CONNS INC - 10-Q filing on 2018-06-07

Guarantor Financial Information (Tables)

3 Months Ended

Apr. 30, 2018

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidated Balance Sheet as of January 31, 2018



(in thousands)	Conn's, Inc.		Guarantors		Non-guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	9,286	$	—	$	—		$	9,286
Restricted cash	—		1,550		85,322		—			86,872
Customer accounts receivable, net of allowances	—		177,117		459,708		—			636,825
Other accounts receivable	—		71,186		—		—			71,186
Inventories	—		211,894		—		—			211,894
Other current assets	—		68,621		15,212		(19,879		)	63,954
Total current assets	—		539,654		560,242		(19,879		)	1,080,017
Investment in and advances to subsidiaries	735,272		209,903		—		(945,175		)	—
Long-term portion of customer accounts receivable, net of allowances	—		195,606		455,002		—			650,608
Property and equipment, net	—		143,152		—		—			143,152
Deferred income taxes	21,565		—		—		—			21,565
Other assets	—		5,457		—		—			5,457
Total assets	$	756,837	$	1,093,772	$	1,015,244	$	(965,054	)	$	1,900,799
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of capital lease obligations	$	—	$	907	$	—	$	—		$	907
Accounts payable	—		71,617		—		—			71,617
Accrued expenses	686		66,370		6,723		(4,667		)	69,112
Other current liabilities	—		32,685		5,002		(15,212		)	22,475
Total current liabilities	686		171,579		11,725		(19,879		)	164,111
Deferred rent	—		87,003		—		—			87,003
Long-term debt and capital lease obligations	221,083		81,043		787,979		—			1,090,105
Other long-term liabilities	—		18,875		5,637		—			24,512
Total liabilities	221,769		358,500		805,341		(19,879		)	1,365,731
Total stockholders' equity	535,068		735,272		209,903		(945,175		)	535,068
Total liabilities and stockholders' equity	$	756,837	$	1,093,772	$	1,015,244	$	(965,054	)	$	1,900,799

Condensed Consolidated Balance Sheet as of April 30, 2018



(in thousands)	Conn's, Inc.		Guarantors		Non-guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	6,190	$	—	$	—		$	6,190
Restricted cash	—		1,550		75,174		—			76,724
Customer accounts receivable, net of allowances	—		226,307		391,853		—			618,160
Other accounts receivable	—		73,543		—		—			73,543
Inventories	—		190,312		—		—			190,312
Other current assets	—		20,108		7,051		(10,875		)	16,284
Total current assets	—		518,010		474,078		(10,875		)	981,213
Investment in and advances to subsidiaries	753,815		210,480		—		(964,295		)	—
Long-term portion of customer accounts receivable, net of allowances	—		306,469		329,039		—			635,508
Property and equipment, net	—		141,314		—		—			141,314
Deferred income taxes	22,052		—		—		—			22,052
Other assets	—		4,662		—		—			4,662
Total assets	$	775,867	$	1,180,935	$	803,117	$	(975,170	)	$	1,784,749
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of debt and capital lease obligations	$	—	$	1,095	$	22,085	$	—		$	23,180
Accounts payable	—		82,362		—		—			82,362
Accrued expenses	4,800		60,859		5,236		(3,824		)	67,071
Other current liabilities	—		24,933		3,479		(7,051		)	21,361
Total current liabilities	4,800		169,249		30,800		(10,875		)	193,974
Deferred rent	—		85,729		—		—			85,729
Long-term debt and capital lease obligations	221,412		151,151		556,972		—			929,535
Other long-term liabilities	—		20,991		4,865		—			25,856
Total liabilities	226,212		427,120		592,637		(10,875		)	1,235,094
Total stockholders' equity	549,655		753,815		210,480		(964,295		)	549,655
Total liabilities and stockholders' equity	$	775,867	$	1,180,935	$	803,117	$	(975,170	)	$	1,784,749

Condensed Consolidated Statement of Operations

Condensed Consolidated Statement of Operations for the three months ended April 30, 2018



(in thousands)	Conn's, Inc.			Guarantors			Non-guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Total net sales	$	—		$	275,756		$	—		$	—		$	275,756
Finance charges and other revenues	—			45,655			36,976			—			82,631
Servicing fee revenue	—			16,746			—			(16,746		)	—
Total revenues	—			338,157			36,976			(16,746		)	358,387
Costs and expenses:
Cost of goods sold	—			166,589			—			—			166,589
Selling, general and administrative expense	—			119,793			11,831			(16,746		)	114,878
Provision for bad debts	—			7,008			37,148			—			44,156
Total costs and expenses	—			293,390			48,979			(16,746		)	325,623
Operating income (loss)	—			44,767			(12,003		)	—			32,764
Interest expense	4,443			3,033			9,344			—			16,820
Loss on extinguishment of debt	—			—			406			—			406
Income (loss) before income taxes	(4,443		)	41,734			(21,753		)	—			15,538
Provision (benefit) for income taxes	(802		)	7,537			(3,929		)	—			2,806
Net income (loss)	(3,641		)	34,197			(17,824		)	—			12,732
Income (loss) from consolidated subsidiaries	16,373			(17,824		)	—			1,451			—
Consolidated net income (loss)	$	12,732		$	16,373		$	(17,824	)	$	1,451		$	12,732

Condensed Consolidated Statement of Operations for the three months ended April 30, 2017



(in thousands)	Conn's, Inc.			Guarantors			Non-guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Total net sales	$	—		$	279,285		$	—		$	—		$	279,285
Finance charges and other revenues	—			36,798			39,743			—			76,541
Servicing fee revenue	—			15,184			—			(15,184		)	—
Total revenues	—			331,267			39,743			(15,184		)	355,826
Costs and expenses:
Cost of goods sold	—			171,950			—			—			171,950
Selling, general and administrative expense	—			106,233			15,488			(15,184		)	106,537
Provision for bad debts	—			(5,433		)	61,363			—			55,930
Charges and credits	—			1,227			—			—			1,227
Total costs and expenses	—			273,977			76,851			(15,184		)	335,644
Operating income (loss)	—			57,290			(37,108		)	—			20,182
Interest expense	4,443			1,778			17,787			—			24,008
Loss on extinguishment of debt	—			349			—			—			349
Income (loss) before income taxes	(4,443		)	55,163			(54,895		)	—			(4,175		)
Provision (benefit) for income taxes	(1,698		)	21,078			(20,975		)	—			(1,595		)
Net income (loss)	(2,745		)	34,085			(33,920		)	—			(2,580		)
Income (loss) from consolidated subsidiaries	165			(33,920		)	—			33,755			—
Consolidated net income (loss)	$	(2,580	)	$	165		$	(33,920	)	$	33,755		$	(2,580	)

Condensed Consolidated Statement of Cash Flows

Condensed Consolidated Statement of Cash Flows for the three months ended April 30, 2018



(in thousands)	Conn's, Inc.			Guarantors			Non-guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(267	)	$	(14,194	)	$	149,800		$	—		$	135,339
Cash flows from investing activities:
Purchase of customer accounts receivables	—			—			(50,774		)	50,774			—
Sale of customer accounts receivables	—			—			50,774			(50,774		)	—
Purchase of property and equipment	—			(6,169		)	—			—			(6,169		)
Net cash used in investing activities	—			(6,169		)	—			—			(6,169		)
Cash flows from financing activities:
Payments on asset-backed notes	—			(50,847		)	(181,737		)	—			(232,584		)
Borrowings from revolving credit facility	—			393,158			—			—			393,158
Payments on revolving credit facility	—			(322,608		)	—			—			(322,608		)
Borrowings from warehouse facility	—			—			52,226			—			52,226
Payments of debt issuance costs and amendment fees	—			(1		)	(532		)	—			(533		)
Payments on warehouse facility	—			—			(29,905		)	—			(29,905		)
Proceeds from stock issued under employee benefit plans	267			—			—			—			267
Tax payments associated with equity-based compensation transactions	—			(1,888		)	—			—			(1,888		)
Payments from extinguishment of debt	—			(294		)	—			—			(294		)
Other	—			(253		)	—			—			(253		)
Net cash provided by (used in) financing activities	267			17,267			(159,948		)	—			(142,414		)
Net change in cash, cash equivalents and restricted cash	—			(3,096		)	(10,148		)	—			(13,244		)
Cash, cash equivalents and restricted cash, beginning of period	—			10,836			85,322			—			96,158
Cash, cash equivalents and restricted cash, end of period	$	—		$	7,740		$	75,174		$	—		$	82,914

Condensed Consolidated Statement of Cash Flows for the three months ended April 30, 2017



(in thousands)	Conn's, Inc.			Guarantors			Non-guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(256	)	$	(192,236	)	$	283,256		$	—		$	90,764
Cash flows from investing activities:
Purchase of customer accounts receivables	—			—			(466,056		)	466,056			—
Sale of customer accounts receivables	—			466,056			—			(466,056		)	—
Purchase of property and equipment	—			(4,286		)	—			—			(4,286		)
Net cash provided by (used in) investing activities	—			461,770			(466,056		)	—			(4,286		)
Cash flows from financing activities:
Proceeds from issuance of asset-backed notes	—			—			469,814			—			469,814
Payments on asset-backed notes	—			—			(232,931		)	—			(232,931		)
Borrowings from revolving credit facility	—			265,935			—			—			265,935
Payments on revolving credit facility	—			(443,435		)	—			—			(443,435		)
Payments of debt issuance costs and amendment fees	—			(2,865		)	(4,740		)	—			(7,605		)
Proceeds from stock issued under employee benefit plans	256			—			—			—			256
Other				84			—			—			84
Net cash provided by (used in) financing activities	256			(180,281		)	232,143			—			52,118
Net change in cash, cash equivalents and restricted cash	—			89,253			49,343			—			138,596
Cash, cash equivalents and restricted cash, beginning of period	—			23,566			110,698			—			134,264
Cash, cash equivalents and restricted cash, end of period	$	—		$	112,819		$	160,041		$	—		$	272,860