Conn’s, Inc. (NASDAQ: CONN) (“Conn’s” or the
“Company”), a specialty retailer of furniture and
mattresses, home appliances, consumer electronics and home office
products, and provider of consumer credit, today announced its
financial results for the quarter ended October 31, 2021.
“Retail sales momentum accelerated during the
third quarter as same store sales increased 20.6% over the prior
fiscal year period and were up 9.7% on a two-year basis. Strong
retail sales reflect our success expanding our addressable market,
as we serve customers across the spectrum of payment options, scale
our digital platform and maintain in-stock inventory levels
throughout our product categories,” stated Chandra Holt, Conn's
Chief Executive Officer.
“I am pleased with our strong execution in this
fluid business environment, and we are well positioned for the
fourth quarter and holiday season. We are on track to deliver
significant revenue growth and record earnings this fiscal year. I
am excited by the direction we are headed and want to thank our
team members for their continued hard work and dedication,”
concluded Ms. Holt.
Third Quarter Financial Highlights as Compared
to the Prior Fiscal Year Period (Unless Otherwise Noted):
- Same store sales increased 20.6%
for the third quarter of fiscal year 2022 as compared to the third
quarter of fiscal year 2021 and increased 9.7% on a two-year
basis;
- Strong same store sales combined
with the contribution of new stores drove a 28.8% increase in total
retail sales for the third quarter of fiscal year 2022 as compared
to the third quarter of fiscal year 2021;
- eCommerce sales increased 294.8% to
a quarterly record of $19.2 million;
- Net earnings increased 140.0% to
$0.60 per diluted share, compared to $0.25 per diluted share for
the same period last fiscal year;
- Inventories increased 21.7%
compared to total retail sales growth of 28.8%, with approximately
80% of SKUs available for next day delivery at October 31,
2021;
- Credit spread was 14.6%, the
highest credit spread in over 10 years;
- At October 31, 2021, the carrying
value of customer accounts receivable 60+ days past due declined
32.5% year-over-year, and the carrying value of re-aged accounts
declined 42.9% year-over-year;
- Net debt as a percent of the
portfolio balance at October 31, 2021, was approximately 37.7%,
compared to 48.2% at October 31, 2020; and
- Completed $377.8 million ABS
transaction in November 2021 at an all-in cost of funds of
approximately 3.91%, representing a 110-basis point reduction from
the most recent transaction, and the lowest all-in cost of funds
since the Company re-entered the ABS market in September 2015.
Third Quarter Results
Net income for the three months ended
October 31, 2021 was $18.2 million, or $0.60 per diluted
share, compared to net income for the three months ended
October 31, 2020 of $7.4 million, or $0.25 per diluted
share.
Retail Segment Third Quarter
Results
Retail revenues were $334.8 million for the
three months ended October 31, 2021 compared to $259.9 million
for the three months ended October 31, 2020, an increase of
$74.9 million or 28.8%. The increase in retail revenue was
primarily driven by an increase in same store sales of 20.6%, new
store growth and an increase in RSA commissions. The increase in
same store sales reflects an increase in demand across most of the
Company’s home-related product categories. The increase also
reflects the impact of prior year proactive underwriting changes,
which were the result of the COVID-19 pandemic.
For the three months ended October 31, 2021
and 2020, retail segment operating income was $22.5 million and
$15.2 million, respectively. The increase in retail segment
operating income for the three months ended October 31, 2021 was
primarily due to an increase in revenue.
The following table presents net sales and
changes in net sales by category:
|
Three Months Ended October 31, |
|
|
|
|
|
Same Store |
(dollars in thousands) |
2021 |
|
% of Total |
|
2020 |
|
% of Total |
|
Change |
|
% Change |
|
% Change |
Furniture and mattress |
$ |
106,756 |
|
|
31.9 |
% |
|
$ |
82,793 |
|
|
31.9 |
% |
|
$ |
23,963 |
|
|
|
28.9 |
|
% |
|
18.8 |
|
% |
Home appliance |
128,385 |
|
|
38.3 |
|
|
99,872 |
|
|
38.4 |
|
|
28,513 |
|
|
|
28.5 |
|
|
|
21.9 |
|
|
Consumer electronics |
46,751 |
|
|
14.0 |
|
|
35,517 |
|
|
13.7 |
|
|
11,234 |
|
|
|
31.6 |
|
|
|
28.2 |
|
|
Home office |
17,373 |
|
|
5.2 |
|
|
16,711 |
|
|
6.4 |
|
|
662 |
|
|
|
4.0 |
|
|
|
(3.2 |
) |
|
Other |
9,036 |
|
|
2.7 |
|
|
4,264 |
|
|
1.6 |
|
|
4,772 |
|
|
|
111.9 |
|
|
|
76.7 |
|
|
Product sales |
308,301 |
|
|
92.1 |
|
|
239,157 |
|
|
92.0 |
|
|
69,144 |
|
|
|
28.9 |
|
|
|
21.0 |
|
|
Repair service agreement
commissions (1) |
23,769 |
|
|
7.1 |
|
|
17,465 |
|
|
6.7 |
|
|
6,304 |
|
|
|
36.1 |
|
|
|
16.8 |
|
|
Service revenues |
2,513 |
|
|
0.8 |
|
|
3,150 |
|
|
1.3 |
|
|
(637 |
) |
|
|
(20.2 |
) |
|
|
|
Total net sales |
$ |
334,583 |
|
|
100.0 |
% |
|
$ |
259,772 |
|
|
100.0 |
% |
|
$ |
74,811 |
|
|
|
28.8 |
|
% |
|
20.6 |
|
% |
(1) |
The total change in sales of repair service agreement commissions
includes retrospective commissions, which are not reflected in the
change in same store sales. |
Credit Segment Third Quarter
Results
Credit revenues were $70.6 million for the three
months ended October 31, 2021 compared to $74.2 million for
the three months ended October 31, 2020, a decrease of $3.6
million or 4.9%. The decrease in credit revenue was primarily due
to a 15.2% decrease in the average outstanding balance of the
customer receivable portfolio. These decreases were partially
offset by an increase in the yield rate from 21.1% for the three
months ended October 31, 2020 to 22.6% for the three months ended
October 31, 2021 and an increase in insurance commissions.
Provision for bad debts was $26.5 million for
the three months ended October 31, 2021 compared to $27.4
million for the three months ended October 31, 2020, a
decrease of $0.9 million. The change was primarily driven by a
year-over-year decrease in net charge-offs of $26.1 million,
partially offset by an increase in the change in allowance for bad
debts. The increase in the change in the allowance for bad debts
was primarily driven by an increase in the customer accounts
receivable portfolio balance during the third quarter of fiscal
year 2022 versus a decrease during the third quarter of fiscal year
2021 and an increase in loss rates due to an increase in
delinquency.
Credit segment operating income was $7.0 million
for the three months ended October 31, 2021, compared to $8.9
million for the three months ended October 31, 2020. The
decrease was primarily due to a decrease in credit revenue, which
was driven by the decline in the customer accounts receivable
portfolio.
Additional information on the credit portfolio
and its performance may be found in the Customer Accounts
Receivable Portfolio Statistics table included within this press
release and in the Company’s Form 10-Q for the quarter ended
October 31, 2021, to be filed with the Securities and Exchange
Commission on December 7, 2021 (the “Third Quarter Form
10-Q”).
Store and Facilities Update
The Company opened two new Conn’s HomePlus®
stores during the third quarter of fiscal year 2022, bringing the
total store count to 157 in 15 states. During fiscal year 2022, the
Company plans to open a total of twelve new store (inclusive of the
stores opened during the first three quarters of fiscal year
2022).
Liquidity and Capital
Resources
As of October 31, 2021, the Company had
$320.5 million of immediately available borrowing capacity under
its $650.0 million revolving credit facility. The Company also had
$10.6 million of unrestricted cash available for use.
On November 23, 2021, the Company completed an
ABS transaction resulting in the issuance and sale of $377.8
million aggregate principal amount of Class A, Class B and Class C
Notes secured by customer accounts receivables and restricted cash
held by a consolidated VIE, which resulted in net proceeds of
$375.2 million, and an all-in cost of funds of 3.91%.
Conference Call Information
The Company will host a conference call on
December 7, 2021, at 10 a.m. CT / 11 a.m. ET, to discuss its
financial results for the three months ended October 31, 2021.
Participants can join the call by dialing 877-451-6152 or
201-389-0879. The conference call will also be broadcast
simultaneously via webcast on a listen-only basis. A link to the
earnings release, webcast and third quarter fiscal year 2022
conference call presentation will be available at ir.conns.com.
Replay of the telephonic call can be accessed
through December 14, 2021 by dialing 844-512-2921 or 412-317-6671
and Conference ID: 13722603.
About Conn’s, Inc.
Conn’s is a specialty retailer currently
operating 157 retail locations in Alabama, Arizona, Colorado,
Florida, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North
Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia.
The Company’s primary product categories include:
- Furniture and
mattress, including furniture and related accessories for the
living room, dining room and bedroom, as well as both traditional
and specialty mattresses;
- Home appliance,
including refrigerators, freezers, washers, dryers, dishwashers and
ranges;
- Consumer
electronics, including LED, OLED, QLED, 4K Ultra HD, and 8K
televisions, gaming products, next generation video game consoles
and home theater and portable audio equipment; and
- Home office,
including computers, printers and accessories.
Additionally, Conn’s offers a variety of
products on a seasonal basis. Unlike many of its competitors,
Conn’s provides flexible in-house credit options for its customers
in addition to third-party financing programs and third-party
lease-to-own payment plans.
This press release contains forward-looking
statements within the meaning of the federal securities laws,
including but not limited to, the Private Securities Litigation
Reform Act of 1995, 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,” “predict,” “will,” “potential,” or the
negative of such terms or other similar expressions are generally
forward-looking in nature and not historical facts. Such
forward-looking statements are based on our current expectations.
We can give no assurance that such statements will prove to be
correct, and actual results may differ materially. 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 execute periodic
securitizations of future originated customer loans on favorable
terms; our ability to continue existing customer financing programs
or to offer new customer financing programs; changes in the
delinquency status of our credit portfolio; unfavorable
developments in ongoing litigation; increased regulatory oversight;
higher than anticipated net charge-offs in the credit portfolio;
the success of our planned opening of new stores; technological and
market developments and sales trends for our major product
offerings; our ability to manage effectively the selection of our
major product offerings; our ability to protect against
cyber-attacks or data security breaches and to protect the
integrity and security of individually identifiable data of our
customers and employees; 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; the effects of
epidemics or pandemics, including the COVID-19 pandemic; and other
risks detailed in Part I, Item 1A, Risk Factors, in our Annual
Report on Form 10-K for the fiscal year ended January 31, 2021 and
other reports filed with the Securities and Exchange Commission. If
one or more of these or other risks or uncertainties materialize
(or the consequences of such a development changes), or should our
underlying assumptions prove incorrect, actual outcomes may vary
materially from those reflected in our forward-looking statements.
You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. We disclaim any intention or obligation to update
publicly or revise such statements, whether as a result of new
information, future events or otherwise, or to provide periodic
updates or guidance. All forward-looking statements attributable to
us, or to persons acting on our behalf, are expressly qualified in
their entirety by these cautionary statements.
CONN-G
S.M. Berger & Company
Andrew Berger (216) 464-6400
CONN’S, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited)(dollars in thousands, except per
share amounts)
|
Three Months EndedOctober
31, |
|
Nine Months EndedOctober 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues: |
|
|
|
|
|
|
|
Total net sales |
$ |
334,583 |
|
|
$ |
259,772 |
|
|
$ |
972,664 |
|
|
$ |
769,838 |
|
|
Finance charges and other
revenues |
70,875 |
|
|
74,386 |
|
|
214,879 |
|
|
248,396 |
|
|
Total revenues |
405,458 |
|
|
334,158 |
|
|
1,187,543 |
|
|
1,018,234 |
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
Cost of goods sold |
211,298 |
|
|
160,378 |
|
|
612,219 |
|
|
484,015 |
|
|
Selling, general and
administrative expense |
138,081 |
|
|
122,158 |
|
|
402,000 |
|
|
350,443 |
|
|
Provision for bad debts |
26,532 |
|
|
27,493 |
|
|
19,658 |
|
|
176,864 |
|
|
Charges and credits |
— |
|
|
— |
|
|
— |
|
|
3,589 |
|
|
Total costs and expenses |
375,911 |
|
|
310,029 |
|
|
1,033,877 |
|
|
1,014,911 |
|
|
Operating income |
29,547 |
|
|
24,129 |
|
|
153,666 |
|
|
3,323 |
|
|
Interest expense |
5,206 |
|
|
11,563 |
|
|
20,498 |
|
|
39,778 |
|
|
Loss on extinguishment of
debt |
— |
|
|
— |
|
|
1,218 |
|
|
— |
|
|
Income (loss) before income taxes |
24,341 |
|
|
12,566 |
|
|
131,950 |
|
|
(36,455 |
) |
|
Provision (benefit) for income
taxes |
6,102 |
|
|
5,147 |
|
|
31,309 |
|
|
(8,192 |
) |
|
Net income (loss) |
$ |
18,239 |
|
|
$ |
7,419 |
|
|
$ |
100,641 |
|
|
$ |
(28,263 |
) |
|
Income (loss) per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.62 |
|
|
$ |
0.25 |
|
|
$ |
3.42 |
|
|
$ |
(0.97 |
) |
|
Diluted |
$ |
0.60 |
|
|
$ |
0.25 |
|
|
$ |
3.34 |
|
|
$ |
(0.97 |
) |
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
Basic |
29,488,321 |
|
|
29,142,843 |
|
|
29,418,047 |
|
|
29,013,759 |
|
|
Diluted |
30,261,421 |
|
|
29,483,481 |
|
|
30,127,419 |
|
|
29,013,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONN’S, INC. AND SUBSIDIARIES
CONDENSED RETAIL SEGMENT FINANCIAL
INFORMATION(unaudited)(dollars in thousands)
|
Three Months EndedOctober
31, |
|
Nine Months EndedOctober 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues: |
|
|
|
|
|
|
|
Product sales |
$ |
308,301 |
|
|
$ |
239,157 |
|
|
$ |
897,757 |
|
|
$ |
702,497 |
|
Repair service agreement
commissions |
23,769 |
|
|
17,465 |
|
|
66,600 |
|
|
57,730 |
|
Service revenues |
2,513 |
|
|
3,150 |
|
|
8,307 |
|
|
9,611 |
|
Total net sales |
334,583 |
|
|
259,772 |
|
|
972,664 |
|
|
769,838 |
|
Finance charges and other |
262 |
|
|
168 |
|
|
695 |
|
|
599 |
|
Total revenues |
334,845 |
|
|
259,940 |
|
|
973,359 |
|
|
770,437 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
Cost of goods sold |
211,298 |
|
|
160,378 |
|
|
612,219 |
|
|
484,015 |
|
Selling, general and
administrative expense |
100,969 |
|
|
84,245 |
|
|
294,019 |
|
|
241,003 |
|
Provision for bad debts |
36 |
|
|
72 |
|
|
196 |
|
|
422 |
|
Charges and credits |
— |
|
|
— |
|
|
— |
|
|
1,355 |
|
Total costs and expenses |
312,303 |
|
|
244,695 |
|
|
906,434 |
|
|
726,795 |
|
Operating income |
$ |
22,542 |
|
|
$ |
15,245 |
|
|
$ |
66,925 |
|
|
$ |
43,642 |
|
Retail gross margin |
36.8 |
% |
|
38.3 |
% |
|
37.1 |
% |
|
37.1 |
% |
Selling, general and administrative expense as percent of
revenues |
30.2 |
% |
|
32.4 |
% |
|
30.2 |
% |
|
31.3 |
% |
Operating margin |
6.7 |
% |
|
5.9 |
% |
|
6.9 |
% |
|
5.7 |
% |
Store
count: |
|
|
|
|
|
|
|
Beginning of period |
155 |
|
|
141 |
|
|
146 |
|
|
137 |
|
Opened |
2 |
|
|
2 |
|
|
11 |
|
|
6 |
|
End of period |
157 |
|
|
143 |
|
|
157 |
|
|
143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONN’S, INC. AND SUBSIDIARIES
CONDENSED CREDIT SEGMENT FINANCIAL
INFORMATION(unaudited)(dollars in thousands)
|
Three Months EndedOctober
31, |
|
Nine Months EndedOctober 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues: |
|
|
|
|
|
|
|
Finance charges and other revenues |
$ |
70,613 |
|
|
$ |
74,218 |
|
|
|
$ |
214,184 |
|
|
$ |
247,797 |
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
Selling, general and
administrative expense |
37,112 |
|
|
37,913 |
|
|
|
107,981 |
|
|
109,440 |
|
|
Provision for bad debts |
26,496 |
|
|
27,421 |
|
|
|
19,462 |
|
|
176,442 |
|
|
Charges and credits |
— |
|
|
— |
|
|
|
— |
|
|
2,234 |
|
|
Total costs and expenses |
63,608 |
|
|
65,334 |
|
|
|
127,443 |
|
|
288,116 |
|
|
Operating income (loss) |
7,005 |
|
|
8,884 |
|
|
|
86,741 |
|
|
(40,319 |
) |
|
Interest expense |
5,206 |
|
|
11,563 |
|
|
|
20,498 |
|
|
39,778 |
|
|
Loss on extinguishment of
debt |
— |
|
|
— |
|
|
|
1,218 |
|
|
— |
|
|
Income (loss) before income taxes |
$ |
1,799 |
|
|
$ |
(2,679 |
) |
|
|
$ |
65,025 |
|
|
$ |
(80,097 |
) |
|
Selling, general and
administrative expense as percent of revenues |
52.6 |
% |
|
51.1 |
|
% |
|
50.4 |
% |
|
44.2 |
|
% |
Selling, general and
administrative expense as percent of average outstanding customer
accounts receivable balance (annualized) |
13.3 |
% |
|
11.5 |
|
% |
|
12.7 |
% |
|
10.2 |
|
% |
Operating margin |
9.9 |
% |
|
12.0 |
|
% |
|
40.5 |
% |
|
(16.3 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONN’S, INC. AND SUBSIDIARIES
CUSTOMER ACCOUNTS RECEIVABLE PORTFOLIO
STATISTICS(unaudited)
|
As of October 31, |
|
2021 |
|
2020 |
Weighted average credit score
of outstanding balances (1) |
607 |
|
|
599 |
|
Average outstanding customer balance |
$ |
2,449 |
|
|
$ |
2,515 |
|
Balances 60+ days past due as
a percentage of total customer portfolio carrying value
(2)(3)(4) |
8.8 |
% |
|
11.5 |
% |
Re-aged balance as a
percentage of total customer portfolio carrying value
(2)(3)(5) |
18.3 |
% |
|
28.2 |
% |
Carrying value of account
balances re-aged more than six months (in thousands) (3) |
$ |
61,807 |
|
|
$ |
98,307 |
|
Allowance for bad debts and
uncollectible interest as a percentage of total customer accounts
receivable portfolio balance |
18.5 |
% |
|
24.9 |
% |
Percent of total customer
accounts receivable portfolio balance represented by no-interest
option receivables |
32.0 |
% |
|
18.0 |
% |
|
|
|
|
|
|
|
Three Months EndedOctober
31, |
|
Nine Months EndedOctober 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Total applications
processed |
337,112 |
|
|
285,569 |
|
|
971,456 |
|
|
908,078 |
|
Weighted average origination
credit score of sales financed (1) |
616 |
|
|
618 |
|
|
615 |
|
|
615 |
|
Percent of total applications
approved and utilized |
21.5 |
% |
|
22.7 |
% |
|
21.9 |
% |
|
21.6 |
% |
Average income of credit customer at origination |
$ |
49,100 |
|
|
$ |
46,900 |
|
|
$ |
48,400 |
|
|
$ |
46,500 |
|
Percent of retail sales paid
for by: |
|
|
|
|
|
|
|
In-house financing, including down payments received |
52.9 |
% |
|
51.5 |
% |
|
50.9 |
% |
|
52.6 |
% |
Third-party financing |
17.9 |
% |
|
20.3 |
% |
|
17.5 |
% |
|
20.6 |
% |
Third-party lease-to-own option |
9.2 |
% |
|
7.2 |
% |
|
11.0 |
% |
|
8.0 |
% |
|
80.0 |
% |
|
79.0 |
% |
|
79.4 |
% |
|
81.2 |
% |
(1) |
Credit scores exclude non-scored accounts. |
(2) |
Accounts that become delinquent after being re-aged are included in
both the delinquency and re-aged amounts. |
(3) |
Carrying value reflects the total customer accounts receivable
portfolio balance, net of deferred fees and origination costs, the
allowance for no-interest option credit programs and the allowance
for uncollectible interest. |
(4) |
Decrease was primarily due to an increase in cash collections and
the tightening of underwriting standards that occurred in fiscal
year 2021. |
(5) |
Decrease was primarily due to an increase in cash collections, the
change in the unilateral re-age policy that occurred in the second
quarter of fiscal year 2021 and the tightening of underwriting
standards that occurred in fiscal year 2021. |
|
|
CONN’S, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS(unaudited)(in thousands)
|
October 31, 2021 |
|
|
January 31, 2021 |
|
Assets |
|
|
|
Current
Assets: |
|
|
|
Cash and cash equivalents |
$ |
10,597 |
|
|
$ |
9,703 |
|
Restricted cash |
25,528 |
|
|
50,557 |
|
Customer accounts receivable,
net of allowances |
460,808 |
|
|
478,734 |
|
Other accounts receivable |
74,811 |
|
|
61,716 |
|
Inventories |
263,134 |
|
|
196,463 |
|
Income taxes receivable |
8,787 |
|
|
38,059 |
|
Prepaid expenses and other
current assets |
9,745 |
|
|
8,831 |
|
Total current assets |
853,410 |
|
|
844,063 |
|
Long-term portion of customer
accounts receivable, net of allowances |
426,220 |
|
|
430,749 |
|
Property and equipment,
net |
188,502 |
|
|
190,962 |
|
Operating lease right-of-use
assets |
265,592 |
|
|
265,798 |
|
Deferred income taxes |
— |
|
|
9,448 |
|
Other assets |
52,855 |
|
|
14,064 |
|
Total assets |
$ |
1,786,579 |
|
|
$ |
1,755,084 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current
liabilities: |
|
|
|
Current finance lease
obligations |
$ |
942 |
|
|
$ |
934 |
|
Accounts payable |
91,084 |
|
|
69,367 |
|
Accrued expenses |
128,054 |
|
|
82,990 |
|
Operating lease liability -
current |
50,390 |
|
|
44,011 |
|
Other current liabilities |
16,402 |
|
|
14,454 |
|
Total current liabilities |
286,872 |
|
|
211,756 |
|
Operating lease liability -
non current |
345,756 |
|
|
354,598 |
|
Long-term debt and finance
lease obligations |
459,319 |
|
|
608,635 |
|
Deferred tax liability |
8,693 |
|
|
— |
|
Other long-term
liabilities |
22,424 |
|
|
22,940 |
|
Total liabilities |
1,123,064 |
|
|
1,197,929 |
|
Stockholders’ equity |
663,515 |
|
|
557,155 |
|
Total liabilities and stockholders’ equity |
$ |
1,786,579 |
|
|
$ |
1,755,084 |
|
|
|
|
|
|
|
|
|
CONN’S, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS(unaudited)(dollars in
thousands, except per share amounts)
Basis for presentation of non-GAAP
disclosures:
To supplement the Condensed Consolidated
Financial Statements, which are prepared and presented in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”), the Company also provides the
following non-GAAP financial measures: adjusted net income (loss),
adjusted net income (loss) per diluted share and net debt as a
percentage of the portfolio balance. These non-GAAP financial
measures are not meant to be considered as a substitute for, or
superior to, comparable GAAP measures and should be considered in
addition to results presented in accordance with GAAP. They are
intended to provide additional insight into our operations and the
factors and trends affecting the business. 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 we use in our financial and operational
decision making and (2) they are used by some of our institutional
investors and the analyst community to help them analyze our
operating results.
ADJUSTED NET INCOME (LOSS) AND ADJUSTED
NET INCOME (LOSS) PER DILUTED SHARE
|
Three Months EndedOctober
31, |
|
Nine Months EndedOctober 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net income (loss), as reported |
$ |
18,239 |
|
|
$ |
7,419 |
|
|
$ |
100,641 |
|
|
|
$ |
(28,263 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
Loss on extinguishment of debt (1) |
— |
|
|
— |
|
|
1,218 |
|
|
|
— |
|
|
Professional fees (2) |
— |
|
|
— |
|
|
— |
|
|
|
3,589 |
|
|
Tax impact of adjustments |
— |
|
|
— |
|
|
(274 |
) |
|
|
(803 |
) |
|
Net income (loss), as adjusted |
$ |
18,239 |
|
|
$ |
7,419 |
|
|
$ |
101,585 |
|
|
|
$ |
(25,477 |
) |
|
Weighted average common shares
outstanding - Diluted |
30,261,421 |
|
|
29,483,481 |
|
|
30,127,419 |
|
|
|
29,013,759 |
|
|
Earnings (loss) per
share: |
|
|
|
|
|
|
|
As reported |
$ |
0.60 |
|
|
$ |
0.25 |
|
|
$ |
3.34 |
|
|
|
$ |
(0.97 |
) |
|
As adjusted |
$ |
0.60 |
|
|
$ |
0.25 |
|
|
$ |
3.37 |
|
|
|
$ |
(0.88 |
) |
|
(1) |
Represents a loss of $1.0 million from retirement of
$141.2 million aggregate principal amount of our 7.25% senior
notes due 2022 (“Senior Notes”) and a loss of
$0.2 million related to the amendment of our Fifth Amended and
Restated Loan and Security Agreement. |
(2) |
Represents professional fees associated with non-recurring
expenses. |
|
|
NET DEBT
(dollars in thousands)
|
October 31, |
|
2021 |
|
2020 |
Debt, as
reported |
|
|
|
Current finance lease obligations |
$ |
942 |
|
|
$ |
769 |
|
Long-term debt and finance
lease obligations |
|
459,319 |
|
|
|
800,586 |
|
Total debt |
$ |
460,261 |
|
|
$ |
801,355 |
|
Cash, as
reported |
|
|
|
Cash and cash equivalents |
|
10,597 |
|
|
|
107,822 |
|
Restricted Cash |
|
25,528 |
|
|
|
78,374 |
|
Total cash |
$ |
36,125 |
|
|
$ |
186,196 |
|
Net debt |
$ |
424,136 |
|
|
$ |
615,159 |
|
Ending portfolio
balance, as reported |
$ |
1,124,872 |
|
|
$ |
1,276,100 |
|
Net debt as a
percentage of the portfolio balance |
37.7 |
% |
|
48.2 |
% |
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