Car-Mart to sell $65 million in stock; Credit line reduced by $20 million

Rogers-based America’s Car-Mart Inc. plans to sell $65 million shares to repay a portion of the balance of its revolving credit facilities. Any remaining proceeds would be used for “general corporate purposes,” according to a Wednesday (Sept. 18) news release.

Car-Mart also plans to grant the underwriters a 30-day option to purchase up to an additional $9.75 million shares. Jefferies is the sole book-running manager for the offering.

“There can be no assurance as to whether or when the offering may be completed or as to the actual size or terms of the offering,” according to the release.

Also Wednesday, Car-Mart filed a report with the U.S. Securities and Exchange Commission that it has amended its agreement with its lenders. The new agreement reduced total permitting borrowings under the revolving line of credit by $20 million to $320 million. Fayetteville-chartered Arvest has a $15 million commitment in the amended agreement.

After Oct. 15, Car-Mart will be required to maintain a minimum amount of $20 million available to be drawn under credit facilities, based on eligible finance receivables and inventory. If the outstanding principal balance under the line of credit is at least $300 million, the company must maintain a minimum availability of $50 million.

“The amendment provides that the company will use the net proceeds of any junior capital raise of $50 million or more to pay down the then outstanding principal balance of the line of credit and will pay a fee to the lenders of 0.10% of the total permitted borrowings under the line of credit if the company has not completed such a capital raise by Oct. 31, 2024,” the report shows.

The amendment also added Colonial Underwriting Inc., an Arkansas corporation, as a new guarantor.

Shares of Car-Mart (NASDAQ: CRMT) closed Wednesday at $49.96, up 69 cents or 1.4%. However, company shares fell more than 12.5% in after hours trading.

In the past 52 weeks, the stock has ranged between $45.40 and $93.63. The company stock hit the 52-week low on Sept. 11. The stock also hit a 52-week low on Sept. 4 after the company posted a net loss and a revenue decline in the first quarter of fiscal 2025, amid a decrease in vehicle sales and narrow price gains.

Before the markets opened Sept. 4, Car-Mart reported a net loss of $974,000, or a loss of 15 cents per share, in the quarter that ended July 31 from net income of $4.17 million, or 63 cents per share, in the same period last year. Revenue declined by 5.2% to $347.76 million from $366.79 million.