Conn's, Inc. Reports Revenue Increase of 5.8% for Quarter

Furniture World Magazine

Conn’s, Inc., a specialty retailer of home appliances, consumer electronics, computers, furniture and mattresses, and lawn and garden products announced its operating results for the quarter ended April 30, 2009. Highlights for the quarter include: Total revenues increased 5.8% to $231.3 million, Credit portfolio performance improved as the annualized net charge-off rate declined to 3.0% as compared to 3.4% and 3.2% during the fourth and first quarters, respectively, of fiscal 2009, and Diluted earnings per share were $0.51, or $0.47 excluding non-cash fair value adjustments, for the first quarter of fiscal 2010. Total revenues for the quarter ended April 30, 2009, increased 5.8% to $231.3 million. Total net sales increased 2.6% to $200.1 million. Strength in consumer electronics and furniture and mattresses was offset by weakness in the lawn and garden and track categories. Finance charges and other increased 12.2% to $29.8 million, and same store sales (revenues earned in stores operated for the entirety of both periods) decreased 4.6% during the first quarter of fiscal 2010. The same store sales decline was impacted by Circuit City’s liquidation sale and shortages of certain television products during the first quarter of fiscal 2010. The Company delivered solid operating performance during the quarter despite the challenging economic environment and reported Net income on a GAAP basis of $11.5 million, or diluted earnings per share of $0.51, for the first quarter of fiscal 2010, including the effects of a $1.4 million non-cash fair value increase in its Interests in securitized assets. Adjusted net income, excluding the non-cash fair value adjustments, was $10.6 million for the first quarter of fiscal 2010, compared with adjusted net income, excluding non-cash fair value adjustments, of $12.6 million for the first quarter of the prior fiscal year. Adjusted diluted earnings per share, excluding the non-cash fair value adjustments in both periods, was $0.47 for the first quarter of fiscal 2010, compared with $0.56 for the first quarter of the prior fiscal year, consistent with the Company’s previously communicated expectations. The credit portfolio performance improved during the quarter as the annualized net charge-off rate declined to 3.0% for the three months ended April 30, 2009, as compared to the 3.4% rate experienced during the quarter ended January 31, 2009, and the 3.2% rate experienced in the first quarter of the prior fiscal year. Additionally, the 60+ day delinquency rate dropped to 6.9% at April 30, 2009, as compared to 7.3% at January 31, 2009, though it was up compared to 6.4% at April 30, 2008. More information on the credit portfolio and its performance may be found in the table included with this press release and in the Company’s filing with the Securities and Exchange Commission on Form 10-Q which will be filed later today. The Company now has 75 stores in operation with plans to add three to five stores during the current fiscal year. About Conn’s, Inc.: The Company is a specialty retailer currently operating 75 retail locations in Texas, Louisiana and Oklahoma: 23 stores in the Houston area, 19 in the Dallas/Fort Worth Metroplex, nine in San Antonio, five in Austin, five in Southeast Texas, one in Corpus Christi, four in South Texas, six in Louisiana and three in Oklahoma. It sells home appliances, including refrigerators, freezers, washers, dryers, dishwashers and ranges, and a variety of consumer electronics, including LCD, LED, plasma and DLP televisions, camcorders, digital cameras, computers and computer accessories, Blu-ray and DVD players, video game equipment, portable audio, MP3 players, GPS devices and home theater products. The Company also sells lawn and garden products, furniture and mattresses, and continues to introduce additional product categories for the home to help respond to its customers' product needs and to increase same store sales. Unlike many of its competitors, the Company provides flexible in-house credit options for its customers. In the last three years, the Company financed, on average, approximately 61% of its retail sales.