Conn’s, Inc. Announces Record Second Quarter Net Income

The Company’s new corporate office address is 4055 Technology Forest Blvd., Suite 210, The Woodlands, Texas, 77381 and its telephone number is [phone]. Conn’s continues to maintain its office in Beaumont, Texas.

This press release contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements include information concerning our future financial performance, business strategy, plans, goals and objectives. Statements containing the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” or the negative of such terms or other similar expressions are generally forward-looking in nature and not historical facts. Although we believe that the expectations, opinions, projections, and comments reflected in these forward-looking statements are reasonable, we can give no assurance that such statements will prove to be correct. A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by our forward-looking statements including, but not limited to: general economic conditions impacting our customers or potential customers; our ability to continue existing or offer new customer financing programs; changes in the delinquency status of our credit portfolio; higher than anticipated net charge-offs in the credit portfolio; the success of our planned opening of new stores and the update of existing stores; technological and market developments, and sales trends for our major product offerings; our ability to fund our operations, capital expenditures, debt repayment and expansion from cash flows from operations, borrowings from our revolving credit facility, and proceeds from accessing debt or equity markets; and the other risks detailed from time-to-time in our SEC reports, including but not limited to, our Annual Report on Form 10-K for our fiscal year ended January 31, 2012 and our quarterly report on Form 10-Q for the quarter ended April 30, 2012. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, we are not obligated to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

CONN'S, INC. AND SUBSIDIARIES
CONDENSED, CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
					Three Months Ended													Six Months Ended
					July 31,													July 31,
					2012						2011							2012						2011
Revenues
Total net sales					$	171,655					$	151,987						$	338,592					$	309,057
Finance charges and other						35,781						35,039							69,695						69,951
Total revenues						207,436						187,026							408,287						379,008
Cost and expenses
Cost of goods sold, including
warehousing and occupancy costs						110,910						105,477							219,353						211,930
Cost of parts sold, including
warehousing and occupancy costs						1,441						1,596							2,991						3,326
Selling, general and administrative expense						59,381						56,174							119,037						115,619
Provision for bad debts						12,204						7,151							21,389						16,715
Store closing and relocation costs						346						3,658							509						3,658
Total cost and expenses						184,282						174,056							363,279						351,248
Operating income						23,154						12,970							45,008						27,760
Interest expense						4,874						7,004							8,633						14,560
Loss on early extinguishment of debt						-						11,056							-						11,056
Other (income) expense, net						(6	)					34							(102	)					86
Income (loss) before income taxes						18,286						(5,124	)						36,477						2,058
Provision (benefit) for income taxes						6,680						(2,022	)						13,315						759
Net income (loss)					$	11,606					$	(3,102	)					$	23,162					$	1,299
Earnings (loss) per share:
Basic					$	0.36					$	(0.10	)					$	0.72					$	0.04
Diluted					$	0.35					$	(0.10	)					$	0.70					$	0.04
Average common shares outstanding:
Basic						32,404						31,808							32,304						31,788
Diluted						33,119						31,808							33,017						31,897

CONN'S, INC. AND SUBSIDIARIES
CONDENSED RETAIL SEGMENT FINANCIAL INFORMATION
(unaudited)
(dollars in thousands)
					Three Months Ended													Six Months Ended
					July 31,													July 31,
					2012						2011							2012						2011
Revenues
Product sales					$	156,026					$	138,231						$	308,141					$	282,510
Repair service agreement commissions						12,355						9,945							23,747						18,847
Service revenues						3,274						3,811							6,704						7,700
Total net sales						171,655						151,987							338,592						309,057
Finance charges and other						276						393							517						618
Total revenues						171,931						152,380							339,109						309,675
Cost and expenses
Cost of goods sold, including
warehousing and occupancy costs						110,910						105,477							219,353						211,930
Cost of parts sold, including
warehousing and occupancy costs						1,441						1,596							2,991						3,326
Selling, general and administrative expense						46,508						42,008							92,557						86,113
Provision for bad debts						189						191							401						334
Store closing and relocation costs						346						3,658							509						3,658
Total cost and expenses						159,394						152,930							315,811						305,361
Operating income (loss)						12,537						(550	)						23,298						4,314
Other (income) expense, net						(6	)					34							(102	)					86
Income (loss) before income taxes					$	12,543					$	(584	)					$	23,400					$	4,228
Retail gross margin						34.1	%					28.8	%						33.9	%					29.7	%
Selling, general and administrative expense
as percent of revenues						27.1	%					27.6	%						27.3	%					27.8	%
Operating margin						7.3	%					(0.4	%)						6.9	%					1.4	%
Number of stores:
Beginning of period						65						75							65						76
Opened						1						-							1						-
Closed						(1	)					(4	)						(1	)					(5	)
End of period						65						71							65						71

CONN'S, INC. AND SUBSIDIARIES
CONDENSED CREDIT SEGMENT FINANCIAL INFORMATION
(unaudited)
(in thousands)
					Three Months Ended													Six Months Ended
					July 31,													July 31,
					2012						2011							2012						2011
Revenues
Finance charges and other					$	35,505					$	34,646						$	69,178					$	69,333
Cost and expenses
Selling, general and administrative expense						12,873						14,166							26,480						29,506
Provision for bad debts						12,015						6,960							20,988						16,381
Total cost and expenses						24,888						21,126							47,468						45,887
Operating income						10,617						13,520							21,710						23,446
Interest expense						4,874						7,004							8,633						14,560
Loss from early extinguishment of debt						-						11,056							-						11,056
Income (loss) before income taxes					$	5,743					$	(4,540	)					$	13,077					$	(2,170	)
Selling, general and administrative expense
as percent of revenues						36.3	%					40.9	%						38.3	%					42.6	%
Operating margin						29.9	%					39.0	%						31.4	%					33.8	%

MANAGED PORTFOLIO STATISTICS
(dollars in thousands, except average outstanding balance per account)
						Three months ended July 31,
						2012								2011
Data for period ended:
Total outstanding balance						$	661,740							$	599,706
Total accounts							460,675								473,386
Average outstanding balance per account						$	1,436							$	1,267
Balance 60+ days delinquent						$	49,763							$	36,706
Percent 60+ days delinquent							7.5	%							6.1	%
Percent of portfolio re-aged							10.7	%							17.2	%
Weighted average credit score of
outstanding balances							602								594
Data for the three-month period:
Weighted average origination credit score of
sales financed							615								625
Weighted average monthly payment rate							5.2	%							5.5	%
Percent of bad debt charge-offs (net of recoveries)
to average outstanding balance, annualized							8.4	%							10.4	%
Percentage of sales generated by payment option:
GE Capital							15.8	%							13.8	%
Conn's Credit (including down payment)							69.4	%							56.4	%
RAC Acceptance (Rent-to-Own)							3.2	%							4.3	%
Total							88.4	%							74.5	%

CONN'S, INC. AND SUBSIDIARIES
CONDENSED, CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
								July 31,								January 31,
								2012								2012
Assets
Current assets
Cash and cash equivalents								$ 5,195								$ 6,265
Customer accounts receivable, net								329,989								316,385
Other accounts receivable, net								35,159								38,715
Inventories								70,165								62,540
Deferred income taxes								14,534								17,111
Prepaid expenses and other assets								18,089								11,542
Total current assets								473,131								452,558
Long-term customer accounts receivable, net								281,767								272,938
Property and equipment, net								44,859								38,484
Deferred income taxes								9,624								9,754
Other assets, net								9,951								9,564
Total assets								$ 819,332								$ 783,298
Liabilities and Stockholders' Equity
Current Liabilities
Current portion of long-term debt								$ 76,408								$ 726
Accounts payable								65,309								44,711
Accrued compensation and related expenses								6,462								7,213
Accrued expenses								20,315								24,030
Other current liabilities								16,817								17,994
Total current liabilities								185,311								94,674
Long-term debt								238,895								320,978
Other long-term liabilities								12,859								14,275
Stockholders' equity								382,267								353,371
Total liabilities and stockholders' equity								$ 819,332								$ 783,298

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														Six Months Ended
					July 31,														July 31,
					2012							2011							2012							2011
Net income (loss), as reported					$	11,606						$	(3,102	)					$	23,162						$	1,299
Adjustments:
Costs related to office relocation						346							-							346							-
Costs related to store closings						-							3,658							163							3,658
Severance costs						-							-							-							813
Loss from early extinguishment of debt						-							11,056							-							11,056
Tax impact of adjustments						(123	)						(5,749	)						(179	)						(6,049	)
Net income, as adjusted					$	11,829						$	5,863						$	23,492						$	10,777
Average common shares
outstanding - Diluted						33,119							31,808							33,017							31,897
Earnings (loss) per share - Diluted
As reported					$	0.35						$	(0.10	)					$	0.70						$	0.04
As adjusted					$	0.36						$	0.18						$	0.71						$	0.34

NON-GAAP RECONCILIATION OF RETAIL SEGMENT
OPERATING INCOME (LOSS), AS ADJUSTED
(unaudited)
(in thousands)
						Three Months Ended																Six Months Ended
						July 31,																July 31,
						2012								2011								2012								2011
Operating income (loss), as reported						$	12,537							$	(550	)						$	23,298							$	4,314
Adjustments:
Costs related to office relocation							346								-								346								-
Costs related to store closings							-								3,658								163								3,658
Severance costs							-								-								-								407
Operating income, as adjusted						$	12,883							$	3,108							$	23,807							$	8,379
Retail segment revenues						$	171,931							$	152,380							$	339,109							$	309,675
Operating margin
As reported							7.3	%							(0.4	%)							6.9	%							1.4	%
As adjusted							7.5	%							2.0	%							7.0	%							2.7	%

NON-GAAP RECONCILIATION OF CREDIT SEGMENT
OPERATING INCOME, AS ADJUSTED
(unaudited)
(in thousands)
					Three Months Ended														Six Months Ended
					July 31,														July 31,
					2012							2011							2012							2011
Operating income, as reported					$	10,617						$	13,520						$	21,710						$	23,446
Adjustments:
Severance costs						-							-							-							406
Operating income, as adjusted					$	10,617						$	13,520						$	21,710						$	23,852
Credit segment revenues					$	35,505						$	34,646						$	69,178						$	69,333
Operating margin
As reported						29.9	%						39.0	%						31.4	%						33.8	%
As adjusted						29.9	%						39.0	%						31.4	%						34.4	%

« First ‹ Previous 1 2 3 4 5 Next › Last »