay. No other concessions are granted to customers, beyond the extension of additional time, at the time of modifications. Modifications are minor and are made for payday changes, minor vehicle repairs and other reasons. For those vehicles that are repossessed, the majority are returned or surrendered by the customer on a voluntary basis. Other repossessions are performed by Company personnel or third-party repossession agents. Depending on the condition of a repossessed vehicle, it is either resold on a retail basis through a Company dealership or sold for cash on a wholesale basis, primarily through physical or online auctions. The Company takes steps to repossess a vehicle when the customer becomes delinquent in his or her payments and management determines that timely collection of future payments is not probable. Accounts are charged-off after the expiration of a statutory notice period for repossessed accounts, or when management determines that the timely collection of future payments is not probable for accounts where the Company has been unable to repossess the vehicle. For accounts with respect to which the vehicle was repossessed, the fair value of the repossessed vehicle is charged as a reduction of the gross finance receivables balance charged-off. On average, accounts are approximately 70 days past due at the time of charge-off. For previously charged-off accounts that are subsequently recovered, the amount of such recovery is credited to the allowance for credit losses. The amount of the net repossession and charge-off loss is also reduced by any deferred service contract and accident protection plan revenue at the time of charge-off. During the second quarter of the 2024 fiscal year, the Company implemented third-party software to assist in calculating the Company’s allowance for credit losses. After implementation, the Company’s quantitative portion of the allowance for credit losses was measured using an undiscounted cash flow (“CF”) model. Whereby the undiscounted cash flows are adjusted by a prepayment rate and then the loss rate is applied and compared to the amortized cost basis of finance receivables to reflect management’s estimate of expected credit losses. The CF model is based on installment sale contract level characteristics of the Company’s finance receivables, such as the contractual payment structure, maturity date, payment frequency for recurring payments, and interest rates, as well as the following assumptions: ● a historical loss period, which represents a full economic credit cycle utilizing loss experience, to calculate the historical loss rate; and ● static annualized historical rate based on average time of charge-off; and ● expected prepayment rates based on our historical experience, which also incorporates non-standard contractual payments such as down payments made during the first ninety-days or annual seasonal payments. The Company’s allowance for credit losses also considers qualitative factors not captured within the CF modeled results such as changes in underwriting and collection practices, economic trends, changes in volume and terms of installment sales contracts, credit quality trends, installment sale contract review results, collateral trends, and concentrations of credit. The Company’s qualitative factors incorporate a macroeconomic variable forecast of inflation over a reasonable and supportable forecast period of one year that affects its customers’ non-discretionary income and ability to repay. The reasonable and supportable forecast period of one year is based on management’s current review of the reliability of extended forecasts and is applied as an adjustment to the historical loss rate. As a result of this update to our methodology and the performance of our loan portfolio, the Company increased the provision for credit losses by $28.0 million and decreased net income by $21.8 million, or basic per share loss of $3.40 per share, upon implementation of the third-party software on our condensed consolidated statement of operations during the second quarter of the 2024 fiscal year and had no effect on periods prior to this. During the third quarter of fiscal year 2024, the Company decreased the allowance for credit loss from 26.04% to 25.74%, resulting in a $3.9 million benefit to the provision. The decrease in Q3 2024 was primarily driven by the lower overall inflationary outlook and fewer past due balances at quarter end. The Company maintains an allowance for credit losses on an aggregate basis at an amount it considers sufficient to cover net credit losses expected over the remaining life of the installment sales contracts in the portfolio at the measurement date. At January 31, 2024, the weighted average total contract term was 47.6 months, with 35.8 months remaining. The allowance for credit losses at January 31, 2024, $335.1 million, was 25.74% of the principal balance in finance receivables of $1.4 billion, less deferred APP revenue of $51.1 million and deferred service contract revenue of $67.3 million, less pending APP claims of $9.1 million. The allowance for credit losses is periodically reviewed by management with any changes reflected in current operations. In most states, the Company offers retail customers who finance their vehicle the option of purchasing an accident protection plan product as an add-on to the installment sale contract. This product contractually obligates the Company to cancel the remaining principal outstanding for any contract where the retail customer has totaled the vehicle, as defined by the product, or the vehicle has been stolen. The Company periodically evaluates anticipated losses to ensure that if anticipated losses exceed deferred accident protection plan revenues, an additional liability is recorded for such difference. At January 31, 2024, anticipated losses did not exceed deferred accident protection plan revenues. No such liability was required at January 31, 2024 or April 30, 2023. Inventory Inventory consists of used vehicles and is valued at the lower of cost or net realizable value on a specific identification basis. Vehicle reconditioning costs are capitalized as a component of inventory. Repossessed vehicles and trade-in vehicles are recorded at fair value, which approximates wholesale value. The cost of used vehicles sold is determined using the specific identification method. Goodwill Goodwill reflects the excess of purchase price over the fair value of specifically identified net assets purchased. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to qualitative annual impairment tests at the Company’s year-end. The impairment tests are based on the comparison of the fair value of the reporting unit to the carrying value of such unit. The implied goodwill is compared to the carrying value of the goodwill to determine the impairment, if any. There was no Goodwill totaled $14.5 million at January 31, 2024 and $11.7 million at April 30, 2023. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Expenditures for additions, remodels and improvements are capitalized. Costs of repairs and maintenance are expensed as incurred. Leasehold improvements are amortized over the shorter of the estimated life of the improvement or the lease period. The lease period includes the primary lease term plus any extensions that are reasonably assured. Depreciation is computed principally using the straight-line method generally over the following estimated useful lives: Furniture, fixtures and equipment 3 to 7 years Leasehold improvements 5 to 15 years Buildings and improvements 18 to 39 years Long-Lived Assets Long-lived assets, such as property and equipment, capitalized internal-use software and operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares the undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, such assets are considered to be impaired, and the impairment is recognized to the extent that the carrying value exceeds its fair value. There were no impairment charges recognized during any of the periods presented. Cloud Computing Implementation Costs The Company enters into cloud computing service contracts to support its sales, inventory management, and administrative activities. The Company capitalizes certain implementation costs for cloud computing arrangements that meet the definition of a service contract. The Company includes these capitalized implementation costs within prepaid expenses and other assets on the Condensed Consolidated Balance Sheets. Once placed in service, the Company amortizes these costs over the remaining subscription term to the same caption on the Condensed Consolidated Statement of Operations as the related cloud subscription. Cash Overdraft As checks are presented for payment from the Company’s primary disbursement bank account, monies are automatically drawn against cash collections for the day and, if necessary, are drawn against one of the revolving credit facilities. Any cash overdraft balance principally represents outstanding checks that as of the balance sheet date had not yet been presented for payment, net of any deposits in transit. Any cash overdraft balance is reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. Deferred Sales Tax Deferred sales tax represents a sales tax liability of the Company for vehicles sold on an installment basis in the states of Alabama and Texas. Under Alabama and Texas law for vehicles sold on an installment basis, the related sales tax is due as the payments are collected from the customer, rather than at the time of sale. Deferred sales tax liabilities are reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. Income Taxes Income taxes are accounted for under the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates expected to apply in the years in which these differences are expected to be recovered or settled. The quarterly provision for income taxes is determined using an estimated annual effective tax rate, which is based on expected annual taxable income, statutory tax rates and the Company’s best estimate of nontaxable and nondeductible items of income and expense. The effective income tax rates were 21.9% and 22.1% for the nine months ended January 31, 2024 and January 31, 2023, respectively. Total income tax expense for the nine months ended January 31, 2024 differed from amounts computed by applying the United States federal statutory tax rates to pre-tax income primarily due to state income taxes and the impact of permanent differences between book and taxable income. The Company recorded a discrete income tax benefit of approximately $213,000 and $206,000 for the nine months ended January 31, 2024 and 2023, respectively, related to excess tax benefits on share based compensation. Occasionally, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applies this methodology to all tax positions for which the statute of limitations remains open. The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before fiscal 2019. The Company’s policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no Revenue Recognition Revenues are generated principally from the sale of used vehicles, which in most cases includes a service contract and an accident protection plan product, as well as interest income and late fees earned on finance receivables. Revenues are net of taxes collected from customers and remitted to government agencies. Cost of vehicle sales include costs incurred by the Company to prepare the vehicle for sale including license and title costs, gasoline, transport services, and repairs. Revenues from the sale of used vehicles are recognized when the sales contract is signed, the customer has taken possession of the vehicle and, if applicable, financing has been approved. Revenues from the sale of vehicles sold at wholesale are recognized at the time the proceeds are received. Revenues from the sale of service contracts are recognized ratably over the expected duration of the product. Service contract revenues are included in sales and the related expenses are included in cost of sales. Accident protection plan revenues are initially deferred and then recognized to income using the “Rule of 78’s” interest method over the life of the contract so that revenues are recognized in proportion to the amount of cancellation protection provided. Accident protection plan revenues are included in sales and related losses are included in cost of sales as incurred. Any unearned revenue from ancillary products is charged-off at the time of repossession. Interest income is recognized on all active finance receivables accounts using the simple effective interest method. Active accounts include all accounts except those that have been paid-off or charged-off. Sales for the three and nine months ended January 31, 2024 and 2023 consisted of the following: Three Months Ended Nine Months Ended (In thousands) 2024 2023 2024 2023 Sales – used autos $ 200,341 $ 239,079 $ 735,145 $ 761,875 Wholesales – third party 13,479 11,816 39,502 40,325 Service contract revenue 17,106 14,577 51,102 41,765 Accident protection plan revenue 9,475 8,804 28,421 25,810 Total $ 240,401 $ 274,276 $ 854,170 $ 869,775 At January 31, 2024 and 2023, finance receivables more than 90 days past due were approximately $6.1 million and $4.0 million, respectively. Late fee revenues totaled approximately $3.6 million and $3.1 million for the nine months ended January 31, 2024 and 2023, respectively. Late fees are recognized when collected and are reflected in interest and other income on the Condensed Consolidated Statements of Operations. The amount of revenue recognized for the nine months ended January 31, 2024 that was included in the April 30, 2023 deferred service contract revenue was $29.6 million. Earnings per Share Basic earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period plus dilutive common stock equivalents. The calculation of diluted earnings per share takes into consideration the potentially dilutive effect of common stock equivalents, such as outstanding stock options and non-vested restricted stock, which if exercised or converted into common stock would then share in the earnings of the Company. In computing diluted earnings per share, the Company utilizes the treasury stock method and anti-dilutive securities are excluded. Stock-Based Compensation The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock, based on the fair value of those awards at the date of grant over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. The Company may issue either new shares or treasury shares upon exercise of these awards. Stock-based compensation plans, related expenses, and assumptions used in the Black-Scholes option pricing model are more fully described in Note I. If an award contains a performance condition, expense is recognized only for those shares for which it is considered reasonably probable as of the current period end that the performance condition will be met. The Company accounts for forfeitures as they occur and records any excess tax benefits or deficiencies from its equity awards in its Consolidated Statements of Operations in the reporting period in which the exercise occurs. The Company recorded a discrete income tax benefit of approximately $213,000 and $206,000 for the nine months ended January 31, 2024 and 2023, respectively. As a result, the Company’s income tax expenses and associated effective tax rate will be impacted by fluctuations in stock price between the grant dates and exercise dates of equity awards. Treasury Stock Treasury stock may be used for issuances under the Company’s stock-based compensation plans or for other general corporate purposes. The Company has a reserve account of 10,000 shares of treasury stock to secure outstanding service contracts issued in Iowa in accordance with the regulatory requirements of that state and another reserve account of 14,000 shares of treasury stock for its subsidiary, ACM Insurance Company, in accordance with the requirements of the Arkansas Department of Insurance. Recent Accounting Pronouncements Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its consolidated financial statements upon adoption. Adopted in the Current Period In March 2022, the FASB issued an accounting pronouncement (ASU 2022-02) related to troubled debt restructurings (“TDRs”) and vintage disclosures for financing receivables. The amendments in this update eliminate the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current period gross write-offs by year of origination for financing receivables. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this standard on May 1, 2023 under a prospective basis. In regard to installment sale contract modifications, management notes that the Company primarily modifies a customer’s installment sale contract to allow for insignificant payment delays. This type of modification is generally done to account for payday changes for the customer and minor |
Note C - Finance Receivables, N
Note C - Finance Receivables, Net | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Financing Receivables [Text Block] | C Finance Receivables, Net The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts, which carry a fixed interest rate of 18.25% for all states except Arkansas (originates at 16.75%), Illinois (originates at 19.5% – 21.5%) and Smart Auto dealerships in Tennessee (which originate at up to 23.0%), are collateralized by the vehicle sold and typically provide for payments over periods ranging from 18 to 69 months. The Company’s finance receivables are defined as one segment and one one The components of finance receivables are as follows: (In thousands) January 31, 2024 April 30, 2023 Gross contract amount $ 1,821,447 $ 1,752,149 Less: unearned finance charges (392,539 ) (378,777 ) Principal balance 1,428,908 1,373,372 Less: estimated insurance receivables for APP claims (4,303 ) (5,694 ) Less: allowance for APP claims (4,507 ) (5,310 ) Less: allowance for credit losses (334,987 ) (299,608 ) Finance receivables, net 1,085,111 1,062,760 Loan origination costs 661 700 Finance receivables, net, including loan origination costs 1,085,772 1,063,460 Changes in the finance receivables, net are as follows: Nine Months Ended (In thousands) 2024 2023 Balance at beginning of period $ 1,062,760 $ 855,424 Finance receivable originations 794,477 841,445 Finance receivable collections (324,703 ) (308,671 ) Provision for credit losses (321,300 ) (250,719 ) Losses on claims for accident protection plan (24,480 ) (17,717 ) Inventory acquired in repossession and accident protection plan claims (101,643 ) (107,882 ) Balance at end of period $ 1,085,111 $ 1,011,880 Changes in the finance receivables allowance for credit losses are as follows: Nine Months Ended (In thousands) 2024 2023 Balance at beginning of period $ 299,608 $ 237,823 Provision for credit losses 321,300 250,719 Charge-offs (386,349 ) (296,154 ) Recovered collateral 100,428 90,387 Balance at end of period $ 334,987 $ 282,775 Amounts recovered from previously written-off accounts were approximately $2.0 million and $2.0 million for the nine months ended January 31, 2024 and 2023, respectively. These amounts are netted against recovered collateral in the table above. Our allowance for credit losses increased during the first nine months of fiscal year 2024 by $35.4 million or 12%, the majority of the increase relates to the $28.0 million increase in second quarter, which resulted from an increase in the allowance for credit loss from 23.91 % to 26.04%. The Company reduced the allowance for credit loss in the third quarter to 25.74%, resulting in a benefit of $3.9 million to the provision. Structural changes to our portfolio, primarily related to the longer contract terms, continue to drive an increase in the provision for credit losses. The charge-offs, net of recovered collateral, were impacted by a higher frequency of losses compared to the prior year as well as a higher severity of losses driven by lower recovery values and longer contract terms. Credit quality information for finance receivables is as follows: (Dollars in thousands) January 31, 2024 April 30, 2023 January 31, 2023 Principal Percent of Principal Percent of Principal Percent of Balance Portfolio Balance Portfolio Balance Portfolio Current $ 1,119,120 78.32 % $ 1,166,860 84.96 % $ 1,011,877 77.48 % 3 - 29 days past due 262,200 18.35 % 156,943 11.43 % 245,939 18.83 % 30 - 60 days past due 34,266 2.40 % 37,214 2.71 % 36,447 2.79 % 61 - 90 days past due 7,258 0.51 % 8,407 0.61 % 7,700 0.59 % > 90 days past due 6,064 0.42 % 3,948 0.29 % 3,993 0.31 % Total $ 1,428,908 100.00 % $ 1,373,372 100.00 % $ 1,305,956 100.00 % Accounts one and two days past due are considered current for this analysis, due to the varying payment dates and variation in the day of the week at each period end. Delinquencies may vary from period to period based on the average age of the portfolio, seasonality within the calendar year, the day of the week and overall economic factors. The above categories are consistent with internal operational measures used by the Company to monitor credit results. Substantially all of the Company’s installment sale contracts involve contracts made to individuals with impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders. Contracts made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better credit. The Company monitors customer scores, contract term length, payment to income, down payment percentages, and collections for credit quality indicators. Nine Months Ended 2024 2023 Average total collected per active customer per month $ 536 $ 516 Principal collected as a percent of average finance receivables 22.7 % 25.4 % Average down-payment percentage 5.0 % 5.4 % Average originating contract term (in months 44.0 42.5 As of January 31, 2024 January 31, 2023 Portfolio weighted average contract term, including modifications (in months 47.6 45.4 Although total dollars collected per active customer for the nine months increased 3.9% year over year, principal collections as a percentage of average finance receivables were lower in the nine months ended January 31, 2024 compared to the prior year, primarily due to the average term increases. Overall collections have also been negatively impacted by the current inflationary environment. The portfolio weighted average contract term increased primarily due to the increased average selling price, up $1,003 or 5.6%, from the prior year period. When customers apply for financing, the Company’s proprietary scoring model relies on the customers’ credit histories and certain application information to evaluate and rank their risk. The Company obtains credit histories and other credit data that includes information such as number of different addresses, age of oldest record, high risk credit activity, job time, time at residence and other factors. The application information that is used includes income, collateral value and down payment. The scoring models yield credit grades that represent the relative likelihood of repayment. Customers with the highest probability of repayment are 6 rated customers. Customers assigned a lower grade are determined to have a lower probability of repayment. For installment sales contracts that are approved, the credit grade influences the terms of the agreement, such as the maximum amount financed, term length and minimum down payment. After origination, credit grades are generally not updated. The Company uses a combination of the initial credit grades and historical performance to monitor the credit quality of the finance receivables on an ongoing basis, and the accuracy of the scoring model is validated periodically. Installment sale contract performance is reviewed on a recurring basis to identify whether the assigned grades adequately reflect the customers’ likelihood of repayment. The following table presents a summary of finance receivables by credit quality indicator, as of January 31, 2024, segregated by customer score. As of January 31, 2024 (Dollars in thousands) Fiscal Year of Origination Prior to Customer Rating 2024 2023 2022 2021 2020 2020 Total % 1-2 $ 32,854 $ 18,416 $ 5,298 $ 661 $ 124 $ 13 $ 57,366 4.0 % 3-4 $ 236,351 $ 153,436 $ 50,070 $ 7,414 $ 450 $ 178 $ 447,899 31.4 % 5-6 $ 394,600 $ 352,267 $ 147,133 $ 27,316 $ 1,797 $ 530 $ 923,643 64.6 % Total $ 663,805 $ 524,119 $ 202,501 $ 35,391 $ 2,371 $ 721 $ 1,428,908 100.0 % Gross charge-offs $ 87,675 $ 211,642 $ 72,511 $ 13,111 $ 957 $ 453 $ 386,349 The following table presents a summary of finance receivables by credit quality indicator, as of January 31, 2023, segregated by customer score. As of January 31, 2023 (Dollars in thousands) Fiscal Year of Origination Prior to Customer Rating 2023 2022 2021 2020 2019 2019 Total % 1-2 $ 31,580 $ 17,295 $ 4,212 $ 545 $ 35 $ 12 $ 53,679 4.1 % 3-4 $ 232,273 $ 135,531 $ 36,562 $ 2,974 $ 332 $ 192 $ 407,864 31.2 % 5-6 $ 437,566 $ 307,513 $ 89,582 $ 8,389 $ 910 $ 453 $ 844,413 64.7 % Total $ 701,419 $ 460,339 $ 130,356 $ 11,908 $ 1,277 $ 657 $ 1,305,956 100.0 % |
Note D - Property and Equipment
Note D - Property and Equipment, Net | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | D Property and Equipment, Net A summary of property and equipment is as follows: (In thousands) January 31, 2024 April 30, 2023 Land $ 11,998 $ 12,386 Buildings and improvements 23,441 20,894 Furniture, fixtures and equipment 20,758 18,989 Leasehold improvements 50,230 47,315 Construction in progress 2,963 7,176 Less: accumulated depreciation and amortization (48,497 ) (45,078 ) Total $ 60,893 $ 61,682 |
Note E - Accrued Liabilities
Note E - Accrued Liabilities | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Other Liabilities Disclosure [Text Block] | E Accrued Liabilities A summary of accrued liabilities is as follows: (In thousands) January 31, 2024 April 30, 2023 Employee compensation $ 8,258 $ 11,197 Deferred sales tax (see Note B) 8,253 8,543 Fair value of contingent consideration 3,193 1,943 Other 7,281 6,229 Total $ 26,985 $ 27,912 |
Note F - Debt Facilities
Note F - Debt Facilities | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | F Debt Facilities A summary of debt facilities is as follows: (In thousands) January 31, 2024 April 30, 2023 Revolving line of credit $ 55,994 $ 168,516 Debt issuance costs (620 ) (1,285 ) Revolving line of credit, net $ 55,374 $ 167,231 Non-recourse notes payable - 2022-1 Issuance $ - $ 134,137 Non-recourse notes payable - 2023-1 Issuance 190,674 $ 338,777 Non-recourse notes payable - 2023-2 Issuance 248,130 - Non-recourse notes payable - 2024-1 Issuance 250,000 - Debt issuance costs (4,116 ) (1,547 ) Non-recourse notes payable, net $ 684,688 $ 471,367 Total debt $ 740,062 $ 638,598 Revolving Line of Credit At January 31, 2024, the Company and its subsidiaries had $600.0 million of permitted borrowings under a revolving line of credit. The revolving credit facilities are collateralized primarily by finance receivables and inventory, are cross collateralized and contain a guarantee by the Company. Interest is payable monthly under the revolving credit facilities with a scheduled maturity date of September 29, 2024. The credit facilities provide for four pricing tiers for determining the applicable interest rate, based on the Company’s consolidated leverage ratio for the preceding fiscal quarter. The applicable interest rate under the credit facilities at January 31, 2024 was generally SOFR plus 2.75%, with a minimum of 2.25% or for non-SOFR amounts the base rate of 8.50% at January 31, 2024 and 8.25% at April 30, 2023. The credit facilities contain various reporting and performance covenants including (i) maintenance of certain financial ratios and tests, (ii) limitations on borrowings from other sources, (iii) restrictions on certain operating activities and (iv) restrictions on the payment of dividends or distributions (see note B). The Company was in compliance with the covenants at January 31, 2024. The amount available to be drawn under the credit facilities is a function of eligible finance receivables and inventory; based upon eligible finance receivables and inventory at January 31, 2024, the Company had additional availability of approximately $125.6 million under the revolving credit facilities. The total permitted borrowings and certain terms of the Company’s revolving credit facilities were amended on February 28, 2024. This amendment is described in Note M, Subsequent Events. Non-Recourse Notes Payable The Company has issued four separate series of asset-backed non-recourse notes (known as the “2022 Issuance”, “2023-1 Issuance”, "2023-2 Issuance" and "2024-1 Issuance"). All four issuances are collateralized by installment sale contracts directly originated by the Company. Credit enhancement for the non-recourse notes payable consists of overcollateralization, a reserve account funded with an initial amount of not less than 2.0% of the pool balance, excess interest on the auto finance receivables, and in some cases, the subordination of certain payments to noteholders of less senior classes of notes. The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto finance receivables. In December 2023, the Company fully paid off the 2022 Issuance. The three notes payable related to the remaining term securitization transactions accrue interest predominately at fixed rates and have scheduled maturities through January 22, 2030, June 20, 2030, and January 21, 2031, respectively, but may mature earlier, depending upon repayment rate of the underlying auto finance receivables. The original principal balance and weighted average fixed coupon rate for the three securitizations are as follows: Original Principal Balance (in thousands) Weighted Average Fixed Coupon Rate 2023-1 $ 400,200 8.68 % 2023-2 360,300 8.80 % 2024-1 250,000 9.50 % |
Note G - Fair Value Measurement
Note G - Fair Value Measurements | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | G Fair Value Measurements Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance also establishes a fair value hierarchy that requires the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Topic 820 describes three levels of inputs that may be used to measure fair value: ● Level 1 Inputs ● Level Inputs ● Level Inputs Because no market exists for certain of the Company’s financial instruments, fair value estimates are based on judgments and estimates regarding yield expectations of investors, credit risk and other risk characteristics, including interest rate and prepayment risk. These estimates are subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The methodology and assumptions utilized to estimate the fair value of the Company’s financial instruments and other assets are as follows: Financial Instrument and Other Assets Valuation Methodology Cash, cash equivalents, and restricted cash The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instruments (Level 1). Repossessed inventory The fair value approximates wholesale value (Level 1). Finance receivables, net The Company estimated the fair value of its receivables at what a third-party purchaser might be willing to pay. The Company has had discussions with third parties and has bought and sold portfolios and has had a third-party appraisal in October 2022 that indicates a range of 34% to 39% discount to face would be a reasonable fair value in a negotiated third-party transaction. The sale of finance receivables from Car-Mart of Arkansas to Colonial is made at a 38.5% discount. For financial reporting purposes these sale transactions are eliminated (Level 2). Accounts payable The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instrument (Level 2). Contingent Consideration The fair value was based upon inputs from the earn-out projection (Level 2). Revolving line of credit The fair value approximates carrying value due to the variable interest rates charged on the borrowings, which reprice frequently (Level 2). Non-recourse notes payable The fair value was based upon inputs derived from prices for similar instruments at period end (Level 2). The estimated fair values, and related carrying amounts, of the financial instruments included in the Company’s financial statements at January 31, 2024 and April 30, 2023 are as follows: January 31, 2024 April 30, 2023 Carrying Fair Carrying Fair (In thousands) Cash and cash equivalents $ 4,239 $ 4,239 $ 9,796 $ 9,796 Restricted cash 90,350 90,350 58,238 58,238 Inventory 18,663 18,663 16,451 16,451 Finance receivables, net 1,085,772 878,778 1,063,460 844,624 Accounts payable 25,868 25,868 27,196 27,196 Contingent Consideration 3,193 3,193 1,943 1,943 Revolving line of credit, net 55,374 55,374 167,231 167,231 Non-recourse notes payable 684,688 692,626 471,367 470,209 |
Note H - Weighted Average Share
Note H - Weighted Average Shares Outstanding | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Weighted Average Shares Outstanding [Text Block] | H Weighted Average Shares Outstanding Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings per share were as follows: Three Months Ended Nine Months Ended 2024 2023 2024 2023 Weighted average shares outstanding-basic 6,393,080 6,370,031 6,386,997 6,370,732 Dilutive options and restricted stock - 166,754 - 191,482 Weighted average shares outstanding-diluted 6,393,080 6,536,785 6,386,997 6,562,214 Antidilutive securities not included: Options 499,986 357,500 947,486 935,000 Restricted stock 68,893 24,565 73,926 60,924 |
Note I - Stock-based Compensati
Note I - Stock-based Compensation | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Share-Based Payment Arrangement [Text Block] | I Stock-Based Compensation The Company has stock-based compensation plans available to grant non-qualified stock options, incentive stock options and restricted stock to employees, directors and certain advisors of the Company. The stock-based compensation plans being utilized at January 31, 2024 are the Amended and Restated Stock Option Plan and the Amended and Restated Stock Incentive Plan. The Company recorded total stock-based compensation expense for all plans of approximately $2.4 million ($1.9 million after tax effects) and $4.2 million ($3.2 million after tax effects) for the nine months ended January 31, 2024 and 2023, respectively. Tax benefits were recognized for these costs at the Company’s overall effective tax rate, excluding discrete income tax benefits related to excess benefits on share-based compensation. Stock Option Plan The Company has options outstanding under a stock option plan approved by the shareholders, the Amended and Restated Stock Option Plan. The shareholders of the Company approved the Amended and Restated Stock Option Plan (the “Restated Option Plan”) on August 5, 2015, which extended the term of the Stock Option Plan to June 10, 2025 and increased the number of shares of common stock reserved for issuance under the plan by an additional 300,000 shares to 1,800,000 shares. On August 29, 2018, August 26, 2020, August 30, 2022, and September 28, 2023, the shareholders of the Company approved amendments to the Restated Option Plan increasing the number of shares of common stock reserved for issuance under the plan by an additional 200,000, 200,000, 185,000, and 385,000 shares, respectively. Currently, a total of 2,770,000 shares of common stock are reserved for issuance under the plan. The Restated Option Plan provides for the grant of options to purchase shares of the Company’s common stock to employees, directors and certain advisors of the Company at a price not less than the fair market value of the stock on the date of grant and for periods not to exceed ten Restated Option Plan Minimum exercise price as a percentage of fair market value at date of grant 100% Last expiration date for outstanding options January 25, 2034 Shares available for grant at January 31, 2024 487,514 The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below. Nine Months Ended 2024 2023 Expected terms (years) 3.9 5.5 Risk-free interest rate 4.06 % 3.59 % Volatility 56 % 55 % Dividend yield - - The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of the Company’s common stock. The Company has not historically issued any dividends and does not expect to do so in the foreseeable future. There were 197,486 and 137,500 options granted during the nine months ended January 31, 2024 and 2023, respectively. The grant-date fair value of options granted during the nine months ended January 31, 2024 and 2023 was $5.7 million and $5.0 million, respectively. The options were granted at fair market value on the date of grant. Stock option compensation expense was $1.5 million ($1.2 million after tax effects) and $3.0 million ($2.3 million after tax effects) for the nine months ended January 31, 2024 and 2023, respectively. As of January 31, 2024, the Company had approximately $2.4 million of total unrecognized compensation cost related to unvested options that are expected to vest. These unvested outstanding options have a weighted-average remaining vesting period of 2.4 years. The Company had the following options exercised for the periods indicated. The impact of these cash receipts is included in financing activities in the accompanying Condensed Consolidated Statements of Cash Flows. Nine Months Ended (Dollars in thousands) 2024 2023 Options exercised 30,000 23,000 Cash received from option exercises $ - $ 1,216 Intrinsic value of options exercised $ 1,036 $ 1,204 During the nine months ended January 31, 2024, there were 30,000 options exercised through net settlements in accordance with plan provisions, wherein the shares issued were reduced by 23,507 shares to satisfy the exercise price and applicable withholding taxes to acquire 6,493 shares. There were no The aggregate intrinsic value of outstanding options at January 31, 2024 and 2023 was $2.4 million and $11.5 million, respectively. As of January 31, 2024, there were 450,900 vested and exercisable stock options outstanding with an aggregate intrinsic value of $2.4 million, a weighted average remaining contractual life of 3.0 years, and a weighted average exercise price of $103.22. Stock Incentive Plan On August 5, 2015, the shareholders of the Company approved the Amended and Restated Stock Incentive Plan (the “Restated Incentive Plan”), which extended the term of the Company’s Stock Incentive Plan to June 10, 2025. On August 29, 2018, the shareholders of the Company approved an amendment to the Restated Stock Incentive Plan that increased the number of shares of common stock that may be issued under the Restated Incentive Plan by 100,000 shares to 450,000. For shares issued under the Stock Incentive Plan, the associated compensation expense is generally recognized equally over the vesting periods established at the award date and is subject to the employee’s continued employment by the Company. There were 74,647 restricted shares granted during the nine months ended January 31, 2024 and 40,470 restricted shares granted during the nine months ended January 31, 2024. A total of 16,970 shares remained available for award at January 31, 2024. There were 214,057 unvested restricted shares outstanding as of January 31, 2024 with a weighted average grant date fair value of $64.37. As of January 31, 2024, the Company had approximately $7.9 million of total unrecognized compensation cost related to unvested awards granted under the Restated Incentive Plan, which the Company expects to recognize over a weighted-average remaining period of 3.0 years. The Company recorded compensation cost of approximately $871,000 ($681,000 ($862,000 There were no modifications to any of the Company’s outstanding share-based payment awards during fiscal 2023 or during the first nine months of fiscal 2024. |
Note J - Commitments and Contin
Note J - Commitments and Contingencies | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | J Commitments and Contingencies The Company has entered into operating leases for approximately 86% of its dealership and office facilities. Generally, these leases are for periods of three five Scheduled amounts and timing of cash flows arising from operating lease payments as of January 31, 2024, discounted at the weighted average interest rate in effect as of January 31, 2024 of approximately 4.6%, are as follows: Maturity of lease liabilities 2024 (remaining) $ 2,303 2025 9,136 2026 8,767 2027 8,274 2028 7,580 Thereafter 49,059 Total undiscounted operating lease payments 85,119 Less: imputed interest (19,255 ) Present value of operating lease liabilities $ 65,864 The Company has two standby letters of credit relating to insurance policies totaling $3.9 million and $2.9 million at January 31, 2024 and 2023, respectively. Car-Mart of Arkansas and Colonial do not meet the affiliation standard for filing consolidated income tax returns, and as such they file separate federal and state income tax returns. Car-Mart of Arkansas routinely sells its finance receivables to Colonial at what the Company believes to be fair market value and is able to take a tax deduction at the time of sale for the difference between the tax basis of the receivables sold and the sales price. These types of transactions, based upon facts and circumstances, have been permissible under the provisions of the Internal Revenue Code as described in the Treasury Regulations. For financial accounting purposes, these transactions are eliminated in consolidation, and a deferred income tax liability has been recorded for this timing difference. The sale of finance receivables from Car-Mart of Arkansas to Colonial provides certain legal protection for the Company’s finance receivables and, principally because of certain state apportionment characteristics of Colonial, also has the effect of reducing the Company’s overall effective state income tax rate. The actual interpretation of the regulations is in part a facts and circumstances matter. The Company believes it satisfies the material provisions of the regulations. Failure to satisfy those provisions could result in the loss of a tax deduction at the time the receivables are sold and have the effect of increasing the Company’s overall effective income tax rate as well as the timing of required tax payments. |
Note K - Supplemental Cash Flow
Note K - Supplemental Cash Flow Information | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | K - Supplemental Cash Flow Information Supplemental cash flow disclosures are as follows: Nine Months Ended (In thousands) 2024 2023 Supplemental disclosures: Interest paid $ 42,152 $ 25,757 Income taxes paid, net 1,628 4,742 Non-cash transactions: Inventory acquired in repossession and accident protection plan claims 103,474 93,248 Reduction in net receivables for deferred ancillary product revenue at time of charge-off 28,542 13,714 Net settlement option exercises 1,646 - Right-of-use assets obtained in exchange for operating lease liabilities 558 384 Right-of-use assets obtained in exchange for operating lease liabilities through acquisitions 1,822 1,729 |
Note M - Subsequent Events
Note M - Subsequent Events | 9 Months Ended |
Jan. 31, 2024 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | M Subsequent Events On February 28, 2024, the Company entered into Amendment No. 6 to the Third Amended and Restated Loan and Security Agreement (the “Agreement”) with certain financial institutions and BMO Harris Bank, N.A., as lead arranger and book manager. Amendment No. 6 to the Agreement (the “Amendment”) extends the term of the Company’s revolving credit facilities to September 30, 2025 and reduces the total permitted borrowings from $600 million to $340 million. The reduction in the facility size relates primarily to the Company’s utilization of funding from recent issuances of asset-backed non-recourse notes, as well as two lenders withdrawing from the facility in connection with the Amendment. The Amendment also restores the accordion feature of the credit facilities back to $100 million as of February 28, 2024 and makes certain other adjustments and modifications to the terms of the Agreement. The reduction in the total permitted borrowings will reduce the Company’s expense for unused line fees for the unused availability under the credit facilities based on the Company’s recent borrowings. However, the Amendment increases the unused line fee rate from 0.375% to 0.50% if the average daily amount of the revolver loan borrowings outstanding during the immediately preceding month is less than 50% of total revolver commitments. The unused line fee rate for average daily revolver loan borrowings outstanding during the immediately preceding month equal to or exceeding 50% of total revolver commitments remains 0.25%. The Amendment removes the existing pricing tiers for determining the applicable interest rate, which were based on the Company’s consolidated leverage ratio for the preceding fiscal quarter and establishes the applicable margin for determining the interest rate at 1.0% plus a base rate for base rate revolver loans and 3.5% plus the adjusted Term SOFR for SOFR-based revolver loans. The Amendment updates the financial covenants under the Agreement to remove certain provisions that triggered compliance with a fixed charge coverage ratio upon borrowings exceeding certain thresholds and to provide for a full-time fixed charge coverage ratio covenant. The Amendment sets the required fixed charge coverage ratio, which measures the Company’s fixed charges (as defined in the Agreement) to its earnings before interest, taxes, depreciation and amortization (“EBITDA”), at 1.00 to 1.0 through August 31, 2024, 1.15 to 1.0 from September 30, 2024 through December 31, 2024, and 1.25 to 1.0 beginning January 31, 2025 and thereafter. The fixed charge coverage ratio will be calculated on a trailing 12-month basis. The Amendment also redefines EBITDA to exclude allowance provisions or reserves and include net-charge offs for Colonial. In addition, the Amendment updates the calculation of the Company’s borrowing base to allow greater vehicle eligibility by updating the definition of eligible vehicle inventory to include vehicles purchased for less than $20,000 increased from $15,000 (less than $30,000, increased from $25,000, for trucks and sport utility vehicles) and extending the period in which net charge-offs, past due receivables and repossession can exceed a set limit under the Agreement from a maximum of two months to three months. Finally, the Amendment updates the definition of “permitted acquisitions” to allow the Company to make strategic business acquisitions so long as the aggregate cash consideration paid for all acquired businesses in any one fiscal year does not exceed $20.0 million and to provide more flexibility in the financial statement requirements for permitted acquisitions in which the total consideration exceeds $10.0 million. |
Insider Trading Arrangements
Insider Trading Arrangements | 9 Months Ended |
Jan. 31, 2024 | |
Insider Trading Arr Line Items | |
Material Terms of Trading Arrangement [Text Block] | Item 5. Other Information During the three months ended January 31, 2024, none |
Issuer Rule 10b5-1, Adopted or Terminated | false |
Non-Rule 10b5-1 Arrangement Adopted [Flag] | false |
Rule 10b5-1 Arrangement Terminated [Flag] | false |
Non-Rule 10b5-1 Arrangement Terminated [Flag] | false |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Jan. 31, 2024 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The condensed consolidated financial statements include the accounts of America’s Car-Mart, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated. |
Segment Reporting, Policy [Policy Text Block] | Segment Information Each dealership is an operating segment with its results regularly reviewed by the Company’s chief operating decision maker in an effort to make decisions about resources to be allocated to the segment and to assess its performance. Individual dealerships meet the aggregation criteria for reporting purposes under the current accounting guidance. The Company operates in the Integrated Auto Sales and Finance segment of the used car market, also referred to as the Integrated Auto Sales and Finance industry. In this industry, the nature of the sale and the financing of the transaction, financing processes, the type of customer and the methods used to distribute the Company’s products and services, including the actual servicing of the contracts as well as the regulatory environment in which the Company operates, all have similar characteristics. Each individual dealership is similar in nature and only engages in the selling and financing of used vehicles. All individual dealerships have similar operating characteristics. As such, individual dealerships have been aggregated into one |
Reclassification, Comparability Adjustment [Policy Text Block] | Reclassifications Accident protection plan (“APP”) reserves in the amount of approximately $11.0 million and Wholesales Sales of $3.7 million in the prior year financial statements were reclassified to conform with the current year presentation. For the year ended April 30, 2023, APP reserves of $5.7 million were reclassed out of accrued liabilities to reserve against finance receivables and $5.3 million of estimated APP insurance receivables were reclassed out of finance receivables to prepaid expenses and other assets. For the nine months ended January 31, 2023, $3.7 million of Wholesales sales were reclassed out of Wholesales – third party sales to Cost of Goods Sold. The reclassification had no effect on the prior year net income or shareholder’s equity. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant estimates include the Company’s allowance for credit losses. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Risk The Company provides financing in connection with the sale of substantially all of its vehicles. These sales are made primarily to customers residing in Alabama, Arkansas, Georgia, Illinois, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee, and Texas, with approximately 27% of current period revenues resulting from sales to Arkansas customers. As of January 31, 2024, and periodically throughout the period, the Company maintained cash in financial institutions in excess of the amounts insured by the federal government. The cash is held in several highly rated banking institutions. The Company regularly monitors its counterparty credit risk and mitigates exposure by limiting the amount it invests in one institution. |
Line of Credit Facility, Dividend Restrictions [Policy Text Block] | Restrictions on Distributions / Dividends The Company’s revolving credit facilities generally restrict distributions by the Company to its shareholders. The distribution limitations under the credit facilities allow the Company to repurchase the Company’s stock so long as either: (a) the aggregate amount of such repurchases after September 30, 2021 does not exceed $50 million, net of proceeds received from the exercise of stock options, and the total availability under the credit facilities is equal to or greater than 20% of the sum of the borrowing bases, in each case after giving effect to such repurchases (repurchases under this item are excluded from fixed charges for covenant calculations), or (b) the aggregate amount of such repurchases does not exceed 75% of the consolidated net income of the Company measured on a trailing twelve month basis; provided that immediately before and after giving effect to the Company’s stock repurchases, at least 12.5% of the aggregate funds committed under the credit facilities remain available. Thus, although the Company does routinely repurchase stock, the Company is limited in its ability to pay dividends or make other distributions to its shareholders without the consent of the Company’s lenders. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash Equivalents The Company considers all highly liquid debt instruments purchased with original maturities of three months or less to be cash equivalents. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Restricted cash is related to the financing and securitization transaction discussed below and is held by the securitization trust. Restricted cash from collections on auto finance receivables includes collections of principal, interest, and late fee payments on auto finance receivables that are restricted for payment to holders of non-recourse notes payable pursuant to the applicable agreements. The restricted cash on deposit in reserve accounts is for the benefit of holders of non-recourse notes payable, and these funds are not expected to be available to the Company or its creditors. If the cash generated by the related receivables in a given period was insufficient to pay the interest, principal, and other required payments, the balances on deposit in the reserve accounts would be used to pay those amounts. Restricted cash consisted of the following at January 31, 2024 and April 30, 2023: (In thousands) January 31, 2024 April 30, 2023 Restricted cash from collections on auto finance receivables $ 45,381 $ 34,442 Restricted cash on deposit in reserve accounts 44,969 23,796 Restricted Cash $ 90,350 $ 58,238 |
Financing and Securitization Transactions Policy [Policy Text Block] | Financing and Securitization Transactions The Company utilizes term securitizations to provide long-term funding for a portion of the auto finance receivables initially funded through the debt facilities. In these transactions, a pool of auto finance receivables is sold to a special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables. The Company is required to evaluate term securitization trusts for consolidation. In the Company’s role as servicer for each securitization, it possesses non-substantive voting rights and has the power to direct the activities of the trust that most significantly impact the economic performance of the trust. In addition, the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trust, remain with the Company. Accordingly, the Company is the primary beneficiary of the trust and is required to consolidate it. The Company recognizes transfers of auto finance receivables into the term securitization as secured borrowings, which results in recording the auto finance receivables and the related non-recourse notes payable on our consolidated balance sheet. These auto finance receivables can only be used as collateral to settle obligations of the related non-recourse notes payable. The term securitization investors have no recourse to the Company’s assets beyond the related auto finance receivables, the amounts on deposit in the reserve account, and the restricted cash from collections on auto finance receivables. See Notes C and F for additional information on auto finance receivables and non-recourse notes payable. |
Financing Receivable [Policy Text Block] | Finance Receivables, Repossessions and Charge-offs and Allowance for Credit Losses The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts carry a weighted average interest rate of approximately 16.9% using the simple effective interest method including any deferred fees. In December 2023, the Company increased the interest rate on new originations of installment sale contracts to 18.25% (from 18.0%) 21.5%) 23.0%) An account is considered delinquent when the customer is three days or more behind on their contractual payments. While the Company does not formally place contracts on nonaccrual status, the immaterial amount of interest that may accrue after an account becomes delinquent up until the point of resolution via repossession or write-off is reserved for against the accrued interest on the Condensed Consolidated Balance Sheets. Delinquent contracts are addressed and either made current by the customer, which is the case in most situations, or the vehicle is repossessed or written off if the collateral cannot be recovered after 90 days. Customer payments are set to match their payday with approximately 78% of payments due on either a weekly or bi-weekly basis. The frequency of the payment due dates combined with the declining value of collateral lead to prompt resolutions on problem accounts. On January 31, 2024, 3.3% of the Company’s finance receivable balances were 30 days or more past due, compared to 3.6% at April 30, 2023. Substantially all of the Company’s installment sale contracts involve contracts made to individuals with impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders. Contracts made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better credit. At the time of originating an installment sale contract, the Company requires customers to meet certain criteria that demonstrate their intent and ability to pay for the financed principal and interest on the vehicle they are purchasing. However, the Company recognizes that their customer base is at a higher risk of default given their impaired or limited credit histories. The Company strives to keep its delinquency percentages low, and not to repossess vehicles. Accounts one to three days late are contacted by telephone or text messaging notifications. Notes from each contact are electronically maintained in the Company’s computer system. The Company also utilizes text messaging notifications that allow customers the option to receive due date reminders and late notifications, if applicable. The Company attempts to resolve payment delinquencies amicably prior to repossessing a vehicle. If a customer becomes severely delinquent in his or her payments, and management determines that timely collection of future payments is not probable, the Company will take steps to repossess the vehicle. Periodically, the Company enters into contract modifications with its customers to extend or modify the payment terms. The Company only enters into a contract modification or extension if it believes such action will increase the amount of money the Company will ultimately realize on the customer’s account and will increase the likelihood of the customer being able to pay off the installment sale contract. At the time of modification, the Company expects to collect amounts due including accrued interest at the contractual interest rate for the period of delay. No other concessions are granted to customers, beyond the extension of additional time, at the time of modifications. Modifications are minor and are made for payday changes, minor vehicle repairs and other reasons. For those vehicles that are repossessed, the majority are returned or surrendered by the customer on a voluntary basis. Other repossessions are performed by Company personnel or third-party repossession agents. Depending on the condition of a repossessed vehicle, it is either resold on a retail basis through a Company dealership or sold for cash on a wholesale basis, primarily through physical or online auctions. The Company takes steps to repossess a vehicle when the customer becomes delinquent in his or her payments and management determines that timely collection of future payments is not probable. Accounts are charged-off after the expiration of a statutory notice period for repossessed accounts, or when management determines that the timely collection of future payments is not probable for accounts where the Company has been unable to repossess the vehicle. For accounts with respect to which the vehicle was repossessed, the fair value of the repossessed vehicle is charged as a reduction of the gross finance receivables balance charged-off. On average, accounts are approximately 70 days past due at the time of charge-off. For previously charged-off accounts that are subsequently recovered, the amount of such recovery is credited to the allowance for credit losses. The amount of the net repossession and charge-off loss is also reduced by any deferred service contract and accident protection plan revenue at the time of charge-off. During the second quarter of the 2024 fiscal year, the Company implemented third-party software to assist in calculating the Company’s allowance for credit losses. After implementation, the Company’s quantitative portion of the allowance for credit losses was measured using an undiscounted cash flow (“CF”) model. Whereby the undiscounted cash flows are adjusted by a prepayment rate and then the loss rate is applied and compared to the amortized cost basis of finance receivables to reflect management’s estimate of expected credit losses. The CF model is based on installment sale contract level characteristics of the Company’s finance receivables, such as the contractual payment structure, maturity date, payment frequency for recurring payments, and interest rates, as well as the following assumptions: ● a historical loss period, which represents a full economic credit cycle utilizing loss experience, to calculate the historical loss rate; and ● static annualized historical rate based on average time of charge-off; and ● expected prepayment rates based on our historical experience, which also incorporates non-standard contractual payments such as down payments made during the first ninety-days or annual seasonal payments. The Company’s allowance for credit losses also considers qualitative factors not captured within the CF modeled results such as changes in underwriting and collection practices, economic trends, changes in volume and terms of installment sales contracts, credit quality trends, installment sale contract review results, collateral trends, and concentrations of credit. The Company’s qualitative factors incorporate a macroeconomic variable forecast of inflation over a reasonable and supportable forecast period of one year that affects its customers’ non-discretionary income and ability to repay. The reasonable and supportable forecast period of one year is based on management’s current review of the reliability of extended forecasts and is applied as an adjustment to the historical loss rate. As a result of this update to our methodology and the performance of our loan portfolio, the Company increased the provision for credit losses by $28.0 million and decreased net income by $21.8 million, or basic per share loss of $3.40 per share, upon implementation of the third-party software on our condensed consolidated statement of operations during the second quarter of the 2024 fiscal year and had no effect on periods prior to this. During the third quarter of fiscal year 2024, the Company decreased the allowance for credit loss from 26.04% to 25.74%, resulting in a $3.9 million benefit to the provision. The decrease in Q3 2024 was primarily driven by the lower overall inflationary outlook and fewer past due balances at quarter end. The Company maintains an allowance for credit losses on an aggregate basis at an amount it considers sufficient to cover net credit losses expected over the remaining life of the installment sales contracts in the portfolio at the measurement date. At January 31, 2024, the weighted average total contract term was 47.6 months, with 35.8 months remaining. The allowance for credit losses at January 31, 2024, $335.1 million, was 25.74% of the principal balance in finance receivables of $1.4 billion, less deferred APP revenue of $51.1 million and deferred service contract revenue of $67.3 million, less pending APP claims of $9.1 million. The allowance for credit losses is periodically reviewed by management with any changes reflected in current operations. In most states, the Company offers retail customers who finance their vehicle the option of purchasing an accident protection plan product as an add-on to the installment sale contract. This product contractually obligates the Company to cancel the remaining principal outstanding for any contract where the retail customer has totaled the vehicle, as defined by the product, or the vehicle has been stolen. The Company periodically evaluates anticipated losses to ensure that if anticipated losses exceed deferred accident protection plan revenues, an additional liability is recorded for such difference. At January 31, 2024, anticipated losses did not exceed deferred accident protection plan revenues. No such liability was required at January 31, 2024 or April 30, 2023. |
Inventory, Policy [Policy Text Block] | Inventory Inventory consists of used vehicles and is valued at the lower of cost or net realizable value on a specific identification basis. Vehicle reconditioning costs are capitalized as a component of inventory. Repossessed vehicles and trade-in vehicles are recorded at fair value, which approximates wholesale value. The cost of used vehicles sold is determined using the specific identification method. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill reflects the excess of purchase price over the fair value of specifically identified net assets purchased. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to qualitative annual impairment tests at the Company’s year-end. The impairment tests are based on the comparison of the fair value of the reporting unit to the carrying value of such unit. The implied goodwill is compared to the carrying value of the goodwill to determine the impairment, if any. There was no Goodwill totaled $14.5 million at January 31, 2024 and $11.7 million at April 30, 2023. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Expenditures for additions, remodels and improvements are capitalized. Costs of repairs and maintenance are expensed as incurred. Leasehold improvements are amortized over the shorter of the estimated life of the improvement or the lease period. The lease period includes the primary lease term plus any extensions that are reasonably assured. Depreciation is computed principally using the straight-line method generally over the following estimated useful lives: Furniture, fixtures and equipment 3 to 7 years Leasehold improvements 5 to 15 years Buildings and improvements 18 to 39 years |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets Long-lived assets, such as property and equipment, capitalized internal-use software and operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares the undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, such assets are considered to be impaired, and the impairment is recognized to the extent that the carrying value exceeds its fair value. There were no impairment charges recognized during any of the periods presented. |
Cloud Computing Implementation Costs [Policy Text Block] | Cloud Computing Implementation Costs The Company enters into cloud computing service contracts to support its sales, inventory management, and administrative activities. The Company capitalizes certain implementation costs for cloud computing arrangements that meet the definition of a service contract. The Company includes these capitalized implementation costs within prepaid expenses and other assets on the Condensed Consolidated Balance Sheets. Once placed in service, the Company amortizes these costs over the remaining subscription term to the same caption on the Condensed Consolidated Statement of Operations as the related cloud subscription. |
Cash Overdraft [Policy Text Block] | Cash Overdraft As checks are presented for payment from the Company’s primary disbursement bank account, monies are automatically drawn against cash collections for the day and, if necessary, are drawn against one of the revolving credit facilities. Any cash overdraft balance principally represents outstanding checks that as of the balance sheet date had not yet been presented for payment, net of any deposits in transit. Any cash overdraft balance is reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. |
Deferred Sales Tax [Policy Text Block] | Deferred Sales Tax Deferred sales tax represents a sales tax liability of the Company for vehicles sold on an installment basis in the states of Alabama and Texas. Under Alabama and Texas law for vehicles sold on an installment basis, the related sales tax is due as the payments are collected from the customer, rather than at the time of sale. Deferred sales tax liabilities are reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. |
Income Tax, Policy [Policy Text Block] | Income Taxes Income taxes are accounted for under the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates expected to apply in the years in which these differences are expected to be recovered or settled. The quarterly provision for income taxes is determined using an estimated annual effective tax rate, which is based on expected annual taxable income, statutory tax rates and the Company’s best estimate of nontaxable and nondeductible items of income and expense. The effective income tax rates were 21.9% and 22.1% for the nine months ended January 31, 2024 and January 31, 2023, respectively. Total income tax expense for the nine months ended January 31, 2024 differed from amounts computed by applying the United States federal statutory tax rates to pre-tax income primarily due to state income taxes and the impact of permanent differences between book and taxable income. The Company recorded a discrete income tax benefit of approximately $213,000 and $206,000 for the nine months ended January 31, 2024 and 2023, respectively, related to excess tax benefits on share based compensation. Occasionally, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applies this methodology to all tax positions for which the statute of limitations remains open. The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before fiscal 2019. The Company’s policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no |
Revenue [Policy Text Block] | Revenue Recognition Revenues are generated principally from the sale of used vehicles, which in most cases includes a service contract and an accident protection plan product, as well as interest income and late fees earned on finance receivables. Revenues are net of taxes collected from customers and remitted to government agencies. Cost of vehicle sales include costs incurred by the Company to prepare the vehicle for sale including license and title costs, gasoline, transport services, and repairs. Revenues from the sale of used vehicles are recognized when the sales contract is signed, the customer has taken possession of the vehicle and, if applicable, financing has been approved. Revenues from the sale of vehicles sold at wholesale are recognized at the time the proceeds are received. Revenues from the sale of service contracts are recognized ratably over the expected duration of the product. Service contract revenues are included in sales and the related expenses are included in cost of sales. Accident protection plan revenues are initially deferred and then recognized to income using the “Rule of 78’s” interest method over the life of the contract so that revenues are recognized in proportion to the amount of cancellation protection provided. Accident protection plan revenues are included in sales and related losses are included in cost of sales as incurred. Any unearned revenue from ancillary products is charged-off at the time of repossession. Interest income is recognized on all active finance receivables accounts using the simple effective interest method. Active accounts include all accounts except those that have been paid-off or charged-off. Sales for the three and nine months ended January 31, 2024 and 2023 consisted of the following: Three Months Ended Nine Months Ended (In thousands) 2024 2023 2024 2023 Sales – used autos $ 200,341 $ 239,079 $ 735,145 $ 761,875 Wholesales – third party 13,479 11,816 39,502 40,325 Service contract revenue 17,106 14,577 51,102 41,765 Accident protection plan revenue 9,475 8,804 28,421 25,810 Total $ 240,401 $ 274,276 $ 854,170 $ 869,775 At January 31, 2024 and 2023, finance receivables more than 90 days past due were approximately $6.1 million and $4.0 million, respectively. Late fee revenues totaled approximately $3.6 million and $3.1 million for the nine months ended January 31, 2024 and 2023, respectively. Late fees are recognized when collected and are reflected in interest and other income on the Condensed Consolidated Statements of Operations. The amount of revenue recognized for the nine months ended January 31, 2024 that was included in the April 30, 2023 deferred service contract revenue was $29.6 million. |
Earnings Per Share, Policy [Policy Text Block] | Earnings per Share Basic earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period plus dilutive common stock equivalents. The calculation of diluted earnings per share takes into consideration the potentially dilutive effect of common stock equivalents, such as outstanding stock options and non-vested restricted stock, which if exercised or converted into common stock would then share in the earnings of the Company. In computing diluted earnings per share, the Company utilizes the treasury stock method and anti-dilutive securities are excluded. |
Share-Based Payment Arrangement [Policy Text Block] | Stock-Based Compensation The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock, based on the fair value of those awards at the date of grant over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. The Company may issue either new shares or treasury shares upon exercise of these awards. Stock-based compensation plans, related expenses, and assumptions used in the Black-Scholes option pricing model are more fully described in Note I. If an award contains a performance condition, expense is recognized only for those shares for which it is considered reasonably probable as of the current period end that the performance condition will be met. The Company accounts for forfeitures as they occur and records any excess tax benefits or deficiencies from its equity awards in its Consolidated Statements of Operations in the reporting period in which the exercise occurs. The Company recorded a discrete income tax benefit of approximately $213,000 and $206,000 for the nine months ended January 31, 2024 and 2023, respectively. As a result, the Company’s income tax expenses and associated effective tax rate will be impacted by fluctuations in stock price between the grant dates and exercise dates of equity awards. |
Treasury Stock [Policy Text Block] | Treasury Stock Treasury stock may be used for issuances under the Company’s stock-based compensation plans or for other general corporate purposes. The Company has a reserve account of 10,000 shares of treasury stock to secure outstanding service contracts issued in Iowa in accordance with the regulatory requirements of that state and another reserve account of 14,000 shares of treasury stock for its subsidiary, ACM Insurance Company, in accordance with the requirements of the Arkansas Department of Insurance. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its consolidated financial statements upon adoption. Adopted in the Current Period In March 2022, the FASB issued an accounting pronouncement (ASU 2022-02) related to troubled debt restructurings (“TDRs”) and vintage disclosures for financing receivables. The amendments in this update eliminate the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current period gross write-offs by year of origination for financing receivables. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this standard on May 1, 2023 under a prospective basis. In regard to installment sale contract modifications, management notes that the Company primarily modifies a customer’s installment sale contract to allow for insignificant payment delays. This type of modification is generally done to account for payday changes for the customer and minor vehicle repairs. |
Note B - Summary of Significa_2
Note B - Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Restrictions on Cash and Cash Equivalents [Table Text Block] | (In thousands) January 31, 2024 April 30, 2023 Restricted cash from collections on auto finance receivables $ 45,381 $ 34,442 Restricted cash on deposit in reserve accounts 44,969 23,796 Restricted Cash $ 90,350 $ 58,238 |
Property, Plant, and Equipment Useful Life [Table Text Block] | Furniture, fixtures and equipment 3 to 7 years Leasehold improvements 5 to 15 years Buildings and improvements 18 to 39 years |
Revenue from External Customers by Products and Services [Table Text Block] | Three Months Ended Nine Months Ended (In thousands) 2024 2023 2024 2023 Sales – used autos $ 200,341 $ 239,079 $ 735,145 $ 761,875 Wholesales – third party 13,479 11,816 39,502 40,325 Service contract revenue 17,106 14,577 51,102 41,765 Accident protection plan revenue 9,475 8,804 28,421 25,810 Total $ 240,401 $ 274,276 $ 854,170 $ 869,775 |
Note C - Finance Receivables,_2
Note C - Finance Receivables, Net (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | (In thousands) January 31, 2024 April 30, 2023 Gross contract amount $ 1,821,447 $ 1,752,149 Less: unearned finance charges (392,539 ) (378,777 ) Principal balance 1,428,908 1,373,372 Less: estimated insurance receivables for APP claims (4,303 ) (5,694 ) Less: allowance for APP claims (4,507 ) (5,310 ) Less: allowance for credit losses (334,987 ) (299,608 ) Finance receivables, net 1,085,111 1,062,760 Loan origination costs 661 700 Finance receivables, net, including loan origination costs 1,085,772 1,063,460 |
Change In Finance Receivables Net [Table Text Block] | Nine Months Ended (In thousands) 2024 2023 Balance at beginning of period $ 1,062,760 $ 855,424 Finance receivable originations 794,477 841,445 Finance receivable collections (324,703 ) (308,671 ) Provision for credit losses (321,300 ) (250,719 ) Losses on claims for accident protection plan (24,480 ) (17,717 ) Inventory acquired in repossession and accident protection plan claims (101,643 ) (107,882 ) Balance at end of period $ 1,085,111 $ 1,011,880 |
Financing Receivable, Allowance for Credit Loss [Table Text Block] | Nine Months Ended (In thousands) 2024 2023 Balance at beginning of period $ 299,608 $ 237,823 Provision for credit losses 321,300 250,719 Charge-offs (386,349 ) (296,154 ) Recovered collateral 100,428 90,387 Balance at end of period $ 334,987 $ 282,775 |
Financing Receivable, Past Due [Table Text Block] | (Dollars in thousands) January 31, 2024 April 30, 2023 January 31, 2023 Principal Percent of Principal Percent of Principal Percent of Balance Portfolio Balance Portfolio Balance Portfolio Current $ 1,119,120 78.32 % $ 1,166,860 84.96 % $ 1,011,877 77.48 % 3 - 29 days past due 262,200 18.35 % 156,943 11.43 % 245,939 18.83 % 30 - 60 days past due 34,266 2.40 % 37,214 2.71 % 36,447 2.79 % 61 - 90 days past due 7,258 0.51 % 8,407 0.61 % 7,700 0.59 % > 90 days past due 6,064 0.42 % 3,948 0.29 % 3,993 0.31 % Total $ 1,428,908 100.00 % $ 1,373,372 100.00 % $ 1,305,956 100.00 % |
Financing Receivable Credit Quality Indicators [Table Text Block] | Nine Months Ended 2024 2023 Average total collected per active customer per month $ 536 $ 516 Principal collected as a percent of average finance receivables 22.7 % 25.4 % Average down-payment percentage 5.0 % 5.4 % Average originating contract term (in months 44.0 42.5 As of January 31, 2024 January 31, 2023 Portfolio weighted average contract term, including modifications (in months 47.6 45.4 |
Schedule of Financing Receivable by Fiscal Year of Origination [Table Text Block] | (Dollars in thousands) Fiscal Year of Origination Prior to Customer Rating 2024 2023 2022 2021 2020 2020 Total % 1-2 $ 32,854 $ 18,416 $ 5,298 $ 661 $ 124 $ 13 $ 57,366 4.0 % 3-4 $ 236,351 $ 153,436 $ 50,070 $ 7,414 $ 450 $ 178 $ 447,899 31.4 % 5-6 $ 394,600 $ 352,267 $ 147,133 $ 27,316 $ 1,797 $ 530 $ 923,643 64.6 % Total $ 663,805 $ 524,119 $ 202,501 $ 35,391 $ 2,371 $ 721 $ 1,428,908 100.0 % Gross charge-offs $ 87,675 $ 211,642 $ 72,511 $ 13,111 $ 957 $ 453 $ 386,349 (Dollars in thousands) Fiscal Year of Origination Prior to Customer Rating 2023 2022 2021 2020 2019 2019 Total % 1-2 $ 31,580 $ 17,295 $ 4,212 $ 545 $ 35 $ 12 $ 53,679 4.1 % 3-4 $ 232,273 $ 135,531 $ 36,562 $ 2,974 $ 332 $ 192 $ 407,864 31.2 % 5-6 $ 437,566 $ 307,513 $ 89,582 $ 8,389 $ 910 $ 453 $ 844,413 64.7 % Total $ 701,419 $ 460,339 $ 130,356 $ 11,908 $ 1,277 $ 657 $ 1,305,956 100.0 % |
Note D - Property and Equipme_2
Note D - Property and Equipment, Net (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | (In thousands) January 31, 2024 April 30, 2023 Land $ 11,998 $ 12,386 Buildings and improvements 23,441 20,894 Furniture, fixtures and equipment 20,758 18,989 Leasehold improvements 50,230 47,315 Construction in progress 2,963 7,176 Less: accumulated depreciation and amortization (48,497 ) (45,078 ) Total $ 60,893 $ 61,682 |
Note E - Accrued Liabilities (T
Note E - Accrued Liabilities (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Schedule of Accrued Liabilities [Table Text Block] | (In thousands) January 31, 2024 April 30, 2023 Employee compensation $ 8,258 $ 11,197 Deferred sales tax (see Note B) 8,253 8,543 Fair value of contingent consideration 3,193 1,943 Other 7,281 6,229 Total $ 26,985 $ 27,912 |
Note F - Debt Facilities (Table
Note F - Debt Facilities (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Schedule of Long-Term Debt Instruments [Table Text Block] | (In thousands) January 31, 2024 April 30, 2023 Revolving line of credit $ 55,994 $ 168,516 Debt issuance costs (620 ) (1,285 ) Revolving line of credit, net $ 55,374 $ 167,231 Non-recourse notes payable - 2022-1 Issuance $ - $ 134,137 Non-recourse notes payable - 2023-1 Issuance 190,674 $ 338,777 Non-recourse notes payable - 2023-2 Issuance 248,130 - Non-recourse notes payable - 2024-1 Issuance 250,000 - Debt issuance costs (4,116 ) (1,547 ) Non-recourse notes payable, net $ 684,688 $ 471,367 Total debt $ 740,062 $ 638,598 |
Debt Instrument, Debt and Interest Rates [Table Text Block] | Original Principal Balance (in thousands) Weighted Average Fixed Coupon Rate 2023-1 $ 400,200 8.68 % 2023-2 360,300 8.80 % 2024-1 250,000 9.50 % |
Note G - Fair Value Measureme_2
Note G - Fair Value Measurements (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | January 31, 2024 April 30, 2023 Carrying Fair Carrying Fair (In thousands) Cash and cash equivalents $ 4,239 $ 4,239 $ 9,796 $ 9,796 Restricted cash 90,350 90,350 58,238 58,238 Inventory 18,663 18,663 16,451 16,451 Finance receivables, net 1,085,772 878,778 1,063,460 844,624 Accounts payable 25,868 25,868 27,196 27,196 Contingent Consideration 3,193 3,193 1,943 1,943 Revolving line of credit, net 55,374 55,374 167,231 167,231 Non-recourse notes payable 684,688 692,626 471,367 470,209 |
Note H - Weighted Average Sha_2
Note H - Weighted Average Shares Outstanding (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Schedule of Weighted Average Number of Shares [Table Text Block] | Three Months Ended Nine Months Ended 2024 2023 2024 2023 Weighted average shares outstanding-basic 6,393,080 6,370,031 6,386,997 6,370,732 Dilutive options and restricted stock - 166,754 - 191,482 Weighted average shares outstanding-diluted 6,393,080 6,536,785 6,386,997 6,562,214 Antidilutive securities not included: Options 499,986 357,500 947,486 935,000 Restricted stock 68,893 24,565 73,926 60,924 |
Note I - Stock-based Compensa_2
Note I - Stock-based Compensation (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Stock Option Plan Comparison [Table Text Block] | Restated Option Plan Minimum exercise price as a percentage of fair market value at date of grant 100% Last expiration date for outstanding options January 25, 2034 Shares available for grant at January 31, 2024 487,514 |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Nine Months Ended 2024 2023 Expected terms (years) 3.9 5.5 Risk-free interest rate 4.06 % 3.59 % Volatility 56 % 55 % Dividend yield - - |
Schedule of Share-based Compensation, Stock Options, Exercises [Table Text Block] | Nine Months Ended (Dollars in thousands) 2024 2023 Options exercised 30,000 23,000 Cash received from option exercises $ - $ 1,216 Intrinsic value of options exercised $ 1,036 $ 1,204 |
Note J - Commitments and Cont_2
Note J - Commitments and Contingencies (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block] | Maturity of lease liabilities 2024 (remaining) $ 2,303 2025 9,136 2026 8,767 2027 8,274 2028 7,580 Thereafter 49,059 Total undiscounted operating lease payments 85,119 Less: imputed interest (19,255 ) Present value of operating lease liabilities $ 65,864 |
Note K - Supplemental Cash Fl_2
Note K - Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Jan. 31, 2024 | |
Notes Tables | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Nine Months Ended (In thousands) 2024 2023 Supplemental disclosures: Interest paid $ 42,152 $ 25,757 Income taxes paid, net 1,628 4,742 Non-cash transactions: Inventory acquired in repossession and accident protection plan claims 103,474 93,248 Reduction in net receivables for deferred ancillary product revenue at time of charge-off 28,542 13,714 Net settlement option exercises 1,646 - Right-of-use assets obtained in exchange for operating lease liabilities 558 384 Right-of-use assets obtained in exchange for operating lease liabilities through acquisitions 1,822 1,729 |
Note A - Organization and Bus_2
Note A - Organization and Business (Details Textual) | 9 Months Ended |
Jan. 31, 2024 | |
Number of Operating Subsidiaries | 2 |
Number of Dealerships Operated | 154 |
Note B - Summary of Significa_3
Note B - Summary of Significant Accounting Policies (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||
Dec. 31, 2023 | Jan. 31, 2024 | Oct. 31, 2023 | Jul. 31, 2023 | Jan. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2022 | Oct. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | May 01, 2023 | Apr. 30, 2023 | Apr. 30, 2022 | |
Number of Reportable Segments | 1 | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 240,401,000 | $ 274,276,000 | $ 854,170,000 | $ 869,775,000 | |||||||||
Financing Receivables, Allowance for APP Claims | 4,507,000 | 4,507,000 | $ 5,310,000 | ||||||||||
Financing Receivable, Insurance Receivables for APP Claims | 4,303,000 | $ 4,303,000 | 5,694,000 | ||||||||||
Average Finance Receivable Interest Rate | 16.90% | ||||||||||||
Financing Receivable Interest Rate | 18% | 18.25% | |||||||||||
Interest Receivable | $ 7,370,000 | $ 7,370,000 | $ 6,115,000 | ||||||||||
Finance Receivables, Customer Payments Due Either Weekly or Bi-Weekly, Percentage | 78% | ||||||||||||
Financing Receivable, Greater Than or Equal to 30 Days Past Due, Percent of Portfolio | 3.30% | 3.30% | 3.60% | ||||||||||
Allowance for Credit Losses, Primary Factor Units Repossessed or Charged Off Evaluation Period | 70 years | ||||||||||||
Financing Receivable, Allowance for Credit Loss | $ 334,987,000 | 282,775,000 | $ 334,987,000 | 282,775,000 | $ 299,608,000 | $ 237,823,000 | |||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ (8,542,000) | $ (27,463,000) | $ 4,186,000 | $ 1,508,000 | $ 3,139,000 | $ 13,697,000 | $ (31,819,000) | $ 18,344,000 | |||||
Earnings Per Share, Basic | $ (1.34) | $ 0.24 | $ (4.99) | $ 2.87 | |||||||||
Allowance for Credit Loss, Percentage | 25.74% | 26.04% | |||||||||||
Financing Receivable, Weighted Average Total Contract Term | 47 months 18 days | ||||||||||||
Financing Receivable, Remaining Contract Term | 35 months 24 days | ||||||||||||
Financing Receivables, Allowance for Credit Losses and Other Losses | $ 335,100,000 | ||||||||||||
Finance Receivables, Allowance, Percent of Principle Balance | 25.74% | 25.74% | |||||||||||
Finance Receivable, Principal Balance | $ 1,428,908,000 | $ 1,428,908,000 | $ 1,305,956,000 | $ 1,305,956,000 | $ 1,428,908,000 | $ 1,428,908,000 | $ 1,305,956,000 | 1,373,372,000 | |||||
Goodwill, Impairment Loss | 0 | ||||||||||||
Goodwill | 14,500,000 | $ 14,500,000 | 11,700,000 | ||||||||||
Effective Income Tax Rate Reconciliation, Percent | 21.90% | 22.10% | |||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | $ 213,000 | $ 206,000 | |||||||||||
Open Tax Year | 2019 | ||||||||||||
Income Tax Examination, Penalties and Interest Accrued | 0 | $ 0 | 0 | ||||||||||
Financing Receivable, Recorded Investment Greater Than 90 Days Past Due | 6,100,000 | $ 4,000,000 | 6,100,000 | 4,000,000 | |||||||||
Late Fee Income Generated by Servicing Financial Assets, Amount | 3,600,000 | 3,100,000 | |||||||||||
Contract with Customer, Liability, Revenue Recognized | $ 29,600,000 | ||||||||||||
Treasury Stock Shares to Establish Reserve Account to Secure Service Contracts | 10,000 | ||||||||||||
ACM Insurance Company [Member] | |||||||||||||
Treasury Stock, Shares to Establish Reserve Account to Meet Regulatory Requirements for Insurance Company | 14,000 | ||||||||||||
Accident Protection Plan [Member] | |||||||||||||
Contract with Customer, Liability | 51,100,000 | $ 51,100,000 | |||||||||||
Service Contract [Member] | |||||||||||||
Contract with Customer, Liability | 67,274,000 | 67,274,000 | 67,404,000 | ||||||||||
Accident Protection Plan Claims [Member] | |||||||||||||
Contract with Customer, Refund Liability | 9,100,000 | 9,100,000 | |||||||||||
Change in Accounting Method Accounted for as Change in Estimate [Member] | |||||||||||||
Financing Receivable, Allowance for Credit Loss | $ 3,900,000 | 3,900,000 | $ 28,000,000 | ||||||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 21,800,000 | ||||||||||||
Earnings Per Share, Basic | $ 3.4 | ||||||||||||
Minimum [Member] | Leasehold Improvements [Member] | |||||||||||||
Property, Plant and Equipment, Useful Life (Year) | 5 years | 5 years | |||||||||||
Minimum [Member] | Building and Building Improvements [Member] | |||||||||||||
Property, Plant and Equipment, Useful Life (Year) | 18 years | 18 years | |||||||||||
Maximum [Member] | |||||||||||||
Financing Receivable Interest Rate | 18.25% | ||||||||||||
Maximum [Member] | Leasehold Improvements [Member] | |||||||||||||
Property, Plant and Equipment, Useful Life (Year) | 15 years | 15 years | |||||||||||
Maximum [Member] | Building and Building Improvements [Member] | |||||||||||||
Property, Plant and Equipment, Useful Life (Year) | 39 years | 39 years | |||||||||||
Revolving Credit Facility [Member] | |||||||||||||
Line of Credit Facility, Distribution Limitations, Maximum Aggregate Amount of Stock Repurchases | $ 50,000,000 | ||||||||||||
Line of Credit Facility, Distribution Limitations Percentage of Sum of Borrowing Bases | 20% | ||||||||||||
Line of Credit Facility, Distribution Limitations Percentage of Consolidated Net Income | 75% | ||||||||||||
Line of Credit Facility Distribution Limitations Minimum Percentage of Aggregate Funds Available | 12.50% | ||||||||||||
ARKANSAS | |||||||||||||
Financing Receivable Interest Rate | 16.75% | ||||||||||||
ARKANSAS | Maximum [Member] | |||||||||||||
Financing Receivable Interest Rate | 16.75% | ||||||||||||
ILLINOIS | Minimum [Member] | |||||||||||||
Financing Receivable Interest Rate | 19.50% | ||||||||||||
ILLINOIS | Maximum [Member] | |||||||||||||
Financing Receivable Interest Rate | 21.50% | ||||||||||||
TENNESSEE | |||||||||||||
Financing Receivable Interest Rate | 23% | ||||||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Arkansas, USA [Member] | |||||||||||||
Concentration Risk, Percentage | 27% | ||||||||||||
Revision of Prior Period, Reclassification, Adjustment [Member] | |||||||||||||
Accident Protection Plan Claims | 11,000,000 | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 3,700,000 | ||||||||||||
Financing Receivables, Allowance for APP Claims | 5,700,000 | ||||||||||||
Financing Receivable, Insurance Receivables for APP Claims | $ 5,300,000 | ||||||||||||
Revision of Prior Period, Reclassification, Adjustment [Member] | Wholesales Third Party [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 3,700,000 |
Note B - Summary of Significa_4
Note B - Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | Jan. 31, 2024 | Apr. 30, 2023 |
Restricted cash | $ 90,350 | $ 58,238 |
Collections On Auto Finance Receivables [Member] | ||
Restricted cash | 45,381 | 34,442 |
Deposit in Reserve Accounts [Member] | ||
Restricted cash | $ 44,969 | $ 23,796 |
Note B - Summary of Significa_5
Note B - Summary of Significant Accounting Policies - Property and Equipment, Estimated Useful Lives (Details) | Jan. 31, 2024 |
Minimum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment, Useful Life (Year) | 3 years |
Minimum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment, Useful Life (Year) | 5 years |
Minimum [Member] | Building and Building Improvements [Member] | |
Property, Plant and Equipment, Useful Life (Year) | 18 years |
Maximum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment, Useful Life (Year) | 7 years |
Maximum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment, Useful Life (Year) | 15 years |
Maximum [Member] | Building and Building Improvements [Member] | |
Property, Plant and Equipment, Useful Life (Year) | 39 years |
Note B - Summary of Significa_6
Note B - Summary of Significant Accounting Policies - Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Sales | $ 240,401 | $ 274,276 | $ 854,170 | $ 869,775 |
Sales Used Autos [Member] | ||||
Sales | 200,341 | 239,079 | 735,145 | 761,875 |
Wholesales Third Party [Member] | ||||
Sales | 13,479 | 11,816 | 39,502 | 40,325 |
Service Contract Sales [Member] | ||||
Sales | 17,106 | 14,577 | 51,102 | 41,765 |
Payment Protection Plan Revenue [Member] | ||||
Sales | $ 9,475 | $ 8,804 | $ 28,421 | $ 25,810 |
Note C - Finance Receivables,_3
Note C - Finance Receivables, Net (Details Textual) | 1 Months Ended | 9 Months Ended | |
Dec. 31, 2023 | Jan. 31, 2024 USD ($) | Jan. 31, 2023 USD ($) | |
Financing Receivable Interest Rate | 18% | 18.25% | |
Finance Receivables, Number of Loan Classes | 1 | ||
Finance Receivables, Number of Risk Pools | 1 | ||
Financing Receivable, Allowance for Credit Loss, Recovery | $ 2,000,000 | $ 2,000,000 | |
Collections as Percentage of Average Financing Receivables | 3.90% | ||
Increase (Decrease) in Average Selling Price | $ 1,003 | ||
Increase (Decrease) in Average Selling Price, Percentage | 5.60% | ||
ARKANSAS | |||
Financing Receivable Interest Rate | 16.75% | ||
TENNESSEE | |||
Financing Receivable Interest Rate | 23% | ||
Maximum [Member] | |||
Financing Receivable Interest Rate | 18.25% | ||
Financing Receivable Payment Period | 69 months | ||
Maximum [Member] | ARKANSAS | |||
Financing Receivable Interest Rate | 16.75% | ||
Maximum [Member] | ILLINOIS | |||
Financing Receivable Interest Rate | 21.50% | ||
Minimum [Member] | |||
Financing Receivable Payment Period | 18 months | ||
Minimum [Member] | ILLINOIS | |||
Financing Receivable Interest Rate | 19.50% |
Note C - Finance Receivables,_4
Note C - Finance Receivables, Net - Components of Finance Receivables (Details) - USD ($) $ in Thousands | Jan. 31, 2024 | Oct. 31, 2023 | Apr. 30, 2023 | Jan. 31, 2023 | Oct. 31, 2022 | Apr. 30, 2022 |
Gross contract amount | $ 1,821,447 | $ 1,752,149 | ||||
Less unearned finance charges | (392,539) | (378,777) | ||||
Principal balance | 1,428,908 | $ 1,428,908 | 1,373,372 | $ 1,305,956 | $ 1,305,956 | |
Less: estimated insurance receivables for APP claims | (4,303) | (5,694) | ||||
Less: allowance for APP claims | (4,507) | (5,310) | ||||
Less: allowance for credit losses | (334,987) | (299,608) | (282,775) | $ (237,823) | ||
Finance receivables, net | 1,085,111 | 1,062,760 | $ 1,011,880 | $ 855,424 | ||
Loan origination costs | 661 | 700 | ||||
Finance receivables, net, including loan origination costs | $ 1,085,772 | $ 1,063,460 |
Note C - Finance Receivables,_5
Note C - Finance Receivables, Net - Changes in Finance Receivables (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Balance at beginning of period | $ 1,062,760 | $ 855,424 | ||
Finance receivable originations | 794,477 | 841,445 | ||
Finance receivable collections | (324,703) | (308,671) | ||
Provision for credit losses | $ (89,582) | $ (85,650) | (321,300) | (250,719) |
Losses on claims for accident protection plan | (24,480) | (17,717) | ||
Inventory acquired in repossession and accident protection plan claims | (101,643) | (107,882) | ||
Balance at end of period | $ 1,085,111 | $ 1,011,880 | $ 1,085,111 | $ 1,011,880 |
Note C - Finance Receivables,_6
Note C - Finance Receivables, Net - Changes in the Finance Receivables Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Oct. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Balance at beginning of period | $ 299,608 | $ 299,608 | $ 237,823 | ||
Provision for credit losses | $ 89,582 | $ 85,650 | 321,300 | 250,719 | |
Charge-offs | $ (386,349) | (386,349) | (296,154) | ||
Recovered collateral | 100,428 | 90,387 | |||
Balance at end of period | $ 334,987 | $ 282,775 | $ 334,987 | $ 282,775 |
Note C - Finance Receivables,_7
Note C - Finance Receivables, Net - Credit Quality Information for Finance Receivables (Details) - USD ($) $ in Thousands | Jan. 31, 2024 | Oct. 31, 2023 | Apr. 30, 2023 | Jan. 31, 2023 | Oct. 31, 2022 |
Principle Balance | $ 1,428,908 | $ 1,428,908 | $ 1,373,372 | $ 1,305,956 | $ 1,305,956 |
Percent of Portfolio | 100% | 100% | 100% | 100% | 100% |
Financial Asset, Not Past Due [Member] | |||||
Principle Balance | $ 1,119,120 | $ 1,166,860 | $ 1,011,877 | ||
Percent of Portfolio | 84.96% | 77.48% | |||
Financial Asset, Past Due [Member] | |||||
Percent of Portfolio | 78.32% | ||||
Financial Asset, 3 to 29 Days Past Due [Member] | |||||
Principle Balance | $ 262,200 | $ 156,943 | $ 245,939 | ||
Percent of Portfolio | 18.35% | 11.43% | 18.83% | ||
Financial Asset, 30 to 59 Days Past Due [Member] | |||||
Principle Balance | $ 34,266 | $ 37,214 | $ 36,447 | ||
Percent of Portfolio | 2.40% | 2.71% | 2.79% | ||
Financial Asset, 60 to 89 Days Past Due [Member] | |||||
Principle Balance | $ 7,258 | $ 8,407 | $ 7,700 | ||
Percent of Portfolio | 0.51% | 0.61% | 0.59% | ||
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | |||||
Principle Balance | $ 6,064 | $ 3,948 | $ 3,993 | ||
Percent of Portfolio | 0.42% | 0.29% | 0.31% |
Note C - Finance Receivables,_8
Note C - Finance Receivables, Net - Financing Receivables Analysis (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2024 | Jan. 31, 2023 | |
Average total collected per active customer per month | $ 536 | $ 516 | ||
Portfolio weighted average contract term, including modifications (in months) (Month) | 47 months 18 days | 45 months 12 days | ||
Principal collected as a percent of average finance receivables | 22.70% | 25.40% | ||
Average down-payment percentage | 5% | 5.40% | ||
Average originating contract term (in months) (Month) | 44 months | 42 months 15 days |
Note C - Finance Receivables,_9
Note C - Finance Receivables, Net - Finance Receivable Summarized by Fiscal Year of Origination (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | |||
Oct. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | Apr. 30, 2023 | Oct. 31, 2022 | |
Current year, principal balance | $ 663,805 | $ 701,419 | |||
Year two, principal balance | 524,119 | 460,339 | |||
Year three, principal balance | 202,501 | 130,356 | |||
Year four, principal balance | 35,391 | 11,908 | |||
Year five, principal balance | 2,371 | 1,277 | |||
Prior, principal balance | 721 | 657 | |||
Finance Receivable, Principal Balance | $ 1,428,908 | $ 1,428,908 | $ 1,305,956 | $ 1,373,372 | $ 1,305,956 |
Principal balance, percentage | 100% | 100% | 100% | 100% | 100% |
Charge-offs, current year | $ 87,675 | ||||
Charge-offs, year two | 211,642 | ||||
Charge-offs, year three | 72,511 | ||||
Charge-offs, year four | 13,111 | ||||
Charge-offs, year five | 957 | ||||
Charge-offs, prior | 453 | ||||
Charge-offs | 386,349 | $ 386,349 | $ 296,154 | ||
Customer Score 1-2 [Member] | |||||
Current year, principal balance | 32,854 | $ 31,580 | |||
Year two, principal balance | 18,416 | 17,295 | |||
Year three, principal balance | 5,298 | 4,212 | |||
Year four, principal balance | 661 | 545 | |||
Year five, principal balance | 124 | 35 | |||
Prior, principal balance | 13 | 12 | |||
Finance Receivable, Principal Balance | $ 57,366 | $ 53,679 | |||
Principal balance, percentage | 4% | 4.10% | |||
Customer Score 3-4 [Member] | |||||
Current year, principal balance | $ 236,351 | $ 232,273 | |||
Year two, principal balance | 153,436 | 135,531 | |||
Year three, principal balance | 50,070 | 36,562 | |||
Year four, principal balance | 7,414 | 2,974 | |||
Year five, principal balance | 450 | 332 | |||
Prior, principal balance | 178 | 192 | |||
Finance Receivable, Principal Balance | $ 447,899 | $ 407,864 | |||
Principal balance, percentage | 31.40% | 31.20% | |||
Customer Score 5-6 [Member] | |||||
Current year, principal balance | $ 394,600 | $ 437,566 | |||
Year two, principal balance | 352,267 | 307,513 | |||
Year three, principal balance | 147,133 | 89,582 | |||
Year four, principal balance | 27,316 | 8,389 | |||
Year five, principal balance | 1,797 | 910 | |||
Prior, principal balance | 530 | 453 | |||
Finance Receivable, Principal Balance | $ 923,643 | $ 844,413 | |||
Principal balance, percentage | 64.60% | 64.70% |
Note D - Property and Equipme_3
Note D - Property and Equipment, Net - Property and Equipment (Details) - USD ($) $ in Thousands | Jan. 31, 2024 | Apr. 30, 2023 |
Less accumulated depreciation and amortization | $ (48,497) | $ (45,078) |
Total | 60,893 | 61,682 |
Land [Member] | ||
Property and equipment | 11,998 | 12,386 |
Building and Building Improvements [Member] | ||
Property and equipment | 23,441 | 20,894 |
Furniture, Fixtures and Equipment [Member] | ||
Property and equipment | 20,758 | 18,989 |
Leasehold Improvements [Member] | ||
Property and equipment | 50,230 | 47,315 |
Construction in Progress [Member] | ||
Property and equipment | $ 2,963 | $ 7,176 |
Note E - Accrued Liabilities -
Note E - Accrued Liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2024 | Apr. 30, 2023 |
Employee compensation | $ 8,258 | $ 11,197 |
Deferred sales tax (see Note B) | 8,253 | 8,543 |
Fair value of contingent consideration | 3,193 | 1,943 |
Other | 7,281 | 6,229 |
Total | $ 26,985 | $ 27,912 |
Note F - Debt Facilities (Detai
Note F - Debt Facilities (Details Textual) | Oct. 31, 2023 |
Notes Payable [Member] | |
Minimum Percent of Pool Balance | 2% |
Note F - Debt Facilities - Summ
Note F - Debt Facilities - Summary of Debt Facilities (Details) - USD ($) $ in Thousands | Jan. 31, 2024 | Apr. 30, 2023 |
Revolving line of credit, net | $ 55,374 | $ 167,231 |
Non-recourse notes payable, net | 684,688 | 471,367 |
Total debt | 740,062 | 638,598 |
Line of Credit [Member] | ||
Debt facilities, gross | 55,994 | 168,516 |
Debt issuance costs | (620) | (1,285) |
Non Recourse Notes Payable, 2022 Issuance [Member] | ||
Debt facilities, gross | 0 | 134,137 |
Non Recourse Notes Payable, 2023 Issuance [Member] | ||
Debt facilities, gross | 190,674 | 338,777 |
Non Recourse Notes Payable, 2023-2 Issuance [Member] | ||
Debt facilities, gross | 248,130 | |
Non Recourse Notes Payable 2024 Issuance [Member] | ||
Debt facilities, gross | 250,000 | 0 |
Notes Payable [Member] | ||
Debt issuance costs | $ (4,116) | $ (1,547) |
Note F - Debt Facilities - Bala
Note F - Debt Facilities - Balance and Coupon Rate (Details) $ in Millions | Jan. 31, 2024 USD ($) |
Notes Payable, 2023 Issuance [Member] | |
Principal balance | $ 400.2 |
Weighted average fixed coupon rate | 8.68% |
Notes Payable, 2023-2 Issuance [Member] | |
Principal balance | $ 360.3 |
Weighted average fixed coupon rate | 8.80% |
Notes Payable 2024 Issuance [Member] | |
Principal balance | $ 250 |
Weighted average fixed coupon rate | 9.50% |
Note G - Fair Value Measureme_3
Note G - Fair Value Measurements (Details Textual) | 1 Months Ended |
Oct. 31, 2022 | |
Fair Value Inputs, Discount Rate, Intercompany Transactions | 38.50% |
Measurement Input, Discount Rate [Member] | Minimum [Member] | |
Receivables, Measurement Input | 34% |
Measurement Input, Discount Rate [Member] | Maximum [Member] | |
Receivables, Measurement Input | 39% |
Note G - Fair Value Measureme_4
Note G - Fair Value Measurements - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jan. 31, 2024 | Apr. 30, 2023 |
Finance receivables, net | $ 878,778 | $ 844,624 |
Reported Value Measurement [Member] | ||
Cash and cash equivalents | 4,239 | 9,796 |
Restricted cash | 90,350 | 58,238 |
Finance receivables, net | 1,085,772 | 1,063,460 |
Accounts payable | 25,868 | 27,196 |
Revolving line of credit, net | 55,374 | 167,231 |
Non-recourse notes payable | 684,688 | 471,367 |
Estimate of Fair Value Measurement [Member] | ||
Cash and cash equivalents | 4,239 | 9,796 |
Restricted cash | 90,350 | 58,238 |
Accounts payable | 25,868 | 27,196 |
Revolving line of credit, net | 55,374 | 167,231 |
Non-recourse notes payable | $ 692,626 | $ 470,209 |
Note H - Weighted Average Sha_3
Note H - Weighted Average Shares Outstanding - Weighted Average Shares of Common Stock Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Weighted average shares outstanding-basic (in shares) | 6,393,080 | 6,370,031 | 6,386,997 | 6,370,732 |
Dilutive options and restricted stock (in shares) | 166,754 | 191,482 | ||
Weighted average shares outstanding-diluted (in shares) | 6,393,080 | 6,536,785 | 6,386,997 | 6,562,214 |
Share-Based Payment Arrangement, Option [Member] | ||||
Antidilutive securities (in shares) | 499,986 | 357,500 | 947,486 | 935,000 |
Restricted Stock [Member] | ||||
Antidilutive securities (in shares) | 68,893 | 24,565 | 73,926 | 60,924 |
Note I - Stock-based Compensa_3
Note I - Stock-based Compensation (Details Textual) - USD ($) | 9 Months Ended | |||||||
Sep. 28, 2023 | Aug. 30, 2022 | Aug. 26, 2020 | Aug. 29, 2018 | Aug. 05, 2015 | Jan. 31, 2024 | Jan. 31, 2023 | Aug. 28, 2018 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) | 197,486 | 137,500 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Fair Value | $ 5,700,000 | $ 5,000,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options Exercised Through Net Settlements | 30,000 | 0 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Reduction in Shares Issued to Satisfy the Exercise Price and Applicable Withholding Taxes | 23,507 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options Exercised Through Net Settlements, Net of Shares to Satisfy the Exercise Price and Applicable Withholding Taxes | 6,493 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | $ 2,400,000 | $ 11,500,000 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 450,900 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value | $ 2,400,000 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 3 years | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 103.22 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 487,514 | |||||||
Share-Based Payment Arrangement, Option [Member] | ||||||||
Share-Based Payment Arrangement, Expense | $ 1,500,000 | 3,000,000 | ||||||
Share-Based Payment Arrangement, Expense, after Tax | 1,200,000 | 2,300,000 | ||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 2,400,000 | |||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 4 months 24 days | |||||||
Restated Option Plan [Member] | ||||||||
Share-Based Payment Arrangement, Expense | $ 2,400,000 | 4,200,000 | ||||||
Share-Based Payment Arrangement, Expense, after Tax | $ 1,900,000 | 3,200,000 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized | 385,000 | 185,000 | 200,000 | 200,000 | 300,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 1,800,000 | 2,770,000 | ||||||
Restated Option Plan [Member] | Share-Based Payment Arrangement, Option [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 10 years | |||||||
Stock Incentive Plan [Member] | ||||||||
Share-Based Payment Arrangement, Expense | $ 871,000 | 1,100,000 | ||||||
Share-Based Payment Arrangement, Expense, after Tax | $ (681,000) | $ (862,000) | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 450,000 | 100,000 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 214,057 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 64.37 | |||||||
Stock Incentive Plan [Member] | Restricted Stock [Member] | ||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 7,900,000 | |||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 74,647 | 40,470 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 16,970 |
Note I - Stock-based Compensa_4
Note I - Stock-based Compensation - Stock Option Plan Comparison (Details) | 9 Months Ended |
Jan. 31, 2024 shares | |
Minimum exercise price as a percentage of fair market value at date of grant | 100% |
Last expiration date for outstanding options | Jan. 25, 2034 |
Shares available for grant at July 31, 2022 (in shares) | 487,514 |
Note I - Stock-based Compensa_5
Note I - Stock-based Compensation - Options Valuation Assumptions (Details) | 9 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Expected terms (years) (Year) | 3 years 10 months 24 days | 5 years 6 months |
Risk-free interest rate | 4.06% | 3.59% |
Volatility | 56% | 55% |
Note I - Stock-based Compensa_6
Note I - Stock-based Compensation - Options Exercised (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Options exercised (in shares) | 30,000 | 23,000 |
Cash received from option exercises | $ 0 | $ 1,216 |
Intrinsic value of options exercised | $ 1,036 | $ 1,204 |
Note J - Commitments and Cont_3
Note J - Commitments and Contingencies (Details Textual) - USD ($) $ in Millions | 9 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Operating Lease, Percent of Facilities Leased | 86% | |
Operating Lease, Expense | $ 6.6 | $ 6.5 |
Operating Lease, Weighted Average Discount Rate, Percent | 4.60% | |
Letters of Credit Outstanding, Amount | $ 3.9 | $ 2.9 |
Minimum [Member] | Dealership Leases [Member] | ||
Lessee, Operating Lease, Term of Contract (Year) | 3 years | |
Maximum [Member] | Dealership Leases [Member] | ||
Lessee, Operating Lease, Term of Contract (Year) | 5 years |
Note J - Commitments and Cont_4
Note J - Commitments and Contingencies - Future Lease Obligations (Details) - USD ($) $ in Thousands | Jan. 31, 2024 | Apr. 30, 2023 |
2024 (remaining) | $ 2,303 | |
2025 | 9,136 | |
2026 | 8,767 | |
2027 | 8,274 | |
2028 | 7,580 | |
Thereafter | 49,059 | |
Total undiscounted operating lease payments | 85,119 | |
Less: imputed interest | (19,255) | |
Present value of operating lease liabilities | $ 65,864 | $ 62,300 |
Note K - Supplemental Cash Fl_3
Note K - Supplemental Cash Flow Information - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Interest paid | $ 42,152 | $ 25,757 |
Income taxes paid, net | 1,628 | 4,742 |
Inventory acquired in repossession and accident protection plan claims | 103,474 | 93,248 |
Reduction in net receivables for deferred ancillary product revenue at time of charge-off | 28,542 | 13,714 |
Net settlement option exercises | 1,646 | 0 |
Right-of-use assets obtained in exchange for operating lease liabilities | 558 | 384 |
Right-of-use assets obtained in exchange for operating lease liabilities through acquisitions | $ 1,822 | $ 1,729 |
Note M - Subsequent Events (Det
Note M - Subsequent Events (Details Textual) - BMO Harris Bank [Member] - USD ($) $ in Millions | Feb. 28, 2024 | Jan. 31, 2024 | Sep. 29, 2019 |
Revolving Credit Facility [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 600 | ||
Line of Credit, Unused Line Fee, Percent | 0.375% | ||
Debt Instrument, Covenant, Permitted Acquisitions Annual Consideration Amount | $ 10 | ||
Revolving Credit Facility [Member] | Subsequent Event [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 340 | ||
Line of Credit Facility, Maximum Borrowing Capacity, Accordion Feature | $ 100 | ||
Line of Credit, Unused Line Fee, Percent | 0.50% | ||
Debt Instrument, Covenant, Permitted Acquisitions Annual Consideration Amount | $ 20 | ||
Revolving Credit Facility [Member] | Subsequent Event [Member] | Base Rate [Member] | |||
Debt Instrument, Basis Spread on Variable Rate | 1% | ||
Revolving Credit Facility [Member] | Subsequent Event [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | ||
Daily Revolving Line of Credit [Member] | Subsequent Event [Member] | |||
Line of Credit, Unused Line Fee, Percent | 0.25% |