BEAUMONT, Texas--(BUSINESS WIRE)--
Conn's, Inc. (NASDAQ/NM:CONN), a specialty retailer of consumer
electronics, home appliances, furniture, mattresses, computers and lawn
and garden products today reported the completion of its previously
announced refinancing plan.
The Company successfully completed the refinancing of its debt
facilities, which includes an expanded asset-based loan facility of $375
million, and a new $100 million senior secured second lien term loan,
with maturity dates in 2013 and 2014, respectively. Borrowings under the
new facilities will be governed by borrowing base calculations and will
have fixed charge coverage and leverage ratio covenants similar to the
existing asset-based loan facility, among other covenants. The
asset-based loan facility will typically bear interest at LIBOR plus a
spread, based on the leverage ratio. The term loan will bear interest at
the greater of 3.0% or LIBOR, plus approximately 1360 basis points,
including the amortization of the original issue discount. In
conjunction with the debt facilities, the Company completed a $25
million common stock rights offering. The completion of the rights
offering resulted in the issuance of approximately 9.3 million shares of
its common stock, based on the exercise of approximately 20.8 million
basic subscription privileges, which is approximately 92% of the rights
issued, and the issuance of approximately 0.7 million shares under the
oversubscription privilege. The Company used a portion of the net
proceeds from the borrowing facilities and the rights offering to repay
the outstanding debt balances under the Company's existing asset-backed
securitization program. Stephens Inc. acted as the Company's financial
advisor in connection with the transactions and Robert W. Baird & Co.
Incorporated acted as financial advisor to a committee of the Company's
board of directors formed in connection with the rights offering.
"We are very pleased with our ability to complete this critical
refinancing transaction, despite the challenging financial market
conditions," commented Tim Frank, the Company's President and CEO. "We
are very fortunate to have the continued support of our long-term
financial relationships and are very appreciative of the new
relationships we are beginning with these transactions."
Bank of America Merrill Lynch and JPMorgan Chase acted as joint book
runners and co-lead arrangers for the asset-based loan facility. Bank of
America Merrill Lynch will act as the administrative agent and
collateral agent for the facility. JPMorgan Chase and Wells Fargo
Preferred Capital, Inc., will act as co-syndication agents. Capital One,
N.A. and Regions Business Capital will act as co-documentation agents.
The other participants in the facility include Amegy Bank, BBVA Compass,
CommunityBank of Texas, N.A., First Tennessee Bank National Association
and Union Bank, N.A.
GA Capital, LLC, a subsidiary of Great American Group®, Inc. (OTCBB:
GAMR), will act as the administrative agent and collateral agent for the
term loan facility. The lenders include funds managed by Tennenbaum
Capital PartnersTM, a multi-strategy alternative investment
management firm; GB Merchant Partners' Debt Investment Group, an
affiliate of Gordon Brothers Group; and the Retail Junior Capital
division of Wells Fargo Capital Finance.
About Conn's, Inc.
The Company is a specialty retailer currently operating 76 retail
locations in Texas, Louisiana and Oklahoma: with 23 stores in the
Houston area, 20 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, 3-D, 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.
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
be 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 ability to amend, renew or replace its existing
credit facilities before the maturity dates of the facilities;
-
the Company's ability to fund operations, debt repayment and
expansion from cash flow from operations, borrowings on its revolving
lines of credit and proceeds from securitizations and from accessing
debt or equity markets;
-
the ability of the Company to obtain additional funding for the
purpose of funding the receivables generated by the Company;
-
the ability of the Company to maintain compliance with the
covenants in its financing facilities or obtain amendments or waivers
of the covenants to avoid violations or potential violations of the
covenants;
-
reduced availability under the Company's credit facilities as a
result of borrowing base requirements and the impact on the borrowing
base calculation of changes in the performance or eligibility of the
customer receivables financed by that facility;
-
delinquency and loss trends in the receivables portfolio;
-
the Company's ability to offer flexible financing programs;
-
the Company's growth strategy and plans regarding opening new
stores and entering new markets;
-
the Company's intention to update, relocate or expand existing
stores;
-
the effect of closing or reducing the hours of operation of
existing stores;
-
the Company's estimated capital expenditures and costs related to
the opening of new stores or the update, relocation or expansion of
existing stores;
-
the Company's ability to introduce additional product categories;
-
the ability of the financial institutions providing lending
facilities to the Company to fund their commitments;
-
the effect on borrowing costs of downgrades by rating agencies or
changes in laws or regulations on the Company's financing providers;
-
the cost of any amended, renewed or replacement credit facilities;
-
growth trends and projected sales in the home appliance, consumer
electronics and furniture and mattresses industries and the Company's
ability to capitalize on such growth;
-
the pricing actions and promotional activities of competitors;
-
relationships with the Company's key suppliers;
-
interest rates;
-
general economic and financial market conditions;
-
weather conditions in the Company's markets;
-
the outcome of litigation or government investigations;
-
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/A filed on April 12, 2010 and
the Company's quarterly report on Form 10-Q filed on August 26, 2010.
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-G
Conn's, Inc., Beaumont
Chief Financial Officer
Michael J.
Poppe, 409-832-1696 Ext. 3294
Source: Conn's, Inc.
News Provided by Acquire Media
