ROGERS, Ark. - America’s Car-Mart, Inc. (NASDAQ: CRMT), a major player in the used car market, has priced an underwritten public offering of 1.7 million shares of common stock at $43 each. The company also offers underwriters a 30-day option to buy up to an additional 255,000 shares at the same price, minus underwriting discounts and commissions.
The closing of the offering is anticipated on or about September 20, 2024, pending the satisfaction of standard closing conditions. Car-Mart aims to allocate the net proceeds from this offering to reduce the balance of its revolving credit facilities, with any leftover funds being used for general corporate purposes.
Jefferies LLC is the sole bookrunner for the offering. The shares are being offered under a shelf registration statement previously filed with and approved by the Securities and Exchange Commission (SEC). The preliminary prospectus supplement and the accompanying prospectus will be filed with the SEC and made available by Jefferies LLC.
The Arkansas-based company operates automotive dealerships in 12 states and is known for its Integrated Auto Sales and Finance approach in the used car market. It focuses on smaller cities in the South-Central United States, priding itself on quality used vehicles and financing solutions for its customers.
This press release contains forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements include the company’s objectives, plans, goals, beliefs, expectations, and projections regarding future performance. However, such statements involve risks and uncertainties, and actual results may differ materially from those projected.
The information for this article is based on a press release statement from America's Car-Mart (NASDAQ:CRMT), Inc.
In other recent news, America's Car-Mart, a significant player in the used car market, has announced a public offering of $65 million of common stock, managed by Jefferies LLC. The funds raised are intended for the repayment of debts on Car-Mart's revolving credit facilities and other corporate purposes. Concurrently, the company has revised its credit facilities, adding Colonial Underwriting as a new guarantor and reducing its total permitted borrowings to $320 million, a strategic move aimed at strengthening its liquidity position.
In the financial realm, America's Car-Mart reported a 5.2% decrease in revenues for the first quarter of fiscal year 2025, primarily due to a decline in retail units sold. However, the company noted an increase in website traffic and a reduction in average retail price, suggesting strong consumer demand. The company also reported a decrease in delinquencies to 3.5% and an expected 72.4% cash-on-cash return for the first quarter.
In response to these developments, America's Car-Mart has entered into a strategic partnership with Cox Automotive, with the goal of improving affordability and gross profit margins. These recent actions reflect the company's ongoing efforts to improve operational strategies and navigate the dynamic auto retail market effectively.
InvestingPro Insights
As America's Car-Mart, Inc. (NASDAQ: CRMT) navigates through its public offering, investors are closely monitoring the company's financial health and market performance. According to InvestingPro data, the company's market capitalization stands at $319.58 million, reflecting its size and investor valuation in the market. Despite challenging market conditions, the company's revenue over the last twelve months as of Q1 2023 reached $1369.96 million, although it experienced a slight revenue decline of 3.85% during the same period.
InvestingPro Tips suggest that America's Car-Mart operates with a significant debt burden and is quickly burning through cash, which could be a concern for potential investors. With analysts not anticipating the company to be profitable this year, the focus on reducing debt through the proceeds of the stock offering appears to be a strategic move. Additionally, the stock's performance has been quite volatile, with a price total return of -17.87% over the last month and -43.85% over the last year, indicating a period of instability for the share value.
Investors may also note that the company's gross profit margin stands at 14.96%, which aligns with the InvestingPro Tip highlighting weak gross profit margins. These financial insights, along with additional tips available on InvestingPro, can provide a more comprehensive understanding of America's Car-Mart's current position and future prospects. There are 11 more InvestingPro Tips available that could further guide investment decisions regarding CRMT.
For those interested in a deeper dive into America's Car-Mart's financials and stock performance, more detailed analysis and tips are available at InvestingPro.
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