Conn's, Inc. Reports Sales Increase For Quarter

Furniture World Magazine

Conn's, Inc., a specialty retailer of home appliances, consumer electronics, computers, lawn and garden products, furniture and mattresses, announced its net sales results for the quarter and year ended January 31, 2007. Net sales for the quarter ended January 31, 2007 of $189.6 million increased $4.7 million, or 2.5%, as compared with the quarter ended January 31, 2006, which, as previously disclosed, was positively impacted by hurricanes Katrina and Rita. Net sales for the year ended January 31, 2007 increased $56.6 million, or 9.1%, from $620.7 million for the year ended January 31, 2006 to $677.3 million for the year ended January 31, 2007. Net sales represent net product sales, delivery charges, service revenues and commissions from service maintenance agreement sales. Revenues from finance charges and other for the quarter will be reported in the Company's press release and conference call scheduled for March 29, 2007. Same store sales (sales recorded in stores operated for the entirety of both periods) decreased 2.0% for the quarter ended January 31, 2007. As previously disclosed, same store sales for the quarter ended January 31, 2006 of 22.6% were positively impacted 700 to 900 basis points by hurricanes Katrina and Rita. Same store sales were up 3.7% for the year ended January 31, 2007. "Despite being up against unprecedented same store sales growth of 22.6% in the fourth quarter of last year, we posted very respectable sales growth in this fourth quarter," said the Company's Chairman and CEO, Thomas J. Frank, Sr., "primarily as a result of very good performance in the critical, holiday selling season." The Company's total net sales for the quarter benefited from the six stores added since last year. For the year ended January 31, 2007, the Company experienced approximately 4% and 15% increases in its core categories of major appliances and electronics, respectively, and also saw strong percentage increases in the mattresses and furniture categories of 35% and 118%, respectively. As a percentage of total product sales, appliances and electronics represent approximately 34% and 34%, respectively. Combined mattresses and furniture sales comprise 8% of total product sales. During the quarter, the Company opened three stores: two in the Dallas market and one in the Houston market. The Company opened six new stores for the year. The Company is targeting to open six to eight new stores during the fiscal year ending January 31, 2008. About Conn's, Inc. The Company is a specialty retailer currently operating 62 retail locations in Texas and Louisiana. It sells major home appliances, including refrigerators, freezers, washers, dryers and ranges, and a variety of consumer electronics, including projection, plasma, LCD and DLP televisions, camcorders, DVD players and home theater products. The Company also sells computers, lawn and garden products, mattresses and furniture, 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 credit options for its customers. Historically, it has financed over 57% of retail sales. Customer receivables are financed substantially through an asset-backed securitization facility, from which the Company derives servicing fee income and interest income from these assets. The Company transfers receivables, consisting of retail installment contracts and revolving accounts extended to its customers, to a qualifying special purpose entity in exchange for cash and subordinated securities represented by asset-backed and variable funding notes issued to third parties.