Conn's, Inc. Reports Third Quarter 2004 Earnings.Business Editors BEAUMONT, Texas--(BUSINESS WIRE)--Dec. 10, 2003 Conn's, Inc. (NASDAQ/NM:CONN CONN Connecticut (old style) CONN Connection CONN Connector CONN Connotation ), a specialty retailer of home appliances, consumer electronics, home office products, bedding and lawn and garden products, today announced record results for the third quarter ended October 31, 2003. Net income available for common stockholders for the third quarter increased 23.2% to $4.7 million compared to $3.8 million for the third quarter of last year. Earnings per share available for common stockholders increased 21.7% to $0.28 from $0.23 in the prior year. Net revenues for the quarter ended October 31, 2003 increased 9.4% to $117.4 million compared with $107.3 million for the quarter ended October 31, 2002. This increase in revenue included net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increases of $9.4 million, or 10.0%, and increases from "Finance charges and other" of $0.7 million, or 4.9%. Same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of (revenues earned in stores operated for the entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. of both periods) increased 4.1% for the third quarter of fiscal 2004. Net revenues for the nine months ended October 31, 2003 increased 9.2% to $355.3 million compared with $325.4 million for the nine months ended October 31, 2002. This increase in revenue included net sales increases of $28.5 million, or 10.0%, and increases from "Finance charges and other" of $1.4 million, or 3.4%. Same store sales increased 0.3% for the first nine months of fiscal 2004. Net income available for common stockholders for the nine months ended October 31, 2003 increased 10.2% to $14.2 million compared to $12.9 million for the first nine months of last year. Earnings per share available for the common stockholder increased 10.4% to $0.85 from $0.77 in the prior year. During the third quarter, the Company made its entrance into the Dallas/Fort Worth metroplex The Dallas–Fort Worth–Arlington metropolitan area, a title designated by the U.S. Census as of 2003, encompasses 12 counties within the U.S. state of Texas. The metropolitan area is further divided into two metropolitan divisions: Dallas–Plano–Irving with the opening of its first two stores in this market in September and October. A third store was opened in this market in late November, bringing the Company's total store count to 45. The Company is in the process of developing additional sites in this market and still expects to open four to six new locations in this market in the fiscal year ended January 31, 2005. "We are pleased with our performance for the quarter just ended, particularly considering that we incurred substantial start up costs to enter the Dallas/Fort Worth market, all of which was absorbed into expense for the third quarter," said Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs J. Frank, Conn's chairman and chief executive officer. "We feel that the same store sales performance for such quarter illustrates what we believe to be the turn around in our recent same store sales trend. Our emphasis on track sales and our ability to take advantage of new product opportunities in bedding and lawn and garden categories seems to be providing positive results. Our holiday selling season is off to an impressive start, and we hope to see positive same store sales increases for the balance of this fiscal year." The initial public offering of Conn's, Inc. common stock became effective on November 24, 2003 and closed on December 1, 2003. Because the closing took place subsequent to the completion of the quarter ended October 31, 2003, the condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge included herein include the accounts of Conn Appliances, Inc. and its subsidiaries, limited liability companies and limited partnerships, all of which are wholly-owned. These statements have not been modified to reflect the merger with Conn's, Inc. that occurred immediately prior to the initial public offering. The per share results presented herein do not include the impact of the recently completed initial public offering whereby the company sold 4,000,000 shares of common stock to the public and a selling stockholder sold 150,000 shares of common stock to the public. The per share results also exclude the effect of approximately 1,750,000 common shares that are expected to be issued as a result of the redemption of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . The per share results do include the preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) that are payable to preferred stockholders prior to the redemption of such stock. Conn's, Inc. now is the present holding company and had a $1,000 capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and no operating activities prior to this merger. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Guidance The Company also issued guidance for the fourth quarter ended January 31, 2004 of earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share of approximately $0.32 to $0.34. Guidance issued for the entire year included earnings per diluted share of approximately $1.15 to $1.17, with comparable store sales increase in the low single digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. range. The quarterly and full year estimate of earnings per diluted share is calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . If the shares issued as a result of the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. , including the over-allotment, were considered outstanding for the entire period, EPS for the quarter ended January 31, 2004 is projected to be approximately $0.29 to $0.31 and EPS for the full year ended January 31, 2004 is projected to be approximately $0.97 to $0.99. Conference Call Information Conn's, Inc. will host a conference call and audio webcast tomorrow, December 11, 2003 at 10:00 AM, CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. , to discuss financial results for the quarter ended October 31, 2003. The webcast will be available at www.conns.com and will be archived for 30 days. The call in number is 800-299-9086, and the participant password is 72097760. About Conn's, Inc. The Company is a specialty retailer currently operating 45 retail locations in Texas and Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. . It sells major home appliances,
including refrigerators, freezers, washers, dryers and ranges, and a
variety of consumer electronics, including projection, plasma and LCD (Liquid Crystal Display) A display technology that uses rod-shaped molecules (liquid crystals) that flow like liquid and bend light. Unenergized, the crystals direct light through two polarizing filters, allowing a natural background color to show. televisions, camcorders, VCRs, DVD players A stand-alone device that plays DVDs. It contains a DVD drive and the electronics to decode the digital video. The device may play only manufactured DVDs, or it may be able to play DVD-R, DVD-RW and DVD+RW discs. DVD players are cabled to a TV or home theater system for display. and home theater An audio/video entertainment center that has a large-screen TV and hi-fi system with three speakers in the front (left, right and center) and left and right speakers in the rear. Starting in the early 1990s, video inputs were added to stereo receivers and preamplifiers. products.
The Company also sells home office equipment, lawn and garden products
and bedding, and continues to introduce additional product categories
for the home to help increase same store sales and to respond to our
customers' product needs.
Unlike many of its competitors, the Company provides in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. credit options for its customers. Historically, it has financed over 56% of retail sales. Customer receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed are financed substantially through an asset-backed securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. facility, from which the Company derives servicing fee income and interest income from these assets. The Company transfers receivables, consisting of retail installment contracts installment contract n. an agreement in which payments of money, delivery of goods or performance of services are to be made in a series of payments, deliveries or performances, usually on specific dates or upon certain happenings. and revolving accounts A revolving account is a type of debt account where the outstanding balance does not have to be paid in full every month by the borrower to the lender. The borrower maybe required to make a minimum payment, based on the balance amount. extended to its customers, to a qualifying special purpose entity, or the issuer, in exchange for cash and subordinated securities represented by asset-backed and variable funding notes issued to third parties. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "could," "estimate," "should," "anticipate," or "believe," or the negative thereof or variations thereon there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that or similar terminology. Although the Company believes that the expectations reflected in such forward-looking statements will prove to be correct, the Company can give no assurance that such expectations will prove to have been correct. The actual future performance of the Company could differ materially from such statements. Factors that could cause or contribute to such differences include, but are not limited to: the Company's growth strategy and plans regarding opening new stores and entering new markets; the Company's intention to update or expand existing stores; the Company's estimated capital expenditures and costs related to the opening of new stores or the update or expansion of existing stores; the Company's cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , borrowings from its revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. and proceeds from securitizations to fund operations, debt repayment and expansion; growth trends and projected sales in the home appliance and consumer electronics industry and the Company's ability to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. such growth; relationships with the Company's key suppliers; the results of the Company's litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; interest rates; weather conditions in the Company's markets; changes in the Company's stock price; and the actual number of shares of common stock outstanding. Further information on these risk factors is included in the Company's filings with the Securities and Exchange Commission, including the Company's current report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed in connection with this press release. 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, the Company is not obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to publicly release any revisions to these forward-looking statements to reflect the events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this press release or to reflect the occurrence of unanticipated events.
Conn Appliances, Inc
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
------------------- ------------------
2002 2003 2002 2003
-------- --------- --------- ---------
Revenues
Total net sales $93,586 $102,977 $283,909 $312,419
Finance charges and other 13,737 14,413 41,479 42,887
-------- --------- --------- ---------
Total revenues 107,323 117,390 325,388 355,306
Cost and Expenses
Cost of goods sold, including
warehousing and occupancy
costs 64,215 72,687 195,854 222,558
Cost of parts sold, including
warehousing and occupancy
costs 1,168 1,038 3,418 3,091
Selling, general and
administrative expense 31,371 33,405 95,284 97,559
Provision for bad debts 1,407 1,215 2,895 3,403
-------- --------- --------- ---------
Total cost and expenses 98,161 108,345 297,451 326,611
-------- --------- --------- ---------
Operating income 9,162 9,045 27,937 28,695
Interest expense 2,354 789 5,479 4,004
-------- --------- --------- ---------
Income before income taxes 6,808 8,256 22,458 24,691
Total provision for income taxes 2,431 2,933 7,996 8,760
-------- --------- --------- ---------
Net income 4,377 5,323 14,462 15,931
Less preferred dividends (533) (587) (1,600) (1,760)
-------- --------- --------- ---------
Net income available for common
stockholders $3,844 $4,736 $12,862 $14,171
======== ========= ========= =========
Earnings per share:
Basic $0.23 $0.28 $0.77 $0.85
Diluted $0.23 $0.28 $0.77 $0.85
Average common shares
outstanding:
Basic 16,720 16,720 16,735 16,720
Diluted 16,720 16,720 16,735 16,720
CONN APPLIANCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Jan. 31, Oct. 31,
2003 2003
--------- ---------
Assets
Current Assets
Cash and cash equivalents $2,448 $2,286
Interest in securitized assets and accounts
receivable, net 73,420 83,231
Inventories 46,118 54,404
Deferred income taxes 3,981 3,799
Prepaid expenses and other assets 3,473 2,889
--------- ---------
Total current assets 129,440 146,609
Non-current deferred tax assets and other costs 5,328 4,313
Total property and equipment, net 38,266 38,274
Goodwill and other 8,524 8,570
--------- ---------
Total assets $181,558 $197,766
========= =========
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable $7,500 $8,215
Current portion of long-term debt 7,928 7,567
Accounts payable 24,501 30,585
Fair value of derivatives 2,895 1,121
Other current liabilities 16,632 18,454
--------- ---------
Total current liabilities 59,456 65,942
Long-term debt 36,564 29,560
Non-current deferred tax liability and other 1,227 1,280
Fair value of derivatives 1,642 630
--------- ---------
Total stockholders' equity, net 82,669 100,354
--------- ---------
Total liabilities and stockholders'
equity $181,558 $197,766
========= =========
CONN APPLIANCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Nine Months
Ended October 31,
2002 2003
-----------------
Cash flows from operating activities
Net income $14,462 $15,931
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,017 5,031
Provision for bad debts 2,895 3,403
Provision for deferred income taxes (1,674) 540
Gain from sale of property and equipment (8) 64
Ineffectiveness of derivatives 70 (768)
Change in operating assets and liabilities, net (21,871) (12,540)
-----------------
Net cash provided (used) by operating activities (2,109) 11,661
Cash flows from investing activities
Purchase of property and equipment (9,431) (6,260)
Proceeds from sale of property 8 1,289
-------- --------
Net cash used by investing activities (9,423) (4,971)
Cash flows from financing activities
Purchase of treasury stock (200) -
Net borrowings (payments) under bank credit
facilities 17,418 (2,942)
Payments on term note (3,500) (2,250)
Debt issuance costs (1,523) (203)
Payment of promissory notes (994) (1,457)
-------- --------
Net cash provided (used) by financing activities 11,201 (6,852)
-------- --------
Net change in cash (331) (162)
Cash and cash equivalents
Beginning of the year 1,571 2,448
-------- --------
End of the year $1,240 $2,286
======== ========
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