Good day, and thank you for standing by. Welcome to America’s Car-Mart’s Fourth Quarter Fiscal 2024 Earnings Call. At this time all participants’ are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Vickie Judy, America’s Car-Mart’s CFO. Please go ahead.

Good morning, and welcome to America’s Car-Mart fourth quarter fiscal year 2024 earnings call for the period ending April 30, 2024. Joining me today is Doug Campbell, our Company’s President and CEO. We’ve issued our earnings release earlier this morning and it is available on our website, along with a slide of supplemental material. We will post the transcript of our prepared remarks following this call, and the Q&A session will be available through the webcast after the call. During today’s call, certain statements we make may be considered forward-looking and inherently involve risk and uncertainties that could cause actual results to differ materially from management’s present view. These statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform act of 1995. The Company cannot guarantee the accuracy of any forecast or estimate, nor does it undertake any obligation to update such forward-looking statements. For more information, including important cautionary notes, please see Part 1 of the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2023, and our current and quarterly reports furnished to or filed with the Securities Exchange Commission on Forms 8-K and 10-Q. I will now turn it over to Doug for his perspectives on our business and strategies moving forward.

Thank you, Vickie. And thank you everyone for your interest in America’s Car-Mart and for joining us to hear more about our fourth quarter and full year results. Our customer-focused associates are dedicated on helping our customers navigate life’s challenges and did so throughout the last fiscal year, especially during the fourth quarter. I’d also like to take a moment to acknowledge the associates and members of our community here in Northwest Arkansas who were devastated by the recent tornadoes that touched down here in Rogers and the surrounding areas. Despite the personal hardships that many associates experience, they didn’t miss a beat on serving our customers. We appreciate their tremendous dedication. Let me start off with some perspective on the tax season. It was a slow start to the season as refunds trailed about a week behind normal timing. From an industry perspective, overall demand was strong and refunds were up just slightly for our consumers, which was good despite the season being somewhat abbreviated. At Car-Mart, there was certainly consumer interest as we had healthy website traffic. The fact that we carried about $20 million less in inventory to start the season certainly had an impact on our results. It was a challenge to balance operating leaner and capturing available demand. Consumers continued to struggle with the economic pressures of covering basic living expenses and skyrocketing costs like auto insurance rates, which are now averaging 50% more when compared to just the same time period three years ago. We are identifying ways that we can help the consumer in this area due to its importance as part of overall car ownership. Sales were down 13.6% during the quarter, which was up against the highest ever quarterly sales volume for us as a company. I mentioned overall website traffic…

Thanks, Doug, and good morning, everyone. In my commentary, the comparison that I will cover will be the fourth quarter of fiscal 2024 versus the fourth quarter of fiscal 2023, unless otherwise noted. Total revenues decreased $22.3 million, or 5.8%, largely due to a decline in retail units sold. However, this was impacted positively by interest income being up 10.5% due to a $91.2 million increase in average finance receivables. Doug covered the pressures that our customers are facing and these factors affected sales, with average units sold down from 37.7% to 33%, or 12.5%. The average retail sales price was up 6.2%, with two-thirds of that attributable to vehicle price and the remaining to increases in ancillary products. The gross profit dollars per retail unit improved by 12.2% as we continued to execute on our margin improvement strategy. I am pleased that we had improvements in gross profit throughout the fiscal year and we expect continued improvements into fiscal year 2025. Doug spoke to the actions that have contributed to these results. Our mission remains to offer vehicles at affordable prices to our customers and help them be successful with their vehicle purchase and financing. We’re focused on a procurement strategy to source lower-priced units and access to affordable units through the reconditioning effort. Execution on these items can deliver better results. LOS has allowed us to improve our deal structure with down payments up 40 basis points to 6.5%. Our originating term was 44 months, up sequentially and also up from last year’s fourth quarter at 43.5 months. Even with our average price up over $1,100, we held the term to just a half-a-month increase. We’re also pleased that the average retail price dropped sequentially approximately $200. At the end of the fourth quarter, the weighted average total…

Thanks, Vickie. In previous calls, I reiterated the importance of LOS. And I want to mention how we’re providing additional expertise in optimizing a growing portfolio. Last week, we welcomed our new Chief Credit and Risk Officer to help us with these efforts. He has over 20 years’ experience in auto lending, with experience managing portfolios ranging in size from $100 million to $70 billion. Before we kick off Q&A, let me go back to the start of my tenure as CEO in October. My goals then were to complete the rollout of several large-scale technology projects, like LOS, ERP, and CRM, which are completed and already delivering benefits. The second was to have better cost discipline across the business, which Vickie talked about earlier, and there’s other things that we can and will do here. The third was the prudent deployment of capital, which includes performance managing our locations and identifying attractive acquisition opportunities, two of which we’ve closed on in the last eight months. I’m pleased that we’ve accomplished these goals because they lay the groundwork for what our teams now need to do to move forward. Fiscal year 2025 started on May 1st and is well underway. Our management team is focused on value creation for our shareholders with improvements in volume, margins, cost efficiencies, and returns. We’re excited about our future and are engaged in the execution of five key areas. One, operational excellence as we leverage our technology and systems recently installed. Number two, improved affordability for our core customers by reducing the average selling price during the fiscal year. Three, the continued optimization of our new loan origination system. Four, to capitalize on our new partnership with Cox Automotive. And lastly, continued investments in acquisitions. We look forward to executing on our strategic plan to differentiate America’s car market in the marketplace, with competitive advantages for serving many more customers and improving shareholder returns long term. Operator, please provide instructions for the Q&A.

Thank you. [Operator Instructions] Our first question comes from John Rowan with Janney Montgomery Scott. Your line is open.

Good Morning. Just quickly, what is the current store count? I just want to make sure I have it correct with the new additions.

It’s 154.

I’m sorry, what was that?

154.

154, that includes the recently acquired locations, correct?

No. Well, we closed on one in December, so it would close that one, the Central Auto Sales. The Texas Auto Center, where we acquired two locations, that didn’t close until June. So those would be additive to that 154.

Okay. So, okay. And then can you go over again? I may have missed it. Just kind of the differences in the loss content between severity and frequency.

Yes, for the quarter, the frequency was about 58% of the change in the provision there. So we’re seeing higher frequency, and we saw that throughout the year. I think in the second quarter, we particularly mentioned severity, but overall throughout the year, frequency was the largest driver of the losses.

Okay. All right. Thank you very much.

[Operator Instructions] And I’m not showing any further requests at this time. I’d like to turn the call back to Doug for any closing remarks.

Thanks, Operator. We appreciate the thoughtful question. Affordability continues to be a challenge for our industry. The technology that we’ve invested in over the last several years has laid the foundation for our future of being a leader in operating efficiency and having a more digitized offering for our customers. Really thrilled about the expansion in Texas with the new acquisition of Texas Auto Center and others like this to come. Our management team and board are committed to actions like these that will drive shareholder value. Thank you again for your interest in our company.

Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect and have a wonderful day.