Just before revealing financial results from the second quarter of its 2024 fiscal year, America’s Car-Mart entered into a definitive agreement to purchase the ongoing dealership assets of Allied Union Group, an Arkansas corporation doing business as Central Auto Sales.

According to a news release, the existing finance receivables will be excluded from the transaction and will be collected by the seller.

Car-Mart expects to close the transaction later this month.

Mike and Stacey Steven-Assheuer founded Central Auto Sales in Hot Springs, Ark., in 1996. Car-Mart said the acquisition of Central Auto Sales will enhance the company’s presence in Hot Springs and expand its reconditioning capabilities.

“This transaction is consistent with our strategy to grow the business through acquisitions, delivering exceptional returns for our shareholders while providing exit opportunities for owner-operators and offering future growth prospects for their associates,” Car-Mart CEO Douglas Campbell said in the news release.

“Mike and Stacey have created a robust business that provides affordable, high-quality vehicles and exceptional customer service. We warmly welcome them and their committed team of associates to the Car-Mart family,” Campbell continued.

In the news release, Mike and Stacey Steven-Assheuer shared their journey to arriving at this decision.

“Selling our business was a difficult decision, and we have turned down several offers in the past. When America’s Car-Mart approached us, we were intrigued by the synergies and similarities between our companies, and we knew it was the right fit,” Stacey Steven-Assheuer said. “Car-Mart shares our goal of providing excellent customer service, offering growth opportunities, and investing in our team members who are the heart of our organization.”

Mike Steven-Assheuer added, “Stacey and I are excited to start a new journey with Car-Mart and create a brighter future for our company and associates. Car-Mart brings strength to the industry and a commitment to excellence for our customers, employees, and community. We are grateful to be joining one of the largest publicly traded automotive retailers in the United States.”

Mike Robortaccio, vice president of mergers and acquisitions at Car-Mart, elaborated about why the company made this move.

“We are thrilled to welcome Central Auto Sales to the Car-Mart network of dealerships and integrate their 15-lift on-site maintenance facility,” Robortaccio said. “After 25 years in the automotive business, Mike and Stacey’s expertise will be invaluable to Car-Mart as we enhance our vehicle reconditioning and warranty servicing abilities.”

Car-Mart Q2 results

Once that Hot Springs location is officially part of the Car-Mart, it will help to build on the company’s performance generated during the second quarter of its 2024 fiscal year. The year-over-year highlights from the span that ended Oct. 31 included:

—Revenues increased 2.8% to $361.6 million

—Retail unit sales were down 4.6%

—Gross margin increased to 34.3% from 32.1%

—Customer count increased 6.0% to 104,596

—Net charge-offs as a percentage of average finance receivables were 7.2% versus 5.8%

—Allowance for credit loss adjusted to 26.04% (EPS reduction of $3.40 after tax)

—Loss per share $4.30 versus $0.48 diluted earnings per share

“Our second quarter results reflect the Car-Mart team’s commitment and focus on delivering value to our customers during a challenging economy,” Campbell said in another news release. “Revenue was up 2.8%, primarily due to interest income despite unit sales being down 4.6% during the quarter.

“The persistent inflationary environment impacted existing customers, which was evident in our credit losses,” he continued. “This required an increase in the allowance for credit losses which subsequently impacted the bottom line for the quarter. We believe these headwinds regarding credit loss are shorter-term in nature. The operational investments we’ve made are driving greater efficiencies in the business, one of which was gross margin, which was a bright spot during the quarter.

“However, we are equally focused on being more agile regarding our cost structure to effectively navigate this environment. We believe this will leave our consumer and our company well-positioned for success in the long term,” Campbell went on to say.