America's Car-Mart, Inc.

Good day and thank you for standing by. Welcome to the America's Karma Third Quarter Fiscal 2026 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jonathan Collins, Chief Financial Officer. Please go ahead.

Good morning. I'm Jonathan Collins, the company's Chief Financial Officer. Welcome to America's Car Mart's third quarter fiscal year 2026 earnings call for the period ended January 31st, 2026. Joining me on the call today is Doug Campbell, our President and CEO, and Jamie Fisher, our COO. We issued our earnings release earlier this morning and a supplemental presentation is available on our website. We will post the transcripts of our prepared remarks following this call and the Q&A session will be available through the webcast. During today's call, certain statements we make may be considered forward-looking and inherently involve risk uncertainties that could cause actual results to differ materially from management's present view. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. The company cannot guarantee the accuracy of any forecast or estimate, nor does it undertake any obligation to update such forward-looking statements. For more information, including important cautionary notes, please see Part 1 of the company's annual report on Form 10-K for the fiscal year ended April 30, 2025, and our current and quarterly reports furnished to or filed with the Securities and Exchange Commission on Forms 8-K and 10-Q. As a note, the comparisons we will make will be for the third quarter of fiscal 2026 versus the third quarter of fiscal 2025, unless otherwise stated. Doug, I'll turn it over to you now.

Thank you, Jonathan, and good morning, everyone, and thank you for joining us today. I want to start by being direct about what happened in the third quarter. Our retail volume declined 22.1% year over year. That's a significant number, and I want to address it head on. This was not a demand story. It was a capital structure story. Let me explain what that means. Throughout the third quarter, our ability to purchase inventory at full capacity was constrained by the ongoing transition of our financing platform. Specifically, as I mentioned last quarter, we need a revolving warehouse facility to bridge originations to securitizations. Without that facility, our purchasing had to be managed against available cash rather than a rotating credit line, and that limited how much inventory that we could put on our lots. Top-up funnel demand tells the real story here. Website traffic was up 4% year-over-year. Credit applications remained elevated. Our customers are there. Our team is there. The constraint is capital deployment. and we're actively working to resolve that. I also want to note an incremental headwind unique to the third quarter. Winter Storm Fern struck in the final week of January and directly impacted our entire South Central operating footprint. The timing, the final days of the quarter, compressed what was already a volume challenge period. Jamie will speak to how Pay Your Way platform performed through the storm and the performance that gave us real confidence in the resilience of the collections infrastructure we're building. The subprime auto capital markets have been operating in a more measured environment since last fall. The industry absorbed significant disruption following the failures of several subprime lenders, events that raised serious questions and legitimate questions among warehouse providers, rating agencies, ABS investors about collateral integrity, loan tape accuracy, and the controls governing these businesses. In the midst of that negative industry noise, we completed our 25-4 ABS transaction, a $161.3 million asset-backed note rated and successfully placed in a turbulent market. This was our first ABS transaction incorporating a residual cash flow structure, a non-turbo deal. For those less familiar with the ABS mechanics and jargon, a turbo structure accelerates principal payment from investors as a form of credit protection. We call that overcollateralization. A turbo structure is structurally simpler to rate and easier to sell because the collections on the assets remaining after paying service provider fees and interest on the notes and topping up liquidity reserve accounts are used to repay principal to investors. As a result, the investors get their money back faster as the level of overall collateralization increases during the life of the deal. A residual cash flow structure does quite the opposite. Rather than using all the collections remaining to repay principal on notes, The issuer repays principal on the notes only in an amount necessary to achieve a targeted level of overall collateralization. Once that level is met, the funds remaining each month after paying the provider fees and interest and principal on the notes and topping up liquidity reserves is released back to the issuer, the company. The company's ability to complete this 25-4 transaction with residual cash flow structure can be viewed as a sign of investor and rating agency confidence in the company. and its asset-backed securitization program, which is particularly noteworthy in light of the heightened sensitivity and the market stress plaguing the securitization markets in the end of 2025. We've made meaningful progress on the transformation of our capital structure this fiscal year, and I want to recognize that, even as I acknowledge there's more to do. In October, we closed the $300 million term loan, which fully retired our revolving line of credit, and removed the income state covenants that had previously limited our operating flexibility. In December, we completed this 25-4 ABS transaction with a residual cash flow structure that delivers monthly cash flows to the company, improving capital efficiency and reducing our long-term cost of capital. These are real milestones. The ABS markets remain a viable and productive funding source for us throughout this period, and we intend to continue accessing it on a regular cadence. However, the capital markets is not without their challenges, elevated rates, a complex macro backdrop, and the heightened scrutiny that followed the industry disruptions I mentioned. But we have demonstrated that we can execute in that market. The critical remaining step is securing a revolving warehouse facility. That is the bridge financing that connects the origination to securitizations and will allow us to fully serve the demand that we're seeing. We're actively working on this and we will update you when we have something definitive to share. Until that facility is in place, volumes will remain below what our demand and team are capable of producing. While we have been working on our capital transition, we've also been executing on the operational side. We've executed phase one and phase two of our SG&A cost control plan, which included a reduction in workforce and store consolidations, which are now complete. Eighteen total locations have been rationalized, and our active store count now stands at 136. These consolidations are not just about reducing cost. They're about concentrating resources and inventory to our strongest performing locations so that when volume recovers, we can recover into a more productive and efficient footprint. The financial benefits of these consolidations are expected to be reflected in the fourth quarter as full run rate savings flow through the P&L. And with that, I'll turn it over to Jamie for the operational detail.