Americas Carmart (CRMT) risk factors, FY2025 10-K

Risks Related to the Company’s Business, Industry, and Markets

1. 01Recent and future disruptions in domestic and global economic and market conditions could have adverse consequences for the used automotive retail industry in the future and may have greater consequences for the non-prime segment of the industry
2. 02A reduction in the availability or access to sources of inventory could adversely affect the Company’s business by increasing the costs of vehicles purchased
3. 03The used automotive retail industry is fragmented and highly competitive, which could result in increased costs to the Company for vehicles and adverse price competition. Increased competition on the financing side of the business could result in increased credit losses
4. 04The used automotive retail industry operates in a highly regulated environment with significant attendant compliance costs and penalties for non-compliance
5. 05The Company’s business is geographically concentrated; therefore, the Company’s results of operations may be adversely affected by unfavorable conditions in its local markets
6. 06The Company’s business is subject to seasonal fluctuations
7. 07The effects of any future public health crisis could have a significant impact on our business, sales, results of operations and financial condition

Risks Related to the Company’s Operations

1. 08The Company may have a higher risk of delinquency and default than traditional lenders because it finances its sales of used vehicles to credit-impaired borrowers
2. 09The Company’s allowance for credit losses may not be sufficient to cover actual credit losses, which could adversely affect its financial condition and operating results
3. 10The Company’s success depends upon the continued contributions of its management teams and the ability to attract and retain qualified employees
4. 11The Company’s business is dependent upon the efficient operation of its information systems
5. 12Security breaches, cyber-attacks or fraudulent activity could result in damage to the Company’s operations or lead to reputational damage
6. 13The Company may be unable to keep pace with technological advances and changes in consumer behavior, which could adversely affect its business, financial condition and results of operations
7. 14The impact of climate-change related events, including efforts to reduce or mitigate the effects of climate change and inclement weather can adversely impact the Company’s operating results

Risks Related to the Company’s Common Stock

1. 15The Company’s stock trading volume may result in greater volatility in the market price of the Company’s common stock and may not provide adequate liquidity for investors
2. 16The Company currently does not intend to pay future dividends on its common stock