Nov 4, 2005
Conn's, Inc. Reports New Long Term Credit Facility
Conn's, Inc. Reports New Long Term Credit Facility
The new Credit Agreement increases the Company's credit capacity under its syndicated revolving line of credit to $50 million (an increase from its $35 million line of credit prior to the new Agreement), provides for an accordion feature to allow expansion of the facility to $90 million under certain conditions, and extends the maturity date to November 1, 2010. The $50 million line provides sublimits of $8 million for a "swingline" line of credit and $5 million for standby letters of credit. Additionally, the new agreement provides reduced interest rate pricing and less restrictive covenants.
All banks in the Company's previous credit arrangement remained in the new Credit Agreement. JPMorgan Chase Bank, National Association will serve as the Administrative Agent for the credit facility, as well as a lender, Bank of America, N.A., as Syndication Agent and lender, and SunTrust Bank, as Documentation Agent and lender. Hibernia National Bank and Guaranty Bank are also lenders under the facility. J.P. Morgan Securities Inc. is the Arranger.
"This new credit facility is a recognition by the lending community of the strength, performance, and growth capacity of our Company," said Thomas J. Frank, Conn's Chairman and Chief Executive Officer. "While we are confident that our cash flow from operations will continue to enable us to drive new business and provide for growth and expansion in existing markets, this new credit capacity provides the company additional liquidity to acquire strategic real estate, open new stores or other corporate needs."
About Conn's, Inc.
The Company is a specialty retailer currently operating 55 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 and LCD televisions, camcorders, VCRs, DVD players and home theater 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 credit options for its customers. Historically, it has financed over 56% 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, 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 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 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, borrowings from its revolving line of credit 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 such growth; relationships with the Company's key suppliers; the results of the Company's 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 Form 10-K filed on April 5, 2005. 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 to publicly release any revisions to these forward-looking statements to reflect the events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
