America's CAR-MART Inc (CRMT) 2024 Q2 法說會逐字稿

Thank you for standing by, and welcome to America's Car-Mart Second Quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. The speakers' presentation there will be a question-and-answer session to ask a question. At that time, please press star one on your telephone. As a reminder, today's call is being recorded. I will now turn the call over to your host, Miss Vicky duty, America's Car-Mart's CFO. Please begin.

感謝您的耐心等待，歡迎參加美國 Car-Mart 2024 年第二季財報電話會議。此時，所有參與者都處於只聽模式。演講者的演講將有一個問答環節來提出問題。屆時，請按手機上的星號一。提醒一下，今天的通話正在錄音。現在我會把電話轉給主持人、美國 Car-Mart 的財務長 Vicky 女士。請開始。

Thank you, and welcome to America's Car-Mart's Second Quarter 2024 earnings call. Joining me today is Doug Campbell, who took over as our company's CEO. on October first, 2023. We've issued our news release earlier this morning, and it is available on our website. We've updated our reporting format with a simplified book, providing an efficient and easy comparison of important metrics against the prior corresponding quarter and commentary about our results. In addition, we will post a transcript of our prepared remarks following this call. And we are also going to be posting some slides to our website, some supplementary materials. We are having some technical difficulties this morning, but those should be up shortly. And those will help further illustrate many of the talking points that we're going to cover in our call today.

謝謝，歡迎參加美國 Car-Mart 2024 年第二季財報電話會議。今天加入我的是道格坎貝爾 (Doug Campbell)，他接任了我們公司的執行長。 2023 年 10 月 1 日。今天早些時候，我們發布了新聞稿，可在我們的網站上查看。我們用簡化的書籍更新了報告格式，提供了重要指標與上一相應季度的有效且輕鬆的比較以及對我們結果的評論。此外，我們將在本次電話會議後發布準備好的演講稿。我們還將在我們的網站上發布一些幻燈片和一些補充資料。今天早上我們遇到了一些技術困難，但這些問題應該很快就會解決。這些將有助於進一步說明我們將在今天的電話會議中討論的許多談話要點。

The Q&A session will be available through the webcast after the call. We believe that this process will help enhance how we share our quarterly results with you, and we welcome your feedback during today's call, certain statements we make may be considered forward-looking and inherently involve risk and 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 estimates, nor does it undertake any obligation to update such forward-looking statements. For more information, including important cautionary notes, please see Part one of the Company's annual report on Form 10 K for the fiscal year ended April 30, 2023, and our current and quarterly reports furnished to or filed with the Securities and Exchange Commission on Forms eight K and 10 Q.

電話會議後將透過網路廣播進行問答環節。我們相信，這項流程將有助於改善我們與您分享季度業績的方式，我們歡迎您在今天的電話會議中提供回饋，我們所做的某些陳述可能被認為是前瞻性的，並且本質上涉及風險和不確定性，可能導致實際結果存在重大差異從管理層目前的觀點來看。這些陳述是根據 1995 年《私人證券訴訟改革法案》的安全港條款作出的。本公司不能保證任何預測或估計的準確性，也不承擔更新此類前瞻性聲明的任何義務。有關更多信息，包括重要的警示說明，請參閱公司截至 2023 年 4 月 30 日的財年 10 K 表格年度報告的第一部分，以及我們向證券交易委員會提供或提交的當前和季度報告的表格8個K 和10 個Q。

I will now turn it over to Doug for his introductory comments about our second quarter.

現在我將把它交給道格，請他對我們第二季度的介紹評論。

Good morning, and thank you for joining us and for your interest in our company. First, I'd like to thank our associates for their relentless focus on keeping our customers on the road.

早安，感謝您加入我們以及對我們公司的興趣。首先，我要感謝我們的員工堅持不懈地致力於讓我們的客戶繼續前進。

I also appreciate all the many messages I've received and my appointment I see yield means a lot. So thanks for that. I want to take a moment to recognize the passing of Hank Henderson, one of our board members and CEO. prior to Jeff Williams. His contributions here at the Company and in the community to his family, leave an indelible mark. He was a valued Board member and a long-time shareholder. He's pointed advice to me about the opportunity to be CEO. has a different meaning today. So thank you.

我也感謝我收到的所有訊息和我的約會，我認為產量意義重大。所以謝謝你。我想花點時間悼念我們的董事會成員兼首席執行官之一漢克·亨德森 (Hank Henderson) 的去世。在傑夫威廉斯之前。他在公司和社區對家人的貢獻留下了不可磨滅的印記。他是一位重要的董事會成員和長期股東。他向我提出了關於成為執行長的機會的建議。今天有不同的意義。所以謝謝。

During the quarter, we identified someone with a similar profile that has a long-term view of the business as such, we recently added Jonathan Dubois from man to Hilla capital management to our Board. He brings many years of experience within specialty finance, including subprime installment lending, pawn lending and lease to own retail. He is a shareholder as well, and we're excited to have him join our Board.

在本季度，我們發現了一個具有類似背景且對業務具有長遠眼光的人，我們最近將 Jonathan Dubois 從 Hilla 資本管理人員添加到了我們的董事會。他在專業金融領域擁有多年的經驗，包括次級分期貸款、當鋪貸款和零售租賃。他也是股東，我們很高興他加入我們的董事會。

Now I'd like to address the quarter. If I'm on the other end of this call and have a lot of questions about the results and particularly credit losses. And as you to bring into context, that GAAP accounting requires us to report our results as a retailer with an accounts receivable balance of almost $1.5 billion originated over the last four years. As the business grows, the impact of reserve and credit adjustments on our portfolio originated over a four year period becomes even larger.

現在我想談談本季的情況。如果我在電話的另一端，對結果，特別是信用損失有很多疑問。正如您所了解的那樣，GAAP 會計要求我們報告作為零售商的業績，過去四年應收帳款餘額近 15 億美元。隨著業務的成長，四年期間的準備金和信貸調整對我們的投資組合的影響變得更大。

In relation to the quarterly results, the way we measure our business is the cash we collect over time relative to the money that we put out on the street. And if you look over time, we've never had a pool of loans in which we earn cumulative cash returns less than 50% in excess of the cash outlay over the life of the contracts. What has changed is that it takes longer to recognize it. But 10 years ago we put a dollar out on the street and get approximately $1.60 back over time. And that's still the case.

就季度業績而言，我們衡量業務的方式是我們隨著時間的推移收集的現金相對於我們在街上投入的錢。如果你看一下時間，你會發現我們從未有過一筆貸款，在合約有效期內，我們賺取的累積現金回報率超過現金支出的比例低於 50%。改變的是識別它需要更長的時間。但 10 年前，我們在街上投入 1 美元，隨著時間的推移，我們會收回大約 1.60 美元。現在情況仍然如此。

Let me also tell you why I came to convert over the last five or six fiscal years, the business has generated almost $600 million in free cash flow. The Company has repurchased 156 million in shares, grown the net AR balance by $739 million, funded various capital expenditures of almost $78 million, while funding increased inventory of $79 million in a growing business, they've been able to do this because of the underlying pools of receivables that the company has originated and have consistently produced cash flows in excess of the cost to operate the business over time.

我還要告訴你為什麼我在過去的五、六個財年裡進行了轉型，該業務產生了近 6 億美元的自由現金流。該公司回購了1.56 億股股票，使應收帳款淨餘額增加了7.39 億美元，為近7,800 萬美元的各種資本支出提供了資金，同時為不斷增長的業務增加了7,900 萬美元的庫存提供了資金，他們之所以能夠做到這一點，是因為公司發起並持續產生超過業務運營成本的現金流量的基礎應收帳款池。

This remains the case. Additionally, this segment of automotive is large and a growing part of our industry, the ability to really help consumers who have little to no access to credit from an industry leader with a great track record and abundance of opportunity made it attractive, especially when you consider the opportunity to feather in my skill set and industry best practices with Core-Mark's unique culture at US power to take the business to the next level, and that's what I'm focused on today. We reported revenue increase of 2.8% that was primarily driven from a 23% increase in interest income. Sales volumes were down 4.6%, but sales revenue only saw a decline of 0.4% due to muted sales revenue was a product of a 5.6% increase in the quarterly average selling price, moving from $18,025 to $19,035 year over year. Approximately 40% of this increase was related to the vehicle selling price, but 60% was related to the increased revenue for ancillary products sequentially, the quarterly average selling price was relatively flat. As far as sales volumes, we finished the quarter with 15,162 units versus 15,885 units sold last year, August and September had respectable volumes and collectively posted a gain in sales year over year, but October sales results were down. Several items contributed to the sales decline witnessed in October. And I'll talk about that, Matt, here what traffic was consistent and still posted gains year over year and online credit applications for the quarter were also positive by 19%. Yet there was a decrease in showroom traffic. Additionally, launching several states onto our new loan origination system or LOS was a contributing factor. I'll speak to more in a minute. Overall, we're trying to balance sales volume with our new system, onboarding new stores and introducing new underwriting guidelines. We spent the better part of last year rolling out the consumer application portal firm LOS, which allows the consumer to apply faster, have a soft credit pull during the application process and get a response via text as to the status of their application as well as centralized appointment setting. We're now in the second phase of our LOS rollout, which is related to underwriting and how sales are being originated. During the quarter, we onboarded three additional states, bringing the total to five states, which accounts for about 45% of our revenue. At quarter end, we started out the fiscal year rolling out the dealer facing portion of this tool. As a reference, our legacy system had limited ability to influence outcomes but served as a stable platform to originate deals and manage associated costs. Our original intent was to roll the system out with similar underwriting rules as our legacy system Atlas, allowing users to learn the system over time, but giving us enhanced data and visibility. However, with a backdrop of increasing credit losses, we made the strategic decision to implement new underwriting rules, which primarily sought to decrease terms and increased down payments. The initial results were very positive. When looking at originating terms, we finished at 44.1 months for the quarter. While this is up year over year, it's down sequentially by 0.6 months is the largest decrease we've seen since July 2019. The originating terms during the quarter for our legacy system were approximately 44 months and 42 months on the new LOS originating terms were both down and up and down in both systems and both trended downward throughout the quarter. Average down payments for the quarter were 4.9% and relatively flat when viewed sequentially, but down 30 basis points year over year. Yet when comparing the two originating systems, we collected nearly a point more in down-payment on the new LOS generating 5.5% down and 4.6% analysis. This demonstrates how effective the system is and our teams are pushing for improved deal structures despite the seasonality we see normally see with cash down payment percentages. The benefits of M2S are no longer. Theoretical is deployed in about half our stores already, and we couldn't think of a more opportune time to begin testing its capabilities. These combined results show that we can more quickly and precisely adjust parameters. And with any new system, there are growing pains, we're projecting to have the LOS completely rolled out in the third quarter prior to tax season. Ultimately, we're striving to achieve higher volumes with better deal structures to help our customers be more successful and we're confident the investment will have long term positive impact, while adding a level of sophistication to our underwriting is critical. A large part of our results is a function of our servicing efforts after the sale, which we must continue to execute at a high level. The gross margin initiatives we are focused on continue to bear fruit and improved materially year over year. Sequentially, there was a small decrease, but this was a function of the sales mix discussed earlier. We also continued to improve the age and mileage of vehicles we're purchasing compared to the prior year. During the quarter, we were able to bring down our purchase costs average of vehicles despite the UAW strike and any noise that created. If you reference Slide 4 in the supplemental period, supplemental material on the website have included two charts. In the first chart, our put our purchase cost average up against Cox's MMR Index, which tracks price movement throughout the year on a set basket of goods. We're improving our timing here, which ultimately will reduce how we own that vehicle relative to a given book value at the time of contract origination, it's evident we are moving with the market better despite us doing this with lead times of three to four weeks, the second chart shows. During the same period, we've improved the quality of the assets by purchasing newer and lower mileage vehicles. These are material changes, which lower repair costs during initial reconditioning and while under a service contract contributing to better gross margins. When combined with the inventory procurement and marketing management processes implemented last year, we're delivering operational improvements for our customers and the company. We've made great strides in both our procurement and remarketing capability capabilities and a key driver going forward will be our ability to resell more of these vehicles that are repossessed. The opportunity today is considerable and continues to grow as newer vehicles cycled through our portfolio. We've engaged a national provider to perform reconditioning and improved vehicle quality, which will in turn help drive the overall average cost down, improve gross margin, reduce credit loss and enhance cash flow. We will launch this during the third quarter. This is also critically important to addressing the affordability headwinds for our consumers.

情況仍然如此。此外，汽車這一細分市場規模很大，並且是我們行業中不斷增長的一部分，能夠真正幫助那些幾乎沒有機會從擁有良好業績記錄和豐富機會的行業領導者那裡獲得信貸的消費者，使其具有吸引力，尤其是當您考慮有機會利用 Core-Mark 在美國的獨特文化來提升我的技能和行業最佳實踐，將業務提升到一個新的水平，這就是我今天關注的重點。我們的收入成長了 2.8%，這主要是由於利息收入增加了 23%。銷量下降 4.6%，但銷售收入僅下降 0.4%，原因是季度平均銷售價格年增 5.6%，從 18,025 美元上漲至 19,035 美元，銷售收入低迷。其中約40%的成長與車輛售價有關，但60%與環比配套產品的營收成長有關，季度平均售價相對持平。就銷量而言，本季度我們售出了 15,162 輛，而去年的銷量為 15,885 輛。8 月和 9 月的銷量相當可觀，總體銷量同比有所增長，但 10 月的銷售結果有所下降。有幾個因素導致 10 月的銷售額下降。馬特，我要談談這一點，這裡的流量保持穩定，仍然同比增長，本季度的線上信貸申請也增加了 19%。然而，陳列室的客流量卻減少。此外，將多個州納入我們的新貸款發放系統或 LOS 也是一個促成因素。我稍後會講更多內容。總體而言，我們正在努力透過新系統、開設新商店並引入新的核保指南來平衡銷售。去年的大部分時間，我們推出了消費者申請入口網站公司 LOS，該公司允許消費者更快地申請，在申請過程中獲得軟信用拉動，並透過簡訊獲得有關其申請狀態的回覆以及集中預約設定。我們現在正處於 LOS 推出的第二階段，該階段與承保和銷售來源有關。本季度，我們新增了 3 個州，總數達到 5 個州，約占我們收入的 45%。在季度末，我們在本財年開始時推出了該工具面向經銷商的部分。作為參考，我們的遺留系統影響結果的能力有限，但可以作為發起交易和管理相關成本的穩定平台。我們最初的目的是推出與我們的舊系統 Atlas 類似的承保規則的系統，允許用戶隨著時間的推移學習該系統，但為我們提供增強的數據和可見性。但在信用損失不斷增加的背景下，我們做出實施新核保規則的策略決策，主要是減少期限、增加首付。初步結果非常正面。從原始期限來看，本季的期限為 44.1 個月。雖然這一數字同比有所上升，但環比下降了0.6 個月，這是我們自2019 年7 月以來看到的最大降幅。本季度我們遺留系統的原始期限約為44 個月，新LOS 原始期限為42 個月兩個系統均出現下降、上升和下降，整個季度均呈下降趨勢。該季度的平均首付率為 4.9%，與上一季相比相對持平，但比去年同期下降 30 個基點。然而，在比較兩個原始系統時，我們在新 LOS 上收取的首付多了近一個百分點，產生了 5.5% 的首付和 4.6% 的分析。這表明了該系統的有效性，並且我們的團隊正在推動改進交易結構，儘管我們通常看到現金首付百分比具有季節性。 M2S 的好處不再存在。 Theoretical 已在我們大約一半的商店中部署，我們想不出比這更合適的時機來開始測試其功能。這些綜合結果顯示我們可以更快速、更精確地調整參數。對於任何新系統，都會遇到成長的煩惱，我們預計 LOS 將在納稅季前的第三季完全推出。最終，我們正在努力透過更好的交易結構實現更高的銷量，以幫助我們的客戶取得更大的成功，我們相信這項投資將產生長期的正面影響，同時提高我們承保的複雜程度至關重要。我們的業績很大程度上取決於我們的售後服務工作，我們必須繼續以高水準執行。我們重點關注的毛利率措施持續取得成果，並逐年大幅改善。隨後，出現了小幅下降，但這是前面討論的銷售組合的函數。與前一年相比，我們也持續提高所購買車輛的車齡和行駛里程。在本季度，儘管出現了 UAW 罷工和由此產生的噪音，我們仍能夠降低車輛的平均採購成本。如果您在補充期間引用投影片 4，則網站上的補充資料已包含兩張圖表。在第一個圖表中，我們將平均購買成本與 Cox 的 MMR 指數進行比較，該指數追蹤一組商品全年的價格變動。我們正在改進我們的時機，這最終將減少我們相對於合約簽訂時給定帳面價值的車輛擁有方式，很明顯，儘管我們的交貨時間為三到四小時，但我們正在更好地適應市場週，第二張圖表顯示。同期，我們透過購買更新、里程更低的車輛來提高資產品質。這些都是重大變化，可降低初始整修期間的維修成本，同時根據服務合同，有助於提高毛利率。與去年實施的庫存採購和行銷管理流程相結合，我們正在為客戶和公司提供營運改善。我們在採購和再行銷能力方面都取得了長足進步，未來的關鍵驅動力將是我們轉售更多被收回車輛的能力。今天的機會是巨大的，並且隨著更新的車輛在我們的產品組合中循環而繼續增長。我們聘請了一家全國性供應商進行整修並提高車輛質量，這將有助於降低整體平均成本、提高毛利率、減少信用損失並增強現金流。我們將在第三季推出該項目。這對於解決消費者的負擔能力問題也至關重要。

I want to touch on net charge-offs and overall credit losses. Although the macro environment has seen some cooling of inflation over the quarter, the lingering financial and psychological effects of the worst bout of inflation and for decades continues to impact our consumers. Goods and services are still far pricier than they are just three years ago with the economic inflationary pressures on our customers, no more prevalent in all areas of their lives, things like higher energy costs, food housing and auto insurance, just to name a few. This is the largest contributing factor that drove an increase to the frequency of losses during the quarter of 24%. The unit losses on repossessions peaked in September and came down slightly in October. Our 30 day plus delinquencies also improved during that same timeframe, which are both positive signs, but we remain cautiously optimistic about this movement.

我想談談淨沖銷和整體信用損失。儘管本季度宏觀環境中通膨有所降溫，但幾十年來最嚴重的一輪通膨所帶來的揮之不去的財務和心理影響繼續影響著我們的消費者。商品和服務的價格仍然比三年前高得多，我們的客戶面臨著經濟通膨壓力，這種壓力在他們生活的各個領域都不再普遍，例如能源成本上升、食品住房和汽車保險等，僅舉幾例。這是導致本季損失頻率增加 24% 的最大因素。收回帶來的單位損失在 9 月達到頂峰，並在 10 月略有下降。我們的 30 天以上拖欠率在同一時間段內也有所改善，這都是積極的跡象，但我們對這一趨勢仍持謹慎樂觀態度。

I will now turn things over to Vicki on more details on the financials.

我現在將把有關財務的更多細節轉交給維姬。

Thank you, Dan. In my commentary, the comparisons that I will cover only the second quarter of 2024 versus second quarter of 2023, unless otherwise noted.

謝謝你，丹。在我的評論中，除非另有說明，我將僅涵蓋 2024 年第二季與 2023 年第二季的比較。

Our revenues for the second quarter were $361.6 million, up 2.8% from last year's prior period. The year-over-year increase is primarily due to the 23% higher interest income. As Doug mentioned, we did have a decrease in unit volumes. Our sales volumes became more challenging as we move throughout the quarter. And most of this decline came in the last month of the quarter, although we did have some operational challenges as we implemented our new LLS. There was also a dampening in the overall used vehicle market because of continued affordability challenges for our consumer. When combined the softness in the market, the continued elevated vehicle prices and onboarding stores to the LOS. We have less predictability in short term sales volumes than we would have otherwise expected to have. But with that said, the application volumes remain robust our LOS onboarding will be completed in the third quarter and the work we are doing to improve affordability should mitigate some of these challenges.

我們第二季的營收為 3.616 億美元，比去年同期成長 2.8%。年比成長主要是由於利息收入增加了 23%。正如道格所提到的，我們的單位數量確實有所減少。隨著整個季度的變化，我們的銷售變得更具挑戰性。儘管我們在實施新的 LLS 時確實遇到了一些營運挑戰，但大部分下降發生在本季度的最後一個月。由於消費者的承受能力持續面臨挑戰，整個二手車市場也受到抑制。加上市場疲軟、車輛價格持續上漲以及 LOS 入駐商店。我們對短期銷售的可預測性低於我們原本的預期。但話雖如此，申請量仍然強勁，我們的 LOS 上線將在第三季完成，我們為提高負擔能力所做的工作應該會緩解其中一些挑戰。

The gross profit dollars per retail unit sold improved by 11.5% and the gross profit percentage increased 220 basis points. A result of the initiatives around inventory lifecycle efficiencies from the procurement reconditioning wholesaling efforts and repairs after the sale. Sequentially, gross profit dollars improved slightly by 1% and the gross margin percentage was 30 basis points lower, primarily due to the lower sales volumes in October, we expect further improvements in our gross margin percentage as volumes improve, and we scale and fully operationalize our initial initiatives due to our operational efficiencies, our inventory dollars decreased $16.5 million from the prior year quarter. Quarterly inventory turns improved to 7.1%-ish compared to 6.7% annualized. SG&A was $44.9 million or 14.9% of sales, up from the prior year quarter of $42.9 million, but down sequentially $1.6 million from $46.5 million. The primary reduction sequentially was a $3.2 million stock reduction or reduction in stock-based compensation, partially offset by increased cost and collection expenses and professional fees related to the implementation of our new technology. Since the quarter end, we have made adjustments to our operating expense structure. First, we reduced the size of our corporate workforce by 10% through a series of strategic decisions. We've also limited hiring, reduced our marketing spend and curtailed the use of some professional services. We will continue to evaluate spend at both the dealership and the corporate level. And we're committed to driving cost efficiencies in the business and implementing cost savings initiatives over the next quarter that when combined with our technology and business investments. We expect to provide SG&A costs, leveraging opportunities as we move forward. However, we continue to serve an expanding customer base with over 104,000 customers, a 6% increase over the prior year quarter. SG&A per average account improved and was $424 compared to $439 in the prior year. And $449 sequentially. On the credit losses, our net charge-offs as a percentage of average finance receivables were 7.2% versus 5.8% this compares to our prior 10-year average for second quarters of 6.2%, and that includes the positive COVID period as a comparison to pre-COVID periods, our average net charge-offs for the five year period, pre-pandemic were 7% for second quarters, the frequency of losses accounted for over two thirds of the credit loss increase. Severity was also higher than usual cause Fasson rapid vehicle depreciation exhibited last year that made some of the originations in the calendar year of 21 and 22 pools experienced both higher frequency and severity of losses.

每個零售單位的毛利提高了 11.5%，毛利百分比提高了 220 個基點。這是圍繞庫存生命週期效率的措施的結果，這些措施來自採購、整修、批發工作和售後維修。隨後，毛利小幅提高了 1%，毛利率下降了 30 個基點，這主要是由於 10 月份銷量下降，我們預計隨著銷量的提高，毛利率將進一步提高，並且我們擴大規模並全面運營由於我們的營運效率，我們的初步措施使我們的庫存金額比去年同期減少了1,650 萬美元。季度庫存週轉率從年化 6.7% 改善至 7.1% 左右。 SG&A 為 4,490 萬美元，佔銷售額的 14.9%，高於去年同期的 4,290 萬美元，但比上一季的 4,650 萬美元減少了 160 萬美元。主要的連續減少是 320 萬美元的庫存減少或基於股票的薪酬減少，部分被與實施新技術相關的成本和收集費用以及專業費用的增加所抵消。自季度末以來，我們對營運費用結構進行了調整。首先，我們透過一系列策略決策將公司員工規模減少了 10%。我們也限制了招聘，減少了行銷支出，並減少了一些專業服務的使用。我們將繼續評估經銷商和公司層面的支出。我們致力於提高業務成本效率，並在下個季度結合我們的技術和業務投資實施成本節約計劃。我們期望提供銷售、管理及行政費用，並利用我們前進的機會。然而，我們繼續為不斷擴大的客戶群提供服務，客戶數量超過 104,000 名，比去年同期增長 6%。每個平均帳戶的 SG&A 有所改善，從前一年的 439 美元增加到 424 美元。連續 449 美元。在信貸損失方面，我們的淨沖銷占平均財務應收帳款的百分比為 7.2%，而我們第二季度的前 10 年平均為 6.2%，其中包括與在新冠疫情爆發之前，我們在疫情爆發之前的五年內第二季的平均淨沖銷率為7%，損失頻率佔信用損失增量的三分之二以上。嚴重程度也高於往常，因為法森去年出現的車輛快速貶值使得21和22日曆年的一些起源經歷了更高的頻率和嚴重程度的損失。

So that's a good point, Ricky, if you reference Chart one on Slide 5, we've indexed wholesale prices back to 2017 to show what happens over a three-year period with price in a normalized environment, I specifically called out two points to illustrate what happens with price between an origination and a default. As an example, in chart one, the periods I've identified for origination default show approximately a nine or 10% reduction in depreciation. Chart two reflects the wholesale price moving from 2021 to 2023 year to date, it showed similar timing of origination and defaults, and it clearly shows the price degrading in excess of 25%. This is why severity is more pronounced than normal. This is not a dynamic that's specific to Car-Mart, but an industry wide issue which most lenders will have to contend with at some point.

所以這是一個很好的觀點，Ricky，如果您參考幻燈片5 上的圖一，我們已將批發價格追溯到2017 年，以顯示三年期間在正常化環境下價格發生的情況，我特別指出了兩點說明起始價格和違約價格之間會發生什麼事。例如，在圖一中，我確定的初始違約期間顯示折舊大約減少了 9% 或 10%。圖二反映了從 2021 年到 2023 年迄今為止的批發價格變化，它顯示了相似的起始和違約時間，並且清楚地顯示價格下降超過 25%。這就是為什麼嚴重程度比正常情況更明顯的原因。這並不是 Car-Mart 特有的動態，而是大多數貸方在某個時候必須應對的全行業問題。

Yes, thank you, Doug. Because of the nature of our contracts being shorter. It's our belief that we are witnessing some of this first many industry metrics, which measure delinquency and default rates, which have historically moved in tandem now show delinquencies continuing to rise without defaults.

是的，謝謝你，道格。因為我們的合約較短。我們相信，我們正在見證最初的許多行業指標中的一些，這些指標衡量拖欠率和違約率，這些指標歷來是同步變化的，現在顯示拖欠率在沒有違約的情況下繼續上升。

Moving at a similar rate as a management team, we have decided not to deviate from our historical collection practices because of our deep experience in dealing with subprime customers. The good news is that we are through the largest percentage of losses expected from these pools. While these pools are challenging, nonetheless, they produced over 50% cash on cash returns and approximately a 35% IRR. As a result of the increased losses in our quarterly analysis, the company did increase the allowance for credit losses from 23.91% to 26.04% sequentially, resulting in a $28 million charge to the provision expense and earnings per loss earnings per share loss of $3.40 after tax. The structural changes to our portfolio over recent years, driven by higher vehicle cost and longer term links as well as the current economic state of our customer continue to drive an increase in the provision for credit losses as our allowance represents an expectation of losses on a $1.5 billion portfolio the result of a change can have a large impact on any period's quarterly earnings, especially based on our retail businesses sales in a given quarter, our pools have consistently produced positive cash on cash returns and attractive IRRs as vehicle prices have risen in terms of increase from approximately 30 months to approximately 44 months, our time to breakeven has been pushed out and our IRRs have declined, although still at very good returns. Please refer to slides 3 and 6 on our website to see how these pools have performed over time. Our accounts 30 plus days past due were 3.6%, consistent with last year's quarter and improved from 4.4% sequentially. As a percentage of accounts receivable, our total dollars past-due improved 213 basis points sequentially. This is especially important given that the quarter closed on a Tuesday, which is historically the highest delinquency day of the week the average originating contract term for the quarter was 44.1 months compared to 42.6 months and improved sequentially from 44.7. The lower delinquencies should result in improved losses over the next quarter. Our weighted average contract term for the entire portfolio, including modifications, was 47.3 months compared to 44.8 for the prior year quarter and 46.9 sequentially. The weighted average age of the portfolio improved to 10.8 months. The percentage of our portfolio held by the highest credit quality customers continues to improve compared to the prior year and was flat sequentially. You should expect us to be more aggressive on capital allocation going forward during this quarter.

作為管理團隊，我們決定不偏離我們歷史上的收款實踐，因為我們在處理次級客戶方面擁有豐富的經驗。好消息是，我們已經度過了這些池中預期損失比例最大的時期。儘管這些資金池具有挑戰性，但它們產生了超過 50% 的現金回報率和約 35% 的 IRR。由於我們季度分析中的虧損增加，該公司確實將信貸損失準備金從 23.91% 提高到 26.04%，導致撥備費用為 2800 萬美元，每股虧損收益為 3.40 美元。稅。近年來，由於車輛成本上升和長期聯繫以及客戶當前的經濟狀況，我們的投資組合發生結構性變化，繼續推動信用損失準備金的增加，因為我們的準備金代表了對損失的預期。15 億 美元的投資組合變化的結果可能對任何時期的季度收益產生重大影響，特別是根據我們特定季度的零售業務銷售情況，隨著汽車價格的上漲，我們的投資組合始終產生正現金回報和有吸引力的IRR。從大約 30 個月增加到大約 44 個月，我們實現盈虧平衡的時間已經被推遲，我們的內部收益率也有所下降，儘管回報仍然非常好。請參閱我們網站上的幻燈片 3 和 6，以了解這些池在一段時間內的表現如何。我們的逾期 30 天以上的帳戶率為 3.6%，與去年季度一致，比上一季的 4.4% 有所改善。作為應收帳款的百分比，我們的逾期總額比上一季提高了 213 個基點。鑑於該季度於週二收盤，這一點尤其重要，而周二是一周中拖欠率最高的一天，該季度的平均原始合約期限為44.1 個月，而此前為42.6 個月，並且比44.7 個月有所改善。拖欠率的下降應該會導致下一季的損失有所改善。我們整個投資組合的加權平均合約期限（包括修改）為 47.3 個月，而去年同期為 44.8 個月，上一季為 46.9 個月。投資組合的加權平均年齡改善至10.8個月。與前一年相比，最高信用品質客戶持有我們投資組合的比例持續提高，與上一季持平。您應該預期我們在本季將更積極地進行資本配置。

We closed another location, bringing the total to three for the fiscal year. We will be adding a newly acquired dealership during the third quarter, moving capital from underperforming stores to higher performing assets which have cascading benefit throughout the Company. We will continue to review and monitor our capital invested in each dealership and other investments to maximize returns. Our interest expense continues to significantly impact our earnings potential. Over 60% of the increase is due to higher interest rates with the remaining a result of an increase in average borrowings. The Company's total securitized non-recourse notes payable was $489 million, net of $90 million in restricted cash related to these notes. We are also currently considering redeeming our first series of asset-backed non-recourse notes issued in April of 2022, as we have satisfied the conditions to repurchase the securitized receivable under the terms of the note sub subject to notification to the noteholders. This will free up some well-seasoned collateral. At quarter end, we had $4.3 million in unrestricted cash and approximately $86 million in additional availability under our revolving credit facilities based on our current borrowing base of receivables and inventory access to capital with our $600 million revolving credit facility, a successful securitization program and an active shelf registration gives us flexibility and a distinct advantage over many competitors. Many competitors may experience even more pressure in accessing capital in the future. Our non-recourse securitized notes represent the bulk of our funding, and our cost of funds fluctuate with the level of interest rates and credit spreads. We've summarized the key drivers and their impact on EPS in the quarter.

我們關閉了另一個地點，使本財年的總數達到三個。我們將在第三季增加一家新收購的經銷店，將資本從業表現不佳的商店轉移到業績較高的資產上，為整個公司帶來連鎖效益。我們將繼續審查和監控我們投資於每個經銷商的資本和其他投資，以最大限度地提高回報。我們的利息支出持續對我們的獲利潛力產生重大影響。超過 60% 的成長是由於利率上升，其餘則是平均借款增加的結果。本公司的證券化無追索權應付票據總額為 4.89 億美元，扣除與這些票據相關的 9,000 萬美元限制性現金。我們目前也正在考慮贖回我們於2022 年4 月發行的第一批資產支持無追索權票據，因為我們已經滿足了根據票據條款回購證券化應收帳款的條件，但須通知票據持有人。這將釋放一些成熟的抵押品。截至季末，我們擁有430 萬美元的非限制性現金以及約8,600 萬美元的循環信貸額度，基於我們目前的應收帳款借款基礎和透過6 億美元的循環信貸額度獲得資本的庫存、成功的證券化計劃和主動貨架註冊為我們提供了靈活性，並比許多競爭對手具有明顯的優勢。許多競爭對手未來在獲取資金方面可能會面臨更大的壓力。我們的無追索權證券化票據占我們資金的大部分，我們的資金成本隨著利率和信用利差水準而波動。我們總結了本季的主要驅動因素及其對每股盈餘的影響。

On Slide 7. In conclusion, we remain committed to growth and prudent financial management. We're focused on delivering value to our shareholders through strategic investments and operational efficiency and a steadfast dedication to keep our customers on the road.

關於投影片 7。總之，我們仍然致力於成長和審慎的財務管理。我們致力於透過策略投資和營運效率以及堅定不移的奉獻精神為股東創造價值，讓我們的客戶繼續前進。

Thanks, and I'll let Doug close SaaS expertise.

謝謝，我會讓 Doug 關閉 SaaS 專業知識。

We continue to optimize our footprint and leverage our investments in technology and infrastructure. Our ERP implementation begins next calendar year, which reduced the need for several manual and redundant processes. We are excited to have central auto sales as a new addition to our dealership group that we expect to close in December. We're actively evaluating several opportunities in our market geographies to acquire productive stores, which offer operators an exit strategy and continue to rework and servicing customers and their communities. This last acquisition has sales volume on par with our largest stores in the country, and we're excited to have some new partners help us grow before we take questions. I want to reiterate that our team is extremely focused on executing our strategy for the back half of fiscal year 2024. Overall, we believe our keen focus on operational efficiencies, reducing costs and prudent capital management will enhance our competitive advantages. The overall macro environment remains challenging for Car-Mart score customers, both existing and prospective, but they need the service we provide. While we're disappointed to show a loss during the current quarter, the underlying cash generative nature of our business continues to position us for long-term profitable growth.

我們繼續優化我們的足跡並利用我們在技術和基礎設施方面的投資。我們的 ERP 實施將於明年開始，這減少了對多個手動和冗餘流程的需求。我們很高興中央汽車銷售中心成為我們經銷商集團的新成員，預計將於 12 月關閉。我們正在積極評估市場地區的多個機會來收購生產性商店，這為營運商提供了退出策略，並繼續返工並為客戶及其社區提供服務。最後一次收購的銷售量與我們在該國最大的商店相當，我們很高興在我們回答問題之前有一些新的合作夥伴幫助我們成長。我想重申，我們的團隊非常專注於執行 2024 財年下半年的策略。總體而言，我們相信，我們對營運效率、降低成本和審慎資本管理的高度關注將增強我們的競爭優勢。對於 Car-Mart 現有和潛在客戶來說，整體宏觀環境仍然充滿挑戰，但他們需要我們提供的服務。雖然我們對本季出現虧損感到失望，但我們業務的潛在現金產生性質繼續使我們能夠實現長期獲利成長。

Now we'll open up the line for questions. Operator, please provide instructions to do so.

現在我們將開通提問熱線。操作員，請提供執行此操作的說明。

Thank you again, ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone. Again, to ask a question, please press star one. We do ask that you please limit yourself to one question and a follow-up. Thank you. One more for our first question.

再次感謝各位，女士們先生們，如果您想提問，請按電話上的一號星星。再次強調，要問，請按星號一。我們確實要求您將自己限制在一個問題和一個後續問題上。謝謝。我們的第一個問題還有一個。

John Rowan, Janney Montgomery Scott.

約翰·羅文，珍妮·蒙哥馬利·斯科特。

Doug, I want to echo your sentiment on Hank, especially because I'm going to reference them here. Mcmoran questions on. You mentioned that the cash on cash return is still the same at 1.6 times that it was historically for the Company, you know, I just want to make sure I understand that metric correctly. And whether or not we have not adjusted for timing because you say it's the same. But it's taking to 45, 44 months duration, it's taking 50% longer to get to that return. I mean, I remember my first meeting with Hank and then you see a CEO. And Jeff, our CFO said we're never going over a 30-month duration right now. Is that still the right metric to look at given, you know how much longer it's taking to collect the cash.

道格，我想回應你對漢克的看法，特別是因為我將在這裡引用他們。麥克莫蘭提問。您提到現金回報率仍然是公司歷史水平的 1.6 倍，您知道，我只是想確保我正確理解該指標。以及我們是否沒有調整時間，因為你說它是一樣的。但需要 45、44 個月的時間才能獲得回報，需要多花 50% 的時間。我的意思是，我記得我第一次與漢克會面，然後你看到了一位執行長。我們的財務長 Jeff 表示，我們目前的期限絕不會超過 30 個月。鑑於您知道收集現金需要多長時間，這仍然是正確的衡量標準嗎？

Yes, that's an undiscounted return, John. So again, putting $1 out and getting $1.60 back when you discount that back for the time and the longer terms that's when I was mentioning the IRRs, which are certainly lower, but still very positive. And if you think about, you know, the last couple of years and I think we've talked about this on a few calls. We could have we could have chosen just to sit out of the market and not serve these customers, but we chose to go ahead and participate, extend the term. We're really working on the quality of the vehicle and have improved that since that COVID period time. So again, overall and overtime, it's still a good return on the output of those pools.

是的，這是無折扣的回報，約翰。再說一次，投入 1 美元，當你將其折回當時和長期期限時，即獲得 1.60 美元的回報，即我提到的 IRR，它肯定較低，但仍然非常積極。如果你想想，你知道，過去幾年，我想我們已經在幾次電話中討論過這個問題。我們本來可以選擇袖手旁觀，不為這些客戶提供服務，但我們選擇繼續參與，延長期限。我們確實在努力提高車輛的質量，並且自新冠疫情期間以來已經有所改善。所以，總的來說，從總體上看，這些池的輸出仍然是一個很好的回報。

Just agreed. I'd also echo Vicki sentiments and appreciate your commentary about Hank. I'm sure if you went back in time and asked them, Hey, can you envision a day we're going to sell 60,000 plus cars at $19,000 apiece. You probably would have pushed back on that, too. But the environment has changed. And I think with other large competitors closing, it creates opportunity for us as well. And we're feeling ourselves out for what that right term is. And I think that's why it's so important to have these new initiatives like the LOS that enable us to drive that and have some centralized thought about what term should be and how we can actually get there.

剛剛同意了。我也同意維基的觀點，並感謝你對漢克的評論。我確信如果你回到過去問他們，嘿，你能想像有一天我們會以每輛 19,000 美元的價格出售 60,000 多輛汽車嗎？你可能也會反對這一點。但環境已經改變了。我認為隨著其他大型競爭對手的關閉，這也為我們創造了機會。我們正在摸索到底什麼是正確的術語。我認為這就是為什麼像 LOS 這樣的新舉措如此重要，它使我們能夠推動這一目標，並集中思考應該是什麼術語以及我們如何真正實現這一目標。

Craig, on your press release had mentioned some underwriting changes in October impacting volume or what were those mentioned, obviously the rollout of the LOS. Should we look for reduction in originating term. Obviously, the average contract term was up pretty sharply sequentially. I assume there is a heightened level of modifications in there since the originating term came down he just kind of break those two pieces out and what the underwriting changes were?

克雷格，在您的新聞稿中提到了 10 月份影響數量的一些承保變化，或者提到了哪些變化，顯然是 LOS 的推出。我們是否應該尋求原始術語的減少？顯然，平均合約期限連續大幅上升。我認為自從原始術語下降以來，那裡的修改程度很高，他只是將這兩部分分開，承保變化是什麼？

Yes. But the as I mentioned before, the underwriting changes primarily focused around term and down-payment. We had made some mild adjustments at the very beginning of the quarter. And as we saw credit losses change, we pulled back and really wanted to focus on highly rated customers and down-payment, we weren't sure how much effect that would have on sales. And so we're really what we could execute on. And we were really surprised by the results. I think we're still trying to figure out what that right term is because what we need to balance is that and sales volumes. And historically, we've served the customer that we underwrite, and it provides a good return, but now we really are able to dial in and really focus on highly rated customers. And to us, that's the real upside of the opportunity to trying to augment the portfolio. So we're trying to we're trying to juggle all that while continuing to onboard the remaining stores. That adds any clarity, John.

是的。但正如我之前提到的，承保變化主要集中在期限和首付方面。我們在本季初進行了一些溫和的調整。當我們看到信用損失發生變化時，我們撤回並真正想專注於高評價客戶和首付，我們不確定這會對銷售產生多大影響。所以我們確實是我們可以執行的。我們對結果感到非常驚訝。我認為我們仍在努力找出正確的術語是什麼，因為我們需要平衡的是術語和銷售。從歷史上看，我們一直為我們承保的客戶提供服務，並提供了良好的回報，但現在我們確實能夠撥入並真正專注於評價較高的客戶。對我們來說，這就是嘗試擴大投資組合的機會的真正好處。因此，我們正在努力兼顧所有這些，同時繼續開設剩餘的商店。這增加了清晰度，約翰。

Okay. And just can you address that whether or not there was increased modifications.

好的。無論是否增加了修改，您都可以解決這個問題。

We have not seen an increase in modifications compared to historical trends.

與歷史趨勢相比，我們沒有看到修改的增加。

No. And I think the in the overall portfolio and term was up 0.4 months, including those modifications. So again, yes, we are working with our customers in this environment, same as we have historically. But I think we mentioned too that we're also ensuring that anything that's not going to be a producing asset or the consumer's not able to keep making payments. We're not kicking those down the road.

不。我認為整體投資組合和期限增加了 0.4 個月，包括這些修改。再說一遍，是的，我們正在這種環境下與客戶合作，就像我們歷史上的那樣。但我想我們也提到過，我們還要確保任何不會成為生產性資產或消費者無法繼續付款的東西。我們不會把它們扔到一邊。

We're taking our lumps as we go here or one more thing on the it's one of the things that you called out when you look at delinquency rates and default rates and the divergence of those two, which historically have moved in tandem. And our experience in working with these customers says continue to run our play, our deep experience we have to trust our playbook and saying things don't materially get better over time working with this tranche of customers. And we got to cycle through these through our portfolio if that's what it means. And so we're just we're staying focused on running our play.

當我們來到這裡或另一件事時，我們正在接受我們的腫塊，這是您在查看拖欠率和違約率以及這兩者的差異時所指出的事情之一，這兩者在歷史上是同步變化的。我們與這些客戶合作的經驗表明，我們必須繼續經營我們的策略，我們的深厚經驗表明我們必須相信我們的策略，並且隨著與這批客戶合作的時間的推移，事情不會實質地變得更好。如果這就是這個意思的話，我們必須在我們的投資組合中循環這些。所以我們只是專注於運行我們的遊戲。

Okay.

好的。

And then just two more. I'll lump them into one question on what's the outlook for share repurchases. Obviously, given the loss you reported here and where they are you anywhere close any amortization events in the ABS facilities?

然後還有兩個。我將把它們歸結為一個關於股票回購前景的問題。顯然，考慮到您在這裡報告的損失以及您在哪裡關閉 ABS 設施中的任何攤銷事件？

Yes. So share repurchases will continue to be a part of our capital allocation as we look ahead and we do want to ensure that we're taking advantage of the opportunities that we have in front of us right now on these acquisitions and not miss out on any of those in the current market, but repurchases will continue to be a part of that. And on the ABL side, we are working on our renewal of our ABL currently, we have a good relationship with our banks and we keep them updated on our business and very transparent with them.

是的。因此，展望未來，股票回購將繼續成為我們資本配置的一部分，我們確實希望確保我們利用目前在這些收購中所擁有的機會，並且不會錯過任何機會。當前市場上的股票，但回購仍將是其中的一部分。在 ABL 方面，我們目前正在努力更新 ABL，我們與銀行有著良好的關係，我們會向他們通報我們的業務最新情況，並且對他們非常透明。

They understand our business and you have I mean, there's got to be a holiday in India actually make sure you're not close to the covenant. That effort is a turbo amortization?

他們了解我們的業務，我的意思是，印度必須有一個假期，實際上確保您沒有接近盟約。那努力是渦輪攤銷嗎？

Yes, now we have and we have availability triggers that we watch and reviewed closely. And as I mentioned, we have $86 million of additional availability at the end of October, and we're not expecting to trip any covenant triggers there and then we have our own B that we're going to call here in the next 30 days or so or less this month in December, which will bring some additional collateral into that ABL. pool. And then we're also looking at another securitization later in the month. So we've got flexibility there.

是的，現在我們已經有了我們密切關注和審查的可用性觸發器。正如我所提到的，我們在 10 月底有 8600 萬美元的額外可用性，我們不希望在那裡觸發任何契約觸發器，然後我們有自己的 B，我們將在接下來的 30 天內調用這裡12 月左右或更少，這將為該ABL 帶來一些額外的抵押品。水池。然後我們還在考慮本月稍後的另一項證券化。所以我們在那裡有靈活性。

And then as I mentioned to you, we also have our active shelf out there, should we need to use some other type of funding in the future.

正如我向您提到的，如果我們將來需要使用其他類型的資金，我們也有活躍的貨架。

Okay.

好的。

Thank you.

謝謝。

Thank you.

謝謝。

Vincent Caintic, Stephens.

文森特凱恩蒂克，史蒂芬斯。

Essentially taking my questions on first on credit. So I appreciate all the detail you gave with that. So the 30 days accounts, 30 days past due came down quarter over quarter, yet the credit provisions went up. So I'm curious what changed in your thinking that drove the credit provisions higher on in the press release, it said higher credit provisions were one-time. Sort of wondering if the higher credit provisions is related to, say one-time higher credit losses that we experienced this quarter. And so reserve should come down as the back book of the portfolio comes down over time or is your credit if the consumer deteriorating further going forward. So we should expect to keep this higher credit reserve rate going forward?

本質上是先賒帳我的問題。所以我很欣賞你提供的所有細節。因此，30 天帳戶（逾期 30 天）逐季下降，但信貸準備金卻上升。所以我很好奇你的想法發生了什麼變化，導致新聞稿中的信貸準備金提高，它說更高的信貸準備金是一次性的。有點想知道較高的信貸準備金是否與我們本季經歷的一次性較高的信貸損失有關。因此，隨著時間的推移，投資組合的帳面價值會下降，或者如果消費者未來進一步惡化，您的信用也會下降，準備金應該會下降。那麼我們應該預期未來能維持較高的信貸準備率嗎？

Sure. So a large piece of that credit reserve analysis is just based on, you know, actual losses that have happened. And so when you see an increase of losses in the quarter like we saw, that's going to and well through the entire portfolio with an expectation that some piece of that continues. So some of it's just a math equation and that results in that higher output. And so as we look at our delinquencies, as we look at the pools that we have out there.

當然。因此，信貸準備金分析的很大一部分只是基於已經發生的實際損失。因此，當您看到本季的虧損增加時，就像我們看到的那樣，這將貫穿整個投資組合，並預計其中的某些部分將繼續下去。所以其中一些只是一個數學方程，這會導致更高的輸出。因此，當我們審視我們的拖欠行為時，當我們審視我們現有的資金池時。

Yes, there would be some expectation as we move forward here that that would be able to be reduced at some point in time in the future, but we've got to work through what's currently in our portfolio and we'll continue to review that quarterly.

是的，隨著我們向前推進，人們會期望在未來的某個時間點能夠減少這種情況，但我們必須解決目前投資組合中的內容，我們將繼續審查這一點季刊。

And I'd also note that the increase in those unit losses during the quarter was really, really sharp again. I mentioned peaking in September coming down in October. And then again, most recently in November, it came down yet again. So we're encouraged by that, but it's tough. It's tough for us to sort of gauge where that's going to end up, but us keeping our delinquencies are in line and seeing positive trends in terms of the unit losses, those are really good indicators. But if we got to see what sort of pans out, the environment is still a challenge for our consumers and that doesn't seem to be going away anytime soon. We're doing everything we can to help them be successful.

我還想指出，本季這些單位損失的成長再次非常非常急劇。我提到 9 月的高峰會在 10 月下降。然後，最近一次是在 11 月，它再次下降。所以我們對此感到鼓舞，但這很困難。我們很難判斷最終結果如何，但我們保持拖欠率保持一致，並看到單位損失的正面趨勢，這些都是非常好的指標。但如果我們看看結果如何，環境對我們的消費者來說仍然是一個挑戰，而且這種情況似乎不會很快消失。我們正在盡一切努力幫助他們取得成功。

Okay.

好的。

That's very helpful. And I guess maybe to put it another way is there a way to say that A., your underwriting has changed such that you're targeting a certain loss rate that's lower than where we are now? Maybe if you could give some detail of what like I understand that the current book or the portfolio that was written up this past two years is probably in a tough spot, but trying to get a sense of the forward portfolio that you are writing going forward, Tom, are you targeting something that's lower than where the portfolio is?

這非常有幫助。我想也許換句話說，有沒有辦法說 A.，你們的承保已經改變，以至於你們的目標是低於我們現在的特定損失率？也許你可以提供一些細節，例如我的理解，當前的書或過去兩年寫的投資組合可能處於困境，但試圖了解你未來正在寫的遠期投資組合湯姆，你的目標是低於投資組合的目標嗎？

Yes. So there's a couple of drivers there.

是的。所以那裡有幾個司機。

Vince.

文斯.

And I think about it this way, if we're targeting higher downpayments and better-rated customers, I would expect the loss rate to come down, especially when you factor in the fact that we're really focused on the asset, right and how it performs in the portfolio, which should drive better recovery rates, right? But all that remains to be seen. We have to prove that out. But we're doing all the things and to sort of get us to that future place.

我這樣想，如果我們的目標是更高的首付和更好的客戶評級，我預計損失率會下降，特別是當你考慮到我們真正專注於資產這一事實時，正確和它在投資組合中的表現如何，這應該會帶來更好的回收率，對嗎？但這一切還有待觀察。我們必須證明這一點。但我們正在做所有的事情，以便讓我們到達未來的地方。

So you're 100%, right that I think that's where we're headed. And that's where we want to be focused on. We don't know what that means yet, right? We need to get these cars cycled through and keep more of these cars and help drive cheaper cars into our portfolio also which help with default rates. So there's a lot going on, but we're trying to do all of those things to drive a differentiated result here than we've experienced recently.

所以你是 100% 正確的，我認為這就是我們的發展方向。這就是我們想要關注的地方。我們還不知道這代表什麼，對嗎？我們需要讓這些汽車循環使用並保留更多這些汽車，並幫助將更便宜的汽車納入我們的投資組合，這也有助於降低違約率。因此，發生了很多事情，但我們正在努力做所有這些事情，以實現比我們最近經歷的差異化結果。

Vincent, I would also add to that that, you know, it is a subprime consumer and we're working to structure the deals for success as best we can. But as you know, these consumers live paycheck to paycheck, and that's why our servicing after the sale and how we help them through those events after the sale are so important and how we service them. So again, we have to keep that in mind because the consumer that we're dealing with and the aspect of that.

文森特，我還要補充一點，你知道，這是一個次級消費者，我們正在努力建立交易，以盡可能地取得成功。但如您所知，這些消費者靠工資過活，這就是為什麼我們的售後服務以及我們如何幫助他們完成售後事件以及我們如何為他們提供服務如此重要。因此，我們必須牢記這一點，因為我們正在處理的消費者及其方面。

Okay.

好的。

That's helpful. Thank you. And then separately on the sales activities, are the sales per store per month declining this quarter? I was wondering if you could give specifically October since that seems to be the weakest in the quarter? And then how much of the impact was driven by the onboarding of LOS system? You've gotten a lot of stores now within that. So I'm just wondering maybe what sales would have been without that onboarding and just generally how you expect sales to be going forward? Is there still more pressure and plus your plus your tighter underwriting? Or are the changes you're making now and we can see some sales growth going forward?

這很有幫助。謝謝。然後從銷售活動來看，本季每家商店每月的銷售額是否有所下降？我想知道您能否具體給出 10 月份的情況，因為那似乎是本季最弱的月份？那麼，LOS 系統的引入帶來了多少影響？現在裡面已經有很多商店了。所以我只是想知道，如果沒有這種入職，銷售額會是多少，以及您預計未來的銷售額會如何？是否還有更大的壓力以及更嚴格的承保？或者您現在正在做出的改變，我們可以看到未來的一些銷售成長？

Yes, I think Vicki touched on that in her remarks there about there being less predictability today. And I think that's really driven by partially by the rollout of the LOS. Our teams in our stores are learning. I've used the system, it's new. We haven't changed it in over a decade. And so there's a learning curve there, which does impact some productivity, right? And we're aware of that. The best thing we can do is continue to roll it out, roll it out quickly to support the stores as best as we can and then get that behind us. And in addition to that, there was some softness in the environment. And what we're trying to do is reconcile, okay. We were up again in online credit apps 19%. Our unique visitors to our website was also up 23%. So I think there's no shortage of demand, right? What we're trying to do is balance the right customers in our portfolio and roll out this new system. There was a little bit of softness in showroom traffic. And so we're trying to figure out is that an us problem writers that's driven by the environment, and it's really, really early to tell there was a sort of sharp drop-off in October. And so it sort of remains to be seen. We're trying to give ourselves some elasticity on the sales volume for the third quarter here because it's important to us to get the right customers in our portfolio. And that's the most thing that's most important thing we're really focused on.

是的，我認為維基在她關於今天的可預測性較低的言論中談到了這一點。我認為這實際上是由 LOS 的推出部分推動的。我們商店的團隊正在學習。我用過這個系統，很新。十多年來我們沒有改變過它。所以那裡有一個學習曲線，確實會影響一些生產力，對吧？我們知道這一點。我們能做的最好的事情就是繼續推出它，迅速推出它，以盡我們所能地支持商店，然後把它拋在身後。除此之外，環境還有些柔軟。我們正在努力做的是和解，好吧。線上信貸應用程式的成長率再次上升 19%。我們網站的獨立訪客也增加了 23%。所以我認為需求並不短缺，對嗎？我們正在努力做的是平衡我們產品組合中的正確客戶並推出這個新系統。展廳客流量有些疲軟。因此，我們試圖弄清楚，美國的問題作者是受環境驅動的，現在說 10 月出現急劇下降還為時過早。所以這還有待觀察。我們正在努力為第三季的銷售提供一定的彈性，因為在我們的產品組合中獲得合適的客戶對我們來說很重要。這是我們真正關注的最重要的事情。

And there is still the affordability challenge. Nothing Cox's come out there, and we're around 50% of the market that may be setting out data affordability. So the improvements that we're working on in terms of the of the vehicle should help with that also your opening dome?

而且仍然存在著負擔能力的挑戰。 Cox 還沒有發布任何內容，而我們約佔市場 50% 的份額，可能正在製定資料可承受性。那麼我們正在對車輛進行的改進應該也會對您的開放圓頂有所幫助？

That's a great point. Would you be young? I touched on that the ability to sell more of our repositions when we do that, our early indicators in our pilot is we can shave a couple of thousand dollars off the transaction price for our consumer. That said, we can generate demand when we scale that. And so that's why it's so important and we're really focused on that. And that does roll out here in the third quarter. So I'm not really answering your question directly, but these are all the things that are sort of in play. We know we can drive some of that. We know the top site demand is really strong. And we know we're also looking at underwriting restrictions and guidelines and trying to balance all of that with onboarding new stores. So I wish I could give you a more clear answer, but it's not on the demand side.

這是一個很好的觀點。你會年輕嗎？我談到，當我們這樣做時，我們能夠銷售更多的重新定位，我們試點的早期指標是我們可以為消費者削減數千美元的交易價格。也就是說，當我們擴大規模時，我們可以產生需求。這就是為什麼它如此重要，我們非常關注這一點。這確實會在第三季推出。所以我並沒有直接回答你的問題，但這些都是正在發揮作用的事情。我們知道我們可以推動其中一些。我們知道頂級網站的需求非常強勁。我們知道，我們也在考慮承保限制和指導方針，並試圖在所有這些與新店開業之間取得平衡。所以我希望能給你一個更明確的答案，但這不是需求方的。

Okay. Understood.

好的。明白了。

That's very helpful.

這非常有幫助。

Thanks so much.

非常感謝。

Thank you. That's it.

謝謝。就是這樣。

Kyle Joseph, Jefferies.

凱爾·約瑟夫，杰弗里斯。

Thanks for taking my questions. Just to just a few more on credit, if you will. I think you referenced that kind of were back at kind of pre-pandemic average loss rates for us the second quarter. But if we look back at kind of pre-pandemic reserve level that I think there are more in the 24.5, 25% range, obviously you're above that now. Is that is that a function of and the portfolio duration or just the uncertain outlook? And then kind of in addition to that, any specific macro changes that trigger the reserve or is it more just a function of performance in that and enduring inflation yes, I would say that most of it is based on the performance, the severity as a piece of that increased reserve as well. And then there are some qualitative factors such as the inflationary environment that also play into that. So it's a combination of all of those things count that causes that reserves need to be at a higher percentage.

感謝您回答我的問題。如果你願意的話，就再賒購一些。我認為您提到了我們第二季度的平均損失率回到了大流行前的水平。但如果我們回顧一下疫情前的儲備水平，我認為在 24.5% 到 25% 的範圍內還有更多，顯然現在已經高於這個水平了。這是投資組合久期的函數還是只是不確定的前景？除此之外，任何觸發準備金的具體宏觀變化，或者它更像是績效和持久通膨的函數，是的，我想說，大部分是基於績效和嚴重性的也是增加儲備的一部分。還有一些定性因素，例如通膨環境，也會產生影響。因此，所有這些因素的結合導致儲備金需要達到更高的百分比。

Got it. And then yes, I think this was referenced earlier, but obviously early stage D Q.s continued to perform well. Some of it is this the back book and then you know, is it just ongoing inflation that's driving one less curings BakBone?

知道了。然後是的，我認為這之前已經提到過，但顯然早期階段的 D Q 繼續表現良好。其中一些是後面的書，然後你知道，是否只是持續的通貨膨脹導致 BakBone 的治療方法減少了？

Yes, I think that's a piece of it just the consumer and the environment they're in. But I think where we ended the quarter, especially in like I said, are closing on a Tuesday, which is typically our highest delinquency day of the week. And then looking at both our 30 plus being lower as well as our less than 30 day delinquencies being lower was a really positive sign.

是的，我認為這只是消費者和他們所處的環境的一部分。但我認為我們在本季結束時，尤其是像我所說的那樣，在星期二結束，這通常是我們拖欠率最高的一天星期。然後看看我們 30 天以上的拖欠率和 30 天以內的拖欠率都較低，這是一個非常積極的跡象。

Yes, thanks very much for taking my questions.

是的，非常感謝您回答我的問題。

Thank you.

謝謝。

Thank you. I'm showing no further questions. At this time, I'll turn the call back over to Doug Cam will for any closing remarks.

謝謝。我沒有再提出任何問題。此時，我會將電話轉回道格·卡姆威爾 (Doug Cam will) 以發表結束語。

Well, I'd like to thank everybody for joining the call. We have obviously a lot going and a lot of positive things for our company. We're really excited about our future and really focused on some of these high line items like RERP. and RLOS., which are tech investments that we've made over the last couple of years, all of which will help our customers be more successful. And I think the affordability is a key part of this equation and knowing that we have a path to help engineer more affordable vehicles for our consumers and generate demand despite the external environment is also a big piece of that.

嗯，我要感謝大家加入這次電話會議。顯然，我們公司有很多事情要做，也有很多正面的事情。我們對未來感到非常興奮，並且非常關注 RERP 等一些高線專案。和 RLOS，這是我們在過去幾年中進行的技術投資，所有這些都將幫助我們的客戶取得更大的成功。我認為負擔能力是這個方程式的關鍵部分，並且知道我們有辦法幫助我們的消費者設計更實惠的汽車並產生需求，儘管外部環境也是其中的重要組成部分。

And then lastly, we're really excited about our acquisition, our posture. We were able to get one of these done. And when you can when you can hedge doors that are were on par with some of your large stores in the country. How can you not be excited about that? And the other ones that are in our pipeline and some of them are two and three times the size of that. So we couldn't be more excited about our future.

最後，我們對我們的收購和我們的姿態感到非常興奮。我們能夠完成其中一項。當你可以的時候，你可以對門進行圍堵，這些門與你在該國的一些大型商店相當。你怎麼能不為此感到興奮呢？我們正在開發的其​​他產品，其中一些的規模是它的兩倍或三倍。因此，我們對未來感到無比興奮。

I appreciate everybody for joining the call and thank you very much for your interest in America's Car-Mart.

我感謝大家參加這次電話會議，也非常感謝您對 America's Car-Mart 的興趣。

Thank you.

謝謝。

Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect and have a great day.

女士們、先生們，今天的會議到此結束。感謝大家的參與。您現在可以斷開連接並度過愉快的一天。