Car-Mart lenders extend financial commitments deadline; shares hit 52-week low
Rogers-based America’s Car-Mart Inc. received lender approval for a five-day extension to meet various financial and reporting obligations, according to a June 5 filing with the U.S. Securities and Exchange Commission. It also approved a retention program for its executive officers.
Shares of Car-Mart (NASDAQ: CRMT) were trading Tuesday (June 9) at $5.82, down 69 cents or 10.59%. In the past 52 weeks, the stock has ranged between $5.77 and $62.72. The stock price fell to the 52-week low on Tuesday.
Car-Mart’s lenders agreed that before June 8 they would not “exercise any remedies including without limitation, the acceleration of any obligations” under the company’s credit agreement “as a result of actual or anticipated defaults or events of defaults” under the agreement. Car-Mart previously closed on a new five-year, $300 million loan agreement on Oct. 30, 2025.
On June 5, the lenders agreed to extend the period of lender forbearance through Friday (June 12).
According to the filing, the anticipated defaults and events of default are related to Car-Mart’s expected failure to “satisfy certain financial covenants and reporting obligations” under the credit agreement, including minimum liquidity and minimum collateral coverage ratio and borrowing base reports and liquidity reports. The lender forbearance doesn’t waive any default or event of default under the credit agreement or any other credit document, “and that all rights, remedies, powers, privileges, and defenses of the agents and the lenders are fully reserved.”
Silver Point Finance LLC is the administrative and collateral agent acting on behalf of the agents and lenders under the agreement.
Car-Mart also approved a retention program for CEO Doug Campbell, Chief Financial Officer Jonathan Collins, Chief Operating Officer Jamie Fischer and Chief Accounting Officer Vickie Judy. Following are the cash retention and total share awards.
• Campbell, $1.2 million and 190,600 shares
• Collins, $563,000 and 45,380 shares
• Fischer, $531,000 and 50,660 shares
• Judy, $300,000 and 16,336 shares
The total share awards are contingent on shareholder approval. The 2026 shareholders meeting is expected to take place by Oct. 23. If shareholders don’t approve the total share awards, the shares that the executives will receive will be 60,307, 16,687, 18,628 and 6,007, respectively.
The retention program is designed to provide short-term and long-term incentives to retain key employees of the company’s management team and other employees to ensure “continued operational stability and to align the interests of senior management and other key employees with the company’s long-term value creation efforts and the interests of the company’s stakeholders,” the filing shows.
If an executive’s employment ends before a change in control and the first anniversary of the retention agreement, the executive must repay the retention award within 30 days, unless the employment ends with a qualifying termination. This includes if the executive is laid off by the company without cause, resigns for good reason, or dies or becomes disabled.
Car-Mart recently retained a global investment bank to serve as its financial adviser as the company considers “strategic alternatives,” including potential financing, recapitalization, mergers and acquisitions, and other transactions.
The company’s Board of Directors retained investment bank Houlihan Lokey Capital Inc., established a committee to oversee the company’s review of strategic alternatives and added a new board member, Adam Paul, president of AP Advisors LLC, to serve as chair of the new committee. The addition of the board member expanded the company’s board to 10 members.
Along with Paul as chair, the committee includes Joshua Welch and Jonathan Buba. The committee is expected to evaluate any financing, refinancing, or recapitalization transaction; raising capital through the issuance of equity securities; asset sales; review and modification of the company’s debt facilities; and other strategic alternatives. It will have authority to review, evaluate, negotiate, and make recommendations to the board regarding the strategic alternatives review and related transactions. The board retains the authority to approve any transaction following a committee recommendation.
Houlihan Lokey Capital and FTI Consulting Inc. will serve as financial advisers to the company regarding these efforts.
In April, Car-Mart closed 42 dealerships amid market challenges that affected its efforts to establish a “non-recourse revolving warehouse credit facility,” according to an April 7 filing with the U.S. Securities and Exchange Commission. By April 14, the company had 94 dealerships, down from 136.
In the company’s third quarter, which ended Jan. 31, Car-Mart reported a loss of $76.71 million, or a loss of $9.25 per share, compared to earnings of $3.15 million, or 37 cents per share, in the same period last year. Revenue declined by 12% to $286.79 million from $325.72 million. In the third quarter, Car-Mart completed the first two phases of a cost-control strategy, closing 18 dealerships. Its dealerships fell from 154 to 136 after those closures.