America’s Car-Mart, Inc. (NASDAQ: CRMT) is operating under temporary covenant relief that initially expires on September 7, 2026, with conditional extensions available through November 6. The company has retained Houlihan Lokey Capital Inc., FTI Consulting, Inc. and Mayer Brown LLP to evaluate refinancing, recapitalization, restructuring, asset sales, additional capital and potential bankruptcy protection.

The company is facing significant financial distress after breaching the minimum liquidity and collateral coverage covenants under its $300 million senior secured term loan. On June 19, America’s Car-Mart amended its credit agreement with Silver Point Finance, LLC, obtaining temporary covenant relief in exchange for lender fees of up to $18 million. In its fiscal 2026 Form 10-K, filed July 14, the company disclosed substantial doubt about its ability to continue as a going concern because of its debt burden, constrained liquidity and financing uncertainty. Independent auditor Grant Thornton LLP also cited the covenant noncompliance.

For fiscal 2026, revenue declined 7.9% to $1.28 billion, while the company recorded a net loss of $139.1 million, compared with net income of $17.9 million in fiscal 2025. America’s Car-Mart also closed 42 dealerships and reduced related staffing during April to align operating costs with its capital constraints.

The company’s shares have fallen more than 90% from their 52-week high of $47.93 and recently traded at approximately $3.08. Until America’s Car-Mart secures additional covenant relief or completes a viable financing or strategic transaction, the risk of a distressed exchange, asset sale or Chapter 11 filing remains significant.

About the Company

America’s Car-Mart, Inc., through its subsidiaries, sells older-model used vehicles and provides in-house financing to customers with limited credit histories or past credit problems. The company operates dealerships across the United States. The company was founded in 1981, and its headquarters is in Rogers, Arkansas. 

Capital Structure

As of April 30, 2026, America’s Car-Mart had approximately $761 million of total debt, consisting of a $300 million senior secured term loan and approximately $461 million of vehicle-related ABS debt across five ACM Auto Trust securitizations. After $47 million of cash and short-term investments, net debt was approximately $714 million. In June 2026, the company amended its term loan after failing to comply with minimum liquidity and collateral coverage covenants, receiving temporary relief subject to specified milestones and up to $18 million in lender fees. The nearest scheduled maturities are the ACM Auto Trust 2025-4 notes, which had $127 million outstanding and a 7.02% weighted-average coupon, due May 20, 2030, followed by the $300 million term loan due October 30, 2030.

Operational and Strategic Outlooks

• Revenue & Profitability: America’s Car-Mart reported fiscal 2026 revenue of $1,275.6 million, down from $1,385.6 million in fiscal 2025, as constrained origination capital led the company to reduce vehicle inventory purchases and finance receivable originations. The company closed 42 dealerships in April 2026, reducing its operating footprint to 94 locations. Retail units sold declined 14.3% year over year to 48,891. Operating income fell to a loss of $18.0 million from income of $93.8 million, while EBITDA declined to negative $9.8 million from positive $101.4 million.

• Margins & Cost Structure: Gross margin declined to 15.1% from 20.6%. The provision for credit losses increased to $419.2 million from $374.6 million, reflecting continued pressure on the company’s credit-challenged customer base. America’s Car-Mart recorded a fiscal 2026 net loss of $139.1 million, compared with net income of $17.9 million in fiscal 2025.

• Liquidity & Cash Flow: America’s Car-Mart ended fiscal 2026 with approximately $47.0 million of cash and cash equivalents and no revolving credit facility available after replacing its former revolver with a $300.0 million senior secured term loan in October 2025. Net cash provided by operating activities improved to $65.0 million from cash used of $48.8 million a year earlier, largely because reduced originations and lower inventory levels released working capital. After fiscal year-end, the company breached the term loan’s minimum liquidity and collateral coverage covenants. It subsequently obtained short-term waivers and entered into a June 19, 2026 amendment providing covenant relief through September 7, 2026, with conditional extensions through November 6. The amendment requires the company to meet specified financial and strategic-review milestones and provides for lender fees of up to $18.0 million.

• Outlook & Strategic Alternatives: The covenant breaches, constrained liquidity and going-concern opinion from the company’s independent auditor raise substantial doubt about America’s Car-Mart’s ability to continue operating. A special committee of independent directors is reviewing financing and strategic alternatives, including a refinancing, recapitalization, restructuring or sale of the company or certain assets. The company is also pursuing a revolving warehouse facility, additional capital and further dealership footprint optimization initiatives. The company is also seeking additional capital and a new revolving warehouse facility to support future loan originations.

Financial Statements

Peer Review

Carvana Co. (NYSE: CVNA) is an online used-vehicle retailer that allows customers to purchase, finance, trade in and arrange delivery of vehicles through its digital platform. DriveTime Automotive Group, Inc. is a privately held used-vehicle retailer and finance company that operates dealerships and provides financing primarily to customers with limited or impaired credit histories. CarMax, Inc. (NYSE: KMX) is a nationwide used-vehicle retailer that sells vehicles through physical locations and digital channels and provides customer financing through CarMax Auto Finance.

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