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ROGERS, Ark. - America’s Car-Mart, Inc. (NASDAQ: CRMT), a prominent automotive dealership in the South-Central United States, today announced the successful completion of a term securitization transaction. The company issued $216 million in principal amount of asset-backed notes, enhancing its capital structure and financing capabilities. According to InvestingPro data, the company currently operates with a total debt of $864 million and a debt-to-equity ratio of 1.55x, highlighting the significance of this financing move.
The transaction, named ACM Auto Trust 2025-2, involved the issuance of two classes of notes: $165.18 million of Class A Notes with a coupon rate of 5.55%, and $50.82 million of Class B Notes with a coupon rate of 7.25%. The overall weighted average coupon rate for the issuance stands at 6.27%. InvestingPro analysis reveals the company has been quickly burning through cash, with negative free cash flow of $83 million in the last twelve months, making this financing crucial for operations.
Douglas Campbell, CEO of America’s Car-Mart, expressed satisfaction with the transaction, the company’s seventh ABS transaction, highlighting strong market demand and improved pricing as indicators of growing confidence in their portfolio. Compared to previous issuances, the weighted average coupon rate has seen a reduction, indicating a decrease in financing costs for the company.
Jonathan Collins, CFO, remarked on the progress in lowering financing costs and strengthening capital efficiency through these transactions. He noted the improvement in the weighted average coupon rate by 22 basis points from their January 2025 issuance and by 107 basis points from their October 2024 issuance.
ACM Auto Trust 2025-2, an indirect subsidiary of America’s Car-Mart, will manage the notes, which are unregistered under the Securities Act of 1933 and are subject to specific exemptions for sale in the U.S.
America’s Car-Mart focuses on the Integrated Auto Sales and Finance segment of the used car market, operating in 12 states. The company prides itself on excellent customer service and building personal relationships with its customers. It primarily serves smaller cities with quality used vehicles and financing solutions for most of its customer base. With annual revenue of $1.38 billion and a market capitalization of $394 million, the company maintains a strong current ratio of 20.48x, indicating solid short-term liquidity. Get deeper insights into America’s Car-Mart’s financial health and access comprehensive analysis through the Pro Research Report, available exclusively on InvestingPro.
This news release, in accordance with Rule 135c under the Securities Act, confirms the completion of the offering and clarifies that it does not constitute an offer to sell or a solicitation of an offer to buy the notes.
Information based on a press release statement from America’s Car-Mart, Inc.
In other recent news, America’s Car-Mart reported a strong Q1 2025 financial performance, surpassing market expectations with an earnings per share (EPS) of $0.37, well above the forecasted $0.11. The company achieved an 8.7% increase in total revenue year-over-year, driven by a 13.2% rise in sales volumes. Gross margin also improved to 35.7%, reflecting operational efficiencies. In leadership changes, Jonathan Collins was announced as the new Chief Financial Officer, succeeding Vickie Judy, who will become the Chief Accounting Officer. Collins brings extensive experience from his previous roles at Walmart and KPMG, which is expected to enhance Car-Mart’s financial planning capabilities. Meanwhile, BTIG analysts maintained a Neutral rating on America’s Car-Mart stock, noting potential upside from the company’s operational changes despite the need for further evidence of financial results. The analysts highlighted improvements in procurement, reconditioning, and logistics as part of Car-Mart’s transformation efforts. These developments indicate significant strategic shifts within America’s Car-Mart, aiming to bolster its growth and operational efficiency.
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