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Conn’s, Inc. Reports Results For The Quarter Ended January 31, 2012

 
Conn's, Inc.
CONDENSED, CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
             
 
January 31, January 31,
2012 2011
Assets
Current assets
Cash and cash equivalents $ 6,265 $ 10,977
Other accounts receivable, net 38,715 30,476
Customer accounts receivable, net 316,385 337,673
Inventories 62,540 82,354
Deferred income taxes

17,111

19,478
Prepaid expenses and other assets   11,994   10,418
Total current assets

453,010

491,376
Non-current deferred income tax asset

9,754

8,009
Long-term customer accounts receivable, net 272,938 285,667
Total property and equipment, net 38,484 46,890
Other assets, net   9,564   10,118
Total assets $ 783,750 $ 842,060
Liabilities and Stockholders' Equity
Current Liabilities
Current portion of long-term debt $ 726 $ 167
Accounts payable 44,711 57,740
Accrued compensation and related expenses 7,213 5,477
Accrued expenses 24,482 16,045
Other current liabilities   17,994   22,925
Total current liabilities 95,126 102,354
Long-term debt 320,978 373,569
Other long-term liabilities 14,275

13,240

Total stockholders' equity   353,371   352,897
Total liabilities and stockholders' equity $ 783,750 $

842,060

 

 
NON-GAAP RECONCILIATION OF NET INCOME (LOSS), AS ADJUSTED
AND DILUTED EARNINGS (LOSS) PER SHARE, AS ADJUSTED
(unaudited)
(in thousands, except earnings per share)
                           
 
Three Months Ended

January 31,

Year Ended

January 31,

2012 2011 2012 2011
Net income (loss), as reported $ 7,701 $ (3,578 ) $ (3,723 ) $ (1,072 )
Adjustments:
Costs and impairment charges related to store closings 5,082 2,321 9,115 2,321
Costs related to financing facilities terminated
and transactions not completed - 1,387 - 4,283
Loss from early extinguishment of debt - - 11,056 -
Severance costs - - 813 -
Inventory reserve adjustments - 1,651 4,669 1,651
Charge to record reserves required by the adoption
of troubled debt restructuring accounting guidance - - 27,487 -
Reserves previously provided related to accounts
considered restructured under the troubled debt
restructuring accounting guidance - - (13,350 ) -
Tax impact of adjustments   (1,789 )   (1,886 )   (14,006 )   (2,906 )
Net income (loss), as adjusted $ 10,994   $ (105 ) $ 22,061   $ 4,277  
 
Average common shares
outstanding - Diluted 32,572

29,491

31,860 26,091
 
Earnings (loss) per share - Diluted
As reported $ 0.24 $ (0.12 ) $ (0.12 ) $ (0.04 )
As adjusted $ 0.34 $ (0.00 ) $ 0.69 $ 0.16
 

 
NON-GAAP RECONCILIATION OF RETAIL SEGMENT
OPERATING INCOME (LOSS), AS ADJUSTED
(unaudited)
(in thousands)
                   
 
Three Months Ended

January 31,

Year Ended

January 31,

2012 2011 2012 2011
Operating income (loss), as reported $ 4,221 $ (1,828 ) $ 2,653 $ 2,193
Adjustments:
Inventory adjustments - 1,651 4,669 1,651
Costs and impairment charges related
to store closings   5,082   2,321     9,115   2,321
Operating income, as adjusted $ 9,303 $ 2,144   $ 16,437 $ 6,165
 
 
NON-GAAP RECONCILIATION OF RETAIL SEGMENT
GROSS MARGIN, AS ADJUSTED
(unaudited)
(dollars in thousands)
                           
 
Three Months Ended

January 31,

Year Ended

January 31,

2012 2011 2012 2011
Product sales, as reported $ 173,446 $ 168,951 $ 596,360 $ 608,443
Repair service agreement commissions,
as reported   12,629     9,179     42,078     37,795  
186,075 178,130 638,438 646,238
Cost of goods sold, including warehousing and
occupancy costs, as reported   130,719     135,032     455,493     474,696  
Gross Profit, as reported $ 55,356   $ 43,098   $ 182,945   $ 171,542  
Gross Margin, as reported 29.7 % 24.2 % 28.7 % 26.5 %
Adjustments:
Inventory reserve adjustments   -     1,651     4,669     1,651  
Gross Profit, as adjusted $ 55,356   $ 44,749   $ 187,614   $ 173,193  

Gross Margin, as adjusted

29.7 % 25.1 % 29.4 % 26.8 %
 

 
NON-GAAP RECONCILIATION OF CREDIT SEGMENT
OPERATING INCOME, AS ADJUSTED
(unaudited)
(in thousands)
                     
 
Three Months Ended

January 31,

Year Ended

January 31,

2012 2011 2012 2011
Operating income, as reported $ 12,164 $ 6,672 $ 27,048 $ 30,576
Adjustments:
Charge to record reserves required by the
adoption of troubled debt restructuring
accounting guidance - - 27,487 -
Reserves previously recorded related to accounts
considered restructured under the troubled debt
restructuring accounting guidance   -   -   (13,350 )   -
Operating income, as adjusted $ 12,164 $ 6,672 $ 41,185   $ 30,576
 

Basis for presentation of non-GAAP disclosures:

To supplement the Company’s consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles ("GAAP"), the Company also provides adjusted net income and adjusted earnings per diluted share information. These non-GAAP financial measures are not meant to be considered as a substitute for comparable GAAP measures but should be considered in addition to results presented in accordance with GAAP, and are intended to provide additional insight into the Company’s operations and the factors and trends affecting the Company’s business. The Company’s management believes these non-GAAP financial measures are useful to financial statement readers because (1) they allow for greater transparency with respect to key metrics the Company uses in its financial and operational decision making and (2) they are used by some of its institutional investors and the analyst community to help them analyze the Company’s operating results.

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