10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2017

Or

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 0-14939

AMERICA’S CAR-MART, INC.

(Exact name of registrant as specified in its charter)

Texas	63-0851141
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

802 Southeast Plaza Ave., Suite 200, Bentonville, Arkansas 72712

(Address of principal executive offices) (zip code)

(479) 464-9944

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐	Accelerated filer  ☒
Non-accelerated filer  ☐	Smaller reporting company  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

	Outstanding at
Title of Each Class	March 6, 2017
Common stock, par value $.01 per share	7,797,138

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements America’s Car-Mart, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(Dollars in thousands except share and per share amounts)

	January 31, 2017			April 30, 2016
Assets:
Cash and cash equivalents	$	254		$	602
Accrued interest on finance receivables		2,318			1,716
Finance receivables, net		363,536			334,793
Inventory		32,303			29,879
Prepaid expenses and other assets		4,572			3,302
Income taxes receivable, net		-			894
Goodwill		355			355
Property and equipment, net		31,313			34,755
Total Assets	$	434,651		$	406,296
Liabilities, mezzanine equity and equity:
Liabilities:
Accounts payable	$	10,544		$	12,313
Deferred payment protection plan revenue		18,158			17,304
Deferred service contract revenue		9,924			10,035
Accrued liabilities		16,903			11,245
Income taxes payable, net		1,179			-
Deferred income tax liabilities, net		19,440			18,280
Revolving credit facilities and notes payable		118,785			107,902
Total liabilities		194,933			177,079
Commitments and contingencies (Note J)
Mezzanine equity:
Mandatorily redeemable preferred stock		400			400
Equity:
Preferred stock, par value $.01 per share, 1,000,000 shares authorized; none issued or outstanding		-			-
Common stock, par value $.01 per share, 50,000,000 shares authorized; 12,875,532 and 12,726,560 issued at January 31, 2017 and April 30, 2016, respectively, of which 7,921,954 and 8,073,820 were outstanding at January 31, 2017 and April 30, 2016, respectively		129			127
Additional paid-in capital		68,512			64,771
Retained earnings		320,287			305,354
Less:  Treasury stock, at cost, 4,953,578 and 4,652,740 shares at January 31, 2017 and April 30, 2016, respectively		(149,710	)		(141,535	)
Total stockholders' equity		239,218			228,717
Non-controlling interest		100			100
Total equity		239,318			228,817
Total Liabilities, Mezzanine Equity and Equity	$	434,651		$	406,296

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Condensed Consolidated Statements of Operations America’s Car-Mart, Inc.

(Unaudited)

(Dollars in thousands except share and per share amounts)

	Three Months Ended January 31,						Nine Months Ended January 31,
	2017			2016			2017			2016
Revenues:
Sales	$	121,263		$	121,791		$	384,117		$	367,056
Interest and other income		17,521			15,672			50,717			46,101
Total revenue		138,784			137,463			434,834			413,157
Costs and expenses:
Cost of sales		71,836			72,702			225,346			219,385
Selling, general and administrative		22,654			23,568			68,476			68,932
Provision for credit losses		37,645			32,786			110,467			106,225
Interest expense		1,060			831			3,040			2,383
Depreciation and amortization		1,059			1,008			3,235			3,056
Loss on disposal of property and equipment		7			27			406			46
Total costs and expenses		134,261			130,922			410,970			400,027
Income before taxes		4,523			6,541			23,864			13,130
Provision for income taxes		1,687			2,439			8,901			4,897
Net income	$	2,836		$	4,102		$	14,963		$	8,233
Less:  Dividends on mandatorily redeemable preferred stock		(10	)		(10	)		(30	)		(30	)
Net income attributable to common stockholders	$	2,826		$	4,092		$	14,933		$	8,203
Earnings per share:
Basic	$	0.36		$	0.49		$	1.89		$	0.97
Diluted	$	0.35		$	0.47		$	1.83		$	0.93
Weighted average number of shares used in calculation:
Basic		7,893,737			8,367,728			7,891,908			8,451,029
Diluted		8,175,754			8,615,757			8,165,931			8,774,334

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Condensed Consolidated Statements of Cash Flows America’s Car-Mart, Inc.

(Unaudited)

(In thousands)

	Nine Months Ended January 31,
Operating Activities:	2017			2016
Net income	$	14,963		$	8,233
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses		110,467			106,225
Losses on claims for payment protection plan		11,260			9,815
Depreciation and amortization		3,235			3,056
Amortization of debt issuance costs		197			144
Loss on disposal of property and equipment		406			46
Stock based compensation		1,020			1,236
Deferred income taxes		1,160			(553	)
Excess tax benefit from share based compensation		(942	)		(238	)
Change in operating assets and liabilities:
Finance receivable originations		(356,776	)		(336,508	)
Finance receivable collections		175,696			173,949
Accrued interest on finance receivables		(602	)		(40	)
Inventory		28,186			23,767
Prepaid expenses and other assets		(1,271	)		295
Accounts payable and accrued liabilities		603			4,364
Deferred payment protection plan revenue		854			1,062
Deferred service contract revenue		(110	)		88
Income taxes, net		3,015			(200	)
Net cash used in operating activities		(8,639	)		(5,259	)
Investing Activities:
Purchase of property and equipment		(1,424	)		(4,201	)
Proceeds from sale of property and equipment		924			-
Net cash used in investing activities		(500	)		(4,201	)
Financing Activities:
Exercise of stock options		1,675			400
Excess tax benefit from share based compensation		942			238
Issuance of common stock		106			144
Purchase of common stock		(8,175	)		(10,485	)
Dividend payments		(30	)		(30	)
Change in cash overdrafts		3,587			(581	)
Debt issuance costs		(378	)		-
Payments on note payable		(77	)		(8	)
Proceeds from revolving credit facilities		278,304			272,427
Payments on revolving credit facilities		(267,163	)		(252,845	)
Net cash provided by financing activities		8,791			9,260
Decrease in cash and cash equivalents		(348	)		(200	)
Cash and cash equivalents, beginning of period		602			790
Cash and cash equivalents, end of period	$	254		$	590

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Notes to Consolidated Financial Statements (Unaudited) America’s Car-Mart, Inc.

A – Organization and Business

America’s Car-Mart, Inc., a Texas corporation (the “Company”), is one of the largest publicly held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. References to the Company typically include the Company’s consolidated subsidiaries. The Company’s operations are principally conducted through its two operating subsidiaries, America’s Car Mart, Inc., an Arkansas corporation (“Car-Mart of Arkansas”), and Colonial Auto Finance, Inc., an Arkansas corporation (“Colonial”). The Company primarily sells older model used vehicles and provides financing for substantially all of its customers. Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems. As of January 31, 2017, the Company operated 143 dealerships located primarily in small cities throughout the South-Central United States.

B – Summary of Significant Accounting Policies

General

The accompanying condensed consolidated balance sheet as of April 30, 2016, which has been derived from audited financial statements, and the unaudited interim condensed financial statements as of January 31, 2017 and 2016, have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended January 31, 2017 are not necessarily indicative of the results that may be expected for the year ending April 30, 2017. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended April 30, 2016.

Principles of Consolidation

The consolidated financial statements include the accounts of America’s Car-Mart, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Segment Information

Each dealership is an operating segment with its results regularly reviewed by the Company’s chief operating decision maker in an effort to make decisions about resources to be allocated to the segment and to assess its performance. Individual dealerships meet the aggregation criteria for reporting purposes under the current accounting guidance. The Company operates in the Integrated Auto Sales and Finance segment of the used car market, also referred to as the Integrated Auto Sales and Finance industry. In this industry, the nature of the sale and the financing of the transaction, financing processes, the type of customer and the methods used to distribute the Company’s products and services, including the actual servicing of the contracts as well as the regulatory environment in which the Company operates, all have similar characteristics. Each of our individual dealerships is similar in nature and only engages in the selling and financing of used vehicles. All individual dealerships have similar operating characteristics. As such, individual dealerships have been aggregated into one reportable segment.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, the Company’s allowance for credit losses.

5

Concentration of Risk

The Company provides financing in connection with the sale of substantially all of its vehicles. These sales are made primarily to customers residing in Alabama, Arkansas, Georgia, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee, and Texas, with approximately 30% of current period revenues resulting from sales to Arkansas customers.

Periodically, the Company maintains cash in financial institutions in excess of the amounts insured by the federal government. The Company’s revolving credit facilities mature in December 2019.

Restrictions on Distributions/Dividends

The Company’s revolving credit facilities generally restrict distributions by the Company to its shareholders. The distribution limitations under the Credit Facilities allow the Company to repurchase the Company’s stock so long as: either (a) the aggregate amount of such repurchases does not exceed $40 million beginning December 12, 2016 and the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases is equal to or greater than 25% of the sum of the borrowing bases, or (b) the aggregate amount of such repurchases does not exceed 75% of the consolidated net income of the Company measured on a trailing twelve month basis; provided that immediately before and after giving effect to the stock repurchases, at least 12.5% of the aggregate funds committed under the credit facilities remain available. Thus, the Company is limited in its ability to pay dividends or make other distributions to its shareholders without the consent of the Company’s lenders.

Cash Equivalents

The Company considers all highly liquid debt instruments purchased with original maturities of three months or less to be cash equivalents.

Finance Receivables, Repossessions and Charge-offs and Allowance for Credit Losses

The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts carry an average interest rate of approximately 15.7% using the simple effective interest method including any deferred fees. In May 2016, the Company increased its retail installment sales contract interest rate from 15.0% to 16.5% in response to continued high levels of credit losses. Contract origination costs are not significant. The installment sale contracts are not pre-computed contracts whereby borrowers are obligated to pay back principal plus the full amount of interest that will accrue over the entire term of the contract. Finance receivables are collateralized by vehicles sold and consist of contractually scheduled payments from installment contracts net of unearned finance charges and an allowance for credit losses. Unearned finance charges represent the balance of interest receivable to be earned over the entire term of the related installment contract, less the earned amount ($2.3 million at January 31, 2017 and $1.7 million April 30, 2016 on the Condensed Consolidated Balance Sheets), and as such, have been reflected as a reduction to the gross contract amount in arriving at the principal balance in finance receivables.

An account is considered delinquent when the customer is one day or more behind on their contractual payments. While the Company does not formally place contracts on nonaccrual status, the immaterial amount of interest that may accrue after an account becomes delinquent up until the point of resolution via repossession or write-off, is reserved for against the accrued interest on the Condensed Consolidated Balance Sheets. Delinquent contracts are addressed and either made current by the customer, which is the case in most situations, or the vehicle is repossessed or written off if the collateral cannot be recovered quickly. Customer payments are set to match their payday with approximately 73% of payments due on either a weekly or bi-weekly basis. The frequency of the payment due dates combined with the declining value of collateral lead to prompt resolutions on problem accounts. At January 31, 2017, 4.7% of the Company’s finance receivable balances were 30 days or more past due compared to 5.0% at January 31, 2016.

Substantially all of the Company’s automobile contracts involve contracts made to individuals with impaired or limited credit histories or higher debt-to-income ratios than permitted by traditional lenders. Contracts made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better credit.

The Company strives to keep its delinquency percentages low, and not to repossess vehicles. Accounts two days late are sent a notice in the mail. Accounts three days late are contacted by telephone. Notes from each telephone contact are electronically maintained in the Company’s computer system. The Company attempts to resolve payment delinquencies amicably prior to repossessing a vehicle. If a customer becomes severely delinquent in his or her payments, and management determines that timely collection of future payments is not probable, the Company will take steps to repossess the vehicle.

6

Periodically, the Company enters into contract modifications with its customers to extend or modify the payment terms. The Company only enters into a contract modification or extension if it believes such action will increase the amount of monies the Company will ultimately realize on the customer’s account and will increase the likelihood of the customer being able to pay off the vehicle contract. At the time of modification, the Company expects to collect amounts due including accrued interest at the contractual interest rate for the period of delay. No other concessions are granted to customers, beyond the extension of additional time, at the time of modifications. Modifications are minor and are made for payday changes, minor vehicle repairs and other reasons. For those vehicles that are repossessed, the majority are returned or surrendered by the customer on a voluntary basis. Other repossessions are performed by Company personnel or third party repossession agents. Depending on the condition of a repossessed vehicle, it is either resold on a retail basis through a Company dealership, or sold for cash on a wholesale basis primarily through physical or online auctions.

Accounts are charged-off after the expiration of a statutory notice period for repossessed accounts, or when management determines that the timely collection of future payments is not probable for accounts where the Company has been unable to repossess the vehicle. For accounts with respect to which the vehicle was repossessed, the fair value of the repossessed vehicle is charged as a reduction of the gross finance receivables balance charged-off. For the quarter ended January 31, 2017, on average, accounts were approximately 62 days past due at the time of charge-off. For previously charged-off accounts that are subsequently recovered, the amount of such recovery is credited to the allowance for credit losses.

The Company maintains an allowance for credit losses on an aggregate basis at a level it considers sufficient to cover estimated losses inherent in the portfolio at the balance sheet date in the collection of its finance receivables currently outstanding.  At January 31, 2017, the weighted average total contract term was 31.9 months with 23.0 months remaining. The reserve amount in the allowance for credit losses at January 31, 2017, $111.8 million, was 25% of the principal balance in finance receivables of $475.4 million, less unearned payment protection plan revenue of $18.2 million and unearned service contract revenue of $9.9 million.

The estimated reserve amount is the Company’s anticipated future net charge-offs for losses incurred through the balance sheet date. The allowance takes into account historical credit loss experience (both timing and severity of losses), with consideration given to recent credit loss trends and changes in contract characteristics (i.e., average amount financed, months outstanding at loss date, term and age of portfolio), delinquency levels, collateral values, economic conditions and underwriting and collection practices. The allowance for credit losses is reviewed at least quarterly by management with any changes reflected in current operations. The calculation of the allowance for credit losses uses the following primary factors:

· The number of units repossessed or charged-off as a percentage of total units financed over specific historical periods of time from one year to five years.

· The average net repossession and charge-off loss per unit during the last eighteen months segregated by the number of months since the contract origination date and adjusted for the expected future average net charge-off loss per unit.  About 50% of the charge-offs that will ultimately occur in the portfolio are expected to occur within 10-11 months following the balance sheet date.  The average age of an account at charge-off date for the eighteen-month period ended January 31, 2017 was 11.9 months.

· The timing of repossession and charge-off losses relative to the date of sale (i.e., how long it takes for a repossession or charge-off to occur) for repossessions and charge-offs occurring during the last eighteen months.

A point estimate is produced by this analysis which is then supplemented by any positive or negative subjective factors to arrive at an overall reserve amount that management considers to be a reasonable estimate of losses inherent in the portfolio at the balance sheet date that will be realized via actual charge-offs in the future. Although it is at least reasonably possible that events or circumstances could occur in the future that are not presently foreseen which could cause actual credit losses to be materially different from the recorded allowance for credit losses, the Company believes that it has given appropriate consideration to all relevant factors and has made reasonable assumptions in determining the allowance for credit losses. While challenging economic conditions can negatively impact credit losses, effective execution of internal policies and procedures within the collections area and the competitive environment on the funding side have historically had a more significant effect on collection results than macro-economic issues.

In most states, the Company offers retail customers who finance their vehicle the option of purchasing a payment protection plan product as an add-on to the installment sale contract. This product contractually obligates the Company to cancel the remaining principal outstanding for any contract where the retail customer has totaled the vehicle, as defined by the contract, or the vehicle has been stolen. The Company periodically evaluates anticipated losses to ensure that if anticipated losses exceed deferred payment protection plan revenues, an additional liability is recorded for such difference. No such liability was required at January 31, 2017 or April 30, 2016.

Inventory

Inventory consists of used vehicles and is valued at the lower of cost or market on a specific identification basis. Vehicle reconditioning costs are capitalized as a component of inventory. Repossessed vehicles and trade-in vehicles are recorded at fair value, which approximates wholesale value. The cost of used vehicles sold is determined using the specific identification method.

7

Goodwill

Goodwill reflects the excess of purchase price over the fair value of specifically identified net assets purchased. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests at the Company’s year-end. The impairment tests are based on the comparison of the fair value of the reporting unit to the carrying value of such unit. There was no impairment of goodwill during fiscal 2016, and to date, there has been no impairment during fiscal 2017.

Property and Equipment

Property and equipment are stated at cost. Expenditures for additions, remodels and improvements are capitalized. Costs of repairs and maintenance are expensed as incurred. Leasehold improvements are amortized over the shorter of the estimated life of the improvement or the lease period. The lease period includes the primary lease term plus any extensions that are reasonably assured. Depreciation is computed using the straight-line method, generally over the following estimated useful lives:

Furniture, fixtures and equipment (in years)	3	to	7
Leasehold improvements (in years)	5	to	15
Buildings and improvements (in years)	18	to	39

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying values of the impaired assets exceed the fair value of such assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Cash Overdraft

As checks are presented for payment from the Company’s primary disbursement bank account, monies are automatically drawn against cash collections for the day and, if necessary, are drawn against one of the revolving credit facilities. Any cash overdraft balance principally represents outstanding checks that as of the balance sheet date had not yet been presented for payment, net of any deposits in transit. Any cash overdraft balance is reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

Deferred Sales Tax

Deferred sales tax represents a sales tax liability of the Company for vehicles sold on an installment basis in the states of Alabama and Texas. Under Alabama and Texas law, for vehicles sold on an installment basis the related sales tax is due as the payments are collected from the customer, rather than at the time of sale. Deferred sales tax liabilities are reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

Income Taxes

Income taxes are accounted for under the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates expected to apply in the years in which these differences are expected to be recovered or settled. The quarterly provision for income taxes is determined using an estimated annual effective tax rate, which is based on expected annual taxable income, statutory tax rates and the Company’s best estimate of nontaxable and nondeductible items of income and expense.

Occasionally, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applies this methodology to all tax positions for which the statute of limitations remains open.

8

The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before fiscal 2013.

The Company’s policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accrued penalties or interest as of January 31, 2017 or April 30, 2016.

Revenue Recognition

Revenues are generated principally from the sale of used vehicles, which in most cases includes a service contract and a payment protection plan product, interest income and late fees earned on finance receivables. Revenues are net of taxes collected from customers and remitted to government agencies. Cost of vehicle sales include costs incurred by the Company to prepare the vehicle for sale including license and title costs, gasoline, transport services and repairs.

Revenues from the sale of used vehicles are recognized when financing, if applicable, has been approved, the sales contract is signed, and the customer has taken possession of the vehicle. Revenues from the sale of vehicles sold at wholesale are recognized at the time the proceeds are received. Revenues from the sale of service contracts are initially deferred and then recognized ratably over the expected duration of the product. Service contract revenues are included in sales and the related expenses are included in cost of sales. Payment protection plan revenues are initially deferred and then recognized to income using the “Rule of 78’s” interest method over the life of the contract so that revenues are recognized in proportion to the amount of cancellation protection provided. Payment protection plan revenues recognized are included in sales and related losses are included in cost of sales as incurred. Interest income is recognized on all active finance receivable accounts using the simple effective interest method. Active accounts include all accounts except those that have been paid-off or charged-off.

Sales consist of the following:

	Three Months Ended January 31,				Nine Months Ended January 31,
(In thousands)	2017		2016		2017		2016
Sales – used autos	$	103,249	$	105,435	$	331,376	$	316,269
Wholesales – third party		5,764		5,097		16,710		16,939
Service contract sales		7,094		6,784		21,072		20,327
Payment protection plan revenue		5,156		4,475		14,959		13,521
Total	$	121,263	$	121,791	$	384,117	$	367,056

At January 31, 2017 and 2016, finance receivables more than 90 days past due were approximately $2.0 million and $2.1 million, respectively. Late fee revenues totaled approximately $1.4 million and $1.5 million for the nine months ended January 31, 2017 and 2016, respectively. Late fees are recognized when collected and are reflected in interest and other income on the Condensed Consolidated Statements of Operations.

Earnings per Share

Basic earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period plus dilutive common stock equivalents. The calculation of diluted earnings per share takes into consideration the potentially dilutive effect of common stock equivalents, such as outstanding stock options and non-vested restricted stock, which if exercised or converted into common stock would then share in the earnings of the Company. In computing diluted earnings per share, the Company utilizes the treasury stock method and anti-dilutive securities are excluded.

Stock-Based Compensation

The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock, based on the fair value of those awards at the date of grant over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. The Company may issue either new shares or treasury shares upon exercise of these awards. Stock-based compensation plans, related expenses and assumptions used in the Black-Scholes option pricing model are more fully described in Note I. If an award contains a performance condition, expense is recognized only for those shares for which it is considered reasonably probable as of the current period end that the performance condition will be met.

9

Treasury Stock

The Company purchased 300,838 shares of its common stock to be held as treasury stock for a total cost of $8.2 million during the first nine months of fiscal 2017 and 342,171 shares for a total cost of $10.5 million during the first nine months of fiscal 2016. Treasury stock may be used for issuances under the Company’s stock-based compensation plans or for other general corporate purposes. During fiscal 2016, the Company established a reserve account of 10,000 shares of treasury stock to secure outstanding service contracts issued in Iowa in accordance with the regulatory requirements of that state.

Recent Accounting Pronouncements

Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its consolidated financial statements upon adoption.

Revenue Recognition. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes existing revenue recognition guidance. The new guidance in ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, to provide entities with an additional year to implement ASU 2014-09. As a result, the guidance in ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, and interim reporting periods within those years, using one of two retrospective application methods. The Company is currently evaluating the potential effects of the adoption of this update on the consolidated financial statements, and expects to complete that evaluation by the end of fiscal 2017.

Leases. In February 2016, the FASB issued ASU 2016-02, Leases. The new guidance requires that lessees recognize all leases, including operating leases, with a term greater than 12 months on-balance sheet and also requires disclosure of key information about leasing transactions. The guidance in ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those years. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

Stock Compensation. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which aims to simplify aspects of accounting for share-based payment transactions, including: presenting the excess tax benefit or deficit from the exercise or vesting of share-based payments in the income statement, a revision to the criteria for classifying an award as equity or liability, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, and certain classifications on the statement of cash flows. In addition, the new guidance eliminates the excess tax benefit from the assumed proceeds calculation under the treasury stock method for purposes of calculating diluted shares. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016 and interim reporting periods within those years. Certain provisions of ASU 2016-09 are required to be adopted prospectively, notably the requirement to recognize the excess tax benefit or deficit in the income statement, while other provisions require modified retrospective application or in some cases full retrospective application. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326). ASU 2016-13 requires financial assets such as loans to be presented net of an allowance for credit losses that reduces the cost basis to the amount expected to be collected over the estimated life. Expected credit losses will be measured based on historical experience and current conditions, as well as forecasts of future conditions that affect the collectability of the reported amount. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, and interim reporting periods within those years using a modified retrospective approach. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

C – Finance Receivables, Net

The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts, which carry an interest rate of 15% or 16.5% per annum (based on the Company’s contract interest rate as of the contract origination date), are collateralized by the vehicle sold and typically provide for payments over periods ranging from 18 to 42 months. The weighted average interest rate for the portfolio was approximately 15.7% at January 31, 2017. The Company’s finance receivables are defined as one segment and one class of loans in sub-prime consumer automobile contracts. The level of risks inherent in the Company’s financing receivables is managed as one homogeneous pool.

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The components of finance receivables are as follows:

(In thousands)	January 31, 2017			April 30, 2016
Gross contract amount	$	549,329		$	504,149
Less unearned finance charges		(73,975	)		(66,871	)
Principal balance		475,354			437,278
Less allowance for credit losses		(111,818	)		(102,485	)
Finance receivables, net	$	363,536		$	334,793

Changes in the finance receivables, net are as follows:

	Nine Months Ended January 31,
(In thousands)	2017			2016
Balance at beginning of period	$	334,793		$	324,144
Finance receivable originations		356,776			336,508
Finance receivable collections		(175,696	)		(173,949	)
Provision for credit losses		(110,467	)		(106,225	)
Losses on claims for payment protection plan		(11,260	)		(9,815	)
Inventory acquired in repossession and payment protection plan claims		(30,610	)		(31,594	)
Balance at end of period	$	363,536		$	339,069

Changes in the finance receivables allowance for credit losses are as follows:

	Nine Months Ended January 31,
(In thousands)	2017			2016
Balance at beginning of period	$	102,485		$	93,224
Provision for credit losses		110,467			106,225
Charge-offs, net of recovered collateral		(101,134	)		(95,221	)
Balance at end of period	$	111,818		$	104,228

The factors which influenced management’s judgment in determining the amount of the current period provision for credit losses are described below.

The level of charge-offs, net of recovered collateral, is the most important factor in determining the provision for credit losses. This is due to the fact that once a contract becomes delinquent the account is either made current by the customer, the vehicle is repossessed or the account is written off if the collateral cannot be recovered. Net charge-offs as a percentage of average finance receivables decreased to 21.8% for the nine months ended January 31, 2017 compared to 22.2% for the same period in the prior year. This improvement in net charge-offs is primarily due to a decrease in the frequency of losses as a result of the low delinquencies greater than 30 days at April 30, 2016 of 3.0%, significantly lower than 5.8% at April 30, 2015.

Collections and delinquency levels can have a significant effect on additions to the allowance and are reviewed frequently. Collections as a percentage of average finance receivables were 37.9% for the nine months ended January 31, 2017 compared to 40.6% for the prior year period. The decrease in collections as a percentage of average finance receivables resulted primarily from the longer average term, higher levels of contract modifications, higher delinquencies and, to a lesser extent, the increase in the contract interest rate. Delinquencies greater than 30 days were 4.7% for January 31, 2017 and 5.0% at January 31, 2016.

Macro-economic factors, the competitive environment on the funding side, and more importantly, proper execution of operational policies and procedures have a significant effect on additions to the allowance charged to the provision. Higher unemployment levels, higher gasoline prices and higher prices for staple items can potentially have a significant effect. The Company continues to focus on operational improvements within the collections area.

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Credit quality information for finance receivables is as follows:

(Dollars in thousands)	January 31, 2017					April 30, 2016					January 31, 2016
	Principal		Percent of			Principal		Percent of			Principal		Percent of
	Balance		Portfolio			Balance		Portfolio			Balance		Portfolio
Current	$	371,078		78.06	%	$	378,631		86.59	%	$	364,453		82.22	%
3 - 29 days past due		81,887		17.23	%		45,631		10.43	%		56,835		12.82	%
30 - 60 days past due		15,957		3.36	%		8,429		1.93	%		15,087		3.40	%
61 - 90 days past due		4,395		0.92	%		3,498		0.80	%		4,790		1.08	%
> 90 days past due		2,037		0.43	%		1,089		0.25	%		2,131		0.48	%
Total	$	475,354		100.00	%	$	437,278		100.00	%	$	443,296		100.00	%

Accounts one and two days past due are considered current for this analysis, due to the varying payment dates and variation in the day of the week at each period end. Delinquencies may vary from period to period based on the average age of the portfolio, seasonality within the calendar year, the day of the week and overall economic factors. The above categories are consistent with internal operational measures used by the Company to monitor credit results. The third quarter of fiscal 2017 ended on a Tuesday, which is believed to contribute to the decrease in current receivables at quarter end.

Substantially all of the Company’s automobile contracts involve contracts made to individuals with impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders; such contracts generally entail a higher risk of delinquency, default, repossession, and losses than contracts made with buyers with better credit. The Company monitors contract term length, down payment percentages, and collections as credit quality indicators.

	Nine Months Ended January 31,
	2017			2016
Principal collected as a percent of average finance receivables		37.9	%		40.6	%
Average down-payment percentage		5.3	%		6.1	%
Average originating contract term (in months)		29.3			28.6

	2017		2016
Portfolio weighted average contract term, including modifications (in months)		31.9		30.9

The decrease in collections as a percentage of average finance receivables resulted primarily from the longer average term, higher levels of contract modifications, higher delinquencies and, to a lesser extent, the increase in the contract interest rate. The increases in contract term are primarily related to efforts to keep payments affordable, for competitive reasons and to continue to work with our customers when they experience financial difficulties. In order to remain competitive, term lengths may continue to increase.

D – Property and Equipment

A summary of property and equipment is as follows:

(In thousands)	January 31, 2017			April 30, 2016
Land	$	6,738		$	6,711
Buildings and improvements		11,976			11,928
Furniture, fixtures and equipment		13,233			14,941
Leasehold improvements		24,347			23,308
Construction in progress		291			250
Less accumulated depreciation and amortization		(25,272	)		(22,383	)
Total	$	31,313		$	34,755

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E – Accrued Liabilities

A summary of accrued liabilities is as follows:

(In thousands)	January 31, 2017		April 30, 2016
Employee compensation	$	5,762	$	3,684
Cash overdrafts (see Note B)		3,587		-
Deferred sales tax (see Note B)		2,978		2,736
Other		4,576		4,825
Total	$	16,903	$	11,245

F – Debt Facilities

A summary of revolving credit facilities is as follows:

(In thousands)
	Aggregate		Interest			Balance at
	Amount		Rate	Maturity		January 31, 2017		April 30, 2016
Revolving credit facilities	$	200,000	LIBOR + 2.375%		December 12, 2019	$	118,346	$	107,386
			(3.14% at January 31, 2017 and 2.81% at April 30, 2016)

On March 9, 2012, the Company entered into an Amended and Restated Loan and Security Agreement with a group of lenders providing revolving credit facilities totaling $125 million (“Credit Facilities”). The Credit Facilities were amended on September 30, 2012, February 4, 2013, June 24, 2013, February 13, 2014 and October 8, 2014, respectively. The first amendment increased the total revolving commitment to $145 million. The second amendment amended the definition of eligible vehicle contracts to include contracts with 36-42 month terms. The third amendment extended the term to June 24, 2016, provided the option to request revolver commitment increases for up to an additional $55 million and provided for a 0.25% decrease in each of the three pricing tiers for determining the applicable interest rate. The fourth amendment amended the structure of the debt covenants related to the application of the fixed charge coverage ratio calculation.  As amended, the fixed charge coverage ratio calculation will be required only if availability, as defined, under the revolving credit facilities is less than specified thresholds.  The fourth amendment also increased allowable capital expenditures to $10 million in the aggregate during any fiscal year and allows the sale of certain vehicle contracts to third parties.

On October 8, 2014, the Company entered into a fifth amendment to the Credit Facilities, which extended the term of the Credit Facilities to October 8, 2017, added a new pricing tier for determining the applicable interest rate, and provided for a 0.125% increase in each of the three existing pricing tiers. The fifth amendment also amended one of two alternative distribution limitations related to repurchases of the Company’s stock. With respect to such limitation, the amendment (i) reset the $40 million aggregate limit on repurchases beginning October 8, 2014, (ii) redefined the aggregate amount of repurchases to be net of proceeds received from the exercise of stock options, and (iii) changed the requirement that the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases be equal to or greater than 30% of the sum of the borrowing bases.

On February 18, 2016, the Company exercised an option under its existing credit agreement to increase the total revolving credit facilities by $27.5 million from $145 million to $172.5 million. The increase in the total revolving credit commitments was made pursuant to the aforementioned accordion feature of the Credit Facilities, which allows the Company to increase the total revolver commitments by up to an additional $55 million (up to $200 million in total commitments), subject to lender approval and/or successful syndication.

On December 12, 2016, the Company entered into a Second Amended and Restated Loan and Security Agreement which amended and restated the Company’s Credit Facilities. The new agreement extended the terms of the Credit Facilities to December 12, 2019, reduced the pricing tiers for determining the applicable interest rate from four to three, and reset the aggregate limit on the repurchase of Company stock to $40 million beginning December 12, 2016. The agreement also increased the total revolving credit facilities from $172.5 million to $200 million, provided the option to request revolver commitment increases for up to an additional $50 million and increased the advance rate on accounts receivable with 37-42 month terms from 50% to 55%, and the advance rate on accounts receivable with 43-60 month terms from 45% to 50%.

The revolving credit facilities are collateralized primarily by finance receivables and inventory, are cross collateralized and contain a guarantee by the Company. Interest is payable monthly under the revolving credit facilities. The Credit Facilities provide for three pricing tiers for determining the applicable interest rate, based on the Company’s consolidated leverage ratio for the preceding fiscal quarter. The current applicable interest rate under the Credit Facilities is generally LIBOR plus 2.375%. The Credit Facilities contain various reporting and performance covenants including (i) maintenance of certain financial ratios and tests, (ii) limitations on borrowings from other sources, (iii) restrictions on certain operating activities and (iv) restrictions on the payment of dividends or distributions.

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The distribution limitations under the Credit Facilities allow the Company to repurchase the Company’s stock so long as: either (a) the aggregate amount of such repurchases does not exceed $40 million beginning December 12, 2016 and the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases is equal to or greater than 25% of the sum of the borrowing bases, or (b) the aggregate amount of such repurchases does not exceed 75% of the consolidated net income of the Company measured on a trailing twelve month basis; provided that immediately before and after giving effect to the stock repurchases at least 12.5% of the aggregate funds committed under the credit facilities remain available.

The Company was in compliance with the covenants at January 31, 2017. The amount available to be drawn under the credit facilities is a function of eligible finance receivables and inventory; based upon eligible finance receivables and inventory at January 31, 2017, the Company had additional availability of approximately $78 million under the revolving credit facilities.

The Company recognized approximately $197,000 and $144,000 of amortization for the nine months ended January 31, 2017 and 2016, respectively, related to debt issuance costs. The amortization is reflected as interest expense in the Company’s Condensed Consolidated Statements of Operations.

During the quarter ended January 31, 2017, the Company incurred approximately $378,000 in debt issuance costs related to the Second Amended and Restated Loan and Security Agreement.

During fiscal 2016, the Company implemented the guidance in ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which amended the presentation of debt issuance costs in the financial statements. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of as an asset. As a result, debt issuance costs of approximately $576,000 and $396,000 as of January 31, 2017 and April 30, 2016, respectively, are shown as a deduction from the revolving credit facilities in the Condensed Consolidated Balance Sheet.

On December 15, 2015, the Company entered into an agreement to purchase the property on which one of its dealerships is located for a purchase price of $550,000. Under the agreement, the purchase price is being paid in monthly principal and interest installments of $10,005. The debt matures in December 2020, bears interest at a rate of 3.50% and is secured by the property. The balance on this note payable was approximately $439,000 and $516,000 as of January 31, 2017 and April 30, 2016, respectively.

G – Fair Value Measurements

The table below summarizes information about the fair value of financial instruments included in the Company’s financial statements at January 31, 2017 and April 30, 2016:

	January 31, 2017				April 30, 2016
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash	$	254	$	254	$	602	$	602
Finance receivables, net		363,536		292,343		334,793		268,926
Accounts payable		10,544		10,544		12,313		12,313
Revolving credit facilities and notes payable		118,785		118,785		107,902		107,902

Because no market exists for certain of the Company’s financial instruments, fair value estimates are based on judgments and estimates regarding yield expectations of investors, credit risk and other risk characteristics, including interest rate and prepayment risk. These estimates are subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The methodology and assumptions utilized to estimate the fair value of the Company’s financial instruments are as follows:

Financial Instrument	Valuation Methodology
Cash	The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instrument.
Finance receivables, net	The Company estimates the fair value of its receivables at what a third party purchaser might be willing to pay. The Company has had discussions with third parties and has bought and sold portfolios, and had a third party appraisal in November 2012 that indicated a range of 35% to 40% discount to face would be a reasonable fair value in a negotiated third party transaction.  The sale of finance receivables from Car-Mart of Arkansas to Colonial is made at a 38.5% discount.  For financial reporting purposes these sale transactions are eliminated. Since the Company does not intend to offer the receivables for sale to an outside third party, the expectation is that the net book value at January 31, 2017, will ultimately be collected. By collecting the accounts internally the Company expects to realize more than a third party purchaser would expect to collect with a servicing requirement and a profit margin included.
Accounts payable	The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instrument.
Revolving credit facilities and notes payable	The fair value approximates carrying value due to the variable interest rates charged on the revolving credit facilities, which reprice frequently.

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H – Weighted Average Shares Outstanding

Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings per share were as follows:

	Three Months Ended January 31,				Nine Months Ended January 31,
	2017		2016		2017		2016
Weighted average shares outstanding-basic		7,893,737		8,367,728		7,891,908		8,451,029
Dilutive options and restricted stock		282,017		248,029		274,023		323,305
Weighted average shares outstanding-diluted		8,175,754		8,615,757		8,165,931		8,774,334
Antidilutive securities not included:
Options		327,750		373,000		360,500		294,000
Restricted stock		-		9,500		6,333		6,333

I – Stock-Based Compensation

The Company has stock-based compensation plans available to grant non-qualified stock options, incentive stock options and restricted stock to employees, directors and certain advisors of the Company. The stock-based compensation plans being utilized at January 31, 2017 are the Amended and Restated Stock Option Plan and the Amended and Restated Stock Incentive Plan. The Company recorded total stock-based compensation expense for all plans of approximately $1 million ($627,000 after tax effects) and $1.2 million ($759,000 after tax effects) for the nine months ended January 31, 2017 and 2016, respectively. Tax benefits were recognized for these costs at the Company’s overall effective tax rate.

Stock Options

The Company has options outstanding under a stock option plan approved by the shareholders, the Amended and Restated Stock Option Plan. The shareholders of the Company approved the Amended and Restated Stock Option Plan (the “Restated Option Plan”) on August 5, 2015, which extended the term of the Restated Option Plan to June 10, 2025 and increased the number of shares of common stock reserved for issuance under the plan to 1,800,000 shares. The Restated Option Plan provides for the grant of options to purchase shares of the Company’s common stock to employees, directors and certain advisors of the Company at a price not less than the fair market value of the stock on the date of grant and for periods not to exceed ten years. Options granted under the Company’s stock option plans expire in the calendar years 2017 through 2026.

	Restated Option Plan
Minimum exercise price as a percentage of fair market value at date of grant		100	%
Last expiration date for outstanding options		August 10, 2026
Shares available for grant at January 31, 2017		286,000

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The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below.

	Nine Months Ended January 31,
	2017			2016
Expected term (years)		5.5			5.5
Risk-free interest rate		1.28	%		1.58	%
Volatility		36	%		34	%
Dividend yield		-			-

The expected term of the options is based on evaluations of historical actual and future expected employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of the Company’s common stock. The Company has not historically issued any dividends and does not expect to do so in the foreseeable future.

There were 35,000 options granted during the nine months ended January 31, 2017 and 298,750 options granted during the nine months ended January 31, 2016. The grant-date fair value of options granted during the nine months ended January 31, 2017 and 2016 was $338,000 and $5.2 million, respectively. The options were granted at fair market value on the date of grant.

Stock option compensation expense was $923,000 ($579,000 after tax effects) and $1.1 million ($710,000 after tax effects) for the nine months ended January 31, 2017 and 2016, respectively. As of January 31, 2017, the Company had approximately $2.9 million of total unrecognized compensation cost related to unvested options that are expected to vest. These unvested outstanding options have a weighted-average remaining vesting period of 3.1 years.

As of January 31, 2017, there were 131,125 performance based stock options outstanding that were granted in fiscal year 2016 with a five-year performance period ending April 30, 2020. Tiered vesting of these units is based solely on comparing the Company’s net income over the specified performance period to net income at April 30, 2015. As of January 31, 2017, the Company had $1.1 million in unrecognized compensation expense related to 62,750 of these options that are not currently expected to vest.

The aggregate intrinsic value of outstanding options at January 31, 2017 and 2016 was $13.7 million and $2.9 million, respectively.

The Company had the following options exercised for the periods indicated. The impact of these cash receipts is included in financing activities in the accompanying Condensed Consolidated Statements of Cash Flows.

	Nine Months Ended January 31,
(Dollars in thousands)	2017		2016
Options exercised		169,500		30,750
Cash received from option exercises	$	1,675	$	400
Intrinsic value of options exercised	$	4,374	$	943

As of January 31, 2017, there were 764,500 vested and exercisable stock options outstanding with an aggregate intrinsic value of $13 million, a weighted average remaining contractual life of 3.29 years, and a weighted average exercise price of $25.49.

Stock Incentive Plan

On October 14, 2009, the shareholders of the Company approved an amendment to the Company’s Stock Incentive Plan that increased the number of shares of common stock that may be issued under the Stock Incentive Plan to 350,000.  On August 5, 2015, the shareholders of the Company approved the Amended and Restated Stock Incentive Plan, which extended the term of the Stock Incentive Plan to June 10, 2025. For shares issued under the Stock Incentive Plan, the associated compensation expense is generally recognized equally over the vesting periods established at the award date and is subject to the employee’s continued employment by the Company.

There were 10,000 restricted shares granted during the nine months ended January 31, 2017 and no restricted shares granted during the nine months ended January 31, 2016. A total of 169,527 shares remained available for award at January 31, 2017. There were 17,500 unvested restricted shares outstanding as of January 31, 2017 with a weighted average grant date fair value of $45.06.

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The Company recorded compensation cost of approximately $78,000 ($49,000 after tax effects) and $74,000 ($47,000 after tax effects) related to the Stock Incentive Plan during the nine months ended January 31, 2017 and 2016, respectively. As of January 31, 2017, the Company had approximately $612,000 of total unrecognized compensation cost related to unvested awards granted under the Stock Incentive Plan, which the Company expects to recognize over a weighted-average remaining period of 4.0 years.

There were no modifications to any of the Company’s outstanding share-based payment awards during fiscal 2016 or during the first nine months of fiscal 2017.

J – Commitments and Contingencies

The Company has a standby letter of credit relating to an insurance policy totaling $1 million at January 31, 2017.

K - Supplemental Cash Flow Information

Supplemental cash flow disclosures are as follows:

	Nine Months Ended January 31,
(in thousands)	2017			2016
Supplemental disclosures:
Interest paid	$	3,040		$	2,614
Income taxes paid, net		4,726			5,650
Non-cash transactions:
Inventory acquired in repossession and payment protection plan claims		30,610			31,594
Loss accrued (incurred) on disposal of property and equipment		(300	)		-
Purchase of property and equipment using the issuance of debt		-			550

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Company's Condensed Consolidated Financial Statements and notes thereto appearing elsewhere in this report.

Forward-Looking Information

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address the Company’s future objectives, plans and goals, as well as the Company’s intent, beliefs and current expectations regarding future operating performance, and can generally be identified by words such as “may”, “will”, “should”, “could”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “foresee”, and other similar words or phrases. Specific events addressed by these forward-looking statements include, but are not limited to:

· new dealership openings;

· performance of new dealerships;

· same dealership revenue growth;

· future revenue growth;

· receivables growth as related to revenue growth;

· gross margin percentages;

· interest rates;

· future credit losses;

· the Company’s collection results, including, but not limited to, collections during income tax refund periods;

· seasonality;

· security breaches, cyber-attacks, or fraudulent activity;

· compliance with tax regulations;

· the Company’s business and growth strategies;

· financing the majority of growth from profits; and

· having adequate liquidity to satisfy its capital needs.

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These forward-looking statements are based on the Company’s current estimates and assumptions and involve various risks and uncertainties. As a result, you are cautioned that these forward-looking statements are not guarantees of future performance, and that actual results could differ materially from those projected in these forward-looking statements. Factors that may cause actual results to differ materially from the Company’s projections include those risks described elsewhere in this report, as well as:

· the availability of credit facilities to support the Company’s business;

· the Company’s ability to underwrite and collect its contracts effectively;

· competition;

· dependence on existing management;

· availability of quality vehicles at prices that will be affordable to customers;

· changes in consumer finance laws or regulations, including, but not limited to, rules and regulations that have recently been enacted or could be enacted by federal and state governments; and

· general economic conditions in the markets in which the Company operates, including, but not limited to, fluctuations in gas prices, grocery prices and employment levels.

The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Overview

America’s Car-Mart, Inc., a Texas corporation initially formed in 1981 (the “Company”), is one of the largest publicly held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. The Company’s operations are principally conducted through its two operating subsidiaries, America’s Car Mart, Inc., an Arkansas corporation (“Car-Mart of Arkansas”), and Colonial Auto Finance, Inc., an Arkansas corporation (“Colonial”). References to the Company include the Company’s consolidated subsidiaries. The Company primarily sells older model used vehicles and provides financing for substantially all of its customers. Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems. As of January 31, 2017, the Company operated 143 dealerships located primarily in small cities throughout the South-Central United States.

The Company has grown its revenues between 3% and 14% per year over the last ten fiscal years (9% on average). Growth results from same dealership revenue growth and the addition of new dealerships. Revenue increased 5.2% for the first nine months of fiscal 2017 compared to the same period of fiscal 2016 due primarily to a 2.5% increase in units sold, a 2.3% increase in the average selling price to $10,500, and a 10.0% increase in interest income.

The Company’s primary focus is on collections. Each dealership is responsible for its own collections with supervisory involvement of the corporate office. Over the last five fiscal years, the Company’s annual credit losses as a percentage of sales have ranged from approximately 21.1% in fiscal 2012 to 28.5% in fiscal 2016 (27.6% excluding the effect of the increase in the allowance for credit losses in the second quarter of fiscal 2016) (average of 25.1%). The higher credit losses as a percentage of sales for fiscal 2016 of 28.5% were primarily a result of competitive pressures remaining elevated and the increased number of newer dealerships weighing on credit loss results. For the first nine months of fiscal 2017, credit losses as a percentage of sales were 28.8%.

Historically, credit losses, on a percentage basis, tend to be higher at new and developing dealerships than at mature dealerships. Generally, this is the case because the management at new and developing dealerships tends to be less experienced in making credit decisions and collecting customer accounts and the customer base is less seasoned. Normally more mature dealerships have more repeat customers and, on average, repeat customers are a better credit risk than non-repeat customers. Negative macro-economic issues do not always lead to higher credit loss results for the Company because the Company provides basic affordable transportation which in many cases is not a discretionary expenditure for customers. The Company does believe, however, that general inflation, particularly within staple items such as groceries and gasoline, as well as overall unemployment levels and potentially lower or stagnant personal income levels affecting customers can have, and have had in recent years, a negative impact on collections. Additionally, increased competition for used vehicle financing in recent years has had a negative effect on collections and charge-offs.

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In an effort to offset the elevated credit losses and lower collection levels and to operate more efficiently, the Company continues to look for improvements to its business practices, including better underwriting and better collection procedures. The Company has a proprietary credit scoring system which enables the Company to monitor the quality of contracts. Corporate office personnel monitor proprietary credit scores and work with dealerships when the distribution of scores falls outside of prescribed thresholds. The Company has implemented credit reporting and the use of GPS units on vehicles. Additionally, the Company has placed significant focus on the collection area; the Company’s training department continues to spend significant time and effort on collections improvements. The Field Operations Officer oversees the collections department and provides timely oversight and additional accountability on a consistent basis. In addition, the Company has a Director of Collection Services who assists with managing the Company’s servicing and collections practices and provides additional monitoring and training. Also, turnover at the dealership level for collections positions is down compared to historical levels, which management believes can have a positive effect on collection results. The Company believes that the proper execution of its business practices is the single most important determinant of its long term credit loss experience.

Historically, the Company’s gross margins as a percentage of sales have been fairly consistent from year to year. Over the period from fiscal 2011 through fiscal 2016, the Company’s gross margins as a percentage of sales ranged between approximately 40% and 43%. Gross margin as a percentage of sales for fiscal 2016 was 39.8%. The Company’s gross margins are based upon the cost of the vehicle purchased, with lower-priced vehicles typically having higher gross margin percentages. Gross margins in recent years have been negatively affected by the increase in the average retail sales price (a function of a higher purchase price) and higher operating costs, mostly related to increased vehicle repair costs and higher fuel costs. Additionally, the percentage of wholesale sales to retail sales, which relate for the most part to repossessed vehicles sold at or near cost, can have a significant effect on overall gross margins. For the first nine months of fiscal 2017, gross margin increased to 41.3% of sales primarily due to a decrease in the level of wholesales due to lower repossession activity, as well as a Company-wide effort to reduce vehicle repair expenses which had also negatively impacted gross margins in fiscal 2016. The Company expects that its gross margin percentage will continue to remain under pressure over the near term.

Hiring, training and retaining qualified associates is critical to the Company’s success. The rate at which the Company adds new dealerships and is able to implement operating initiatives is limited by the number of trained managers and support personnel the Company has at its disposal. Excessive turnover, particularly at the dealership manager level, could impact the Company’s ability to add new dealerships and to meet operational initiatives. The Company has added resources to recruit, train, and develop personnel, especially personnel targeted for dealership manager positions. The Company expects to continue to invest in the development of its workforce.

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Consolidated Operations

(Operating Statement Dollars in Thousands)

							% Change			As a % of Sales
	Three Months Ended January 31,						2017 vs.			Three Months Ended January 31,
	2017			2016			2016			2017		2016
Revenues:
Sales	$	121,263		$	121,791			(0.4	)%		100.0		100.0
Interest income		17,521			15,672			11.8			14.4		12.9
Total		138,784			137,463			1.0
Costs and expenses:
Cost of sales, excluding depreciation shown below		71,836			72,702			(1.2	)		59.2		59.7
Selling, general and administrative		22,654			23,568			(3.9	)		18.7		19.4
Provision for credit losses		37,645			32,786			14.8			31.0		26.9
Interest expense		1,060			831			27.6			0.9		0.7
Depreciation and amortization		1,059			1,008			5.1			0.9		0.8
Loss on disposal of property and equipment		7			27			(74.1	)		-		-
Total		134,261			130,922			2.6
Pretax income (loss)	$	4,523		$	6,541						3.7		5.4
Operating Data:
Retail units sold		10,866			11,013
Average stores in operation		143			147
Average units sold per store per month		25.3			25.0
Average retail sales price	$	10,629		$	10,599
Same store revenue change		1.1	%		0.0	%
Period End Data:
Stores open		143			147
Accounts over 30 days past due		4.7	%		5.0	%

Three Months Ended January 31, 2017 vs. Three Months Ended January 31, 2016

Revenues increased by approximately $1.3 million, or 1.0%, for the three months ended January 31, 2017 as compared to the same period in the prior fiscal year. This increase resulted from revenue growth at dealerships that operated a full three months in both current and prior year third quarter ($1.5 million), revenue growth from dealerships opened during or after the prior year quarter ($880,000), offset by lower revenues at dealerships closed after the three months ended January 31, 2016 (slightly less than $1.1 million). Interest income increased approximately $1.8 million for the three months ended January 31, 2017, as compared to the same period in the prior fiscal year primarily due to the $37.8 million increase in average finance receivables, and to a lesser extent to the increase in the contract interest rate from 15.0% to 16.5% at the end of May 2016.

Cost of sales, as a percentage of sales, decreased to 59.2% for the three months ended January 31, 2017 compared to 59.7% for the same period of the prior fiscal year, resulting in a gross margin as a percentage of sales of 40.8% for the current year period compared to 40.3% for the prior year period. The higher gross margin percentage primarily relates to lower repair expenses and improved inventory quality and turns, partially offset by the effect of a higher average selling price. The average retail sales price for the third quarter of fiscal 2017 was $10,629, a $30 increase over the prior year quarter. Increases in the volume of wholesales sales, resulting from higher credit losses, negatively affected our gross margin percentages in the third quarter of fiscal 2016.

The increase in average retail sales price during the third quarter of fiscal 2017 largely relates to an increase in the Company’s purchase costs. As purchase costs increase, the margin between the purchase cost and the sales price of the vehicles we sell narrows as a percentage because the Company must offer affordable prices to our customers. The increased purchase costs are the result of a combination of consumer demand for the types of vehicles the Company purchases for resale, which remains high relative to supply, and a strategic management decision to purchase higher quality vehicles for our customers. The high demand and tight supply of the vehicles we purchase for resale are largely related to excess funding to the used vehicle financing market and the depressed levels of new car sales during and after the recession, although more robust new car sales in recent years have begun to bolster the supply of used vehicles. We continue to focus efforts on minimizing the average retail sales price of our vehicles in order to help keep contract terms shorter, which helps customers to maintain appropriate equity in their vehicles and reduces credit losses and resulting wholesale volumes.

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Selling, general and administrative expenses, as a percentage of sales, were 18.7% for the three months ended January 31, 2017, a decrease of 0.7% from the same period of the prior fiscal year. Selling, general and administrative expenses are, for the most part, more fixed in nature. In dollar terms, overall selling, general and administrative expenses decreased approximately $914,000 in the third quarter of fiscal 2017 compared to the same period of the prior fiscal year. The Company continues to focus on controlling costs, at the same time ensuring a solid infrastructure.

Provision for credit losses as a percentage of sales was 31.0% for the three months ended January 31, 2017 compared to 26.9% for the three months ended January 31, 2016. Net charge-offs as a percentage of average finance receivables were 7.8% for the three months ended January 31, 2017 compared to 6.6% for the prior year quarter. The increase related to a higher frequency of losses. The Company continues to push for improvements and better execution of its collection practices. However, the extended challenging macro-economic and competitive conditions, and low wholesale values are expected to continue to put pressure on our customers and the resulting collections of our finance receivables. The Company believes that the proper execution of its business practices remains the single most important determinant of its long-term credit loss experience.

Interest expense as a percentage of sales increased to 0.9% for the three months ended January 31, 2017 compared to 0.7% for the same period of the prior fiscal year. Average borrowings during the three months ended January 31, 2017 were $120.1 million, compared to $114.3 million for the prior year quarter.

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Consolidated Operations

(Operating Statement Dollars in Thousands)

							% Change			As a % of Sales
	Nine Months Ended January 31,						2017 vs.			Nine Months Ended January 31,
	2017			2016			2016			2017		2016
Revenues:
Sales	$	384,117		$	367,056			4.6	%		100.0		100.0
Interest income		50,717			46,101			10.0			13.2		12.6
Total		434,834			413,157			5.2
Costs and expenses:
Cost of sales, excluding depreciation shown below		225,346			219,385			2.7			58.7		59.8
Selling, general and administrative		68,476			68,932			(0.7	)		17.8		18.8
Provision for credit losses		110,467			106,225			4.0			28.8		28.9
Interest expense		3,040			2,383			27.6			0.8		0.6
Depreciation and amortization		3,235			3,056			5.9			0.8		0.8
Loss on Disposal of Property and Equipment		406			46			782.6			0.1		-
Total		410,970			400,027			2.7
Pretax income	$	23,864		$	13,130						6.2		3.6
Operating Data:
Retail units sold		34,990			34,138
Average stores in operation		143			144
Average units sold per store per month		27.2			26.4
Average retail sales price	$	10,500		$	10,259
Same store revenue change		4.2	%		1.3	%
Period End Data:
Stores open		143			147
Accounts over 30 days past due		4.7	%		5.0	%

Nine Months Ended January 31, 2017 vs. Nine Months Ended January 31, 2016

Revenues increased by approximately $21.7 million, or 5.2%, for the nine months ended January 31, 2017 as compared to the same period in the prior fiscal year. This increase resulted from revenue growth at dealerships that operated a full nine months in both current and prior year period ($17.2 million), and dealerships opened during the nine months ended January 31, 2016 ($8.4 million), partially offset by lower revenues due to dealerships closed after the nine months ended January 31, 2016 ($3.9 million). Interest income increased approximately $4.6 million for the nine months ended January 31, 2017, as compared to the same period in the prior fiscal year primarily due to the $35 million increase in average finance receivables, and to a lesser extent to the increase in the contract interest rate from 15.0% to 16.5% at the end of May 2016.

Cost of sales, as a percentage of sales, decreased to 58.7% for the nine months ended January 31, 2017 compared to 59.8% for the same period of the prior fiscal year, resulting in a gross margin as a percentage of sales of 41.3% for the current year period compared to 40.2% for the prior year period. The higher gross margin percentage relates to lower repair expenses, partially offset by the effect of a higher average selling price. The average retail sales price for the period ended January 31, 2017 was $10,500, a $241 increase over the prior year period. Increases in the volume of wholesales sales, resulting from higher credit losses, negatively affected our gross margin percentages in the first nine months of fiscal 2016.

Selling, general and administrative expenses, as a percentage of sales, were 17.8% for the nine months ended January 31, 2017, a decrease of 1.0% from the same period of the prior fiscal year. Selling, general and administrative expenses are, for the most part, more fixed in nature. In dollar terms, overall selling, general and administrative expenses decreased approximately $456,000 in the first nine months of fiscal 2017 compared to the same period of the prior fiscal year.

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Provision for credit losses as a percentage of sales was 28.8% for the period ended January 31, 2017 compared to 28.9% (27.6% excluding a $3 million non-cash after-tax charge resulting from an increase to the allowance for credit losses) for the period ended January 31, 2016. Net charge-offs as a percentage of average finance receivables were 21.8% for the nine months ended January 31, 2017 compared to 22.2% for the prior year period. The decrease in the net charge-offs primarily related to a decrease in the frequency of losses. The Company believes that the proper execution of its business practices remains the single most important determinant of its long-term credit loss experience.

Interest expense as a percentage of sales increased to 0.8% for the nine months ended January 31, 2017 compared to 0.6% for the same period of the prior fiscal year. The overall dollar increase in interest expense was attributable to higher average borrowings during the nine months ended January 31, 2017 as compared to the same period in the prior fiscal year ($119.2 million compared to $108.3 million).

Financial Condition

The following table sets forth the major balance sheet accounts of the Company as of the dates specified (in thousands):

	January 31, 2017		April 30, 2016
Assets:
Finance receivables, net	$	363,536	$	334,793
Inventory		32,303		29,879
Property and equipment, net		31,313		34,755
Liabilities:
Accounts payable and accrued liabilities		27,447		23,558
Deferred revenue		28,082		27,339
Income taxes payable (receivable), net		1,179		(894	)
Deferred tax liabilities, net		19,440		18,280
Debt facilities and notes payable		118,785		107,902

Historically, finance receivables tended to grow slightly faster than revenue; for fiscal year 2016, however, revenue growth exceeded growth in net finance receivables. During the first nine months of fiscal 2017, finance receivables grew slightly faster than revenue, consistent with the historical trends. The Company currently anticipates going forward that the growth in finance receivables will generally be slightly higher than overall revenue growth on an annual basis due to overall term length increases partially offset by improvements in underwriting and collection procedures in an effort to reduce credit losses.

During the first nine months of fiscal 2017, inventory increased by $2.4 million compared to inventory at April 30, 2016. This increase in inventory was attributable to an increase in purchasing levels to meet demand and provide an adequate supply of affordable vehicles. The Company strives to offer a broad mix and sufficient quantities of vehicles to adequately serve its expanding customer base. The Company will continue to manage inventory levels in the future to ensure adequate supply, in volume and mix, and to meet anticipated sales demand.

Property and equipment, net, decreased by $3.4 million at January 31, 2017 as compared to property and equipment, net, at April 30, 2016. The Company incurred $1.4 million in expenditures to refurbish and expand existing locations, offset by depreciation expense.

Accounts payable and accrued liabilities increased by $3.9 million during the first nine months of fiscal 2017 as compared to accounts payable and accrued liabilities at April 30, 2016, related primarily to increases in inventory, cash overdrafts and accrued employee compensation.

Deferred revenue increased $743,000 at January 31, 2017 as compared to April 30, 2016, primarily resulting from increased sales of the payment protection plan product and service contracts.

Income taxes payable (receivable), net, increased by $2.1 million at January 31, 2017 as compared to April 30, 2016, primarily due to the timing of quarterly tax payments and refunds.

Deferred income tax liabilities, net, increased approximately $1.2 million at January 31, 2017 as compared to April 30, 2016, due primarily to the change in finance receivables.

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Borrowings on the Company’s revolving credit facilities fluctuate primarily based upon a number of factors including (i) net income, (ii) finance receivables changes, (iii) income taxes, (iv) capital expenditures and (v) common stock repurchases.  Historically, income from continuing operations, as well as borrowings on the revolving credit facilities, have funded the Company’s finance receivables growth, capital asset purchases and common stock repurchases. In the first nine months of fiscal 2017, the Company funded finance receivables growth of $38.1 million, inventory growth of $2.4 million, capital expenditures of $1.4 million and common stock repurchases of $8.2 million with income from operations and a $10.9 million increase in total debt.

Liquidity and Capital Resources

The following table sets forth certain summarized historical information with respect to the Company’s Statements of Cash Flows (in thousands):

	Nine Months Ended January 31,
	2017			2016
Operating activities:
Net income	$	14,963		$	8,233
Provision for credit losses		110,467			106,225
Losses on claims for payment protection plan		11,260			9,815
Depreciation and amortization		3,235			3,056
Stock based compensation		1,020			1,236
Finance receivable originations		(356,776	)		(336,508	)
Finance receivable collections		175,696			173,949
Inventory		28,186			23,767
Accounts payable and accrued liabilities		603			4,364
Deferred payment protection plan revenue		854			1,062
Deferred service contract revenue		(110	)		88
Income taxes, net		3,015			(200	)
Deferred income taxes		1,160			(553	)
Accrued interest on finance receivables		(602	)		(40	)
Other		(1,610	)		247
Total		(8,639	)		(5,259	)
Investing activities:
Purchase of property and equipment		(1,424	)		(4,201	)
Proceeds from sale of property and equipment		924			-
Total		(500	)		(4,201	)
Financing activities:
Revolving credit facilities, net		11,141			19,582
Debt issuance costs		(378	)		-
Payments on note payable		(77	)		(8	)
Change in cash overdrafts		3,587			(581	)
Purchase of common stock		(8,175	)		(10,485	)
Dividend payments		(30	)		(30	)
Exercise of stock options, including tax benefits and issuance of common stock		2,723			782
Total		8,791			9,260
Decrease in cash	$	(348	)	$	(200	)

The primary drivers of operating profits and cash flows include (i) top line sales (ii) interest rates on finance receivables, (iii) gross margin percentages on vehicle sales, and (iv) credit losses, a significant portion of which relates to the collection of principal on finance receivables. The Company generates cash flow from operations.  Historically, most or all of this cash is used to fund finance receivables growth, capital expenditures and common stock repurchases.  To the extent finance receivables growth, capital expenditures and common stock repurchases exceed income from operations, generally the Company increases its borrowings under its revolving credit facilities.  The majority of the Company’s growth has been self-funded.

Cash flows used in operations for the nine months ended January 31, 2017 compared to the same period in the prior fiscal year were positively impacted by (i) higher net income, (ii) decrease in inventory, and (iii) a higher non-cash charge for credit losses offset by (iv) an increase in finance receivables originations and (v) higher accounts payable and accrued liabilities. Finance receivables, net, increased by $28.7 million from April 30, 2016 to January 31, 2017.

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The purchase price the Company pays for a vehicle has a significant effect on liquidity and capital resources. Because the Company bases its selling price on the purchase cost for the vehicle, increases in purchase costs result in increased selling prices. As the selling price increases, it becomes more difficult to keep the gross margin percentage and contract term in line with historical results because the Company’s customers have limited incomes and their car payments must remain affordable within their individual budgets. Several external factors can negatively affect the purchase cost of vehicles. Decreases in the overall volume of new car sales, particularly domestic brands, lead to decreased supply in the used car market. Also, constrictions in consumer credit, as well as general economic conditions, can increase overall demand for the types of vehicles the Company purchases for resale as used vehicles become more attractive than new vehicles in times of economic instability. A negative shift in used vehicle supply, combined with strong demand, results in increased used vehicle prices and thus higher purchase costs for the Company. Management expects the recent tight supply of vehicles and resulting increases in vehicle purchase costs to continue, although some relief is expected as a result of steady increases in new car sales levels in recent periods.

The Company believes that the amount of credit available for the sub-prime auto industry has increased in recent years, and management expects the availability of consumer credit within the automotive industry to be higher over the near term when compared to historical levels. This is expected to contribute to continued strong overall demand for most, if not all, of the vehicles the Company purchases for resale.  Increased competition resulting from availability of funding to the sub-prime auto industry has also contributed to lower down payments and longer terms, which have had a negative effect on collection percentages, liquidity and credit losses when compared to prior periods.

Macro-economic factors can have an effect on credit losses and resulting liquidity. General inflation, particularly within staple items such as groceries, as well as overall unemployment levels can have a significant effect on collection results and ultimately credit losses. The Company anticipates that credit losses in the near term will be higher than historical ranges due to significant continued macro-economic challenges for the Company’s customer base as well as increased competitive pressures. Management continues to focus on improved execution at the dealership level, specifically as related to working individually with customers concerning collection issues.

The Company has generally leased the majority of the properties where its dealerships are located. As of January 31, 2017, the Company leased approximately 85% of its dealership properties. The Company expects to continue to lease the majority of the properties where its dealerships are located.

The Company’s revolving credit facilities generally restrict distributions by the Company to its shareholders. The distribution limitations under the Credit Facilities allow the Company to repurchase the Company’s stock so long as: either (a) the aggregate amount of such repurchases does not exceed $40 million beginning December 12, 2016 and the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases is equal to or greater than 25% of the sum of the borrowing bases, or (b) the aggregate amount of such repurchases does not exceed 75% of the consolidated net income of the Company measured on a trailing twelve month basis; provided that immediately before and after giving effect to the stock repurchases, at least 12.5% of the aggregate funds committed under the credit facilities remain available. Thus, although the Company currently does routinely repurchase stock, the Company is limited in its ability to pay dividends or make other distributions to its shareholders without the consent of the Company’s lenders.

At January 31, 2017, the Company had approximately $254,000 of cash on hand and approximately an additional $78 million of availability under its revolving credit facilities (see Note F to the Condensed Consolidated Financial Statements).  On a short-term basis, the Company’s principal sources of liquidity include income from operations and borrowings under its revolving credit facilities. On a longer-term basis, the Company expects its principal sources of liquidity to consist of income from operations and borrowings under revolving credit facilities or fixed interest term loans. The Company’s revolving credit facilities mature in December 2019. Furthermore, while the Company has no specific plans to issue debt or equity securities, the Company believes, if necessary, it could raise additional capital through the issuance of such securities.

The Company expects to use cash from operations and borrowings to (i) grow its finance receivables portfolio, (ii) purchase property and equipment of approximately $3.7 million in the next 12 months in connection with refurbishing existing dealerships and adding new dealerships, (iii) repurchase shares of common stock when favorable conditions exist and (iv) reduce debt to the extent excess cash is available.

The Company believes it will have adequate liquidity to continue to grow its revenues and to satisfy its capital needs for the foreseeable future.

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Contractual Payment Obligations

There have been no material changes outside of the ordinary course of business in the Company’s contractual payment obligations from those reported at April 30, 2016 in the Company’s Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

The Company has entered into operating leases for approximately 85% of its dealerships and office facilities. Generally, these leases are for periods of three to five years and usually contain multiple renewal options. The Company uses leasing arrangements to maintain flexibility in its dealership locations and to preserve capital. The Company expects to continue to lease the majority of its dealerships and office facilities under arrangements substantially consistent with the past.

The Company has a standby letter of credit relating to an insurance policy totaling $1 million at January 31, 2017.

Other than its operating leases and the letter of credit, the Company is not a party to any off-balance sheet arrangement that management believes is reasonably likely to have a current or future effect on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Related Finance Company Contingency

Car-Mart of Arkansas and Colonial do not meet the affiliation standard for filing consolidated income tax returns, and as such they file separate federal and state income tax returns. Car-Mart of Arkansas routinely sells its finance receivables to Colonial at what the Company believes to be fair market value and is able to take a tax deduction at the time of sale for the difference between the tax basis of the receivables sold and the sales price. These types of transactions, based upon facts and circumstances, have been permissible under the provisions of the Internal Revenue Code as described in the Treasury Regulations. For financial accounting purposes, these transactions are eliminated in consolidation and a deferred income tax liability has been recorded for this timing difference. The sale of finance receivables from Car-Mart of Arkansas to Colonial provides certain legal protection for the Company’s finance receivables and, principally because of certain state apportionment characteristics of Colonial, also has the effect of reducing the Company’s overall effective state income tax rate by approximately 300 basis points. The actual interpretation of the Regulations is in part a facts and circumstances matter. The Company believes it satisfies the material provisions of the Regulations. Failure to satisfy those provisions could result in the loss of a tax deduction at the time the receivables are sold and have the effect of increasing the Company’s overall effective income tax rate as well as the timing of required tax payments.

The Company’s policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accrued penalties or interest as of January 31, 2017.

Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires the Company to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the Company’s estimates. The Company believes the most significant estimate made in the preparation of the accompanying Condensed Consolidated Financial Statements relates to the determination of its allowance for credit losses, which is discussed below. The Company’s accounting policies are discussed in Note B to the Condensed Consolidated Financial Statements.

The Company maintains an allowance for credit losses on an aggregate basis at a level it considers sufficient to cover estimated losses inherent in the portfolio at the balance sheet date in the collection of its finance receivables currently outstanding.  At January 31, 2017, the weighted average total contract term was 31.9 months with 23.0 months remaining. The reserve amount in the allowance for credit losses at January 31, 2017, $111.8 million, was 25% of the principal balance in finance receivables of $475.4 million, less unearned payment protection plan revenue of $18.2 million and unearned service contract revenue of $9.9 million.

The estimated reserve amount is the Company’s anticipated future net charge-offs for losses incurred through the balance sheet date. The allowance takes into account historical credit loss experience (both timing and severity of losses), with consideration given to recent credit loss trends and changes in contract characteristics (i.e., average amount financed, months outstanding at loss date, term and age of portfolio), delinquency levels, collateral values, economic conditions and underwriting and collection practices. The allowance for credit losses is reviewed at least quarterly by management with any changes reflected in current operations. The calculation of the allowance for credit losses uses the following primary factors:

· The number of units repossessed or charged-off as a percentage of total units financed over specific historical periods of time from one year to five years.

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· The average net repossession and charge-off loss per unit during the last eighteen months segregated by the number of months since the contract origination date and adjusted for the expected future average net charge-off loss per unit.  About 50% of the charge-offs that will ultimately occur in the portfolio are expected to occur within 10-11 months following the balance sheet date.  The average age of an account at charge-off date for the eighteen-month period ended January 31, 2017 was 11.9 months.

· The timing of repossession and charge-off losses relative to the date of sale (i.e., how long it takes for a repossession or charge-off to occur) for repossessions and charge-offs occurring during the last eighteen months.

A point estimate is produced by this analysis which is then supplemented by any positive or negative subjective factors to arrive at an overall reserve amount that management considers to be a reasonable estimate of losses inherent in the portfolio at the balance sheet date that will be realized via actual charge-offs in the future. Although it is at least reasonably possible that events or circumstances could occur in the future that are not presently foreseen which could cause actual credit losses to be materially different from the recorded allowance for credit losses, the Company believes that it has given appropriate consideration to all relevant factors and has made reasonable assumptions in determining the allowance for credit losses. While challenging economic conditions can negatively impact credit losses, the effectiveness of the execution of internal policies and procedures within the collections area and the competitive environment on the funding side have historically had a more significant effect on collection results than macro-economic issues. A 1% change, as a percentage of finance receivables, in the allowance for credit losses would equate to an approximate pre-tax adjustment of $4.8 million.

Recent Accounting Pronouncements

Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies, which the Company will adopt as of the specified effective date. Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its consolidated financial statements upon adoption.

Revenue Recognition. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes existing revenue recognition guidance. The new guidance in ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, to provide entities with an additional year to implement ASU 2014-09. As a result, the guidance in ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, and interim reporting periods within those years, using one of two retrospective application methods. The Company is currently evaluating the potential effects of the adoption of this update on the consolidated financial statements, and expects to complete that evaluation by the end of fiscal 2017.

Leases. In February 2016, the FASB issued ASU 2016-02, Leases. The new guidance requires that lessees recognize all leases, including operating leases, with a term greater than 12 months on-balance sheet and also requires disclosure of key information about leasing transactions. The guidance in ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those years. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

Stock Compensation. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which aims to simplify aspects of accounting for share-based payment transactions, including: presenting the excess tax benefit or deficit from the exercise or vesting of share-based payments in the income statement, a revision to the criteria for classifying an award as equity or liability, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, and certain classifications on the statement of cash flows. In addition, the new guidance eliminates the excess tax benefit from the assumed proceeds calculation under the treasury stock method for purposes of calculating diluted shares. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016 and interim reporting periods within those years. Certain provisions of ASU 2016-09 are required to be adopted prospectively, notably the requirement to recognize the excess tax benefit or deficit in the income statement, while other provisions require modified retrospective application or in some cases full retrospective application. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326). ASU 2016-13 requires financial assets such as loans to be presented net of an allowance for credit losses that reduces the cost basis to the amount expected to be collected over the estimated life. Expected credit losses will be measured based on historical experience and current conditions, as well as forecasts of future conditions that affect the collectability of the reported amount. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, and interim reporting periods within those years, using a modified retrospective approach. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

27

Seasonality

Historically, the Company’s third fiscal quarter (November through January) has been the slowest period for vehicle sales. Conversely, the Company’s first and fourth fiscal quarters (May through July and February through April) have historically been the busiest times for vehicle sales. Therefore, the Company generally realizes a higher proportion of its revenue and operating profit during the first and fourth fiscal quarters. Tax refund anticipation sales efforts during the Company’s third fiscal quarter have increased sales levels during the third fiscal quarter in some past years; however, due to the timing of actual tax refund dollars in the Company’s markets, these sales and collections have primarily occurred in the fourth quarter in each of the last four fiscal years. The Company expects this pattern to continue in future years.

If conditions arise that impair vehicle sales during the first, third or fourth fiscal quarters, the adverse effect on the Company’s revenues and operating results for the year could be disproportionately large.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to market risk on its financial instruments from changes in interest rates.  In particular, the Company has historically had exposure to changes in the federal primary credit rate, and the prime interest rate of its lender.  The Company does not use financial instruments for trading purposes but has in the past entered into an interest rate swap agreement to manage interest rate risk.

Interest rate risk.   The Company’s exposure to changes in interest rates is primarily related to its debt obligations. The Company is exposed to changes in interest rates as a result of its revolving credit facilities. The interest rates charged to the Company under its credit facilities fluctuate based on its primary lender’s base rate of interest. The Company had total indebtedness of $118.3 million outstanding under its revolving credit facilities at January 31, 2017. The impact of a 1% increase in interest rates on this amount of debt would result in increased annual interest expense of approximately $1.2 million and a corresponding decrease in net income before income tax.

The Company’s earnings are impacted by its net interest income, which is the difference between the income earned on interest-bearing assets and the interest paid on interest-bearing notes payable. The Company’s finance receivables carry a fixed interest rate of 15% or 16.5% per annum, while its revolving credit facilities contain variable interest rates that fluctuate with market interest rates.

Item 4. Controls and Procedures

a) Evaluation of Disclosure Controls and Procedures

Based on management’s evaluation (with the participation of the Company’s Chief Executive Officer and Chief Financial Officer), as of January 31, 2017, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), to allow timely decisions regarding required disclosure.

b) Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

Item 1. Legal Proceedings

In the ordinary course of business, the Company has become a defendant in various types of legal proceedings.  While the outcome of these proceedings cannot be predicted with certainty, the Company does not expect the final outcome of any of these proceedings, individually or in the aggregate, to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Item 1A. Risk Factors

There have been no material changes to the Company’s risk factors as previously disclosed in Item 1A to Part 1 of the Company’s Form 10-K for the fiscal year ended April 30, 2016.

28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company is authorized to repurchase shares of its common stock under its common stock repurchase program. The Board of Directors most recently approved, and the Company announced, on July 22, 2016 the authorization to repurchase up to an additional one million shares along with the balance remaining under its previous authorization approved in November 2014.

The following table sets forth information with respect to purchases made by or on behalf of the Company of shares of the Company’s common stock during the periods indicated:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1)
November 1, 2016 through November 30, 2016		3,145		37.03		3,145		1,028,122
December 1, 2016 through December 31, 2016		-		-		-		1,028,122
January 1, 2017 through January 31, 2017		-		-		-		1,028,122
Total		3,145	$	37.03		3,145

(1) The above described stock repurchase program has no expiration date.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

Not applicable.

29

Item 6. Exhibits

Exhibit
Number Description of Exhibit

3.1	Articles of Incorporation of the Company, as amended. (Incorporated by reference to Exhibits 4.1-4.8 to the Company's Registration Statement on Form S-8 filed with the SEC on November 16, 2005 (File No. 333-129727)).
3.2	Amended and Restated Bylaws of the Company dated December 4, 2007.  (Incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2007 filed with the SEC on December 7, 2007).
3.3	Amendment No. 1 to the Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Report on Form 8-K filed with the SEC on February 19, 2014)
4.1	Second Amended and Restated Loan and Security Agreement dated December 12, 2016, among America’s Car-Mart, Inc., a Texas corporation, as Parent; Colonial Auto Finance, Inc., an Arkansas corporation, America’s Car Mart, Inc., an Arkansas corporation, and Texas Car-Mart, Inc., a Texas corporation, as Borrowers; and certain financial institutions, as Lenders, with Bank of America N.A., as Agent, Lead Arranger and Book Manager (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2016).
4.2	Colonial Third Amended and Restated Revolver Note dated September 20, 2012, by Colonial Auto Finance, Inc. in favor of Bank of America, N.A., as Lender (Incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 21, 2012).
4.3	Colonial Revolver Note dated December 12, 2016 by Colonial Auto Finance, Inc. in favor of BOKF, NA d/b/a Bank of Arkansas, as Lender (Incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2016).
4.4	Colonial Revolver Note dated December 12, 2016 by Colonial Auto Finance, Inc. in favor of Commerce Bank, as Lender (Incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2016).
4.5	Colonial Revolver Note dated December 12, 2016 by Colonial Auto Finance, Inc. in favor of First Tennessee Bank, as Lender (Incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2016).
4.6	Colonial Revolver Note dated December 12, 2016 by Colonial Auto Finance, Inc. in favor of Arvest Bank, as Lender (Incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2016).
4.7	ACM-TCM Amended and Restated Revolver Note dated March 9, 2012, by America’s Car Mart, Inc., an Arkansas corporation, and Texas Car-Mart, Inc., as Borrowers, in favor of Bank of America, N.A., as Lender (Incorporated by reference to Exhibit 4.7 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2012).
4.8	ACM-TCM Revolver Note dated December 12, 2016 by America’s Car Mart, Inc., an Arkansas corporation, and Texas Car-Mart, Inc., as Borrowers, in favor of BOKF, NA d/b/a Bank of Arkansas, as Lender (Incorporated by reference to Exhibit 4.8 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2016).
4.9	ACM-TCM Revolver Note dated December 12, 2016 by America’s Car Mart, Inc., an Arkansas corporation, and Texas Car-Mart, Inc., as Borrowers, in favor of Commerce Bank, as Lender (Incorporated by reference to Exhibit 4.9 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2016).
4.10	ACM-TCM Revolver Note dated December 12, 2016 by America’s Car Mart, Inc., an Arkansas corporation, and Texas CarMart, Inc., as Borrowers, in favor of First Tennessee Bank, as Lender (Incorporated by reference to Exhibit 4.10 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2016).
4.11	ACM-TCM Revolver Note dated December 12, 2016 by America’s Car Mart, Inc., an Arkansas corporation, and Texas Car-Mart, Inc., as Borrowers, in favor of Arvest Bank, as Lender (Incorporated by reference to Exhibit 4.11 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2016).
4.12	Amended and Restated Continuing Guaranty dated as of March 9, 2012, by America’s Car-Mart, Inc., a Texas corporation, as Guarantor, in favor of Bank of America, N.A. as Agent for the Lenders (Incorporated by reference to Exhibit 4.12 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2012).

30

4.13	Amended and Restated Continuing Guaranty dated as of March 9, 2012, by America’s Car Mart, Inc., an Arkansas corporation, and Texas Car-Mart, Inc., a Texas corporation, as Guarantors, in favor of Bank of America, N.A., as Agent for the Lenders (Incorporated by reference to Exhibit 4.13 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2012).
4.14	Amended and Restated Continuing Guaranty dated as of March 9, 2012, by Colonial Auto Finance, Inc., as Guarantor, in favor of Bank of America, N.A., as Agent for the Lenders (Incorporated by reference to Exhibit 4.14 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2012).
4.15	Amended and Restated Security Agreement dated as of March 9, 2012, between America’s Car-Mart, Inc., a Texas corporation, as Grantor, and Bank of America, N.A., as Agent for Lenders (Incorporated by reference to Exhibit 4.15 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2012).
4.16	Amended and Restated Security Agreement dated as of March 9, 2012, by and among America’s Car Mart, Inc., an Arkansas corporation, and Texas Car-Mart, Inc., a Texas corporation, as Grantors, and Bank of America, N.A., as Agent for Lenders (Incorporated by reference to Exhibit 4.16 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2012).
4.17	Amended and Restated Security Agreement dated as of March 9, 2012, between Colonial Auto Finance, Inc., as Grantor, and Bank of America, N.A., as Agent for Lenders (Incorporated by reference to Exhibit 4.17 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2012).
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.
32.1	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

America’s Car-Mart, Inc.
By:	/s/ William H. Henderson
	William H. Henderson
	Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Jeffrey A. Williams
	Jeffrey A. Williams
	President, Chief Financial Officer and Secretary
	(Principal Financial Officer)
By:	/s/ Vickie D. Judy
	Vickie D. Judy
	Vice President, Accounting
	(Principal Accounting Officer)

Dated: March 8, 2017

32

EX-31.1

Exhibit 31.1

Certification

I, William H. Henderson, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of America’s Car-Mart, Inc. for the period ended January 31, 2017;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 8, 2017	/s/ William H. Henderson
	William H. Henderson
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Jeffrey A. Williams, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of America’s Car-Mart, Inc. for the period ended January 31, 2017;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 8, 2017	/s/ Jeffrey A. Williams
	Jeffrey A. Williams
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of America’s Car-Mart, Inc. (the “Company”) on Form 10-Q for the quarter ended January 31, 2017 filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, William H. Henderson, Chief Executive Officer of the Company, and Jeffrey A. Williams, Chief Financial Officer of the Company, certify in our capacities as officers of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ William H. Henderson
	William H. Henderson
	Chief Executive Officer
	March 8, 2017
By:	/s/ Jeffrey A. Williams
	Jeffrey A. Williams
	Chief Financial Officer and Secretary
	March 8, 2017

XML

Document And Entity Information - shares	9 Months Ended
	Jan. 31, 2017	Mar. 06, 2017
Document Information [Line Items]
Entity Registrant Name	AMERICAS CARMART INC
Entity Central Index Key	0000799850
Trading Symbol	crmt
Current Fiscal Year End Date	--04-30
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	No
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		7,797,138
Document Type	10-Q
Document Period End Date	Jan. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jan. 31, 2017	Apr. 30, 2016
Cash and cash equivalents	$ 254	$ 602
Accrued interest on finance receivables	2,318	1,716
Finance receivables, net	363,536	334,793
Inventory	32,303	29,879
Prepaid expenses and other assets	4,572	3,302
Income taxes receivable, net		894
Goodwill	355	355
Property and equipment, net	31,313	34,755
Total Assets	434,651	406,296
Liabilities:
Accounts payable	10,544	12,313
Accrued liabilities	16,903	11,245
Income taxes payable, net	1,179
Deferred income tax liabilities, net	19,440	18,280
Revolving credit facilities and notes payable	118,785	107,902
Total liabilities	194,933	177,079
Commitments and contingencies (Note J)
Mezzanine equity:
Mandatorily redeemable preferred stock	400	400
Equity:
Preferred stock, par value $.01 per share, 1,000,000 shares authorized; none issued or outstanding
Common stock, par value $.01 per share, 50,000,000 shares authorized; 12,875,532 and 12,726,560 issued at January 31, 2017 and April 30, 2016, respectively, of which 7,921,954 and 8,073,820 were outstanding at January 31, 2017 and April 30, 2016, respectively	129	127
Additional paid-in capital	68,512	64,771
Retained earnings	320,287	305,354
Less: Treasury stock, at cost, 4,953,578 and 4,652,740 shares at January 31, 2017 and April 30, 2016, respectively	(149,710)	(141,535)
Total stockholders' equity	239,218	228,717
Non-controlling interest	100	100
Total equity	239,318	228,817
Total Liabilities, Mezzanine Equity and Equity	434,651	406,296
Payment Protection Plan [Member]
Liabilities:
Deferred Revenue	18,158	17,304
Service Contract [Member]
Liabilities:
Deferred Revenue	$ 9,924	$ 10,035

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Jan. 31, 2017	Apr. 30, 2016
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	12,875,532	12,726,560
Common stock, shares outstanding (in shares)	7,921,954	8,073,820
Treasury stock, shares (in shares)	4,953,578	4,652,740

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
Sales	$ 121,263	$ 121,791	$ 384,117	$ 367,056
Interest and other income	17,521	15,672	50,717	46,101
Total revenue	138,784	137,463	434,834	413,157
Costs and expenses:
Cost of sales	71,836	72,702	225,346	219,385
Selling, general and administrative	22,654	23,568	68,476	68,932
Provision for credit losses	37,645	32,786	110,467	106,225
Interest expense	1,060	831	3,040	2,383
Depreciation and amortization	1,059	1,008	3,235	3,056
Loss on disposal of property and equipment	7	27	406	46
Total costs and expenses	134,261	130,922	410,970	400,027
Income before taxes	4,523	6,541	23,864	13,130
Provision for income taxes	1,687	2,439	8,901	4,897
Net income	2,836	4,102	14,963	8,233
Less: Dividends on mandatorily redeemable preferred stock	(10)	(10)	(30)	(30)
Net income attributable to common stockholders	$ 2,826	$ 4,092	$ 14,933	$ 8,203
Earnings per share:
Basic (in dollars per share)	$ 0.36	$ 0.49	$ 1.89	$ 0.97
Diluted (in dollars per share)	$ 0.35	$ 0.47	$ 1.83	$ 0.93
Weighted average number of shares used in calculation:
Weighted average shares outstanding-basic (in shares)	7,893,737	8,367,728	7,891,908	8,451,029
Diluted (in shares)	8,175,754	8,615,757	8,165,931	8,774,334

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Net income	$ 14,963,000	$ 8,233,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses	110,467,000	106,225,000
Losses on claims for payment protection plan	11,260,000	9,815,000
Depreciation and amortization	3,235,000	3,056,000
Amortization of debt issuance costs	197,000	144,000
Loss on disposal of property and equipment	406,000	46,000
Stock based compensation	1,020,000	1,236,000
Deferred income taxes	1,160,000	(553,000)
Excess tax benefit from share based compensation	(942,000)	(238,000)
Change in operating assets and liabilities:
Finance receivable originations	(356,776,000)	(336,508,000)
Finance receivable collections	175,696,000	173,949,000
Accrued interest on finance receivables	(602,000)	(40,000)
Inventory	28,186,000	23,767,000
Prepaid expenses and other assets	(1,271,000)	295,000
Accounts payable and accrued liabilities	603,000	4,364,000
Income taxes, net	3,015,000	(200,000)
Net cash used in operating activities	(8,639,000)	(5,259,000)
Investing Activities:
Purchase of property and equipment	(1,424,000)	(4,201,000)
Proceeds from sale of property and equipment	924,000
Net cash used in investing activities	(500,000)	(4,201,000)
Financing Activities:
Exercise of stock options	1,675,000	400,000
Excess tax benefit from share based compensation	942,000	238,000
Issuance of common stock	106,000	144,000
Purchase of common stock	(8,175,000)	(10,485,000)
Dividend payments	(30,000)	(30,000)
Change in cash overdrafts	3,587,000	(581,000)
Debt issuance costs	(378,000)
Payments on note payable	(77,000)	(8,000)
Proceeds from revolving credit facilities	278,304,000	272,427,000
Payments on revolving credit facilities	(267,163,000)	(252,845,000)
Net cash provided by financing activities	8,791,000	9,260,000
Decrease in cash and cash equivalents	(348,000)	(200,000)
Cash and cash equivalents, beginning of period	602,000	790,000
Cash and cash equivalents, end of period	254,000	590,000
Payment Protection Plan [Member]
Change in operating assets and liabilities:
Increase (Decrease) in Deferred Revenue	854,000	1,062,000
Service Contract [Member]
Change in operating assets and liabilities:
Increase (Decrease) in Deferred Revenue	$ (110,000)	$ 88,000

XML

Note A - Organization and Business

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

A – Organization and Business

America’s Car-Mart, Inc., a Texas corporation (the “Company”), is

one

of the largest publicly held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. References to the Company typically include the Company’s consolidated subsidiaries. The Company’s operations are principally conducted through its

two

operating subsidiaries, America’s Car Mart, Inc., an Arkansas corporation (“Car-Mart of Arkansas”), and Colonial Auto Finance, Inc., an Arkansas corporation (“Colonial”). The Company primarily sells older model used vehicles and provides financing for substantially all of its customers. Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems. As of

January

31,

2017,

the Company operated

143

dealerships located primarily in small cities throughout the South-Central United States.

XML

Note B - Summary of Significant Accounting Policies

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Significant Accounting Policies [Text Block]

B – Summary of Significant Accounting Policies

General

The accompanying condensed consolidated balance sheet as of

April

30,

2016,

which has been derived from audited financial statements, and the unaudited interim condensed financial statements as of

January

31,

2017

and

2016,

have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form

10

-Q and Article

10

of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the

nine

months ended

January

31,

2017

are not necessarily indicative of the results that

may

be expected for the year ending

April

30,

2017.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form

10

-K for the year ended

April

30,

2016.

Principles of Consolidation

The consolidated financial statements include the accounts of America’s Car-Mart, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Segment Information

Each dealership is an operating segment with its results regularly reviewed by the Company’s chief operating decision maker in an effort to make decisions about resources to be allocated to the segment and to assess its performance. Individual dealerships meet the aggregation criteria for reporting purposes under the current accounting guidance. The Company operates in the Integrated Auto Sales and Finance segment of the used car market, also referred to as the Integrated Auto Sales and Finance industry. In this industry, the nature of the sale and the financing of the transaction, financing processes, the type of customer and the methods used to distribute the Company’s products and services, including the actual servicing of the contracts as well as the regulatory environment in which the Company operates, all have similar characteristics. Each of our individual dealerships is similar in nature and only engages in the selling and financing of used vehicles. All individual dealerships have similar operating characteristics. As such, individual dealerships have been aggregated into

one

reportable segment.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, the Company’s allowance for credit losses.

Concentration of Risk

The Company provides financing in connection with the sale of substantially all of its vehicles. These sales are made primarily to customers residing in Alabama, Arkansas, Georgia, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee, and Texas, with approximately

30%

of current period revenues resulting from sales to Arkansas customers.

Periodically, the Company maintains cash in financial institutions in excess of the amounts insured by the federal government. The Company’s revolving credit facilities mature in

December

2019.

Restrictions on Distributions/Dividends

The Company’s revolving credit facilities generally restrict distributions by the Company to its shareholders. The distribution limitations under the Credit Facilities allow the Company to repurchase the Company’s stock so long as: either (a) the aggregate amount of such repurchases does not exceed

$40

million beginning

December

12,

2016

and the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases is equal to or greater than

25%

of the sum of the borrowing bases, or (b) the aggregate amount of such repurchases does not exceed

75%

of the consolidated net income of the Company measured on a trailing

twelve

month basis; provided that immediately before and after giving effect to the stock repurchases, at least

12.5%

of the aggregate funds committed under the credit facilities remain available. Thus, the Company is limited in its ability to pay dividends or make other distributions to its shareholders without the consent of the Company’s lenders.

Cash Equivalents

The Company considers all highly liquid debt instruments purchased with original maturities of

three

months or less to be cash equivalents.

Finance Receivables, Repossessions and Charge-offs and Allowance for Credit Losses

The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts carry an average interest rate of approximately

15.7%

using the simple effective interest method including any deferred fees. In

May

2016,

the Company increased its retail installment sales contract interest rate from

15.0%

to

16.5%

in response to continued high levels of credit losses. Contract origination costs are not significant. The installment sale contracts are not pre-computed contracts whereby borrowers are obligated to pay back principal plus the full amount of interest that will accrue over the entire term of the contract. Finance receivables are collateralized by vehicles sold and consist of contractually scheduled payments from installment contracts net of unearned finance charges and an allowance for credit losses. Unearned finance charges represent the balance of interest receivable to be earned over the entire term of the related installment contract, less the earned amount

($2.3

million at

January

31,

2017

and

$1.7

million

April

30,

2016

on the Condensed Consolidated Balance Sheets), and as such, have been reflected as a reduction to the gross contract amount in arriving at the principal balance in finance receivables

.

An account is considered delinquent when the customer is

one

day or more behind on their contractual payments. While the Company does not formally place contracts on nonaccrual status, the immaterial amount of interest that

may

accrue after an account becomes delinquent up until the point of resolution via repossession or write-off, is reserved for against the accrued interest on the Condensed Consolidated Balance Sheets. Delinquent contracts are addressed and either made current by the customer, which is the case in most situations, or the vehicle is repossessed or written off if the collateral cannot be recovered quickly. Customer payments are set to match their payday with approximately

73%

of payments due on either a weekly or bi-weekly basis. The frequency of the payment due dates combined with the declining value of collateral lead to prompt resolutions on problem accounts. At

January

31,

2017,

4.7%

of the Company’s finance receivable balances were

30

days or more past due compared to

5.0%

at

January

31,

2016.

Substantially all of the Company’s automobile contracts involve contracts made to individuals with impaired or limited credit histories or higher debt-to-income ratios than permitted by traditional lenders. Contracts made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better credit.

The Company strives to keep its delinquency percentages low, and not to repossess vehicles. Accounts

two

days late are sent a notice in the mail. Accounts

three

days late are contacted by telephone. Notes from each telephone contact are electronically maintained in the Company’s computer system. The Company attempts to resolve payment delinquencies amicably prior to repossessing a vehicle. If a customer becomes severely delinquent in his or her payments, and management determines that timely collection of future payments is not probable, the Company will take steps to repossess the vehicle.

Periodically, the Company enters into contract modifications with its customers to extend or modify the payment terms. The Company only enters into a contract modification or extension if it believes such action will increase the amount of monies the Company will ultimately realize on the customer’s account and will increase the likelihood of the customer being able to pay off the vehicle contract. At the time of modification, the Company expects to collect amounts due including accrued interest at the contractual interest rate for the period of delay. No other concessions are granted to customers, beyond the extension of additional time, at the time of modifications. Modifications are minor and are made for payday changes, minor vehicle repairs and other reasons. For those vehicles that are repossessed, the majority are returned or surrendered by the customer on a voluntary basis. Other repossessions are performed by Company personnel or

third

party repossession agents. Depending on the condition of a repossessed vehicle, it is either resold on a retail basis through a Company dealership, or sold for cash on a wholesale basis primarily through physical or online auctions.

Accounts are charged-off after the expiration of a statutory notice period for repossessed accounts, or when management determines that the timely collection of future payments is not probable for accounts where the Company has been unable to repossess the vehicle. For accounts with respect to which the vehicle was repossessed, the fair value of the repossessed vehicle is charged as a reduction of the gross finance receivables balance charged-off. For the quarter ended

January

31,

2017,

on average, accounts were approximately

62

days past due at the time of charge-off. For previously charged-off accounts that are subsequently recovered, the amount of such recovery is credited to the allowance for credit losses.

The Company maintains an allowance for credit losses on an aggregate basis at a level it considers sufficient to cover estimated losses inherent in the portfolio at the balance sheet date in the collection of its finance receivables currently outstanding.  At

January

31,

2017,

the weighted average total contract term was

31.9

months with

23.0

months remaining. The reserve amount in the allowance for credit losses at

January

31,

2017,

$111.8

million, was

25%

of the principal balance in finance receivables of

$475.4

million, less unearned payment protection plan revenue of

$18.2

million and unearned service contract revenue of

$9.9

million.

The estimated reserve amount is the Company’s anticipated future net charge-offs for losses incurred through the balance sheet date. The allowance takes into account historical credit loss experience (both timing and severity of losses), with consideration given to recent credit loss trends and changes in contract characteristics (i.e., average amount financed, months outstanding at loss date, term and age of portfolio), delinquency levels, collateral values, economic conditions and underwriting and collection practices. The allowance for credit losses is reviewed at least quarterly by management with any changes reflected in current operations. The calculation of the allowance for credit losses uses the following primary factors:

· The number of units repossessed or charged-off as a percentage of total units financed over specific historical periods of time from one year to five years.

· The average net repossession and charge-off loss per unit during the last eighteen months segregated by the number of months since the contract origination date and adjusted for the expected future average net charge-off loss per unit.  About 50% of the charge-offs that will ultimately occur in the portfolio are expected to occur within 10 - 11 months following the balance sheet date.  The average age of an account at charge-off date for the eighteen -month period ended January 31, 2017 was 11.9 months.

· The timing of repossession and charge-off losses relative to the date of sale (i.e., how long it takes for a repossession or charge-off to occur) for repossessions and charge-offs occurring during the last eighteen months.

A point estimate is produced by this analysis which is then supplemented by any positive or negative subjective factors to arrive at an overall reserve amount that management considers to be a reasonable estimate of losses inherent in the portfolio at the balance sheet date that will be realized via actual charge-offs in the future. Although it is at least reasonably possible that events or circumstances could occur in the future that are not presently foreseen which could cause actual credit losses to be materially different from the recorded allowance for credit losses, the Company believes that it has given appropriate consideration to all relevant factors and has made reasonable assumptions in determining the allowance for credit losses. While challenging economic conditions can negatively impact credit losses, effective execution of internal policies and procedures within the collections area and the competitive environment on the funding side have historically had a more significant effect on collection results than macro-economic issues.

In most states, the Company offers retail customers who finance their vehicle the option of purchasing a payment protection plan product as an add-on to the installment sale contract. This product contractually obligates the Company to cancel the remaining principal outstanding for any contract where the retail customer has totaled the vehicle, as defined by the contract, or the vehicle has been stolen. The Company periodically evaluates anticipated losses to ensure that if anticipated losses exceed deferred payment protection plan revenues, an additional liability is recorded for such difference. No such liability was required at

January

31,

2017

or

April

30,

2016.

Inventory

Inventory consists of used vehicles and is valued at the lower of cost or market on a specific identification basis. Vehicle reconditioning costs are capitalized as a component of inventory. Repossessed vehicles and trade-in vehicles are recorded at fair value, which approximates wholesale value. The cost of used vehicles sold is determined using the specific identification method.

Goodwill

Goodwill reflects the excess of purchase price over the fair value of specifically identified net assets purchased. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests at the Company’s year-end. The impairment tests are based on the comparison of the fair value of the reporting unit to the carrying value of such unit. There was no impairment of goodwill during fiscal

2016,

and to date, there has been no impairment during fiscal

2017.

Property and Equipment

Property and equipment are stated at cost. Expenditures for additions, remodels and improvements are capitalized. Costs of repairs and maintenance are expensed as incurred. Leasehold improvements are amortized over the shorter of the estimated life of the improvement or the lease period. The lease period includes the primary lease term plus any extensions that are reasonably assured. Depreciation is computed using the straight-line method, generally over the following estimated useful lives:

Furniture, fixtures and equipment (in years)	3	to	7
Leasehold improvements (in years)	5	to	15
Buildings and improvements (in years)	18	to	39

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset

may

not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying values of the impaired assets exceed the fair value of such assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Cash Overdraft

As checks are presented for payment from the Company’s primary disbursement bank account, monies are automatically drawn against cash collections for the day and, if necessary, are drawn against

one

of the revolving credit facilities. Any cash overdraft balance principally represents outstanding checks that as of the balance sheet date had not yet been presented for payment, net of any deposits in transit. Any cash overdraft balance is reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

Deferred Sales Tax

Deferred sales tax represents a sales tax liability of the Company for vehicles sold on an installment basis in the states of Alabama and Texas. Under Alabama and Texas law, for vehicles sold on an installment basis the related sales tax is due as the payments are collected from the customer, rather than at the time of sale. Deferred sales tax liabilities are reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

Income Taxes

Income taxes are accounted for under the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates expected to apply in the years in which these differences are expected to be recovered or settled. The quarterly provision for income taxes is determined using an estimated annual effective tax rate, which is based on expected annual taxable income, statutory tax rates and the Company’s best estimate of nontaxable and nondeductible items of income and expense.

Occasionally, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than

50

percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applies this methodology to all tax positions for which the statute of limitations remains open.

The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before fiscal

2013.

The Company’s policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accrued penalties or interest as of

January

31,

2017

or

April

30,

2016.

Revenue Recognition

Revenues are generated principally from the sale of used vehicles, which in most cases includes a service contract and a payment protection plan product, interest income and late fees earned on finance receivables. Revenues are net of taxes collected from customers and remitted to government agencies. Cost of vehicle sales include costs incurred by the Company to prepare the vehicle for sale including license and title costs, gasoline, transport services and repairs.

Revenues from the sale of used vehicles are recognized when financing, if applicable, has been approved, the sales contract is signed, and the customer has taken possession of the vehicle. Revenues from the sale of vehicles sold at wholesale are recognized at the time the proceeds are received. Revenues from the sale of service contracts are initially deferred and then recognized ratably over the expected duration of the product. Service contract revenues are included in sales and the related expenses are included in cost of sales. Payment protection plan revenues are initially deferred and then recognized to income using the “Rule of

78’s”

interest method over the life of the contract so that revenues are recognized in proportion to the amount of cancellation protection provided. Payment protection plan revenues recognized are included in sales and related losses are included in cost of sales as incurred. Interest income is recognized on all active finance receivable accounts using the simple effective interest method. Active accounts include all accounts except those that have been paid-off or charged-off.

Sales consist of the following:

	Three Months Ended January 31,				Nine Months Ended January 31,
(In thousands)	2017		2016		2017		2016
Sales – used autos	$	103,249	$	105,435	$	331,376	$	316,269
Wholesales – third party		5,764		5,097		16,710		16,939
Service contract sales		7,094		6,784		21,072		20,327
Payment protection plan revenue		5,156		4,475		14,959		13,521
Total	$	121,263	$	121,791	$	384,117	$	367,056

At

January

31,

2017

and

2016,

finance receivables more than

90

days past due were approximately

$2.0

million and

$2.1

million, respectively. Late fee revenues totaled approximately

$1.4

million and

$1.5

million for the

nine

months ended

January

31,

2017

and

2016,

respectively. Late fees are recognized when collected and are reflected in interest and other income on the Condensed Consolidated Statements of Operations.

Earnings per Share

Basic earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period plus dilutive common stock equivalents. The calculation of diluted earnings per share takes into consideration the potentially dilutive effect of common stock equivalents, such as outstanding stock options and non-vested restricted stock, which if exercised or converted into common stock would then share in the earnings of the Company. In computing diluted earnings per share, the Company utilizes the treasury stock method and anti-dilutive securities are excluded.

Stock-Based Compensation

The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock, based on the fair value of those awards at the date of grant over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. The Company

may

issue either new shares or treasury shares upon exercise of these awards. Stock-based compensation plans, related expenses and assumptions used in the Black-Scholes option pricing model are more fully described in Note I. If an award contains a performance condition, expense is recognized only for those shares for which it is considered reasonably probable as of the current period end that the performance condition will be met.

Treasury Stock

The Company purchased

300,838

shares of its common stock to be held as treasury stock for a total cost of

$8.2

million during the

first

nine

months of fiscal

2017

and

342,171

shares for a total cost of

$10.5

million during the

first

nine

months of fiscal

2016.

Treasury stock

may

be used for issuances under the Company’s stock-based compensation plans or for other general corporate purposes. During fiscal

2016,

the Company established a reserve account of

10,000

shares of treasury stock to secure outstanding service contracts issued in Iowa in accordance with the regulatory requirements of that state.

Recent Accounting Pronouncements

Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its consolidated financial statements upon adoption.

Revenue Recognition

. In

May

2014,

the FASB issued ASU

2014

-

09,

Revenue from Contracts with Customers

(Topic

606),

which supersedes existing revenue recognition guidance. The new guidance in ASU

2014

-

09

is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU

2014

-

09

also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In

August

2015,

the FASB issued ASU

2015

-

14,

Revenue from Contracts with Customers (Topic

606):

Deferral of the Effective Date

, to provide entities with an additional year to implement ASU

2014

-

09.

As a result, the guidance in ASU

2014

-

09

is effective for annual reporting periods beginning after

December

15,

2017,

and interim reporting periods within those years, using

one

of

two

retrospective application methods. The Company is currently evaluating the potential effects of the adoption of this update on the consolidated financial statements, and expects to complete that evaluation by the end of fiscal

2017.

Leases

. In

February

2016,

the FASB issued ASU

2016

-

02,

Leases

. The new guidance requires that lessees recognize all leases, including operating leases, with a term greater than

12

months on-balance sheet and also requires disclosure of key information about leasing transactions. The guidance in ASU

2016

-

02

is effective for annual reporting periods beginning after

December

15,

2018,

and interim reporting periods within those years. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

Stock Compensation

. In

March

2016,

the FASB issued ASU

2016

-

09,

Improvements to Employee Share-Based Payment Accounting

, which aims to simplify aspects of accounting for share-based payment transactions, including: presenting the excess tax benefit or deficit from the exercise or vesting of share-based payments in the income statement, a revision to the criteria for classifying an award as equity or liability, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, and certain classifications on the statement of cash flows. In addition, the new guidance eliminates the excess tax benefit from the assumed proceeds calculation under the treasury stock method for purposes of calculating diluted shares. ASU

2016

-

09

is effective for annual reporting periods beginning after

December

15,

2016

and interim reporting periods within those years. Certain provisions of ASU

2016

-

09

are required to be adopted prospectively, notably the requirement to recognize the excess tax benefit or deficit in the income statement, while other provisions require modified retrospective application or in some cases full retrospective application. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

Credit Losses

. In

June

2016,

the FASB issued ASU

2016

-

13,

Financial Instruments — Credit Losses

(Topic

326).

ASU

2016

-

13

requires financial assets such as loans to be presented net of an allowance for credit losses that reduces the cost basis to the amount expected to be collected over the estimated life. Expected credit losses will be measured based on historical experience and current conditions, as well as forecasts of future conditions that affect the collectability of the reported amount. ASU

2016

-

13

is effective for annual reporting periods beginning after

December

15,

2019,

and interim reporting periods within those years using a modified retrospective approach. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

XML

Note C - Finance Receivables, Net

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Financing Receivables [Text Block]

C – Finance Receivables, Net

The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts, which carry an interest rate of

15%

or

16.5%

per annum (based on the Company’s contract interest rate as of the contract origination date), are collateralized by the vehicle sold and typically provide for payments over periods ranging from

18

to

42

months. The weighted average interest rate for the portfolio was approximately

15.7%

at

January

31,

2017.

The Company’s finance receivables are defined as

one

segment and

one

class of loans in sub-prime consumer automobile contracts. The level of risks inherent in the Company’s financing receivables is managed as

one

homogeneous pool.

The components of finance receivables are as follows:

(In thousands)	January 31, 2017			April 30, 2016
Gross contract amount	$	549,329		$	504,149
Less unearned finance charges		(73,975	)		(66,871	)
Principal balance		475,354			437,278
Less allowance for credit losses		(111,818	)		(102,485	)
Finance receivables, net	$	363,536		$	334,793

Changes in the finance receivables, net are as follows:

	Nine Months Ended January 31,
(In thousands)	2017			2016
Balance at beginning of period	$	334,793		$	324,144
Finance receivable originations		356,776			336,508
Finance receivable collections		(175,696	)		(173,949	)
Provision for credit losses		(110,467	)		(106,225	)
Losses on claims for payment protection plan		(11,260	)		(9,815	)
Inventory acquired in repossession and payment protection plan claims		(30,610	)		(31,594	)
Balance at end of period	$	363,536		$	339,069

Changes in the finance receivables allowance for credit losses are as follows:

	Nine Months Ended January 31,
(In thousands)	2017			2016
Balance at beginning of period	$	102,485		$	93,224
Provision for credit losses		110,467			106,225
Charge-offs, net of recovered collateral		(101,134	)		(95,221	)
Balance at end of period	$	111,818		$	104,228

The factors which influenced management’s judgment in determining the amount of the current period provision for credit losses are described below.

The level of charge-offs, net of recovered collateral, is the most important factor in determining the provision for credit losses. This is due to the fact that once a contract becomes delinquent the account is either made current by the customer, the vehicle is repossessed or the account is written off if the collateral cannot be recovered. Net charge-offs as a percentage of average finance receivables decreased to

21.8%

for the

nine

months ended

January

31,

2017

compared to

22.2%

for the same period in the prior year. This improvement in net charge-offs is primarily due to a decrease in the frequency of losses as a result of the low delinquencies greater than

30

days at

April

30,

2016

of

3.0%,

significantly lower than

5.8%

at

April

30,

2015.

Collections and delinquency levels can have a significant effect on additions to the allowance and are reviewed frequently. Collections as a percentage of average finance receivables were

37.9%

for the

nine

months ended

January

31,

2017

compared to

40.6%

for the prior year period. The decrease in collections as a percentage of average finance receivables resulted primarily from the longer average term, higher levels of contract modifications, higher delinquencies and, to a lesser extent, the increase in the contract interest rate. Delinquencies greater than

30

days were

4.7%

for

January

31,

2017

and

5.0%

at

January

31,

2016.

Macro-economic factors, the competitive environment on the funding side, and more importantly, proper execution of operational policies and procedures have a significant effect on additions to the allowance charged to the provision. Higher unemployment levels, higher gasoline prices and higher prices for staple items can potentially have a significant effect. The Company continues to focus on operational improvements within the collections area.

Credit quality information for finance receivables is as follows:

(Dollars in thousands)	January 31, 2017					April 30, 2016					January 31, 2016
	Principal		Percent of			Principal		Percent of			Principal		Percent of
	Balance		Portfolio			Balance		Portfolio			Balance		Portfolio
Current	$	371,078		78.06	%	$	378,631		86.59	%	$	364,453		82.22	%
3 - 29 days past due		81,887		17.23	%		45,631		10.43	%		56,835		12.82	%
30 - 60 days past due		15,957		3.36	%		8,429		1.93	%		15,087		3.40	%
61 - 90 days past due		4,395		0.92	%		3,498		0.80	%		4,790		1.08	%
> 90 days past due		2,037		0.43	%		1,089		0.25	%		2,131		0.48	%
Total	$	475,354		100.00	%	$	437,278		100.00	%	$	443,296		100.00	%

Accounts

one

and

two

days past due are considered current for this analysis, due to the varying payment dates and variation in the day of the week at each period end. Delinquencies

may

vary from period to period based on the average age of the portfolio, seasonality within the calendar year, the day of the week and overall economic factors. The above categories are consistent with internal operational measures used by the Company to monitor credit results. The

third

quarter of fiscal

2017

ended on a Tuesday, which is believed to contribute to the decrease in current receivables at quarter end.

Substantially all of the Company’s automobile contracts involve contracts made to individuals with impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders; such contracts generally entail a higher risk of delinquency, default, repossession, and losses than contracts made with buyers with better credit. The Company monitors contract term length, down payment percentages, and collections as credit quality indicators.

	Nine Months Ended January 31,
	2017			2016
Principal collected as a percent of average finance receivables		37.9	%		40.6	%
Average down-payment percentage		5.3	%		6.1	%
Average originating contract term (in months )		29.3			28.6

	2017		2016
Portfolio weighted average contract term, including modifications (in months )		31.9		30.9

The decrease in collections as a percentage of average finance receivables resulted primarily from the longer average term, higher levels of contract modifications, higher delinquencies and, to a lesser extent, the increase in the contract interest rate. The increases in contract term are primarily related to efforts to keep payments affordable, for competitive reasons and to continue to work with our customers when they experience financial difficulties. In order to remain competitive, term lengths

may

continue to increase.

XML

Note D - Property and Equipment

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

D – Property and Equipment

A summary of property and equipment is as follows:

(In thousands)	January 31, 2017			April 30, 2016
Land	$	6,738		$	6,711
Buildings and improvements		11,976			11,928
Furniture, fixtures and equipment		13,233			14,941
Leasehold improvements		24,347			23,308
Construction in progress		291			250
Less accumulated depreciation and amortization		(25,272	)		(22,383	)
Total	$	31,313		$	34,755

XML

Note E - Accrued Liabilities

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Other Liabilities Disclosure [Text Block]

E – Accrued Liabilities

A summary of accrued liabilities is as follows:

(In thousands)	January 31, 2017		April 30, 2016
Employee compensation	$	5,762	$	3,684
Cash overdrafts (see Note B)		3,587		-
Deferred sales tax (see Note B)		2,978		2,736
Other		4,576		4,825
Total	$	16,903	$	11,245

XML

Note F - Debt Facilities

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

F – Debt Facilities

A summary of revolving credit facilities is as follows:

(In thousands)
	Aggregate		Interest			Balance at
	Amount		Rate	Maturity		January 31, 2017		April 30, 2016
Revolving credit facilities	$	200,000	LIBOR + 2.375%		December 12, 2019	$	118,346	$	107,386
			(3.14% at January 31, 2017 and 2.81% at April 30, 2016)

On

March

9,

2012,

the Company entered into an Amended and Restated Loan and Security Agreement with a group of lenders providing revolving credit facilities totaling

$125

million (“Credit Facilities”). The Credit Facilities were amended on

September

30,

2012,

February

4,

2013,

June

24,

2013,

February

13,

2014

and

October

8,

2014,

respectively. The

first

amendment increased the total revolving commitment to

$145

million. The

second

amendment amended the definition of eligible vehicle contracts to include contracts with

36

-

42

month terms. The

third

amendment extended the term to

June

24,

2016,

provided the option to request revolver commitment increases for up to an additional

$55

million and provided for a

0.25%

decrease in each of the

three

pricing tiers for determining the applicable interest rate. The

fourth

amendment amended the structure of the debt covenants related to the application of the fixed charge coverage ratio calculation.  As amended, the fixed charge coverage ratio calculation will be required only if availability, as defined, under the revolving credit facilities is less than specified thresholds.  The

fourth

amendment also increased allowable capital expenditures to

$10

million in the aggregate during any fiscal year and allows the sale of certain vehicle contracts to

third

parties.

On

October

8,

2014,

the Company entered into a

fifth

amendment to the Credit Facilities, which extended the term of the Credit Facilities to

October

8,

2017,

added a new pricing tier for determining the applicable interest rate, and provided for a

0.125%

increase in each of the

three

existing pricing tiers. The

fifth

amendment also amended

one

of

two

alternative distribution limitations related to repurchases of the Company’s stock. With respect to such limitation, the amendment (i) reset the

$40

million aggregate limit on repurchases beginning

October

8,

2014,

(ii) redefined the aggregate amount of repurchases to be net of proceeds received from the exercise of stock options, and (iii) changed the requirement that the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases be equal to or greater than

30%

of the sum of the borrowing bases.

On

February

18,

2016,

the Company exercised an option under its existing credit agreement to increase the total revolving credit facilities by

$27.5

million from

$145

million to

$172.5

million. The increase in the total revolving credit commitments was made pursuant to the aforementioned accordion feature of the Credit Facilities, which allows the Company to increase the total revolver commitments by up to an additional

$55

million (up to

$200

million in total commitments), subject to lender approval and/or successful syndication.

On

December

12,

2016,

the Company entered into a Second Amended and Restated Loan and Security Agreement which amended and restated the Company’s Credit Facilities. The new agreement extended the terms of the Credit Facilities to

December

12,

2019,

reduced the pricing tiers for determining the applicable interest rate from

four

to

three,

and reset the aggregate limit on the repurchase of Company stock to

$40

million beginning

December

12,

2016.

The agreement also increased the total revolving credit facilities from

$172.5

million to

$200

million, provided the option to request revolver commitment increases for up to an additional

$50

million and increased the advance rate on accounts receivable with

37

-

42

month terms from

50%

to

55%,

and the advance rate on accounts receivable with

43

-

60

month terms from

45%

to

50%.

The revolving credit facilities are collateralized primarily by finance receivables and inventory, are cross collateralized and contain a guarantee by the Company. Interest is payable monthly under the revolving credit facilities. The Credit Facilities provide for

three

pricing tiers for determining the applicable interest rate, based on the Company’s consolidated leverage ratio for the preceding fiscal quarter. The current applicable interest rate under the Credit Facilities is generally LIBOR plus

2.375%.

The Credit Facilities contain various reporting and performance covenants including (i) maintenance of certain financial ratios and tests, (ii) limitations on borrowings from other sources, (iii) restrictions on certain operating activities and (iv) restrictions on the payment of dividends or distributions.

The distribution limitations under the Credit Facilities allow the Company to repurchase the Company’s stock so long as: either (a) the aggregate amount of such repurchases does not exceed

$40

million beginning

December

12,

2016

and the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases is equal to or greater than

25%

of the sum of the borrowing bases, or (b) the aggregate amount of such repurchases does not exceed

75%

of the consolidated net income of the Company measured on a trailing

twelve

month basis; provided that immediately before and after giving effect to the stock repurchases at least

12.5%

of the aggregate funds committed under the credit facilities remain available.

The Company was in compliance with the covenants at

January

31,

2017.

The amount available to be drawn under the credit facilities is a function of eligible finance receivables and inventory; based upon eligible finance receivables and inventory at

January

31,

2017,

the Company had additional availability of approximately

$78

million under the revolving credit facilities.

The Company recognized approximately

$197,000

and

$144,000

of amortization for the

nine

months ended

January

31,

2017

and

2016,

respectively, related to debt issuance costs. The amortization is reflected as interest expense in the Company’s Condensed Consolidated Statements of Operations.

During the quarter ended

January

31,

2017,

the Company incurred approximately

$378,000

in debt issuance costs related to the Second Amended and Restated Loan and Security Agreement.

During fiscal

2016,

the Company implemented the guidance in ASU

2015

-

03,

Simplifying the Presentation of Debt Issuance Costs

, which amended the presentation of debt issuance costs in the financial statements. ASU

2015

-

03

requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of as an asset. As a result, debt issuance costs of approximately

$576,000

and

$396,000

as of

January

31,

2017

and

April

30,

2016,

respectively, are shown as a deduction from the revolving credit facilities in the Condensed Consolidated Balance Sheet.

On

December

15,

2015,

the Company entered into an agreement to purchase the property on which

one

of its dealerships is located for a purchase price of

$550,000.

Under the agreement, the purchase price is being paid in monthly principal and interest installments of

$10,005.

The debt matures in

December

2020,

bears interest at a rate of

3.50%

and is secured by the property. The balance on this note payable was approximately

$439,000

and

$516,000

as of

January

31,

2017

and

April

30,

2016,

respectively.

XML

Note G - Fair Value Measurements

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

G – Fair Value Measurements

The table below summarizes information about the fair value of financial instruments included in the Company’s financial statements at

January

31,

2017

and

April

30,

2016:

	January 31, 2017				April 30, 2016
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash	$	254	$	254	$	602	$	602
Finance receivables, net		363,536		292,343		334,793		268,926
Accounts payable		10,544		10,544		12,313		12,313
Revolving credit facilities and notes payable		118,785		118,785		107,902		107,902

Because no market exists for certain of the Company’s financial instruments, fair value estimates are based on judgments and estimates regarding yield expectations of investors, credit risk and other risk characteristics, including interest rate and prepayment risk. These estimates are subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The methodology and assumptions utilized to estimate the fair value of the Company’s financial instruments are as follows:

Financial Instrument	Valuation Methodology
Cash	The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instrument.
Finance receivables, net	The Company estimates the fair value of its receivables at what a third party purchaser might be willing to pay. The Company has had discussions with third parties and has bought and sold portfolios, and had a third party appraisal in November 2012 that indicated a range of 35% to 40% discount to face would be a reasonable fair value in a negotiated third party transaction.  The sale of finance receivables from Car-Mart of Arkansas to Colonial is made at a 38.5% discount.  For financial reporting purposes these sale transactions are eliminated. Since the Company does not intend to offer the receivables for sale to an outside third party, the expectation is that the net book value at January 31, 2017, will ultimately be collected. By collecting the accounts internally the Company expects to realize more than a third party purchaser would expect to collect with a servicing requirement and a profit margin included.
Accounts payable	The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instrument.
Revolving credit facilities and notes payable	The fair value approximates carrying value due to the variable interest rates charged on the revolving credit facilities, which reprice frequently.

XML

Note H - Weighted Average Shares Outstanding

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Weighted Average Shares Outstanding [Text Block]

H – Weighted Average Shares Outstanding

Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings per share were as follows:

	Three Months Ended January 31,				Nine Months Ended January 31,
	2017		2016		2017		2016
Weighted average shares outstanding-basic		7,893,737		8,367,728		7,891,908		8,451,029
Dilutive options and restricted stock		282,017		248,029		274,023		323,305
Weighted average shares outstanding-diluted		8,175,754		8,615,757		8,165,931		8,774,334
Antidilutive securities not included:
Options		327,750		373,000		360,500		294,000
Restricted stock		-		9,500		6,333		6,333

XML

Note I - Stock-based Compensation

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

I – Stock-Based Compensation

The Company has stock-based compensation plans available to grant non-qualified stock options, incentive stock options and restricted stock to employees, directors and certain advisors of the Company. The stock-based compensation plans being utilized at

January

31,

2017

are the Amended and Restated Stock Option Plan and the Amended and Restated Stock Incentive Plan. The Company recorded total stock-based compensation expense for all plans of approximately

$1

million

($627,000

after tax effects) and

$1.2

million

($759,000

after tax effects) for the

nine

months ended

January

31,

2017

and

2016,

respectively. Tax benefits were recognized for these costs at the Company’s overall effective tax rate.

Stock Options

The Company has options outstanding under a stock option plan approved by the shareholders, the Amended and Restated Stock Option Plan. The shareholders of the Company approved the Amended and Restated Stock Option Plan (the “Restated Option Plan”) on

August

5,

2015,

which extended the term of the Restated Option Plan to

June

10,

2025

and increased the number of shares of common stock reserved for issuance under the plan to

1,800,000

shares. The Restated Option Plan provides for the grant of options to purchase shares of the Company’s common stock to employees, directors and certain advisors of the Company at a price not less than the fair market value of the stock on the date of grant and for periods not to exceed

ten

years. Options granted under the Company’s stock option plans expire in the calendar years

2017

through

2026.

	Restated Option Plan
Minimum exercise price as a percentage of fair market value at date of grant		100	%
Last expiration date for outstanding options		August 10, 2026
Shares available for grant at January 31, 2017		286,000

The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below.

	Nine Months Ended January 31,
	2017			2016
Expected term (years)		5.5			5.5
Risk-free interest rate		1.28	%		1.58	%
Volatility		36	%		34	%
Dividend yield		-			-

The expected term of the options is based on evaluations of historical actual and future expected employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of the Company’s common stock. The Company has not historically issued any dividends and does not expect to do so in the foreseeable future.

There were

35,000

options granted during the

nine

months ended

January

31,

2017

and

298,750

options granted during the

nine

months ended

January

31,

2016.

The grant-date fair value of options granted during the

nine

months ended

January

31,

2017

and

2016

was

$338,000

and

$5.2

million, respectively. The options were granted at fair market value on the date of grant.

Stock option compensation expense was

$923,000

($579,000

after tax effects) and

$1.1

million

($710,000

after tax effects) for the

nine

months ended

January

31,

2017

and

2016,

respectively. As of

January

31,

2017,

the Company had approximately

$2.9

million of total unrecognized compensation cost related to unvested options that are expected to vest. These unvested outstanding options have a weighted-average remaining vesting period of

3.1

years.

As of

January

31,

2017,

there were

131,125

performance based stock options outstanding that were granted in fiscal year

2016

with a

five

-year performance period ending

April

30,

2020.

Tiered vesting of these units is based solely on comparing the Company’s net income over the specified performance period to net income at

April

30,

2015.

As of

January

31,

2017,

the Company had

$1.1

million in unrecognized compensation expense related to

62,750

of these options that are not currently expected to vest.

The aggregate intrinsic value of outstanding options at

January

31,

2017

and

2016

was

$13.7

million and

$2.9

million, respectively.

The Company had the following options exercised for the periods indicated. The impact of these cash receipts is included in financing activities in the accompanying Condensed Consolidated Statements of Cash Flows.

	Nine Months Ended January 31,
(Dollars in thousands)	2017		2016
Options exercised		169,500		30,750
Cash received from option exercises	$	1,675	$	400
Intrinsic value of options exercised	$	4,374	$	943

As of

January

31,

2017,

there were

764,500

vested and exercisable stock options outstanding with an aggregate intrinsic value of

$13

million, a weighted average remaining contractual life of

3.29

years, and a weighted average exercise price of

$25.49.

Stock Incentive Plan

On

October

14,

2009,

the shareholders of the Company approved an amendment to the Company’s Stock Incentive Plan that increased the number of shares of common stock that

may

be issued under the Stock Incentive Plan to

350,000.

  On

August

5,

2015,

the shareholders of the Company approved the Amended and Restated Stock Incentive Plan, which extended the term of the Stock Incentive Plan to

June

10,

2025.

For shares issued under the Stock Incentive Plan, the associated compensation expense is generally recognized equally over the vesting periods established at the award date and is subject to the employee’s continued employment by the Company.

There were

10,000

restricted shares granted during the

nine

months ended

January

31,

2017

and no restricted shares granted during the

nine

months ended

January

31,

2016.

A total of

169,527

shares remained available for award at

January

31,

2017.

There were

17,500

unvested restricted shares outstanding as of

January

31,

2017

with a weighted average grant date fair value of

$45.06.

The Company recorded compensation cost of approximately

$78,000

($49,000

after tax effects) and

$74,000

($47,000

after tax effects) related to the Stock Incentive Plan during the

nine

months ended

January

31,

2017

and

2016,

respectively. As of

January

31,

2017,

the Company had approximately

$612,000

of total unrecognized compensation cost related to unvested awards granted under the Stock Incentive Plan, which the Company expects to recognize over a weighted-average remaining period of

4.0

years.

There were no modifications to any of the Company’s outstanding share-based payment awards during fiscal

2016

or during the

first

nine

months of fiscal

2017.

XML

Note J - Commitments and Contingencies

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

J – Commitments and Contingencies

The Company has a standby letter of credit relating to an insurance policy totaling

$1

million at

January

31,

2017.

XML

Note K - Supplemental Cash Flow Information

9 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

K - Supplemental Cash Flow Information

Supplemental cash flow disclosures are as follows:

	Nine Months Ended January 31,
(in thousands)	2017			2016
Supplemental disclosures:
Interest paid	$	3,040		$	2,614
Income taxes paid, net		4,726			5,650
Non-cash transactions:
Inventory acquired in repossession and payment protection plan claims		30,610			31,594
Loss accrued (incurred) on disposal of property and equipment		(300	)		-
Purchase of property and equipment using the issuance of debt		-			550

XML

Significant Accounting Policies (Policies)

9 Months Ended

Jan. 31, 2017

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements include the accounts of America’s Car-Mart, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Segment Reporting, Policy [Policy Text Block]

Segment Information

Each dealership is an operating segment with its results regularly reviewed by the Company’s chief operating decision maker in an effort to make decisions about resources to be allocated to the segment and to assess its performance. Individual dealerships meet the aggregation criteria for reporting purposes under the current accounting guidance. The Company operates in the Integrated Auto Sales and Finance segment of the used car market, also referred to as the Integrated Auto Sales and Finance industry. In this industry, the nature of the sale and the financing of the transaction, financing processes, the type of customer and the methods used to distribute the Company’s products and services, including the actual servicing of the contracts as well as the regulatory environment in which the Company operates, all have similar characteristics. Each of our individual dealerships is similar in nature and only engages in the selling and financing of used vehicles. All individual dealerships have similar operating characteristics. As such, individual dealerships have been aggregated into

one

reportable segment.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, the Company’s allowance for credit losses.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Risk

The Company provides financing in connection with the sale of substantially all of its vehicles. These sales are made primarily to customers residing in Alabama, Arkansas, Georgia, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee, and Texas, with approximately

30%

of current period revenues resulting from sales to Arkansas customers.

Periodically, the Company maintains cash in financial institutions in excess of the amounts insured by the federal government. The Company’s revolving credit facilities mature in

December

2019.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents

The Company considers all highly liquid debt instruments purchased with original maturities of

three

months or less to be cash equivalents.

Line of Credit Facility, Dividend Restrictions [Policy Text Block]

Restrictions on Distributions/Dividends

The Company’s revolving credit facilities generally restrict distributions by the Company to its shareholders. The distribution limitations under the Credit Facilities allow the Company to repurchase the Company’s stock so long as: either (a) the aggregate amount of such repurchases does not exceed

$40

million beginning

December

12,

2016

and the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases is equal to or greater than

25%

of the sum of the borrowing bases, or (b) the aggregate amount of such repurchases does not exceed

75%

of the consolidated net income of the Company measured on a trailing

twelve

month basis; provided that immediately before and after giving effect to the stock repurchases, at least

12.5%

of the aggregate funds committed under the credit facilities remain available. Thus, the Company is limited in its ability to pay dividends or make other distributions to its shareholders without the consent of the Company’s lenders.

Finance, Loans and Leases Receivable, Policy [Policy Text Block]

Finance Receivables, Repossessions and Charge-offs and Allowance for Credit Losses

The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts carry an average interest rate of approximately

15.7%

using the simple effective interest method including any deferred fees. In

May

2016,

the Company increased its retail installment sales contract interest rate from

15.0%

to

16.5%

in response to continued high levels of credit losses. Contract origination costs are not significant. The installment sale contracts are not pre-computed contracts whereby borrowers are obligated to pay back principal plus the full amount of interest that will accrue over the entire term of the contract. Finance receivables are collateralized by vehicles sold and consist of contractually scheduled payments from installment contracts net of unearned finance charges and an allowance for credit losses. Unearned finance charges represent the balance of interest receivable to be earned over the entire term of the related installment contract, less the earned amount

($2.3

million at

January

31,

2017

and

$1.7

million

April

30,

2016

on the Condensed Consolidated Balance Sheets), and as such, have been reflected as a reduction to the gross contract amount in arriving at the principal balance in finance receivables

.

An account is considered delinquent when the customer is

one

day or more behind on their contractual payments. While the Company does not formally place contracts on nonaccrual status, the immaterial amount of interest that

may

accrue after an account becomes delinquent up until the point of resolution via repossession or write-off, is reserved for against the accrued interest on the Condensed Consolidated Balance Sheets. Delinquent contracts are addressed and either made current by the customer, which is the case in most situations, or the vehicle is repossessed or written off if the collateral cannot be recovered quickly. Customer payments are set to match their payday with approximately

73%

of payments due on either a weekly or bi-weekly basis. The frequency of the payment due dates combined with the declining value of collateral lead to prompt resolutions on problem accounts. At

January

31,

2017,

4.7%

of the Company’s finance receivable balances were

30

days or more past due compared to

5.0%

at

January

31,

2016.

Substantially all of the Company’s automobile contracts involve contracts made to individuals with impaired or limited credit histories or higher debt-to-income ratios than permitted by traditional lenders. Contracts made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better credit.

The Company strives to keep its delinquency percentages low, and not to repossess vehicles. Accounts

two

days late are sent a notice in the mail. Accounts

three

days late are contacted by telephone. Notes from each telephone contact are electronically maintained in the Company’s computer system. The Company attempts to resolve payment delinquencies amicably prior to repossessing a vehicle. If a customer becomes severely delinquent in his or her payments, and management determines that timely collection of future payments is not probable, the Company will take steps to repossess the vehicle.

Periodically, the Company enters into contract modifications with its customers to extend or modify the payment terms. The Company only enters into a contract modification or extension if it believes such action will increase the amount of monies the Company will ultimately realize on the customer’s account and will increase the likelihood of the customer being able to pay off the vehicle contract. At the time of modification, the Company expects to collect amounts due including accrued interest at the contractual interest rate for the period of delay. No other concessions are granted to customers, beyond the extension of additional time, at the time of modifications. Modifications are minor and are made for payday changes, minor vehicle repairs and other reasons. For those vehicles that are repossessed, the majority are returned or surrendered by the customer on a voluntary basis. Other repossessions are performed by Company personnel or

third

party repossession agents. Depending on the condition of a repossessed vehicle, it is either resold on a retail basis through a Company dealership, or sold for cash on a wholesale basis primarily through physical or online auctions.

Accounts are charged-off after the expiration of a statutory notice period for repossessed accounts, or when management determines that the timely collection of future payments is not probable for accounts where the Company has been unable to repossess the vehicle. For accounts with respect to which the vehicle was repossessed, the fair value of the repossessed vehicle is charged as a reduction of the gross finance receivables balance charged-off. For the quarter ended

January

31,

2017,

on average, accounts were approximately

62

days past due at the time of charge-off. For previously charged-off accounts that are subsequently recovered, the amount of such recovery is credited to the allowance for credit losses.

The Company maintains an allowance for credit losses on an aggregate basis at a level it considers sufficient to cover estimated losses inherent in the portfolio at the balance sheet date in the collection of its finance receivables currently outstanding.  At

January

31,

2017,

the weighted average total contract term was

31.9

months with

23.0

months remaining. The reserve amount in the allowance for credit losses at

January

31,

2017,

$111.8

million, was

25%

of the principal balance in finance receivables of

$475.4

million, less unearned payment protection plan revenue of

$18.2

million and unearned service contract revenue of

$9.9

million.

The estimated reserve amount is the Company’s anticipated future net charge-offs for losses incurred through the balance sheet date. The allowance takes into account historical credit loss experience (both timing and severity of losses), with consideration given to recent credit loss trends and changes in contract characteristics (i.e., average amount financed, months outstanding at loss date, term and age of portfolio), delinquency levels, collateral values, economic conditions and underwriting and collection practices. The allowance for credit losses is reviewed at least quarterly by management with any changes reflected in current operations. The calculation of the allowance for credit losses uses the following primary factors:

· The number of units repossessed or charged-off as a percentage of total units financed over specific historical periods of time from one year to five years.

· The average net repossession and charge-off loss per unit during the last eighteen months segregated by the number of months since the contract origination date and adjusted for the expected future average net charge-off loss per unit.  About 50% of the charge-offs that will ultimately occur in the portfolio are expected to occur within 10 - 11 months following the balance sheet date.  The average age of an account at charge-off date for the eighteen -month period ended January 31, 2017 was 11.9 months.

· The timing of repossession and charge-off losses relative to the date of sale (i.e., how long it takes for a repossession or charge-off to occur) for repossessions and charge-offs occurring during the last eighteen months.

A point estimate is produced by this analysis which is then supplemented by any positive or negative subjective factors to arrive at an overall reserve amount that management considers to be a reasonable estimate of losses inherent in the portfolio at the balance sheet date that will be realized via actual charge-offs in the future. Although it is at least reasonably possible that events or circumstances could occur in the future that are not presently foreseen which could cause actual credit losses to be materially different from the recorded allowance for credit losses, the Company believes that it has given appropriate consideration to all relevant factors and has made reasonable assumptions in determining the allowance for credit losses. While challenging economic conditions can negatively impact credit losses, effective execution of internal policies and procedures within the collections area and the competitive environment on the funding side have historically had a more significant effect on collection results than macro-economic issues.

In most states, the Company offers retail customers who finance their vehicle the option of purchasing a payment protection plan product as an add-on to the installment sale contract. This product contractually obligates the Company to cancel the remaining principal outstanding for any contract where the retail customer has totaled the vehicle, as defined by the contract, or the vehicle has been stolen. The Company periodically evaluates anticipated losses to ensure that if anticipated losses exceed deferred payment protection plan revenues, an additional liability is recorded for such difference. No such liability was required at

January

31,

2017

or

April

30,

2016.

Inventory, Policy [Policy Text Block]

Inventory

Inventory consists of used vehicles and is valued at the lower of cost or market on a specific identification basis. Vehicle reconditioning costs are capitalized as a component of inventory. Repossessed vehicles and trade-in vehicles are recorded at fair value, which approximates wholesale value. The cost of used vehicles sold is determined using the specific identification method.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill

Goodwill reflects the excess of purchase price over the fair value of specifically identified net assets purchased. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests at the Company’s year-end. The impairment tests are based on the comparison of the fair value of the reporting unit to the carrying value of such unit. There was no impairment of goodwill during fiscal

2016,

and to date, there has been no impairment during fiscal

2017.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment are stated at cost. Expenditures for additions, remodels and improvements are capitalized. Costs of repairs and maintenance are expensed as incurred. Leasehold improvements are amortized over the shorter of the estimated life of the improvement or the lease period. The lease period includes the primary lease term plus any extensions that are reasonably assured. Depreciation is computed using the straight-line method, generally over the following estimated useful lives:

Furniture, fixtures and equipment (in years)	3	to	7
Leasehold improvements (in years)	5	to	15
Buildings and improvements (in years)	18	to	39

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset

may

not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying values of the impaired assets exceed the fair value of such assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Cash Overdraft [Policy Text Block]

Cash Overdraft

As checks are presented for payment from the Company’s primary disbursement bank account, monies are automatically drawn against cash collections for the day and, if necessary, are drawn against

one

of the revolving credit facilities. Any cash overdraft balance principally represents outstanding checks that as of the balance sheet date had not yet been presented for payment, net of any deposits in transit. Any cash overdraft balance is reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

Deferred Sales Tax [Policy Text Block]

Deferred Sales Tax

Deferred sales tax represents a sales tax liability of the Company for vehicles sold on an installment basis in the states of Alabama and Texas. Under Alabama and Texas law, for vehicles sold on an installment basis the related sales tax is due as the payments are collected from the customer, rather than at the time of sale. Deferred sales tax liabilities are reflected in accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

Income Tax, Policy [Policy Text Block]

Income Taxes

Income taxes are accounted for under the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates expected to apply in the years in which these differences are expected to be recovered or settled. The quarterly provision for income taxes is determined using an estimated annual effective tax rate, which is based on expected annual taxable income, statutory tax rates and the Company’s best estimate of nontaxable and nondeductible items of income and expense.

Occasionally, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than

50

percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applies this methodology to all tax positions for which the statute of limitations remains open.

The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before fiscal

2013.

The Company’s policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accrued penalties or interest as of

January

31,

2017

or

April

30,

2016.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

Revenues are generated principally from the sale of used vehicles, which in most cases includes a service contract and a payment protection plan product, interest income and late fees earned on finance receivables. Revenues are net of taxes collected from customers and remitted to government agencies. Cost of vehicle sales include costs incurred by the Company to prepare the vehicle for sale including license and title costs, gasoline, transport services and repairs.

Revenues from the sale of used vehicles are recognized when financing, if applicable, has been approved, the sales contract is signed, and the customer has taken possession of the vehicle. Revenues from the sale of vehicles sold at wholesale are recognized at the time the proceeds are received. Revenues from the sale of service contracts are initially deferred and then recognized ratably over the expected duration of the product. Service contract revenues are included in sales and the related expenses are included in cost of sales. Payment protection plan revenues are initially deferred and then recognized to income using the “Rule of

78’s”

interest method over the life of the contract so that revenues are recognized in proportion to the amount of cancellation protection provided. Payment protection plan revenues recognized are included in sales and related losses are included in cost of sales as incurred. Interest income is recognized on all active finance receivable accounts using the simple effective interest method. Active accounts include all accounts except those that have been paid-off or charged-off.

Sales consist of the following:

	Three Months Ended January 31,				Nine Months Ended January 31,
(In thousands)	2017		2016		2017		2016
Sales – used autos	$	103,249	$	105,435	$	331,376	$	316,269
Wholesales – third party		5,764		5,097		16,710		16,939
Service contract sales		7,094		6,784		21,072		20,327
Payment protection plan revenue		5,156		4,475		14,959		13,521
Total	$	121,263	$	121,791	$	384,117	$	367,056

At

January

31,

2017

and

2016,

finance receivables more than

90

days past due were approximately

$2.0

million and

$2.1

million, respectively. Late fee revenues totaled approximately

$1.4

million and

$1.5

million for the

nine

months ended

January

31,

2017

and

2016,

respectively. Late fees are recognized when collected and are reflected in interest and other income on the Condensed Consolidated Statements of Operations.

Earnings Per Share, Policy [Policy Text Block]

Earnings per Share

Basic earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period plus dilutive common stock equivalents. The calculation of diluted earnings per share takes into consideration the potentially dilutive effect of common stock equivalents, such as outstanding stock options and non-vested restricted stock, which if exercised or converted into common stock would then share in the earnings of the Company. In computing diluted earnings per share, the Company utilizes the treasury stock method and anti-dilutive securities are excluded.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock, based on the fair value of those awards at the date of grant over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. The Company

may

issue either new shares or treasury shares upon exercise of these awards. Stock-based compensation plans, related expenses and assumptions used in the Black-Scholes option pricing model are more fully described in Note I. If an award contains a performance condition, expense is recognized only for those shares for which it is considered reasonably probable as of the current period end that the performance condition will be met.

Treasury Stock [Policy Text Block]

Treasury Stock

The Company purchased

300,838

shares of its common stock to be held as treasury stock for a total cost of

$8.2

million during the

first

nine

months of fiscal

2017

and

342,171

shares for a total cost of

$10.5

million during the

first

nine

months of fiscal

2016.

Treasury stock

may

be used for issuances under the Company’s stock-based compensation plans or for other general corporate purposes. During fiscal

2016,

the Company established a reserve account of

10,000

shares of treasury stock to secure outstanding service contracts issued in Iowa in accordance with the regulatory requirements of that state.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its consolidated financial statements upon adoption.

Revenue Recognition

. In

May

2014,

the FASB issued ASU

2014

-

09,

Revenue from Contracts with Customers

(Topic

606),

which supersedes existing revenue recognition guidance. The new guidance in ASU

2014

-

09

is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU

2014

-

09

also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In

August

2015,

the FASB issued ASU

2015

-

14,

Revenue from Contracts with Customers (Topic

606):

Deferral of the Effective Date

, to provide entities with an additional year to implement ASU

2014

-

09.

As a result, the guidance in ASU

2014

-

09

is effective for annual reporting periods beginning after

December

15,

2017,

and interim reporting periods within those years, using

one

of

two

retrospective application methods. The Company is currently evaluating the potential effects of the adoption of this update on the consolidated financial statements, and expects to complete that evaluation by the end of fiscal

2017.

Leases

. In

February

2016,

the FASB issued ASU

2016

-

02,

Leases

. The new guidance requires that lessees recognize all leases, including operating leases, with a term greater than

12

months on-balance sheet and also requires disclosure of key information about leasing transactions. The guidance in ASU

2016

-

02

is effective for annual reporting periods beginning after

December

15,

2018,

and interim reporting periods within those years. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

Stock Compensation

. In

March

2016,

the FASB issued ASU

2016

-

09,

Improvements to Employee Share-Based Payment Accounting

, which aims to simplify aspects of accounting for share-based payment transactions, including: presenting the excess tax benefit or deficit from the exercise or vesting of share-based payments in the income statement, a revision to the criteria for classifying an award as equity or liability, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, and certain classifications on the statement of cash flows. In addition, the new guidance eliminates the excess tax benefit from the assumed proceeds calculation under the treasury stock method for purposes of calculating diluted shares. ASU

2016

-

09

is effective for annual reporting periods beginning after

December

15,

2016

and interim reporting periods within those years. Certain provisions of ASU

2016

-

09

are required to be adopted prospectively, notably the requirement to recognize the excess tax benefit or deficit in the income statement, while other provisions require modified retrospective application or in some cases full retrospective application. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

Credit Losses

. In

June

2016,

the FASB issued ASU

2016

-

13,

Financial Instruments — Credit Losses

(Topic

326).

ASU

2016

-

13

requires financial assets such as loans to be presented net of an allowance for credit losses that reduces the cost basis to the amount expected to be collected over the estimated life. Expected credit losses will be measured based on historical experience and current conditions, as well as forecasts of future conditions that affect the collectability of the reported amount. ASU

2016

-

13

is effective for annual reporting periods beginning after

December

15,

2019,

and interim reporting periods within those years using a modified retrospective approach. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

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Note B - Summary of Significant Accounting Policies (Tables)

9 Months Ended

Jan. 31, 2017

Notes Tables

Property, Plant, and Equipment Useful Life [Table Text Block]

Furniture, fixtures and equipment (in years)	3	to	7
Leasehold improvements (in years)	5	to	15
Buildings and improvements (in years)	18	to	39

Revenue from External Customers by Products and Services [Table Text Block]

	Three Months Ended January 31,				Nine Months Ended January 31,
(In thousands)	2017		2016		2017		2016
Sales – used autos	$	103,249	$	105,435	$	331,376	$	316,269
Wholesales – third party		5,764		5,097		16,710		16,939
Service contract sales		7,094		6,784		21,072		20,327
Payment protection plan revenue		5,156		4,475		14,959		13,521
Total	$	121,263	$	121,791	$	384,117	$	367,056

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Note C - Finance Receivables, Net (Tables)

9 Months Ended

Jan. 31, 2017

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

(In thousands)	January 31, 2017			April 30, 2016
Gross contract amount	$	549,329		$	504,149
Less unearned finance charges		(73,975	)		(66,871	)
Principal balance		475,354			437,278
Less allowance for credit losses		(111,818	)		(102,485	)
Finance receivables, net	$	363,536		$	334,793

Change In Finance Receivables Net [Table Text Block]

	Nine Months Ended January 31,
(In thousands)	2017			2016
Balance at beginning of period	$	334,793		$	324,144
Finance receivable originations		356,776			336,508
Finance receivable collections		(175,696	)		(173,949	)
Provision for credit losses		(110,467	)		(106,225	)
Losses on claims for payment protection plan		(11,260	)		(9,815	)
Inventory acquired in repossession and payment protection plan claims		(30,610	)		(31,594	)
Balance at end of period	$	363,536		$	339,069

Allowance for Credit Losses on Financing Receivables [Table Text Block]

	Nine Months Ended January 31,
(In thousands)	2017			2016
Balance at beginning of period	$	102,485		$	93,224
Provision for credit losses		110,467			106,225
Charge-offs, net of recovered collateral		(101,134	)		(95,221	)
Balance at end of period	$	111,818		$	104,228

Past Due Financing Receivables [Table Text Block]

(Dollars in thousands)	January 31, 2017					April 30, 2016					January 31, 2016
	Principal		Percent of			Principal		Percent of			Principal		Percent of
	Balance		Portfolio			Balance		Portfolio			Balance		Portfolio
Current	$	371,078		78.06	%	$	378,631		86.59	%	$	364,453		82.22	%
3 - 29 days past due		81,887		17.23	%		45,631		10.43	%		56,835		12.82	%
30 - 60 days past due		15,957		3.36	%		8,429		1.93	%		15,087		3.40	%
61 - 90 days past due		4,395		0.92	%		3,498		0.80	%		4,790		1.08	%
> 90 days past due		2,037		0.43	%		1,089		0.25	%		2,131		0.48	%
Total	$	475,354		100.00	%	$	437,278		100.00	%	$	443,296		100.00	%

Financing Receivable Credit Quality Indicators [Table Text Block]

	Nine Months Ended January 31,
	2017			2016
Principal collected as a percent of average finance receivables		37.9	%		40.6	%
Average down-payment percentage		5.3	%		6.1	%
Average originating contract term (in months )		29.3			28.6

Financing Receivable Contract Terms [Table Text Block]

	2017		2016
Portfolio weighted average contract term, including modifications (in months )		31.9		30.9

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Note D - Property and Equipment (Tables)

9 Months Ended

Jan. 31, 2017

Notes Tables

Property, Plant and Equipment [Table Text Block]

(In thousands)	January 31, 2017			April 30, 2016
Land	$	6,738		$	6,711
Buildings and improvements		11,976			11,928
Furniture, fixtures and equipment		13,233			14,941
Leasehold improvements		24,347			23,308
Construction in progress		291			250
Less accumulated depreciation and amortization		(25,272	)		(22,383	)
Total	$	31,313		$	34,755

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Note E - Accrued Liabilities (Tables)

9 Months Ended

Jan. 31, 2017

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

(In thousands)	January 31, 2017		April 30, 2016
Employee compensation	$	5,762	$	3,684
Cash overdrafts (see Note B)		3,587		-
Deferred sales tax (see Note B)		2,978		2,736
Other		4,576		4,825
Total	$	16,903	$	11,245

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Note F - Debt Facilities (Tables)

9 Months Ended

Jan. 31, 2017

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

(In thousands)
	Aggregate		Interest			Balance at
	Amount		Rate	Maturity		January 31, 2017		April 30, 2016
Revolving credit facilities	$	200,000	LIBOR + 2.375%		December 12, 2019	$	118,346	$	107,386
			(3.14% at January 31, 2017 and 2.81% at April 30, 2016)

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Note G - Fair Value Measurements (Tables)

9 Months Ended

Jan. 31, 2017

Notes Tables

Fair Value, by Balance Sheet Grouping [Table Text Block]

	January 31, 2017				April 30, 2016
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash	$	254	$	254	$	602	$	602
Finance receivables, net		363,536		292,343		334,793		268,926
Accounts payable		10,544		10,544		12,313		12,313
Revolving credit facilities and notes payable		118,785		118,785		107,902		107,902

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Note H - Weighted Average Shares Outstanding (Tables)

9 Months Ended

Jan. 31, 2017

Notes Tables

Schedule of Weighted Average Number of Shares [Table Text Block]

	Three Months Ended January 31,				Nine Months Ended January 31,
	2017		2016		2017		2016
Weighted average shares outstanding-basic		7,893,737		8,367,728		7,891,908		8,451,029
Dilutive options and restricted stock		282,017		248,029		274,023		323,305
Weighted average shares outstanding-diluted		8,175,754		8,615,757		8,165,931		8,774,334
Antidilutive securities not included:
Options		327,750		373,000		360,500		294,000
Restricted stock		-		9,500		6,333		6,333

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Note I - Stock-based Compensation (Tables)

9 Months Ended

Jan. 31, 2017

Notes Tables

Stock Option Plan Comparison [Table Text Block]

	Restated Option Plan
Minimum exercise price as a percentage of fair market value at date of grant		100	%
Last expiration date for outstanding options		August 10, 2026
Shares available for grant at January 31, 2017		286,000

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Nine Months Ended January 31,
	2017			2016
Expected term (years)		5.5			5.5
Risk-free interest rate		1.28	%		1.58	%
Volatility		36	%		34	%
Dividend yield		-			-

Schedule of Share-based Compensation, Stock Options, Exercises [Table Text Block]

	Nine Months Ended January 31,
(Dollars in thousands)	2017		2016
Options exercised		169,500		30,750
Cash received from option exercises	$	1,675	$	400
Intrinsic value of options exercised	$	4,374	$	943

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Note K - Supplemental Cash Flow Information (Tables)

9 Months Ended

Jan. 31, 2017

Notes Tables

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	Nine Months Ended January 31,
(in thousands)	2017			2016
Supplemental disclosures:
Interest paid	$	3,040		$	2,614
Income taxes paid, net		4,726			5,650
Non-cash transactions:
Inventory acquired in repossession and payment protection plan claims		30,610			31,594
Loss accrued (incurred) on disposal of property and equipment		(300	)		-
Purchase of property and equipment using the issuance of debt		-			550

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Note A - Organization and Business (Details Textual)	9 Months Ended
	Jan. 31, 2017
Number of Operating Subsidiaries	2
Number of Stores	143

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Note B - Summary of Significant Accounting Policies (Details Textual) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended		12 Months Ended
	May 30, 2016	Jan. 31, 2017	Jan. 31, 2017	Jan. 31, 2016	Apr. 30, 2016	Apr. 30, 2015
Number of Reportable Segments			1
Line of Credit Facility,Distribution Limitations Maximum Aggregate Amount of Stock Repurchases			$ 40,000,000
Line of Credit Facility, Distribution Limitations Percentage of Sum of Borrowing Bases			25.00%
Line of Credit Facility, Distribution Limitations Percentage of Consolidated Net Income			75.00%
Line of Credit Facility Distribution Limitations Minimum Percentage of Aggregate Funds Available			12.50%
Interest Earned on Financing Receivables			$ 2,300,000		$ 1,700,000
Finance Receivables, Customer Payments Due Either Weekly or Bi-Weekly, Percentage			73.00%
Financing Receivable, Greater Than or Equal to 30 Days Past Due, Percent of Portfolio		4.70%	4.70%	5.00%
Financing Receivable, Average Days Past Due At Charge Off		62 days
Financing Receivable, Weighted Average Contractual Term			2 years 237 days
Financing Receivable, Weighted Average Remaining Contractual Term			1 year 330 days
Financing Receivable, Allowance for Credit Losses		$ 111,818,000	$ 111,818,000	$ 104,228,000	102,485,000	$ 93,224,000
Finance Receivables, Percent of Principle Balance, Net Deferred Revenue		25.00%	25.00%
Finance Receivable Principal Balance		$ 475,354,000	$ 475,354,000	443,296,000	437,278,000
Percentage of Receivable Charge-Offs		50.00%	50.00%
Average Age of Account at Charge-Off Date			357 days
Financing Receivable, Recorded Investment Greater Than 90 Days Past Due		$ 2,037,000	$ 2,037,000	2,131,000	$ 1,089,000
Late Fee Income Generated by Servicing Financial Assets, Amount			$ 1,400,000	$ 1,500,000
Stock Repurchased During Period, Shares			300,838	342,171
Stock Repurchased During Period, Value			$ 8,200,000	$ 10,500,000
Treasury Stock, Shares to Establish Reserve Account to Secure Service Contracts					10,000
Payment Protection Plan Liability, Anticipated Losses in Excess of Deferred Revenues		0	0		$ 0
Goodwill, Impairment Loss			0		0
Income Tax Examination, Penalties and Interest Accrued		0	0		0
Service Life [Member] | GPS Units [Member]
Increase (Decrease) in Selling General and Administrative Expense			(350,000)
Payment Protection Plan [Member]
Deferred Revenue		18,158,000	18,158,000		17,304,000
Service Contract [Member]
Deferred Revenue		$ 9,924,000	$ 9,924,000		$ 10,035,000
Maximum [Member]
Financing Receivable Interest Rate	16.50%		16.50%		15.70%
Allowance for Credit Losses, Primary Factor Units Repossessed or Charged Off Evaluation Period			5 years
Minimum [Member]
Financing Receivable Interest Rate			15.00%
Allowance for Credit Losses, Primary Factor Units Repossessed or Charged Off Evaluation Period			1 year
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Arkansas, USA [Member]
Concentration Risk, Percentage			30.00%

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Note B - Summary of Significant Accounting Policies - Property and Equipment, Estimated Useful Lives (Details)	9 Months Ended
	Jan. 31, 2017
Furniture, Fixtures and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment Useful Lives (Year)	3 years
Furniture, Fixtures and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment Useful Lives (Year)	7 years
Leasehold Improvements [Member] | Minimum [Member]
Property, Plant and Equipment Useful Lives (Year)	5 years
Leasehold Improvements [Member] | Maximum [Member]
Property, Plant and Equipment Useful Lives (Year)	15 years
Building and Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment Useful Lives (Year)	18 years
Building and Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment Useful Lives (Year)	39 years

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Note B - Summary of Significant Accounting Policies - Sales (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
Sales	$ 121,263	$ 121,791	$ 384,117	$ 367,056
Sales Used Autos [Member]
Sales	103,249	105,435	331,376	316,269
Wholesales Third Party [Member]
Sales	5,764	5,097	16,710	16,939
Service Contract Sales [Member]
Sales	7,094	6,784	21,072	20,327
Payment Protection Plan Revenue [Member]
Sales	$ 5,156	$ 4,475	$ 14,959	$ 13,521

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Note C - Finance Receivables, Net (Details Textual)	1 Months Ended	9 Months Ended		12 Months Ended
	May 30, 2016	Jan. 31, 2017	Jan. 31, 2016	Apr. 30, 2016	Apr. 30, 2015
Finance Receivables, Weighted Average Interest Rate		15.70%
Finance Receivables, Number of Loan Classes		1
Finance Receivables, Number of Risk Pools		1
Net Charge Offs as Percentage of Average Finance Receivables		21.80%	22.20%
Delinquencies Greater Than 30 Days as Percentage of Average Financing Receivables		4.70%	5.00%	3.00%	5.80%
Collections as Percentage of Average Financing Receivables		37.90%	40.60%
Minimum [Member]
Financing Receivable Interest Rate		15.00%
Financing Receivable Payment Period		1 year 180 days
Maximum [Member]
Financing Receivable Interest Rate	16.50%	16.50%		15.70%
Financing Receivable Payment Period		3 years 180 days

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Note C - Finance Receivables, Net - Components of Finance Receivables (Details) - USD ($) $ in Thousands	Jan. 31, 2017	Apr. 30, 2016	Jan. 31, 2016	Apr. 30, 2015
Gross contract amount	$ 549,329	$ 504,149
Less unearned finance charges	(73,975)	(66,871)
Principal balance	475,354	437,278	$ 443,296
Less allowance for credit losses	(111,818)	(102,485)	(104,228)	$ (93,224)
Finance receivables, net	$ 363,536	$ 334,793	$ 339,069	$ 324,144

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Note C - Finance Receivables, Net - Changes in Finance Receivables (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
Balance			$ 334,793	$ 324,144
Finance receivable originations			356,776	336,508
Finance receivable collections			(175,696)	(173,949)
Provision for credit losses	$ (37,645)	$ (32,786)	(110,467)	(106,225)
Losses on claims for payment protection plan			(11,260)	(9,815)
Inventory acquired in repossession and payment protection plan claims			(30,610)	(31,594)
Balance	$ 363,536	$ 339,069	$ 363,536	$ 339,069

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Note C - Finance Receivables, Net - Changes in the Finance Receivables Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
Balance			$ 102,485	$ 93,224
Provision for credit losses	$ 37,645	$ 32,786	110,467	106,225
Charge-offs, net of recovered collateral			(101,134)	(95,221)
Balance	$ 111,818	$ 104,228	$ 111,818	$ 104,228

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Note C - Finance Receivables, Net - Credit Quality Information for Finance Receivables (Details) - USD ($) $ in Thousands	Jan. 31, 2017	Apr. 30, 2016	Jan. 31, 2016
Current, Principal Balance	$ 371,078	$ 378,631	$ 364,453
Current, Percent of Portfolio	78.06%	86.59%	82.22%
3 - 29 days past due, Principal Balance	$ 81,887	$ 45,631	$ 56,835
3 - 29 days past due, Percent of Portfolio	17.23%	10.43%	12.82%
30 - 60 days past due, Principal Balance	$ 15,957	$ 8,429	$ 15,087
30 - 60 days past due, Percent of Portfolio	3.36%	1.93%	3.40%
61 - 90 days past due, Principal Balance	$ 4,395	$ 3,498	$ 4,790
61 - 90 days past due, Percent of Portfolio	0.92%	0.80%	1.08%
Financing Receivable, Recorded Investment Greater Than 90 Days Past Due	$ 2,037	$ 1,089	$ 2,131
> 90 days past due	0.43%	0.25%	0.48%
Finance Receivable Principal Balance	$ 475,354	$ 437,278	$ 443,296
Total, Percent of Portfolio	100.00%	100.00%	100.00%

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Note C - Finance Receivables, Net - Financing Receivables Analysis (Details)	9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Principal collected as a percent of average finance receivables	37.90%	40.60%
Average down-payment percentage	5.30%	6.10%
Average originating contract term (in months) (Month)	2 years 159 days	2 years 138 days

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Note C - Finance Receivables, Net - Average Financing Receivable Contract Terms (Details)	9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Portfolio weighted average contract term, including modifications (in months) (Month)	2 years 237 days	2 years 207 days

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Note D - Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	Jan. 31, 2017	Apr. 30, 2016
Less accumulated depreciation and amortization	$ (25,272)	$ (22,383)
Total	31,313	34,755
Land [Member]
Property and Equipment	6,738	6,711
Building and Building Improvements [Member]
Property and Equipment	11,976	11,928
Furniture, Fixtures and Equipment [Member]
Property and Equipment	13,233	14,941
Leasehold Improvements [Member]
Property and Equipment	24,347	23,308
Construction in Progress [Member]
Property and Equipment	$ 291	$ 250

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Note E - Accrued Liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands	Jan. 31, 2017	Apr. 30, 2016
Employee compensation	$ 5,762	$ 3,684
Cash overdrafts (see Note B)	3,587
Deferred sales tax (see Note B)	2,978	2,736
Other	4,576	4,825
Total	$ 16,903	$ 11,245

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Note F - Debt Facilities (Details Textual) - USD ($)							9 Months Ended
	Dec. 12, 2016	Oct. 31, 2016	Dec. 15, 2015	Oct. 08, 2014	Jun. 24, 2013	Feb. 04, 2013	Jan. 31, 2017	Jan. 31, 2016	Apr. 30, 2016	Feb. 18, 2016	Feb. 17, 2016	Feb. 13, 2014	Sep. 30, 2012	Mar. 09, 2012
Line of Credit Facility, Distribution Limitations Percentage of Sum of Borrowing Bases							25.00%
Line of Credit Facility, Distribution Limitations Percentage of Consolidated Net Income							75.00%
Line of Credit Facility Distribution Limitations Minimum Percentage of Aggregate Funds Available							12.50%
Amortization of Debt Issuance Costs and Discounts							$ 197,000	$ 144,000
Debt Issuance Costs, Line of Credit Arrangements, Net							378,000
Debt Issuance Costs, Gross							576,000		$ 396,000
Note Payable Related to the Property Purchase Agreement [Member]
Debt Instrument, Face Amount			$ 550,000
Debt Instrument, Periodic Payment			$ 10,005
Debt Instrument, Interest Rate, Stated Percentage			3.50%
Long-term Debt							439,000		$ 516,000
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 200,000,000						200,000			$ 172,500,000	$ 145,000,000		$ 145,000,000	$ 125,000,000
Dividend Restrictions Maximum Aggregate Amount of Stock Repurchases	40,000,000
Line of Credit Facility, Total Increase in Borrowing Capacity										27,500,000
Line of Credit Facility, Additional Borrowing Capacity, Accordion Feature	$ 50,000,000						$ 78,000,000			55,000,000
Line of Credit Facility, Maximum Borrowing Capacity, Accordion Feature										$ 200,000,000
Debt Agreement, Accounts Receivable Advances, Term Range One, Rate	55.00%	50.00%
Debt Agreement, Accounts Receivable Advances, Term Range Two, Rate	50.00%	45.00%
Line of Credit Facility, Distribution Limitations Percentage of Sum of Borrowing Bases							25.00%
Line of Credit Facility, Distribution Limitations Percentage of Consolidated Net Income							75.00%
Line of Credit Facility Distribution Limitations Minimum Percentage of Aggregate Funds Available							12.50%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate							2.375%
Revolving Credit Facility [Member] | Credit Facilities, Amendment Number 3 [Member]
Line of Credit Facility, Additional Borrowing Capacity, Accordion Feature					$ 55,000,000
Line of Credit Facility, Decrease in Pricing Tiers, Percent					0.25%
Revolving Credit Facility [Member] | Credit Facilities, Amendment Number 4 [Member]
Maximum Allowable Capital Expenditures By Credit Facilities Amendment												$ 10,000,000
Revolving Credit Facility [Member] | Credit Facilities Amendment Number 5 [Member]
Line of Credit Facility Increase in Pricing Tiers Percent				0.125%
Dividend Restrictions Maximum Aggregate Amount of Stock Repurchases				$ 40,000,000
Dividend Restrictions Percentage of Sum of Borrowing Bases				30.00%
Revolving Credit Facility [Member] | Minimum [Member]
Contract Term of Contracts Included by Credit Facilities Amendment						3 years
Debt Agreement, Accounts Receivable Advances, Term Range One	3 years 30 days
Debt Agreement, Accounts Receivable Advances, Term Range Two	3 years 210 days
Revolving Credit Facility [Member] | Maximum [Member]
Contract Term of Contracts Included by Credit Facilities Amendment						3 years 180 days
Debt Agreement, Accounts Receivable Advances, Term Range One	3 years 180 days
Debt Agreement, Accounts Receivable Advances, Term Range Two	5 years

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Note F - Summary of Revolving Credit Facilities (Details) - USD ($)	9 Months Ended
	Jan. 31, 2017	Dec. 12, 2016	Apr. 30, 2016	Feb. 18, 2016	Feb. 17, 2016	Sep. 30, 2012	Mar. 09, 2012
Revolving credit facilities and notes payable	$ 118,785,000		$ 107,902,000
Revolving Credit Facility [Member]
Aggregate amount	$ 200,000	$ 200,000,000		$ 172,500,000	$ 145,000,000	$ 145,000,000	$ 125,000,000
Maturity	Dec. 12, 2019
Revolving credit facilities and notes payable	$ 118,346		$ 107,386
Interest rate	3.14%		2.81%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Interest rate	2.375%

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Note G - Fair Value Measurements (Details Textual)	1 Months Ended
	Nov. 30, 2012
Fair Value Inputs, Discount Rate, Intercompany Transactions	38.50%
Minimum [Member]
Fair Value Inputs, Discount Rate	35.00%
Maximum [Member]
Fair Value Inputs, Discount Rate	40.00%

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Note G - Fair Value Measurements - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jan. 31, 2017	Apr. 30, 2016
Reported Value Measurement [Member]
Cash	$ 254	$ 602
Finance receivables, net	363,536	334,793
Accounts payable	10,544	12,313
Revolving credit facilities and notes payable	118,785	107,902
Estimate of Fair Value Measurement [Member]
Cash	254	602
Finance receivables, net	292,343	268,926
Accounts payable	10,544	12,313
Revolving credit facilities and notes payable	$ 118,785	$ 107,902

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Note H - Weighted Average Shares Outstanding - Weighted Average Shares of Common Stock Outstanding (Details) - shares	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
Weighted average shares outstanding-basic (in shares)	7,893,737	8,367,728	7,891,908	8,451,029
Dilutive options and restricted stock (in shares)	282,017	248,029	274,023	323,305
Weighted average shares outstanding-diluted (in shares)	8,175,754	8,615,757	8,165,931	8,774,334
Employee Stock Option [Member]
Antidilutive securities not included:
Antidilutive securities (in shares)	327,750	373,000	360,500	294,000
Restricted Stock [Member]
Antidilutive securities not included:
Antidilutive securities (in shares)		9,500	6,333	6,333

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Note I - Stock-based Compensation (Details Textual) - USD ($)		9 Months Ended		12 Months Ended
	Aug. 05, 2015	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2016	Oct. 14, 2009
Allocated Share-based Compensation Expense		$ 1,000,000	$ 1,200,000
Allocated Share-based Compensation Expense, Net of Tax		627,000	759,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value		$ 13,700,000	2,900,000	$ 2,900,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number		764,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value		$ 13,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term		3 years 105 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Exercise Price		$ 25.49
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		286,000
Employee Stock Option [Member]
Allocated Share-based Compensation Expense		$ 923,000	1,100,000
Allocated Share-based Compensation Expense, Net of Tax		$ 579,000	$ 710,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				5 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		35,000	298,750	131,125
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Fair Value		$ 338,000	$ 5,200,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 2,900,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		3 years 36 days
Performance Shares [Member]
Employee Service Share-based Compensation, Not Currently Expected to Vest Awards, Compensation Cost Not yet Recognized		$ 1,100,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Not Currently Expected to Vest, Outstanding, Number		62,750
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		10,000	0
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		169,527
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number		17,500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 45.06
Restated Option Plan [Member]
Common Stock, Capital Shares Reserved for Future Issuance	1,800,000
Restated Option Plan [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Stock Incentive Plan [Member]
Allocated Share-based Compensation Expense		$ 78,000	$ 74,000
Allocated Share-based Compensation Expense, Net of Tax		49,000	$ 47,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 612,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		4 years
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					350,000

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Note I - Stock-based Compensation - Stock Option Plan Comparison (Details)	9 Months Ended
	Jan. 31, 2017 shares
Minimum exercise price as a percentage of fair market value at date of grant	100.00%
Shares available for grant at January 31, 2017 (in shares)	286,000
The 1997 Plan [Member]
Last expiration date for outstanding options	Aug. 10, 2026

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Note I - Stock-based Compensation - Options Valuation Assumptions (Details)	9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Expected term (years) (Year)	5 years 182 days	5 years 182 days
Risk-free interest rate	1.28%	1.58%
Volatility	36.00%	34.00%
Dividend yield

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Note I - Stock-based Compensation - Options Exercised (Details) - USD ($) $ in Thousands	9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Options exercised (in shares)	169,500	30,750
Cash received from option exercises	$ 1,675	$ 400
Intrinsic value of options exercised	$ 4,374	$ 943

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Note J - Commitments and Contingencies (Details Textual) $ in Millions	Jan. 31, 2017 USD ($)
Letters of Credit Outstanding, Amount	$ 1

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Note K - Supplemental Cash Flow Information - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands	9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Supplemental disclosures:
Interest paid	$ 3,040	$ 2,614
Income taxes paid, net	4,726	5,650
Non-cash transactions:
Inventory acquired in repossession and payment protection plan claims	30,610	31,594
Loss accrued (incurred) on disposal of property and equipment	(300)
Purchase of property and equipment using the issuance of debt		$ 550