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Finance Receivables, Net | 3 Months Ended
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Jul. 31, 2025
Receivables [Abstract] |
Finance Receivables, Net | – Finance Receivables, Net The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts, which originate at interest rates ranging from 12.99% to 23.0% are collateralized by the vehicle sold and typically provide for payments over periods ranging from 18 months to 79 months. The Company’s finance receivables are defined as one segment and one class of loans, which is sub-prime consumer automobile contracts. As of July 31, 2025, the Company maintains two distinct loan pools for the purpose of estimating expected credit losses under the CECL model in accordance with ASC 326. These pools are grouped based on origination method and are managed collectively under a unified credit risk management framework. Although not considered separate segments under applicable disclosure rules, each pool is evaluated separately for expected credit losses, and the allowance for credit losses is determined accordingly. The components of finance receivables are as follows:
(In thousands) | July 31, 2025 |  | April 30, 2025
Gross contract amount | $ | 1,952,693 |  |  | $ | 1,946,042 |
Less unearned finance charges | (437,012) |  |  | (436,887) |
Principal balance | 1,515,681 |  |  | 1,509,155 |
Less: estimated insurance receivables for accident protection plan claims | (3,279) |  |  | (2,910) |
Less: allowance for accident protection plan claims | (3,543) |  |  | (3,135) |
Less allowance for credit losses | (326,070) |  |  | (323,100) |
Finance receivables, net | 1,182,789 |  |  | 1,180,010 |
Loan origination costs | 663 |  |  | 663 |
Finance receivables, net, including loan origination costs | $ | 1,183,452 |  |  | $ | 1,180,673 |
Changes in the finance receivables, net are as follows:
| Three Months Ended July 31,
(In thousands) | 2025 |  | 2024
Balance at beginning of period | $ | 1,180,010 |  |  | $ | 1,097,931 |
Finance receivable originations | 262,746 |  |  | 271,756 |
Finance receivable collections | (118,720) |  |  | (112,358) |
Provision for credit losses | (103,036) |  |  | (95,423) |
Losses on claims for accident protection plan | (8,595) |  |  | (9,321) |
Inventory acquired in repossession and accident protection plan claims | (29,616) |  |  | (26,975) |
Balance at end of period | $ | 1,182,789 |  |  | $ | 1,125,610 |
Changes in the finance receivables allowance for credit losses are as follows:
| Three Months Ended July 31,
(In thousands) | 2025 |  | 2024
Balance at beginning of period | $ | 323,100 |  |  | $ | 331,260 |
Provision for credit losses | 103,036 |  |  | 95,423 |
Charge-offs | (128,876) |  |  | (121,605) |
Recovered collateral | 28,810 |  |  | 29,346 |
Balance at end of period | $ | 326,070 |  |  | $ | 334,424 |
Amounts recovered from previously written-off accounts were approximately $925 thousand and $772 thousand for the three months ended July 31, 2025 and 2024, respectively. These amounts are netted against recovered collateral in the table above. The Company increased the allowance for credit loss in the first quarter to 23.35% from 23.25% at April 30, 2025, resulting in an addition of $3.0 million to the calculated provision. The following table presents the finance receivables that are current and past due as follows:
(Dollars in thousands) | July 31, 2025 |  | April 30, 2025 |  | July 31, 2024
| Principal Balance |  | Percent of Portfolio |  | Principal Balance |  | Percent of Portfolio |  | Principal Balance |  | Percent of Portfolio
Current | $ | 1,206,214 |  |  | 79.58 | % |  | $ | 1,208,330 |  |  | 80.06 | % |  | $ | 1,155,006 |  |  | 78.82 | %
3 - 29 days past due | 247,549 |  |  | 16.33 | % |  | 249,263 |  |  | 16.52 | % |  | 259,145 |  |  | 17.69 | %
30 - 60 days past due | 42,080 |  |  | 2.78 | % |  | 34,407 |  |  | 2.28 | % |  | 38,035 |  |  | 2.60 | %
61 - 90 days past due | 12,007 |  |  | 0.79 | % |  | 11,461 |  |  | 0.76 | % |  | 7,463 |  |  | 0.51 | %
> 90 days past due | 7,831 |  |  | 0.52 | % |  | 5,694 |  |  | 0.38 | % |  | 5,610 |  |  | 0.38 | %
Total | $ | 1,515,681 |  |  | 100.00 | % |  | $ | 1,509,155 |  |  | 100.00 | % |  | $ | 1,465,259 |  |  | 100.00 | %
Accounts one and two days past due, as well as bankruptcy accounts, are considered current for this analysis, due to the varying payment dates and variation in the day of the week at each period end. The Company suspends its standard collections practices following a customer’s bankruptcy filing and treats these accounts as being administered by the bankruptcy trustee rather than the customer, conducting all account-related communications, payment processing, and modification activities with the trustee in accordance with the bankruptcy plan and applicable bankruptcy law. See Note B for further discussion of customer accounts in bankruptcy. Delinquencies may vary from period to period based on the average age of the portfolio, seasonality within the calendar year, the day of the week and overall economic factors. The above categories are consistent with internal operational measures used by the Company to monitor credit results. Substantially all of the Company’s installment sale contracts involve contracts made to individuals with impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders. Contracts made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better credit. The Company monitors customer scores, contract term length, payment to income, down payment percentages, and collections for credit quality indicators.
| Three Months Ended July 31,
| 2025 |  | 2024
Average total collected per active customer per month | $ | 585 |  |  | $ | 562 |
Principal collected as a percent of average finance receivables | 7.9 | % |  | 7.8 | %
Average down-payment percentage | 4.9 | % |  | 5.2 | %
Average originating contract term (in months) | 44.9 |  | 44.3
| As of
| July 31, 2025 |  | July 31, 2024
Portfolio weighted average contract term, including modifications (in months) | 48.3 |  | 48.1
Total dollars collected per active customer increased 4.1% year over year and principal collections as a percentage of average finance receivables increased slightly by 10 basis points compared to prior year. The portfolio weighted average contract term increased slightly from the prior year quarter but was flat compared to April 30, 2025. Average originating term has increased slightly from prior year due to a couple of factors including: 1) focus on addressing affordability for the highest risk customers by slightly increasing the maximum terms over the last year and 2) the business is booking a higher percentage of better quality customers that qualify for longer terms. When customers apply for financing, the Company’s proprietary scoring models rely on the customers’ credit histories and certain application information to evaluate and rank their risk. The Company obtains credit histories and other credit data that includes information such as number of different addresses, age of oldest record, high risk credit activity, job time, time at residence and other factors. The application information that is used includes income, collateral value and down payment. The scoring models yield credit grades that represent the relative likelihood of repayment. The Company has historically utilized a six-point scorecard for credit evaluation. In May 2025, a new seven-rank scorecard was fully implemented, offering greater granularity and improving the accuracy of loss ratio projections. Under this enhanced scoring model, customers with the highest probability of repayment are 7-rated customers. Customers assigned a lower grade are determined to have a lower probability of repayment. For loans that are approved, the credit grade influences the terms of the agreement, such as the maximum amount financed, term length and minimum down payment. After origination, credit grades are generally not updated. The following table presents a summary of finance receivables by credit quality indicator, as of July 31, 2025, segregated by customer score and year of origination.
| As of July 31, 2025
(Dollars in thousands) | Fiscal Year of Origination |  | Prior to |  |  |  |
Customer Rating | 2026 |  | 2025 |  | 2024 |  | 2023 |  | 2022 |  | 2022 |  | Total |  | %
1-2 | $ | 32,567 |  |  | $ | 24,592 |  |  | $ | 12,365 |  |  | $ | 3,742 |  |  | $ | 552 |  |  | $ | 65 |  |  | $ | 73,883 |  |  | 4.9 | %
3-4 | $ | 71,617 |  |  | $ | 183,952 |  |  | $ | 102,214 |  |  | $ | 32,313 |  |  | $ | 6,218 |  |  | $ | 768 |  |  | $ | 397,082 |  |  | 26.2 | %
5-7 | $ | 151,763 |  |  | $ | 510,742 |  |  | $ | 237,276 |  |  | $ | 109,996 |  |  | $ | 31,229 |  |  | $ | 3,710 |  |  | $ | 1,044,716 |  |  | 68.9 | %
Total | $ | 255,947 |  |  | $ | 719,286 |  |  | $ | 351,855 |  |  | $ | 146,051 |  |  | $ | 37,999 |  |  | $ | 4,543 |  |  | $ | 1,515,681 |  |  | 100.0 | %
Charge-offs | $ | 2,241 |  |  | $ | 69,568 |  |  | $ | 37,819 |  |  | $ | 15,307 |  |  | $ | 3,586 |  |  | $ | 355 |  |  | $ | 128,876 |  |  |
The following table presents a summary of finance receivables by credit quality indicator, as of July 31, 2024, segregated by customer score.
| As of July 31, 2024
(Dollars in thousands) | Fiscal Year of Origination |  | Prior to |  |  |  |
Customer Rating | 2025 |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2021 |  | Total |  | %
1-2 | $ | 18,758 |  |  | $ | 34,722 |  |  | $ | 10,548 |  |  | $ | 2,645 |  |  | $ | 245 |  |  | $ | 90 |  |  | $ | 67,008 |  |  | 4.6 | %
3-4 | $ | 94,738 |  |  | $ | 251,217 |  |  | $ | 94,939 |  |  | $ | 26,565 |  |  | $ | 2,899 |  |  | $ | 396 |  |  | $ | 470,754 |  |  | 32.1 | %
5-6 | $ | 148,448 |  |  | $ | 424,197 |  |  | $ | 246,371 |  |  | $ | 93,171 |  |  | $ | 14,071 |  |  | $ | 1,239 |  |  | $ | 927,497 |  |  | 63.3 | %
Total | $ | 261,944 |  |  | $ | 710,136 |  |  | $ | 351,858 |  |  | $ | 122,381 |  |  | $ | 17,215 |  |  | $ | 1,725 |  |  | $ | 1,465,259 |  |  | 100.0 | %
Charge-offs | $ | 2,619 |  |  | $ | 70,413 |  |  | $ | 36,752 |  |  | $ | 10,578 |  |  | $ | 1,048 |  |  | $ | 195 |  |  | $ | 121,605 |  |  |
The percentage of the portfolio in the highest customer ratings (5-7) continues to grow as a result of the Company’s early risk based pricing testing as well as the conversion to the new, more predictive, scorecard. Contract Modifications During the preparation of the Company's Annual Report on Form 10-K for the year ended April 30, 2025, management identified material omissions of required disclosures under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 310-10-50-42 through 50-44 related to loan modifications for borrowers experiencing financial difficulty. The previously issued financial statements have been restated to include such disclosures. The Company identifies and discloses modifications made to customers experiencing financial difficulty after the origination date. Due to the subprime nature and limited financial resources of the majority of the Company’s customers, all modifications that result in a term extension are identified by the Company as modifications made to customers experiencing financial difficulty and are therefore included in the related disclosures. These modifications are made with the intent to support customers while preserving asset value and minimizing credit losses. The following tables present the aggregate outstanding principal balance of contracts that have been modified during the three months ended July 31, 2025 and 2024, categorized by type of modification. These modifications represent management’s efforts to work with customers experiencing financial difficulty to help them maintain their vehicle ownership while preserving asset value for the Company. The percentages shown represent the portion of the total gross finance receivables portfolio as of July 31, 2025 and 2024 that has been modified at least once during the period. The following table presents contract modifications by type of modification at three months ended July 31, 2025 and 2024:
(Dollars in thousands) |  | Contract Modifications by Type
|  | July 31, 2025 |  | July 31,2024 (Restated) |  |
Type of Modification |  | Principal Balance |  | % of Portfolio |  | Principal Balance |  | % of Portfolio |  |  |  |
Term extension |  | $ | 192,122 |  |  | 12.7 | % |  | $ | 199,667 |  |  | 13.6 | % |  |  |  |
Combination (1) |  | 2,818 |  |  | 0.2 | % |  | 2,894 |  |  | 0.2 | % |  |  |  |
Total |  | $ | 194,940 |  |  | 12.9 | % |  | $ | 202,561 |  |  | 13.8 | % |  |  |  |
(1)These modifications result from customer bankruptcy filings and have been made in accordance with bankruptcy court requirements. They generally consist of a reduction in the contractual interest rate and/or an extension of the contract term as part of the customer’s court-approved payment restructuring plan. The following table describes the financial effect of the modifications for each period:
Type of Modification |  | Three Months Ended July 31, 2025 |  | Three Months Ended July 31, 2024 (Restated) |  |
Term extension |  | Added a weighted average of 1.4 months to the life of contracts, which reduced payment amounts due from borrowers. |  | Added a weighted average of 1.6 months to the life of contracts, which reduced payment amounts due from borrowers. |  |
Combination |  | Added a weighted average of 10.2 months to the life of contracts, which reduced payment amounts due from borrowers and/or reduced the interest rate to a weighted average of 8.14%. |  | Added a weighted average of 12.5 months to the life of contracts, which reduced payment amounts due from borrowers and/or reduced the interest rate to a weighted average of 7.00%. |  |
The Company closely monitors the performance of the contracts that are modified to understand the effectiveness of its modification efforts. The following table depicts the status of contracts that have term modifications in the three months ended July 31:
|  | Payment Status (Principal Balance)
(In thousands) |  | Total |  | Current |  | 3-29 Days Past Due |  | 30-60 Days Past Due |  | 61-90 Days Past Due |  | 90+ Days Past Due
For Three Months Ended July 31, 2025 |  | $ | 192,122 |  |  | $ | 143,015 |  |  | $ | 42,693 |  |  | $ | 5,745 |  |  | $ | 669 |  |  | $ | - |
For Three Months Ended July 31, 2024 (Restated) |  | 199,667 |  | 143,949 |  |  | 48,961 |  |  | 6,234 |  |  | 523 |  |  | - |
The following table depicts the status of contracts that have term modifications due to the combination of modifications due to bankruptcies for the periods presented:
|  | Payment Status (Principal Balance) |  |
(In thousands) |  | Total |  | Payment Received in Last 30 Days |  | Payment Received in Last 31-60 Days |  | Payment Received in Last 61-90 Days |  | Payment Received in Last 90+ Days |  |
For Three Months Ended July 31, 2025 |  | $ | 2,818 |  |  | $ | 772 |  |  | $ | 753 |  |  | $ | 605 |  |  | $ | 688 |  |  |
For Three Months Ended July 31, 2024 (Restated) |  | 2,894 |  |  | 871 |  | 589 |  | 844 |  | 590 |  |
For the three months ended July 31, 2025 and 2024, customer contracts with an aggregate principal balance of $4.6 million and $4.9 million, respectively, were charged off within the period following contract modifications. These modifications and their subsequent performance were evaluated under the Company’s CECL methodology, and the related allowance for credit losses reflects expected future losses based on borrower performance, economic conditions, and the nature of the modifications. The Company continues to monitor the performance of all modified contracts and has credit risk management processes in place to assess and manage these exposures.

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