We are seeing positive results on the collections side of the business and we anticipate the sales volumes to increase into the future as we focus on better inventory, sales training and the continuation of our pursuit of repeat customers.
Hank Henderson, Incoming CEO of Car-Mart

T.J. Falgout, CEO of America's Car-Mart, the largest publicly held automotive retailer in the United States focused exclusively on the "Buy Here/Pay Here" segment of the used car market, will step down effective October 16, 2007. Company President hank Henderson will take over as CEO. Henderson will also retain the title of President, the position he has held with Car-Mart since 2002. Mr. Falgout, a major shareholder, will remain as Chairman of the Board of Directors.

"Hank combines over 21 years of experience at Car-Mart with strong vision and leadership skills, as he has demonstrated these skills in transforming the Company into a multi-state force in the 'buy-here/pay-here' segment of the automotive industry," stated Mr. Falgout.

Car-Mart operates 93 automotive dealerships in nine states. The company's revenues for the quarter ended July 31, 2007 decreased 5.6% to $58.7 million compared with $62.2 million in the same period last year. Net income for the quarter fell by 50% to $2.1 million or $.18 per diluted share, versus $4.2 million, or $0.35 per diluted share in the same period last year. Retail unit sales were down 14.9%, with 5,847 vehicles in the current quarter, compared to 6,867 in the same period last year. Same store revenue decreased 8.3% during the quarter.

There were some bright spots in the most recent quarter. Finance Receivables grew by $2.3 million during the quarter or 1.3%, aided by sales of the company's new Payment Protection Plan product. "Our new Payment Protection Plan product has been very well received by our customers and we expect to expand sales of this product beyond the states of Arkansas and Alabama, the two states where we sold this product in the first quarter." said William H. ("Hank") Henderson, President of America's Car-Mart. "Sales of this product to our new customers is in excess of 85%, and we have also experienced great sales of this product to our existing customers. This product will help our customers in situations where their vehicle is stolen or totaled. This is another example of Car-Mart being the leader in cultivating repeat customers, the life-blood of our industry."

"Once again, credit losses, collections and current receivables all improved as compared to the first quarter of 2007 and as compared to recent quarters. Our average percentage of Finance Receivables current was 81.7% for the quarter compared to 79% for the first quarter of 2007," stated Falgout. "We are very pleased with our strong cash flows from operations which have allowed us to pay down our debt by $7.2 million during the quarter and $15.3 million from its high point at the end of October 2006. We continue to be disciplined in requiring higher down-payments at certain dealerships and shorter terms with our loans to ensure we set the customer up for success. These efforts have had a positive effect on our operating cash flows, evidenced by the increase in our collections as a percentage of average Finance Receivables. We will continue to focus on ensuring that we earn an appropriate return on our invested capital on a lot-by-lot basis and that we employ capital appropriately into the future. In addition, we have made significant investments in our infrastructure over the last two years and we believe we are now positioned to leverage these costs to support higher sales and loan volumes."

"We are very proud of our associates and their efforts during the past several months. We are seeing positive results on the collections side of the business and we anticipate the sales volumes to increase into the future as we focus on better inventory, sales training and the continuation of our pursuit of repeat customers. Additionally, we believe our Payment Protection Plan will draw new customers to Car-Mart," said Mr. Henderson. "We will continue to work hard at improving our lot level operations and fully expect our financial results to follow accordingly."