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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report:
(Date of earliest event reported)
May 31, 2005
----------------------------
CONN'S, INC.
(Exact name of registrant as specified in charter)
Delaware
(State or other Jurisdiction of Incorporation or Organization)
000-50421 06-1672840
(Commission File Number) (IRS Employer Identification No.)
3295 College Street
Beaumont, Texas 77701
(Address of Principal Executive
Offices and zip code)
(409) 832-1696
(Registrant's telephone
number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Securities Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) 12 under the
Securities Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) 12 under the
Securities Act (17 CFR 240.13e-2(c))
Item 2.02 Results of Operations and Financial Condition.
On May 31, 2005, the Company issued a press release announcing its earnings
for the quarter ended April 30, 2005. A copy of the press release is furnished
herewith as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01(c) Exhibits.
Exhibit 99.1 Press Release, dated May 31, 2005
All of the information contained in Item 2.02 and Item 9.01(c) in this Form
8-K and the accompanying exhibit shall not be deemed to be "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and
shall not be incorporated by reference in any filing under the Securities Act of
1933, as amended.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONN'S, INC.
Date: May 31, 2005 By: /s/ David L. Rogers
-----------------------
David L. Rogers
Chief Financial Officer
3
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release, dated May 31, 2005
4
Exhibit 99.1
Conn's, Inc. Reports Record Earnings for the Quarter Ended April 30, 2005
BEAUMONT, Texas--(BUSINESS WIRE)--May 31, 2005--Conn's, Inc.
(NASDAQ/NM:CONN), a specialty retailer of home appliances, consumer
electronics, computers, mattresses and lawn and garden products, today
announced record results for the first quarter ended April 30, 2005.
Net income for the first quarter increased 26.1% to $9.8 million
compared to $7.8 million for the first quarter of last year. Diluted
earnings per share available for common stockholders were $0.41
compared with $0.33 for the first quarter of last year. Total revenues
for the quarter ended April 30, 2005 increased 17.3% to $158.2 million
compared with $134.9 million for the quarter ended April 30, 2004.
This increase in revenue included net sales increases of $20.4
million, or 17.2%, and increases from "Finance charges and other" of
$2.9 million, or 17.7%. Same store sales (revenues earned in stores
operated for the entirety of both periods) increased 7.3% for the
first quarter of fiscal 2006.
During the first quarter, the Company continued its expansion into
the Dallas/Fort Worth Metroplex with the opening of one additional
store, bringing the store count in this market to nine as of April 30,
2005. This new store also brings the Company's total store count to
51. Three additional stores are under construction by the Company in
the Dallas/Fort Worth market and other stores are in various stages of
development in other locations. By the end of January 2006, the
Company expects to operate approximately 56 to 58 stores.
"Our continuing focus on improving execution in merchandising,
store operations, logistics, training and credit resulted in
satisfying results during the first quarter. We are certainly pleased
with our same store sales growth, as well as the contribution to total
sales from our new stores," said Thomas J. Frank, Conn's Chairman and
Chief Executive Officer. "Our new store openings are on schedule and
we are confident in our strategy of controlled, profitable growth."
EPS Guidance
The Company continues to believe its previously issued guidance
for the year ending January 31, 2006 of earnings per diluted share of
approximately $1.40 to $1.46 will be achievable. The estimate of
earnings per diluted share is calculated in accordance with current
generally accepted accounting principles. Comparable store sales
increases are projected in the low to mid single digit range.
Conference Call Information
Conn's, Inc. will host a conference call and audio webcast today,
May 31, 2005 at 10:00 AM, CDT, to discuss financial results for the
quarter ended April 30, 2005. The webcast will be available at
www.conns.com and will be archived for 30 days. The webcast is also
being distributed over CCBN's Investor Distribution Network to both
institutional and individual investors. Individual investors can
listen to the call through CCBN's individual investor center at
www.fulldisclosure.com. Institutional investors can access the call
via StreetEvents (www.streetevents.com).
About Conn's, Inc.
The Company is a specialty retailer currently operating 51 retail
locations in Texas and Louisiana: 18 stores in the Houston area, nine
in the Dallas/Fort Worth Metroplex, seven in San Antonio, five in
Austin, four in Southeast Texas, one in Corpus Christi, one in McAllen
and six stores in 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, computers and computer peripherals, DVD
players, portable audio and home theater products. The Company also
sells lawn and garden products and mattresses, and continues to
introduce additional product categories for the home to help increase
same store sales and to respond to its customers' product needs.
Unlike many of its competitors, the Company provides flexible
in-house credit options for its customers. Historically, it has
financed, on average, approximately 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 annual report on Form 10-K filed on April 5,
2005 and current report on Form 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
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.
Conn's, Inc.
CONDENSED, CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except earnings per share)
Three Months Ended
April 30,
-------------------
2004 2005
--------- ---------
Revenues
Total net sales $118,542 $138,934
Finance charges and other 16,336 19,229
--------- ---------
Total revenues 134,878 158,163
Cost and expenses
Cost of goods sold, including warehousing
and occupancy costs 84,774 100,917
Cost of parts sold, including warehousing
and occupancy costs 1,104 1,225
Selling, general and administrative expense 34,862 39,482
Provision for bad debts 1,422 1,152
--------- ---------
Total cost and expenses 122,162 142,776
--------- ---------
Operating income 12,716 15,387
Interest expense 582 355
--------- ---------
Income before minority interest and income taxes 12,134 15,032
Minority interest in limited partnership (115) -
--------- ---------
Income before income taxes 12,019 15,032
Total provision for income taxes 4,246 5,230
--------- ---------
Net income $7,773 $9,802
========= =========
Earnings per share
Basic $0.34 $0.42
Diluted $0.33 $0.41
Average common shares outstanding
Basic 23,145 23,307
Diluted 23,749 23,856
Conn's, Inc.
CONDENSED, CONSOLIDATED BALANCE SHEETS
(in thousands)
January 31, April 30,
2005 2005
------------ ------------
Assets
Current assets
Cash and cash equivalents $7,027 $5,669
Interests in securitized assets and
accounts receivable, net 131,294 130,176
Inventories 62,346 69,394
Deferred income taxes 4,901 6,896
Prepaid expenses and other assets 3,356 3,105
------------ ------------
Total current assets 208,924 215,240
Non-current deferred income tax asset 1,523 1,893
Total property and equipment, net 47,710 48,321
Goodwill and other assets, net 9,846 9,796
------------ ------------
Total assets $268,003 $275,250
============ ============
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $5,500 $-
Current portion of long-term debt 29 25
Accounts payable 26,912 29,504
Accrued expenses 19,883 25,932
Fair value of derivatives 177 -
Other current liabilities 8,349 7,946
------------ ------------
Total current liabilities 60,850 63,407
Long-term debt 5,003 -
Non-current deferred income tax liability 704 762
Deferred gain on sale of property 644 602
Total stockholders' equity 200,802 210,479
------------ ------------
Total liabilities and stockholders'
equity $268,003 $275,250
============ ============
Conn's, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Three Months
Ended April 30,
---------------------
2004 2005
---------- ----------
Net cash provided by operating activities $541 $11,656
Cash flows from investing activities
Purchase of property and equipment (4,346) (3,273)
Proceeds from sale of property 2 11
---------- ----------
Net cash used in investing activities (4,344) (3,262)
Cash flows from financing activities
Net borrowings (payments) under bank credit
facilities (3) (10,500)
Net proceeds from stock issued under employee
benefit plans 591 755
Payment of promissory notes (17) (7)
---------- ----------
Net cash provided by (used in) financing
activities 571 (9,752)
---------- ----------
Impact on cash of consolidation of SRDS (49) -
---------- ----------
Net change in cash (3,281) (1,358)
Cash and cash equivalents
Beginning of the year 12,942 7,027
---------- ----------
End of the year $9,661 $5,669
========== ==========
CALCULATION OF GROSS MARGIN PERCENTAGE
(dollars in thousands)
Three Months Ended
April 30,
---------------------
2004 2005
---------- ----------
Total revenues $134,878 $158,163
Less cost of goods and parts sold, including
warehousing and occupancy cost (85,878) (102,142)
---------- ----------
Gross margin dollars $49,000 $56,021
========== ==========
Gross margin percentage 36.3% 35.4%
CONTACT: Conn's, Inc., Beaumont
Thomas J. Frank, 409-832-1696 Ext. 3218