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

Conn’s, Inc. (NASDAQ:CONN), a specialty retailer of home appliances, furniture, mattresses, consumer electronics and provider of consumer credit, today announced its results for the quarter ended July 31, 2013.

Significant items for the second quarter of fiscal 2014 include:

  • Fiscal 2014 earnings guidance reaffirmed at $2.50 to $2.65 per diluted share;
  • Net income was $19.2 million, up $7.6 million, or 65.1%, over the prior-year period;
  • Earnings per diluted share increased to $0.52 from $0.35 per share a year ago on an 11.3% rise in diluted shares outstanding;
  • Consolidated revenues totaled $270.7 million, an increase of 30.5% from last year;
  • Retail gross margin equaled 38.3% for the quarter, expanding 420 basis points over the prior-year quarter;
  • Retail segment operating income equaled $25.7 million, $13.1 million above the level reported in the prior-year period;
  • Credit segment operating income was $7.5 million, down $3.1 million from the prior-year quarter; and
  • Credit segment provision for bad debts on an annualized basis was 10.6% of the average outstanding portfolio this quarter.

Theodore M. Wright, the Company's Chairman and CEO, commented, “August net sales increased 51% over the prior-year period. Same store sales in August rose 31%. Phoenix market store openings have been successful with three stores now open. We plan to open four more Phoenix area locations over the next several quarters.”

Mr. Wright continued, “The performance of our credit segment for the second quarter was below our expectations due to short-term execution issues in our collection operations. Corrective actions were taken and negative delinquency trends rapidly reversed. Early stage delinquency at the end of August had declined 12% from peak levels earlier in the month. At August 31, early stage delinquency was below the levels experienced at the end of each of the past nine quarters. We expect further improvement in overall delinquency rates over the next several months. Despite the challenges in our collections operations in the second quarter, we are reaffirming our guidance for the year.”

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