America's Car-Mart — First Quarter Fiscal 2027 Earnings Summary

Financial Performance

• Total revenue decreased 57.3% year-over-year to $145.8 million, driven by an 81.9% decline in retail units sold (2,450 units vs. 13,568) and a 68.7% reduction in inventory ($35.2 million vs. $112.5 million).
• Net loss attributable to common shareholders was $68.99 million, compared to a net loss of $5.75 million in the prior year quarter.
• Gross profit margin declined to 21.8% from 36.6% in the prior year quarter; total gross profit per retail unit increased 7.5% to $8,015.
• SG&A expenses totaled $51.6 million (57.3% of sales), including $13.7 million in non-recurring charges ($9.6 million professional fees and $4.1 million retention awards); adjusted SG&A was $37.9 million.
• Interest expense increased 12.8% to $19.2 million, primarily due to a larger balance on the senior secured term loan and higher interest rates.
• Net charge-offs as a percentage of average finance receivables rose to 9.5% from 6.6% in the prior year quarter.
• Total debt decreased 19.5% to $623.9 million from $775.1 million a year ago; debt-to-finance receivables ratio was 52.4% (up from 51.1%).
• Net debt-to-finance receivables (non-GAAP) was 43.1% at July 31, 2026.
• Total cash, including restricted cash, decreased to $110.0 million from $121.4 million a year ago; unrestricted cash was $27.5 million.
• Allowance for credit losses was $277.0 million, representing 24.74% of finance receivables, net of deferred revenue and pending claims.

Guidance and Future Outlook

• The Company is evaluating a full range of financing and strategic alternatives, including discussions with third parties, with no intention to comment further on the process.
• A covenant relief amendment to the Credit and Guaranty Agreement was extended to September 11, 2026, to allow additional time for review.
• The Company cannot assure that the review will result in a favorable transaction, additional financing on acceptable terms, or any financing at all.
• Management states that resolving the capital structure remains the first priority.

Business Segments and Product Lines

• Retail unit sales volume was constrained by limited inventory availability rather than customer demand.
• Third-party wholesale sales increased to $21.0 million from $10.8 million, reflecting a strategic shift to sell substantially all repossessed vehicles to accelerate cash conversion.
• The Company consolidated 60 dealership locations during fiscal 2026, reducing the total dealership count from 154 to 94.
• Average retail sales price (excluding ancillary products) increased 7.0% to $18,530 as the Company prioritized sales to higher credit quality customers.
• Interest income decreased 14.2% to $55.8 million due to a $325 million decrease in the portfolio size.

Market and Competitive Landscape

• The Company attributes weaker credit performance to the contraction of the portfolio, continued fuel and cost-of-living pressure on customers, and the transition to centralized collections.
• The transition of a small portion of the book to centralized collections, completed alongside dealership consolidations, contributed to elevated delinquency and charge-off performance during the ramp-up period.
• The Company operates in 12 states, primarily in smaller cities throughout the South-Central United States.

Risks and Challenges

• Substantial doubt exists regarding the Company's ability to continue as a going concern.
• Risks include the inability to secure additional financing, the potential need to seek bankruptcy protection, and the risk of indebtedness acceleration.
• The Company faces challenges in funding finance receivable originations and vehicle inventory purchases due to liquidity constraints.
• Operational risks include the impact of the centralized collections transition on customer relationships and the potential for significant or complete loss of investment for common stockholders.
• Macroeconomic factors such as inflation, fuel prices, and cost-of-living pressures continue to weigh on customer ability to make payments.

Management Commentary and Tone

• President and CEO Doug Campbell characterized the results as a "capital structure story, not a demand story," noting that application volume was limited by available vehicles.
• Management emphasized that the transition work regarding centralized collections and dealership consolidations is now behind them.
• The tone reflects a focus on preserving liquidity and aligning the cost structure with available capital, including deliberate curtailment of inventory purchases and originations.

Other Key Points

• No conference call or webcast will be hosted to discuss the results; the Company will respond to investor inquiries only with publicly disclosed information.
• The Company filed its Form 10-Q for the quarter ended July 31, 2026, on September 9, 2026.
• The Special Committee, together with advisors and management, continues to evaluate financing and strategic alternatives.
• $1.1 million of interest due on the senior secured loan was paid in kind and added to the outstanding principal balance.
• The Company retired its revolver in October 2025, resulting in the absence of revolver interest in the current quarter.