Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2015 | Dec. 03, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CONNS INC | |
Entity Central Index Key | 1,223,389 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 32,244,955 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 109,071 | $ 12,223 |
Restricted cash (all held by the VIE) | 97,924 | 0 |
Customer accounts receivable, net of allowances (includes VIE balance of $523,662 as of October 31, 2015) | 706,934 | 643,094 |
Other accounts receivable | 84,145 | 67,703 |
Inventories | 238,153 | 159,068 |
Deferred income taxes | 23,445 | 20,040 |
Income taxes recoverable | 0 | 11,058 |
Prepaid expenses and other current assets | 17,958 | 12,529 |
Total current assets | 1,277,630 | 925,715 |
Long-term portion of customer accounts receivable, net of allowances (includes VIE balance of $440,840 as of October 31, 2015) | 595,127 | 558,257 |
Property and equipment, net | 139,163 | 120,218 |
Deferred income taxes | 43,043 | 33,505 |
Other assets | 33,880 | 9,627 |
Total assets | 2,088,843 | 1,647,322 |
Current Liabilities | ||
Current portion of debt | 830 | 395 |
Accounts payable | 139,429 | 85,355 |
Accrued compensation and related expenses | 8,275 | 12,151 |
Accrued expenses | 34,465 | 27,479 |
Income taxes payable | 4,004 | 3,450 |
Deferred revenues and allowances | 16,636 | 16,179 |
Total current liabilities | 203,639 | 145,009 |
Deferred Rent Credit, Noncurrent | 69,412 | 52,792 |
Long-term debt (includes VIE balance of $933,651 as of October 31, 2015) | 1,158,746 | 774,015 |
Other long-term liabilities | 21,838 | 21,836 |
Total liabilities | 1,453,635 | 993,652 |
Stockholders' equity | ||
Preferred stock ($0.01 par value, 1,000,000 shares authorized; none issued or outstanding) | 0 | 0 |
Common stock ($0.01 par value, 100,000 shares authorized; 34,618 and 36,352 shares issued, respectively) | 346 | 364 |
Additional paid-in capital | 183,157 | 231,395 |
Retained earnings | 451,705 | 421,911 |
Total stockholders' equity | 635,208 | 653,670 |
Total liabilities and stockholders' equity | 2,088,843 | $ 1,647,322 |
Senior Notes [Member] | ||
Debt Instrument, Fair Value Disclosure | $ 218,600 |
CONSOLIDATED BALANCE SHEETS (u3
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 |
Restricted cash (all held by the VIE) | $ 97,924 | $ 0 |
Assets, Noncurrent [Abstract] | ||
Customer accounts receivable, net of allowances (includes VIE balance of $523,662 as of October 31, 2015) | 706,934 | 643,094 |
Long-term customer accounts receivable, net | 595,127 | 558,257 |
Long-term debt | $ 1,158,746 | $ 774,015 |
Stockholders' equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 34,617,784 | 36,351,700 |
Variable Interest Entity | ||
Restricted cash (all held by the VIE) | $ 14,426 | |
Assets, Noncurrent [Abstract] | ||
Customer accounts receivable, net of allowances (includes VIE balance of $523,662 as of October 31, 2015) | 523,662 | $ 0 |
Long-term customer accounts receivable, net | 440,840 | 0 |
Long-term debt | $ 933,651 | $ 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Revenues | ||||
Product sales | $ 293,122 | $ 278,139 | $ 858,487 | $ 796,525 |
Repair service agreement commissions | 26,038 | 23,056 | 77,590 | 64,042 |
Service revenues | 3,474 | 3,414 | 9,982 | 9,952 |
Total net sales | 322,634 | 304,609 | 946,059 | 870,519 |
Finance charges and other | 72,599 | 65,449 | 210,300 | 187,951 |
Total revenues | 395,233 | 370,058 | 1,156,359 | 1,058,470 |
Cost and expenses | ||||
Cost of goods sold, including warehousing and occupancy costs | 186,807 | 178,976 | 547,403 | 508,475 |
Cost of service parts sold, including warehousing and occupancy costs | 1,463 | 1,525 | 4,325 | 4,815 |
Shipping, Handling and Transportation Costs | 14,631 | 13,216 | 40,767 | 38,543 |
Selling, general and administrative expense | 113,668 | 99,346 | 314,175 | 281,526 |
Provision for bad debts | 58,208 | 72,019 | 157,397 | 133,862 |
Quarterly Financial Information, Quarterly Charges and Credits, Amount Affecting Comparability | 2,540 | 355 | 4,172 | 3,601 |
Total cost and expenses | 377,317 | 365,437 | 1,068,239 | 970,822 |
Operating income | 17,916 | 4,621 | 88,120 | 87,648 |
Interest expense | 19,702 | 8,950 | 39,185 | 19,921 |
Loss on extinguishment of debt | 1,367 | 0 | 1,367 | 0 |
Income before income taxes | (3,153) | (4,329) | 47,568 | 67,727 |
Provision for income taxes | (732) | (1,265) | 17,774 | 24,672 |
Net income | $ (2,421) | $ (3,064) | $ 29,794 | $ 43,055 |
Earnings per share: | ||||
Basic (in dollars per share) | $ (0.07) | $ (0.08) | $ 0.82 | $ 1.19 |
Diluted (in dollars per share) | $ (0.07) | $ (0.08) | $ 0.81 | $ 1.17 |
Average common shares outstanding: | ||||
Basic (in shares) | 35,704 | 36,265 | 36,175 | 36,203 |
Diluted (in shares) | 35,704 | 36,265 | 36,694 | 36,928 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ (2,421) | $ (3,064) | $ 29,794 | $ 43,055 |
Change in fair value of hedges | 0 | 39 | 0 | 155 |
Impact of provision for income taxes on comprehensive income | 0 | (14) | 0 | (55) |
Comprehensive income | $ (2,421) | $ (3,039) | $ 29,794 | $ 43,155 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) - 9 months ended Oct. 31, 2015 $ in Thousands | USD ($) |
Balance at Jan. 31, 2015 | $ 653,670 |
Net income | 29,794 |
Balance at Oct. 31, 2015 | $ 635,208 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Statement of Cash Flows [Abstract] | ||
Provision for bad debts | $ 157,397 | $ 133,862 |
Cash flows from operating activities | ||
Net income | 29,794 | 43,055 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 16,400 | 13,294 |
Amortization of debt issuance costs | 7,048 | 2,287 |
Loss from extinguishment of debt | (1,367) | 0 |
Provision for bad debts and uncollectible interest | 184,297 | 153,709 |
Stock-based compensation | 2,961 | 3,258 |
Excess tax benefits from stock-based compensation | (479) | (961) |
Restructuring Costs and Asset Impairment Charges | 637 | 3,105 |
Benefit for deferred income taxes | (12,944) | (23,681) |
(Gain) loss on sale of property and equipment | (1,303) | (345) |
Payments for (Proceeds from) Tenant Allowance | 12,866 | 14,621 |
Change in operating assets and liabilities: | ||
Customer accounts receivable | (285,007) | (274,669) |
Increase (Decrease) in Other Receivables | (10,260) | (9,622) |
Inventories | (79,085) | (48,073) |
Increase (Decrease) in Prepaid Expense and Other Assets | (551) | (1,347) |
Accounts payable | 58,790 | 9,239 |
Accrued expenses | 687 | (4,854) |
Income taxes payable | 11,612 | (10,798) |
Increase (Decrease) in Deferred Revenue and Customer Advances and Deposits | (1,656) | 2,376 |
Deferred revenues and allowances | (468) | 2,612 |
Net cash used in operating activities | (65,294) | (126,794) |
Cash flows from investing activities | ||
Purchase of property and equipment | (46,667) | (53,116) |
Proceeds from sale of property and equipment | 5,609 | 19,402 |
Net cash used in investing activities | (41,058) | (33,714) |
Proceeds from Accounts Receivable Securitization | 1,118,000 | 0 |
Cash flows from financing activities | ||
Payments on asset-backed notes | (184,349) | 0 |
Changes in restricted cash balances | (97,924) | 0 |
Borrowings under lines of credit | 277,081 | 357,456 |
Payments on lines of credit | (805,193) | (441,950) |
Proceeds from issuance of senior notes, net of issuance costs | 0 | 243,400 |
Repurchase of senior notes | (22,965) | 0 |
Payment of debt issuance costs and amendment fees | (31,871) | 0 |
Repurchase of common stock | (51,680) | 0 |
Proceeds from stock issued under employee benefit plans | 2,034 | 975 |
Excess Tax Benefit from Share-based Compensation, Financing Activities | 479 | 961 |
Other | (412) | (301) |
Net cash provided by financing activities | 203,200 | 160,541 |
Net change in cash and cash equivalents | 96,848 | 33 |
Beginning of period | 12,223 | 5,727 |
End of period | $ 109,071 | $ 5,760 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Business . Conn’s is a leading specialty retailer that offers a broad selection of quality, branded durable consumer goods and related services in addition to a proprietary credit solution for its core credit constrained consumers. We operate an integrated and scalable business through our retail stores and website. Our complementary product offerings include furniture and mattresses, home appliances, consumer electronics and home office products from leading global brands across a wide range of price points. Our credit offering provides financing solutions to a large, under-served population of credit constrained consumers who typically have limited banking options. We operate two reportable segments: retail and credit. Our retail stores bear the "Conn’s" or "Conn’s HomePlus" name and deliver the same products and services to a common customer group. All of the retail stores follow the same procedures and methods in managing their operations. Our retail business and credit business are operated independently from each other. The credit segment is dedicated to providing short- and medium-term financing for our retail customers. The retail segment is not involved in credit approval decisions. Our management evaluates performance and allocates resources based on the operating results of the retail and credit segments. Basis of Presentation . The accompanying unaudited, condensed consolidated financial statements of Conn’s, Inc. and its wholly-owned subsidiaries have been prepared by management in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature, except as otherwise described herein. The condensed consolidated financial position, results of operations and cash flows for these interim periods are not necessarily indicative of the results that may be expected in future periods. The balance sheet at January 31, 2015 has been derived from the audited financial statements at that date. The financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015 , filed with the United States Securities and Exchange Commission (the "SEC") on April 1, 2015. Variable Interest Entity. In September 2015, we securitized $1.4 billion of customer accounts receivables by transferring the receivables to a bankruptcy-remote variable-interest entity (the "VIE"). The VIE issued asset-backed notes at a face amount of $1.12 billion secured by the transferred portfolio balance, which resulted in net proceeds to us of approximately $1.08 billion , net of transaction costs and restricted cash held by the VIE. The net proceeds were used to pay down the entire balance on our revolving credit facility, to repurchase shares of the Company's common stock and Senior Notes, and for other general corporate purposes. We currently hold the residual equity of the VIE, which we are in the process of marketing. We may elect to retain all or a portion of the residual equity of the VIE if that is determined to be in our best economic interest. We also plan to execute periodic securitizations of future originated customer loans. We retain the servicing of the securitized portfolio and have a variable interest in the VIE by holding the residual equity. We determined that we are the primary beneficiary of the VIE because (i) our servicing responsibilities for the securitized portfolio give us the power to direct the activities that most significantly impact the performance of the VIE and (ii) our variable interest in the VIE gives us the obligation to absorb losses and the right to receive residual returns that could potentially be significant. As a result, while holding all or a significant portion of the residual equity of the VIE, we will consolidate the VIE within our financial statements. If we sell all or a significant portion of the residual equity, we will assess if the transaction achieves sale treatment for accounting purposes, which may result in deconsolidation of the VIE. There is no assurance that we will complete a sale of all or a portion of the residual equity of the VIE, and there is no assurance we will achieve sale treatment. No timetable has been set for completion of this process. As a result, we have determined that the securitized portfolio does not meet the criteria for treatment as an asset held for sale, which would require recording at the lower of cost, net of allowances, or fair value. We have not made an adjustment to the customer accounts receivable balance as a result of the transaction or in anticipation of any gain or loss that may occur should a sale of the residual portion of the VIE be completed. Refer to Note 6, Debt , and Note 8, Variable Interest Entity , for additional information. Principles of Consolidation . The consolidated financial statements include the accounts of Conn’s, Inc. and its wholly-owned subsidiaries, including the VIE. Conn’s, Inc., a Delaware corporation, is a holding company with no independent assets or operations other than its investments in its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Fiscal Year. Our fiscal year ends on January 31. References to a fiscal year refer to the calendar year in which the fiscal year ends. Accounting Policies. The complete summary of significant accounting policies is included in the notes to the consolidated financial statements as presented in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015 . Use of Estimates . The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Supplemental Cash Flow Information. The following table provides additional cash flow information: Nine Months Ended (in thousands) 2015 2014 Non-cash investing and financing activities: Capital lease asset additions and related obligations $ 2,187 $ 304 Property and equipment purchases not yet paid $ 2,391 $ — Supplemental cash flow data: Cash interest paid $ 29,200 $ 11,913 Cash income taxes paid, net $ 21,393 $ 58,363 Restricted Cash. The restricted cash balance as of October 31, 2015 includes $83.5 million of cash we collected as servicer on the securitized receivables that was remitted to the VIE and $ 14.4 million of cash held by the VIE as additional collateral for the asset-backed notes. Earnings per Share . Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share include the potential dilutive effects of any stock options and restricted stock units granted, which is calculated using the treasury-stock method. The following table sets forth the shares outstanding used for the earnings per share calculations: Three Months Ended Nine Months Ended (in thousands) 2015 2014 2015 2014 Weighted average common shares outstanding - Basic 35,704 36,265 36,175 36,203 Dilutive effect of stock options and restricted stock units — — 519 725 Weighted average common shares outstanding - Diluted 35,704 36,265 36,694 36,928 For the three months ended October 31, 2015 and 2014 , the weighted average number of stock options and restricted stock units not included in the calculation due to their anti-dilutive effect was 867,000 and 744,000 , respectively. For the nine months ended October 31, 2015 and 2014 , the weighted average number of stock options and restricted stock units not included in the calculation due to their anti-dilutive effect was 173,000 and 92,000 , respectively. Customer accounts receivable and related allowance for doubtful accounts. Customer accounts receivable reported in the consolidated balance sheet includes total receivables managed, including those transferred to the VIE and those receivables not transferred to the VIE. Customer accounts receivable are originated at the time of sale and delivery of the various products and services. Based on contractual terms, we record the amount of principal and accrued interest on customer receivables that is expected to be collected within the next twelve months in current assets with the remaining balance in long-term assets on the consolidated balance sheet. Customer receivables are considered delinquent if a payment has not been received on the scheduled due date. Accounts that are delinquent more than 209 days as of the end of a month are charged-off against the allowance for doubtful accounts and interest accrued subsequent to the last payment is reversed and charged against the allowance for uncollectible interest. In an effort to mitigate losses on our accounts receivable, we may make loan modifications to a borrower experiencing financial difficulty. In our role as servicer, we may also make modifications to loans held by the VIE. The loan modifications are intended to maximize net cash flow after expenses and avoid the need to repossess collateral or exercise legal remedies available to us. We may extend the loan term, refinance or otherwise re-age an account. We consider accounts that have been re-aged in excess of three months or refinanced as Troubled Debt Restructurings ("TDR" or "Restructured Accounts"). We record an allowance for doubtful accounts, including estimated uncollectible interest, for our non-TDR customer accounts receivable that we expect to charge-off over the next twelve months based on our historical cash collection and net loss experience using a projection of monthly delinquency performance, cash collections and losses. In addition to pre-charge-off cash collections and charge-off information, estimates of post-charge-off recoveries, including cash payments, amounts realized from the repossession of the products financed and payments received under credit insurance policies are also considered. We determine allowances for those accounts that are TDR based on the discounted present value of cash flows expected to be collected over the life of those accounts. The excess of the carrying amount over the discounted cash flow amount is recorded as an allowance for loss on those accounts. Interest income on customer accounts receivable . Interest income is accrued using the interest method for installment contracts and is reflected in finance charges and other revenues. Typically, interest income is accrued until the contract or account is paid off or charged-off. We provide an allowance for estimated uncollectible interest. Interest income on installment contracts with our customers is calculated using the rule of 78s. In order to convert the interest income recognized to the interest method, we have recorded the excess earnings of rule of 78s over the interest method as deferred revenue on our balance sheets. This deferred interest will ultimately be brought into income as the accounts pay off or accounts amortize to the point that interest income under the interest method exceeds that which is being earned under rule of 78s. At October 31, 2015 and January 31, 2015 , there was $10.1 million and $11.2 million , respectively, of deferred interest included in deferred revenues and other credits and other long-term liabilities. We offer 12-month no-interest finance programs. If the customer is delinquent in making a scheduled monthly payment or does not repay the principal in full by the end of the no-interest program period (grace periods are provided), the account does not qualify for the no-interest provision and the terms of the account revert back to those of the executed installment contract resulting in interest over the entire term. Interest income is recognized based on our historical experience related to customers that fail to satisfy the requirements of the programs. We also offer 18- and 24-month equal-payment, no-interest finance programs to certain higher credit quality borrowers, which are discounted to their present value at origination, resulting in a reduction in sales and customer receivables, and the discount amount is amortized into finance charges and other revenues over the term of the contract. If a customer is delinquent in making a scheduled monthly payment (grace periods are provided), the account begins accruing interest based on the contract rate from the date of the last payment made, which is a higher rate than the discount rate. We recognize interest income on TDR accounts using the interest income method, which requires reporting interest income equal to the increase in the net carrying amount of the loan attributable to the passage of time. Cash proceeds and other adjustments are applied to the net carrying amount such that it always equals the present value of expected future cash flows. We typically only place accounts in non-accrual status when legally required. Payments received on non-accrual loans will be applied to principal and reduce the amount of the loan. Interest accrual is resumed on those accounts once a legally-mandated settlement arrangement is reached or other payment arrangements are made with the customer. At October 31, 2015 and January 31, 2015 , customer receivables carried in non-accrual status were $23.6 million and $13.7 million , respectively. At October 31, 2015 and January 31, 2015 , customer receivables that were past due 90 days or more and still accruing interest totaled $107.9 million and $97.1 million , respectively. Fair Value of Financial Instruments . Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels related to subjectivity associated with the inputs to fair value measurements as follows: • Level 1 – Quoted prices available in active markets for identical assets or liabilities • Level 2 – Pricing inputs not quoted in active markets but either directly or indirectly observable • Level 3 – Significant inputs to pricing that have little or no transparency with inputs requiring significant management judgment or estimation. The fair value of cash and cash equivalents, restricted cash, and accounts payable approximate their carrying amounts because of the short maturity of these instruments. The fair value of customer accounts receivables, determined using a Level 3 discounted cash flow analysis using data from the recent securitization transaction, approximates their carrying amount. At October 31, 2015 , the fair value of our Senior Notes, which was determined using Level 1 inputs, was $218.6 million as compared to the carrying value of $227.0 million , excluding the impact of the related discount. At October 31, 2015 , the fair value of the VIE's Class A Notes and Class B Notes, which were determined using Level 2 inputs based on inactive trading activity, approximates their carrying value. Repurchase Program. On September 9, 2015, we announced that the Board of Directors of the Company ("Board of Directors") authorized a repurchase program of up to an aggregate of $75.0 million of (i) shares of the Company's outstanding common stock; (ii) 7.250% Senior Notes Due 2022 (the "Senior Notes"); or (iii) a combination thereof. During the three months ended October 31, 2015, we purchased 1.9 million shares of common stock, using $51.6 million of the $75.0 million repurchase authorization. Additionally, we utilized $22.9 million of the repurchase authorization to acquire $23.0 million of face of value of our senior notes. As a result of the bond repurchases, we had a loss on extinguishment of approximately $0.5 million, primarily due to the write-off of related deferred costs. On November 2, 2015, we announced that the the Board of Directors authorized an additional $100.0 million towards the repurchase program for purchase of shares of the Company's outstanding common stock, Senior Notes, or a combination thereof. Subsequent to October 31, 2015, we purchased 3.3 million additional shares of common stock, using $80.6 million of the $100.0 million repurchase authorization. Common stock repurchases may be made from time to time on the open market or through privately negotiated transactions, at management’s discretion, based on market and business conditions. We have no obligation to repurchase shares under the authorization, and the timing and value of the shares that are repurchased will be at the discretion of management and will depend on a number of factors, including the price of the Company's common stock. We may suspend or discontinue repurchases at any time without notice. Stockholders' Rights Plan. On October 6, 2014, we adopted a stockholders' rights plan whereby the Board of Directors declared a dividend of one right for each outstanding share of the Company's common stock to stockholders of record on October 16, 2014. On September 2, 2015, the Board of Directors approved the termination of the Company’s stockholder rights plan, and the rights plan was terminated, effective September 10, 2015. Related Party Transactions. From time to time, we have engaged Stephens Inc. to act as our financial advisor. Stephens Inc. and its affiliates beneficially own shares of our common stock and one of our Board of Directors, Douglas H. Martin, is a Senior Managing Director of Stephens Inc. On March 31, 2015, we announced that we had engaged Stephens Inc., as a financial advisor to assist us with the process of pursuing a sale of all or a portion of the loan portfolio, or other refinancing of our loan portfolio. The disinterested members of our Board of Directors determined that it was in the Company’s best interest to engage Stephens Inc. in such capacity to assist us in analyzing and advising us with respect to the opportunity. The engagement of Stephens Inc. as financial advisor was approved by the independent members of our Board of Directors after full disclosure of the conflicts of interests of the related parties in the transaction. Douglas H. Martin did not participate in the approval process. During the three months ended October 31, 2015 , we paid Stephens Inc. a success fee of $1.1 million as a result of the close of the securitization transaction. Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers , which provides a single comprehensive accounting standard for revenue recognition for contracts with customers and supersedes current guidance. Upon adoption of ASU 2014-09, entities are required to recognize revenue using the following comprehensive model: (1) identify contracts with customers, (2) identify the performance obligations in contracts, (3) determine transaction price, (4) allocate the transaction price to the performance obligations, and (5) recognize revenue as each performance obligation is satisfied. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date , which defers the effective date of ASU 2015-14 by one year and allows early adoption on a limited basis. ASU 2014-09 is now effective for us beginning in the first quarter of fiscal year 2019 and will result in retrospective application, either in the form of recasting all prior periods presented or a cumulative adjustment to equity in the period of adoption. We are currently assessing the impact the new standard will have on our financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis, which focuses on a reporting company’s consolidation evaluation to determine whether they should consolidate certain legal entities. ASU 2015-02 is effective for us beginning in the first quarter of fiscal year 2017 and allows early adoption, including adoption in an interim period. We early adopted ASU 2015-02 beginning with the quarter ended July 31, 2015, which did not have an impact to our financial statements. Reclassifications. Certain reclassifications have been made to prior year fiscal year amounts to conform to the presentation in the current fiscal year. On the consolidated statement of operations, delivery, transportation and handling costs is shown separately and was reclassified out of selling, general and administrative expenses. On the consolidated statements of cash flows, tenant improvement allowances received from landlords, changes in other accounts receivables and changes in deferred rents is shown separately and was reclassified out of changes in other assets and accrued expenses. These reclassifications did not impact consolidated operating income, net income, or net cash used in operating activities. |
Charges and Credits
Charges and Credits | 9 Months Ended |
Oct. 31, 2015 | |
Charges and Credits [Abstract] | |
Charges and Credits | Charges and Credits Charges and credits consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2015 2014 2015 2014 Store and facility closure and relocation costs (credits) $ 212 $ (141 ) $ 637 $ 3,105 Legal and professional fees related to the exploration of strategic alternatives and securities-related litigation 999 496 2,206 496 Executive management transition costs 1,329 — 1,329 — $ 2,540 $ 355 $ 4,172 $ 3,601 During the three months ended October 31, 2015 , we had costs associated with legal and professional fees related to our exploration of strategic alternatives (including our securitization transaction), our securities-related litigation, and transition costs due to changes in the executive management team. During the three months ended October 31, 2014 , we recorded a net credit related to store closures and relocations due to the revision of estimated lease termination and other costs, and had costs associated with legal and professional fees related to our exploration of strategic alternatives and our class action litigation. |
Supplemental Disclosure of Fina
Supplemental Disclosure of Finance Charges and Other Revenue | 9 Months Ended |
Oct. 31, 2015 | |
Supplemental Disclosure of Finance Charges and Other Revenue [Abstract] | |
Allowance for doubtful accounts and uncollectible interest for customer receivables | Customer accounts receivable consisted of the following: Total Outstanding Balance Customer Accounts Receivable 60 Days Past Due (1) Re-aged (1) (in thousands) October 31, January 31, October 31, January 31, October 31, January 31, Customer accounts receivable $ 1,391,795 $ 1,277,135 $ 122,040 $ 112,365 $ 100,937 $ 94,304 Restructured accounts 109,879 88,672 30,882 20,722 109,879 88,672 Total customer portfolio balance 1,501,674 1,365,807 $ 152,922 $ 133,087 $ 210,816 $ 182,976 Allowance for uncollectible accounts (180,533 ) (146,982 ) Allowance for short-term, no-interest programs (19,080 ) (17,474 ) Total customer accounts receivable, net 1,302,061 1,201,351 Short-term portion of customer accounts receivable, net (706,934 ) (643,094 ) Long-term portion of customer accounts receivable, net $ 595,127 $ 558,257 Securitized receivables held by the VIE $ 1,142,259 $ — $ 152,136 $ — $ 204,670 $ — Receivables not held by the VIE 359,415 1,365,807 786 133,087 6,146 182,976 Total customer portfolio balance $ 1,501,674 $ 1,365,807 $ 152,922 $ 133,087 $ 210,816 $ 182,976 (1) Due to the fact that an account can become past due after having been re-aged, accounts could be represented as both past due and re-aged. As of October 31, 2015 and January 31, 2015 , the amounts included within both past due and re-aged was $55.6 million and $44.9 million , respectively. As of October 31, 2015 and January 31, 2015 , the total customer portfolio balance past due one day or greater was $357.8 million and $316.0 million , respectively. These amounts include the 60 days past due balances shown. The following presents the activity in the allowance for doubtful accounts and uncollectible interest for customer receivables: Nine Months Ended October 31, 2015 Nine Months Ended October 31, 2014 (in thousands) Customer Accounts Receivable Restructured Accounts Total Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 118,786 $ 28,196 $ 146,982 $ 54,448 $ 17,353 $ 71,801 Provision (1) 146,587 37,710 184,297 131,806 21,903 153,709 Principal charge-offs (2) (107,590 ) (22,779 ) (130,369 ) (77,058 ) (12,404 ) (89,462 ) Interest charge-offs (19,613 ) (4,153 ) (23,766 ) (13,807 ) (2,223 ) (16,030 ) Recoveries (2) 2,797 592 3,389 10,896 1,754 12,650 Allowance at end of period $ 140,967 $ 39,566 $ 180,533 $ 106,285 $ 26,383 $ 132,668 Average total customer portfolio balance $ 1,325,324 $ 98,993 $ 1,424,317 $ 1,090,078 $ 57,715 $ 1,147,793 (1) Includes provision for uncollectible interest, which is included in finance charges and other revenues. (2) Charge-offs include the principal amount of losses (excluding accrued and unpaid interest). Recoveries include principal collections of previously charged-off balances for both periods shown and proceeds received from selling charged off accounts to third parties during the nine months ended October 31, 2014 (we did not sell charged off accounts during the current fiscal year). Net charge-offs are calculated as the net of principal charge-offs and recoveries. |
Customer Accounts Receivable
Customer Accounts Receivable | 9 Months Ended |
Oct. 31, 2015 | |
Receivables [Abstract] | |
Customer Accounts Receivable | Customer Accounts Receivable Customer accounts receivable consisted of the following: Total Outstanding Balance Customer Accounts Receivable 60 Days Past Due (1) Re-aged (1) (in thousands) October 31, January 31, October 31, January 31, October 31, January 31, Customer accounts receivable $ 1,391,795 $ 1,277,135 $ 122,040 $ 112,365 $ 100,937 $ 94,304 Restructured accounts 109,879 88,672 30,882 20,722 109,879 88,672 Total customer portfolio balance 1,501,674 1,365,807 $ 152,922 $ 133,087 $ 210,816 $ 182,976 Allowance for uncollectible accounts (180,533 ) (146,982 ) Allowance for short-term, no-interest programs (19,080 ) (17,474 ) Total customer accounts receivable, net 1,302,061 1,201,351 Short-term portion of customer accounts receivable, net (706,934 ) (643,094 ) Long-term portion of customer accounts receivable, net $ 595,127 $ 558,257 Securitized receivables held by the VIE $ 1,142,259 $ — $ 152,136 $ — $ 204,670 $ — Receivables not held by the VIE 359,415 1,365,807 786 133,087 6,146 182,976 Total customer portfolio balance $ 1,501,674 $ 1,365,807 $ 152,922 $ 133,087 $ 210,816 $ 182,976 (1) Due to the fact that an account can become past due after having been re-aged, accounts could be represented as both past due and re-aged. As of October 31, 2015 and January 31, 2015 , the amounts included within both past due and re-aged was $55.6 million and $44.9 million , respectively. As of October 31, 2015 and January 31, 2015 , the total customer portfolio balance past due one day or greater was $357.8 million and $316.0 million , respectively. These amounts include the 60 days past due balances shown. The following presents the activity in the allowance for doubtful accounts and uncollectible interest for customer receivables: Nine Months Ended October 31, 2015 Nine Months Ended October 31, 2014 (in thousands) Customer Accounts Receivable Restructured Accounts Total Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 118,786 $ 28,196 $ 146,982 $ 54,448 $ 17,353 $ 71,801 Provision (1) 146,587 37,710 184,297 131,806 21,903 153,709 Principal charge-offs (2) (107,590 ) (22,779 ) (130,369 ) (77,058 ) (12,404 ) (89,462 ) Interest charge-offs (19,613 ) (4,153 ) (23,766 ) (13,807 ) (2,223 ) (16,030 ) Recoveries (2) 2,797 592 3,389 10,896 1,754 12,650 Allowance at end of period $ 140,967 $ 39,566 $ 180,533 $ 106,285 $ 26,383 $ 132,668 Average total customer portfolio balance $ 1,325,324 $ 98,993 $ 1,424,317 $ 1,090,078 $ 57,715 $ 1,147,793 (1) Includes provision for uncollectible interest, which is included in finance charges and other revenues. (2) Charge-offs include the principal amount of losses (excluding accrued and unpaid interest). Recoveries include principal collections of previously charged-off balances for both periods shown and proceeds received from selling charged off accounts to third parties during the nine months ended October 31, 2014 (we did not sell charged off accounts during the current fiscal year). Net charge-offs are calculated as the net of principal charge-offs and recoveries. |
Accrual for Store Closures
Accrual for Store Closures | 9 Months Ended |
Oct. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Accrual for Store Closures | Accrual for Store Closures We have closed or relocated retail locations that did not perform at a level we expect for mature store locations. Certain of the closed or relocated stores had noncancelable lease agreements, resulting in the accrual of the present value of the remaining lease payments and estimated related occupancy obligations, net of estimated sublease income. Adjustments to these projections for changes in estimated marketing times and sublease rates, as well as other revisions, are made to the obligation as further information related to the actual terms and costs become available. The following table presents detail of the activity in the accrual for store closures: Nine Months Ended (in thousands) 2015 2014 Balance at beginning of period $ 2,556 $ 4,316 Accrual for additional closures 318 2,595 Adjustments (21 ) (216 ) Cash payments, net of sublease income (876 ) (3,880 ) Balance at end of period 1,977 2,815 Current portion, included in accrued expenses (473 ) (954 ) Long-term portion, included in other long-term liabilities $ 1,504 $ 1,861 |
Debt and Letters of Credit
Debt and Letters of Credit | 9 Months Ended |
Oct. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt and Letters of Credit | Debt Debt consisted of the following: (in thousands) October 31, January 31, Revolving credit facility $ — $ 528,112 Senior Notes 227,000 250,000 Class A Notes 767,751 — Class B Notes 165,900 — Other debt 2,708 933 Total debt 1,163,359 779,045 Less: Discount on debt (3,783 ) (4,635 ) Current portion of debt (830 ) (395 ) Long-term debt $ 1,158,746 $ 774,015 Senior Notes. On July 1, 2014, we issued $250.0 million of unsecured Senior Notes bearing interest at 7.250% , pursuant to an indenture dated July 1, 2014 (the "Indenture") among Conn’s, Inc., its subsidiary guarantors (the "Guarantors") and U.S. Bank National Association, as trustee. The effective interest rate of the Senior Notes after giving effect to offering fees and debt discount is 7.8% . The Indenture restricts the Company's and certain of its subsidiaries' ability to: (i) incur indebtedness; (ii) pay dividends or make other distributions in respect of, or repurchase or redeem, our capital stock; (iii) prepay, redeem or repurchase debt that is junior in right of payment to the notes; (iv) make loans and certain investments; (v) sell assets; (vi) incur liens; (vii) enter into transactions with affiliates; and (viii) consolidate, merge or sell all or substantially all of our assets. These covenants are subject to a number of important exceptions and qualifications. During any time when the Senior Notes are rated investment grade by either of Moody's Investors Service, Inc. or Standard & Poor's Ratings Services and no Default (as defined in the Indenture) has occurred and is continuing, many of such covenants will be suspended, and we will cease to be subject to such covenants during such period. Events of default under the Indenture include customary events, such as a cross-acceleration provision in the event that we default in the payment of other debt due at maturity or upon acceleration for default in an amount exceeding $25.0 million , as well as in the event a judgment is entered against us in excess of $25.0 million that is not discharged, bonded or insured. The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantors. The only direct or indirect subsidiaries of Conn’s, Inc. that are not Guarantors are minor subsidiaries. There are no restrictions on the ability of any of the Guarantors to transfer funds to Conn’s, Inc. in the form of loans, advances or dividends, except as provided by applicable law. On April 24, 2015, the SEC declared effective the Company’s registration statement on Form S-4 pursuant to which we exchanged the Senior Notes for an equivalent amount of 7.250% Senior Notes due July 2022 that are registered under the Securities Act of 1933, as amended (the "Exchange Notes"). The exchange offer was completed on June 1, 2015, and all of the outstanding Senior Notes were tendered in exchange for the Exchange Notes. The terms of the Exchange Notes are substantially identical to the Senior Notes. During the three months ended October 31, 2015 , we repurchased $23.0 million of face of value of the Senior Notes for $22.9 million . As a result of the bond repurchases, we had a loss on extinguishment of $0.5 million , primarily due to the write-off of related deferred costs. In October 2015, the Company, the Guarantors and U.S. Bank National Association, as trustee, adopted, with the consent of the holders of a majority in the outstanding principal amount of the Senior Notes, the Second Supplemental Indenture (the "Supplemental Indenture"). Pursuant to the Supplemental Indenture, the Indenture was amended to extend, from May 1, 2014 to November 1, 2015, the beginning of the accounting period from which consolidated net income is calculated for purposes of determining the size of the "restricted payment basket" exception to the restricted payments limitation and to increase, from $75.0 million to $375.0 million , the dollar threshold exception to the restricted payments limitation. In November 2015, we paid approximately $3.8 million as an aggregate consent fee to the consenting holders of the Senior Notes. Such fee will be amortized over the remaining life of the Senior Notes. Asset-backed Notes. In September 2015, the VIE issued asset-backed notes at a face amount of $1.12 billion secured by the transferred customer accounts receivables and restricted cash held by the VIE, which resulted in net proceeds to us of approximately $1.08 billion , net of transaction costs and restricted cash held by the VIE. The net proceeds were used to pay down the entire balance on our previous revolving credit facility, to repurchase shares of the Company's common stock and Senior Notes, and for other general corporate purposes. The asset-backed notes consist of the following securities: • Asset-backed Fixed Rate Notes, Class A, Series 2015-A ("Class A Notes") in aggregate principal amount of $952.1 million that bear interest at a fixed annual rate of 4.565% and mature on September 15, 2020. The effective interest rate of the Class A Notes after giving effect to offering fees is 7.5% . • Asset-backed Fixed Rate Notes, Class B, Series 2015-A ("Class B Notes") in aggregate principal amount of $165.9 million that bear interest at a fixed annual rate of 8.500% and mature on September 15, 2020. The effective interest rate of the Class B Notes after giving effect to offering fees is 13.3% . The Class A Notes and Class B Notes were offered and sold to qualified institutional buyers pursuant to the exemptions from registration provided by Rule 144A under the Securities Act. If an event of default were to occur under the indenture that governs the Class A Notes and Class B Notes, the payment of the outstanding amounts will be accelerated, in which event the cash proceeds of the receivables that otherwise might be released to the residual equity holder would instead be directed entirely toward repayment of the Class A Notes and Class B Notes. The holders of the Class A Notes and Class B Notes have no recourse to assets outside of the VIE. Events of default include, but are not limited to, failure to make required payments on the notes or specified bankruptcy-related events. Revolving Credit Facility. On October 30, 2015, Conn's, Inc. and certain of its subsidiaries (the "Borrowers") entered into the Third Amended and Restated Loan and Security Agreement with certain lenders, that provides for an $810.0 million asset-based revolving credit facility (the "revolving credit facility") under which availability is subject to a borrowing base. The amended revolving credit facility resulted in various changes, including: • Extended the maturity date from November 25, 2017 to October 30, 2018; • Increased the maximum total leverage ratio covenant (ratio of total liabilities less the sum of qualified cash and ABS qualified cash to tangible net worth) from 2.0 x to 4.0 x; • Added a new maximum "ABS excluded" leverage ratio covenant (ratio of total liabilities (excluding liabilities of the consolidated VIE and other permitted securitization transactions) less qualified cash to tangible net worth) of 2.0 x; • Replaced the fixed charge coverage ratio covenant with a minimum interest coverage ratio covenant of 2.0 x beginning with our fourth quarter of fiscal 2016; • Reduced the maximum accounts receivable advance rate from 80% to 75% ; • Included a fourth quarter seasonal step-down in the cash recovery covenant from 4.5% to 4.25% ; • Increased the maximum inventory component of the borrowing base from $100.0 million to $175.0 million ; • Modified the conditions for repurchases of the Company’s common stock, including changes in the liquidity test and the elimination of the fixed charge coverage ratio test; • Included a new liquidity test for repurchases and redemptions of our debt; and • Modified our ability to effect future securitizations of our customer receivables portfolio, including removing the consent rights of the lenders and establishing set criteria for permitted securitizations. In connection with entering into the amended revolving credit facility, we wrote-off $0.9 million of debt issuance costs related to the previous revolving credit facility for lenders that did not continue to participate. Also, we deferred $3.0 million of debt issuance costs, which will be amortized over the remaining term of the amended revolving credit facility along with the debt issuance costs remaining from the previous revolving credit facility. Loans under the amended revolving credit facility bear interest, at our option, at a rate of LIBOR plus a margin ranging from 2.50% to 3.00% per annum (depending on quarterly average net availability under the borrowing base) or the alternate base rate plus a margin ranging from 1.50% to 2.00% per annum (depending on quarterly average net availability under the borrowing base). The alternate base rate is the greater of the prime rate announced by Bank of America, N.A., the federal funds rate plus 0.5% , or LIBOR for a 30-day interest period plus 1.0% . We also pay an unused fee on the portion of the commitments that are available for future borrowings or letters of credit at a rate ranging from 0.25% to 0.75% per annum, depending on the outstanding balance and letters of credit of the revolving credit facility. The amended revolving credit facility provides funding based on a borrowing base calculation that includes customer accounts receivable and inventory, and provides for a $40.0 million sub-facility for letters of credit to support obligations incurred in the ordinary course of business. The obligations under the revolving credit facility are secured by substantially all assets of the Company, excluding the assets of the VIE. As of October 31, 2015 , we had immediately available borrowing capacity of $269.5 million under our revolving credit facility, net of standby letters of credit issued of $1.1 million . The revolving credit facility places restrictions on our ability to incur additional indebtedness, grant liens on assets, make distributions on equity interests, dispose of assets, make loans, pay other indebtedness, engage in mergers, and other matters. The revolving credit facility contains customary default provisions, which, if triggered, could result in acceleration of all amounts outstanding under the revolving credit facility. Debt covenants. We were in compliance with our debt covenants at October 31, 2015 . A summary of the significant financial covenants that govern our revolving credit facility compared to our actual compliance status at October 31, 2015 is presented below: Actual Required Leverage Ratio must not exceed maximum 1.96 to 1.00 4.00:1.00 ABS Excluded Leverage Ratio must not exceed maximum 0.65 to 1.00 2.00:1.00 Cash Recovery Percent must exceed stated amount 4.73% 4.50% Capital Expenditures, net, must not exceed maximum $27.7 million $75.0 million All capitalized terms in the above table are defined by the revolving credit facility, as amended, and may or may not agree directly to the financial statement captions in this document. The covenants are calculated quarterly, except for the Cash Recovery Percent, which is calculated monthly on a trailing three-month basis, and Capital Expenditures, which is calculated for a period of four consecutive fiscal quarters, as of the end of each fiscal quarter. The revolving credit facility is a significant factor relative to our ongoing liquidity and our ability to meet the cash needs associated with the growth of our business. Our inability to use this facility because of a failure to comply with its covenants would adversely affect our business operations. |
Contingencies
Contingencies | 9 Months Ended |
Oct. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Securities Class Action Litigation. We and two of our current executive officers are defendants in a consolidated securities class action lawsuit pending in the Southern District of Texas (the "Court"), In re Conn’s Inc. Securities Litigation, Cause No. 14-CV-00548 (the "Consolidated Securities Action"). The plaintiffs in the Consolidated Securities Action allege that the defendants made false and misleading statements and/or failed to disclose material adverse facts about our business, operations, and prospects. They allege violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and seek to certify a class of all persons and entities that purchased or otherwise acquired Conn’s common stock and/or call options, or sold/wrote Conn’s put options between April 3, 2013 and December 9, 2014. The complaint does not specify the amount of damages sought. On June 30, 2015, the Court held a hearing on the defendants’ motion to dismiss plaintiffs’ complaint. At the hearing, the Court dismissed Brian Taylor, a former executive officer, and certain other aspects of the complaint. The Court ordered the plaintiffs to further amend their complaint in accordance with its ruling, and the plaintiffs filed their Fourth Consolidated Amended Complaint on July 21, 2015. The remaining defendants filed a motion to dismiss on August 28, 2015. The briefing on the defendant’s motion to dismiss is fully briefed and pending with the Court. The defendants intend to vigorously defend against all of these claims. It is not possible at this time to predict the timing or outcome of any of this litigation. Derivative Litigation. On December 1, 2014, an alleged shareholder filed, purportedly on behalf of the Company, a derivative shareholder lawsuit against us and certain of our current and former directors and executive officers in the United States District Court for the Southern District of Texas captioned Robert Hack, derivatively on behalf of Conn’s, Inc., v. Theodore M. Wright, Bob L. Martin, Jon E.M. Jacoby, Kelly M. Malson, Douglas H. Martin, David Schofman, Scott L. Thompson, Brian Taylor, a former executive officer, and Michael J. Poppe and Conn’s, Inc., Case No. 4:14-cv-03442 (the "Original Derivative Action"). The complaint asserts claims for breach of fiduciary duty, unjust enrichment, gross mismanagement, and insider trading based on substantially similar factual allegations as those asserted in the Consolidated Securities Action. The plaintiff seeks unspecified damages against these persons and does not request any damages from us. The court approved a stipulation among the parties to stay the action pending resolution of the motion to dismiss in the Consolidated Securities Action, and the parties have requested that the Court extend the stay pending resolution of the anticipated motion to dismiss. Another derivative action was filed on January 27, 2015, captioned, Richard A. Dohn v. Wright, et al., Cause No. 2015-04405, filed in the 281st District Court, Harris County, Texas. This action makes substantially similar allegations to the Original Derivative Action against the same defendants. The parties have entered into an agreed stay pending resolution of the motion to dismiss in the Consolidated Securities Action. On February 25, 2015, a third derivative action was filed in the United States District Court for the Southern District of Texas, captioned 95250 Canada LTEE, derivatively on Behalf of Conn’s, Inc. v. Wright et al., Cause No. 4:15-cv-00521. This action makes substantially similar allegations to the Original Derivative Action. On March 30, 2015, the plaintiffs in this action and the Original Derivative Action filed a joint motion to consolidate these two derivative actions, which is still pending. None of the plaintiffs in any of the derivative actions made a demand on our Board of Directors prior to filing their respective lawsuits. The defendants in the derivative actions intend to vigorously defend against these claims. Regulatory Matters. We are continuing to cooperate with the SEC’s investigation which generally relates to our underwriting policies and bad debt provisions. The investigation is a non-public, fact-finding inquiry, and the SEC has stated that the investigation does not mean that any violations of law have occurred. In addition, we are involved in other routine litigation and claims incidental to our business from time to time which, individually or in the aggregate are not expected to have a material adverse effect on our financial position, results of operations or cash flows. As required, we accrue estimates of the probable costs for the resolution of these matters. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. However, the results of these proceedings cannot be predicted with certainty, and changes in facts and circumstances could impact our estimate of reserves for litigation. |
Variable Interest Entity Variab
Variable Interest Entity Variable Interest Entity | 9 Months Ended |
Oct. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity | Variable Interest Entity In September 2015, we securitized $1.4 billion of customer accounts receivables by transferring the receivables to the VIE. The VIE issued asset-backed notes at a face amount of $ 1.12 billion secured by the transferred portfolio balance. Under the terms of the securitization transaction, the customer receivable principal and interest payment cash flows will go first to the servicer and the holders of the Class A Notes and Class B Notes, and then to the residual equity holder. We retain the servicing of the securitized portfolio and are receiving a monthly fee of 4.75% (annualized) based on the outstanding balance of the securitized receivables, and we currently hold all of the residual equity. In addition, we will retain, rather than the VIE, all credit insurance income together with certain recoveries related to credit insurance and repair service agreements on charge-offs of the securitized receivables, which will continue to be reflected as a reduction of net charge-offs on a consolidated basis for as long as we consolidate the VIE. The following presents the assets and liabilities held by the VIE and that are included in our consolidated balance sheet: (in thousands) October 31, January 31, Assets: Customer accounts receivable: Customer accounts receivable $ 1,037,645 $ — Restructured accounts 104,614 — Allowance for uncollectible accounts (161,343 ) — Allowance for short-term, no-interest programs (16,414 ) — Total customer accounts receivable, net 964,502 — Restricted cash 97,924 — Deferred debt issuance costs 23,109 — Total assets $ 1,085,535 $ — Liabilities: Accrued interest $ 2,048 $ — Due to Conn's, Inc., net 2,434 — Deferred interest income 6,461 — Long-term debt: Class A Notes 767,751 — Class B Notes 165,900 — Total long-term debt 933,651 — Total liabilities $ 944,594 $ — The assets of the VIE serve as collateral for the obligations of the VIE. The holders of the Class A Notes and Class B Notes have no recourse to assets outside of the VIE. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Oct. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Financial information by segment is presented in the following tables: Three Months Ended October 31, 2015 Three Months Ended October 31, 2014 (in thousands) Retail Credit Total Retail Credit Total Revenues: Furniture and mattress $ 105,735 $ — $ 105,735 $ 86,820 $ — $ 86,820 Home appliance 86,434 — 86,434 82,811 — 82,811 Consumer electronic 70,263 — 70,263 73,722 — 73,722 Home office 26,108 — 26,108 28,380 — 28,380 Other 4,582 — 4,582 6,406 — 6,406 Product sales 293,122 — 293,122 278,139 — 278,139 Repair service agreement commissions 26,038 — 26,038 23,056 — 23,056 Service revenues 3,474 — 3,474 3,414 — 3,414 Total net sales 322,634 — 322,634 304,609 — 304,609 Finance charges and other revenues 416 72,183 72,599 531 64,918 65,449 Total revenues 323,050 72,183 395,233 305,140 64,918 370,058 Costs and expenses: Cost of goods sold, including warehousing and occupancy costs 186,807 — 186,807 178,976 — 178,976 Cost of service parts sold, including warehousing and occupancy costs 1,463 — 1,463 1,525 — 1,525 Delivery, transportation and handling costs 14,631 — 14,631 13,216 — 13,216 Selling, general and administrative expenses (1) 81,484 32,184 113,668 73,220 26,126 99,346 Provision for bad debts 120 58,088 58,208 54 71,965 72,019 Charges and credits 2,540 — 2,540 355 — 355 Total costs and expense 287,045 90,272 377,317 267,346 98,091 365,437 Operating income (loss) 36,005 (18,089 ) 17,916 37,794 (33,173 ) 4,621 Interest expense — 19,702 19,702 — 8,950 8,950 Loss on extinguishment of debt — 1,367 1,367 — — — Income (loss) before income taxes $ 36,005 $ (39,158 ) $ (3,153 ) $ 37,794 $ (42,123 ) $ (4,329 ) Nine Months Ended October 31, 2015 Nine Months Ended October 31, 2014 (in thousands) Retail Credit Total Retail Credit Total Revenues: Furniture and mattress $ 294,119 $ — $ 294,119 $ 249,085 $ — $ 249,085 Home appliance 267,796 — 267,796 244,281 — 244,281 Consumer electronic 211,375 — 211,375 209,110 — 209,110 Home office 71,033 — 71,033 76,377 — 76,377 Other 14,164 — 14,164 17,672 — 17,672 Product sales 858,487 — 858,487 796,525 — 796,525 Repair service agreement commissions 77,590 — 77,590 64,042 — 64,042 Service revenues 9,982 — 9,982 9,952 — 9,952 Total net sales 946,059 — 946,059 870,519 — 870,519 Finance charges and other revenues 1,224 209,076 210,300 1,340 186,611 187,951 Total revenues 947,283 209,076 1,156,359 871,859 186,611 1,058,470 Costs and expenses: Cost of goods sold, including warehousing and occupancy costs 547,403 — 547,403 508,475 — 508,475 Cost of service parts sold, including warehousing and occupancy costs 4,325 — 4,325 4,815 — 4,815 Delivery, transportation and handling costs 40,767 — 40,767 38,543 — 38,543 Selling, general and administrative expenses (1) 226,394 87,781 314,175 206,559 74,967 281,526 Provision for bad debts 513 156,884 157,397 98 133,764 133,862 Charges and credits 4,172 — 4,172 3,601 — 3,601 Total costs and expense 823,574 244,665 1,068,239 762,091 208,731 970,822 Operating income (loss) 123,709 (35,589 ) 88,120 109,768 (22,120 ) 87,648 Interest expense — 39,185 39,185 — 19,921 19,921 Loss on extinguishment of debt — 1,367 1,367 — — — Income (loss) before income taxes $ 123,709 $ (76,141 ) $ 47,568 $ 109,768 $ (42,041 ) $ 67,727 (1) Selling, general and administrative expenses include the direct expenses of the retail and credit operations, allocated overhead expenses and a charge to the credit segment to reimburse the retail segment for expenses it incurs related to occupancy, personnel, advertising and other direct costs of the retail segment that benefit the credit operations by sourcing credit customers and collecting payments. The reimbursement received by the retail segment from the credit segment is estimated using an annual rate of 2.5% times the average portfolio balance for each applicable period. The amount of overhead allocated to each segment was $3.7 million and $2.8 million for the three months ended October 31, 2015 and 2014 , respectively, and $10.6 million and $8.7 million for the nine months ended October 31, 2015 and 2014 , respectively. The amount of reimbursement made to the retail segment by the credit segment was $9.3 million and $7.7 million for the three months ended October 31, 2015 and 2014 , respectively, and $26.7 million and $21.5 million for the nine months ended October 31, 2015 and 2014 , respectively. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Business . Conn’s is a leading specialty retailer that offers a broad selection of quality, branded durable consumer goods and related services in addition to a proprietary credit solution for its core credit constrained consumers. We operate an integrated and scalable business through our retail stores and website. Our complementary product offerings include furniture and mattresses, home appliances, consumer electronics and home office products from leading global brands across a wide range of price points. Our credit offering provides financing solutions to a large, under-served population of credit constrained consumers who typically have limited banking options. We operate two reportable segments: retail and credit. Our retail stores bear the "Conn’s" or "Conn’s HomePlus" name and deliver the same products and services to a common customer group. All of the retail stores follow the same procedures and methods in managing their operations. Our retail business and credit business are operated independently from each other. The credit segment is dedicated to providing short- and medium-term financing for our retail customers. The retail segment is not involved in credit approval decisions. Our management evaluates performance and allocates resources based on the operating results of the retail and credit segments. |
Basis of Presentation and Significant Accounting Policies [Text Block] | Basis of Presentation . The accompanying unaudited, condensed consolidated financial statements of Conn’s, Inc. and its wholly-owned subsidiaries have been prepared by management in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature, except as otherwise described herein. The condensed consolidated financial position, results of operations and cash flows for these interim periods are not necessarily indicative of the results that may be expected in future periods. The balance sheet at January 31, 2015 has been derived from the audited financial statements at that date. The financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015 , filed with the United States Securities and Exchange Commission (the "SEC") on April 1, 2015. |
Variable Interest Entity | Variable Interest Entity. In September 2015, we securitized $1.4 billion of customer accounts receivables by transferring the receivables to a bankruptcy-remote variable-interest entity (the "VIE"). The VIE issued asset-backed notes at a face amount of $1.12 billion secured by the transferred portfolio balance, which resulted in net proceeds to us of approximately $1.08 billion , net of transaction costs and restricted cash held by the VIE. The net proceeds were used to pay down the entire balance on our revolving credit facility, to repurchase shares of the Company's common stock and Senior Notes, and for other general corporate purposes. We currently hold the residual equity of the VIE, which we are in the process of marketing. We may elect to retain all or a portion of the residual equity of the VIE if that is determined to be in our best economic interest. We also plan to execute periodic securitizations of future originated customer loans. We retain the servicing of the securitized portfolio and have a variable interest in the VIE by holding the residual equity. We determined that we are the primary beneficiary of the VIE because (i) our servicing responsibilities for the securitized portfolio give us the power to direct the activities that most significantly impact the performance of the VIE and (ii) our variable interest in the VIE gives us the obligation to absorb losses and the right to receive residual returns that could potentially be significant. As a result, while holding all or a significant portion of the residual equity of the VIE, we will consolidate the VIE within our financial statements. If we sell all or a significant portion of the residual equity, we will assess if the transaction achieves sale treatment for accounting purposes, which may result in deconsolidation of the VIE. There is no assurance that we will complete a sale of all or a portion of the residual equity of the VIE, and there is no assurance we will achieve sale treatment. No timetable has been set for completion of this process. As a result, we have determined that the securitized portfolio does not meet the criteria for treatment as an asset held for sale, which would require recording at the lower of cost, net of allowances, or fair value. We have not made an adjustment to the customer accounts receivable balance as a result of the transaction or in anticipation of any gain or loss that may occur should a sale of the residual portion of the VIE be completed. Refer to Note 6, Debt , and Note 8, Variable Interest Entity , for additional information. |
Principles of Consolidation | Principles of Consolidation . The consolidated financial statements include the accounts of Conn’s, Inc. and its wholly-owned subsidiaries, including the VIE. Conn’s, Inc., a Delaware corporation, is a holding company with no independent assets or operations other than its investments in its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation |
Fiscal Period, Policy [Policy Text Block] | Fiscal Year. Our fiscal year ends on January 31. References to a fiscal year refer to the calendar year in which the fiscal year ends. |
Use of Estimates | Use of Estimates . The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Earnings per Share | Earnings per Share . Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share include the potential dilutive effects of any stock options and restricted stock units granted, which is calculated using the treasury-stock method. The following table sets forth the shares outstanding used for the earnings per share calculations: Three Months Ended Nine Months Ended (in thousands) 2015 2014 2015 2014 Weighted average common shares outstanding - Basic 35,704 36,265 36,175 36,203 Dilutive effect of stock options and restricted stock units — — 519 725 Weighted average common shares outstanding - Diluted 35,704 36,265 36,694 36,928 For the three months ended October 31, 2015 and 2014 , the weighted average number of stock options and restricted stock units not included in the calculation due to their anti-dilutive effect was 867,000 and 744,000 , respectively. For the nine months ended October 31, 2015 and 2014 , the weighted average number of stock options and restricted stock units not included in the calculation due to their anti-dilutive effect was 173,000 and 92,000 , respectively. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Customer accounts receivable and related allowance for doubtful accounts. Customer accounts receivable reported in the consolidated balance sheet includes total receivables managed, including those transferred to the VIE and those receivables not transferred to the VIE. Customer accounts receivable are originated at the time of sale and delivery of the various products and services. Based on contractual terms, we record the amount of principal and accrued interest on customer receivables that is expected to be collected within the next twelve months in current assets with the remaining balance in long-term assets on the consolidated balance sheet. Customer receivables are considered delinquent if a payment has not been received on the scheduled due date. Accounts that are delinquent more than 209 days as of the end of a month are charged-off against the allowance for doubtful accounts and interest accrued subsequent to the last payment is reversed and charged against the allowance for uncollectible interest. In an effort to mitigate losses on our accounts receivable, we may make loan modifications to a borrower experiencing financial difficulty. In our role as servicer, we may also make modifications to loans held by the VIE. The loan modifications are intended to maximize net cash flow after expenses and avoid the need to repossess collateral or exercise legal remedies available to us. We may extend the loan term, refinance or otherwise re-age an account. We consider accounts that have been re-aged in excess of three months or refinanced as Troubled Debt Restructurings ("TDR" or "Restructured Accounts"). We record an allowance for doubtful accounts, including estimated uncollectible interest, for our non-TDR customer accounts receivable that we expect to charge-off over the next twelve months based on our historical cash collection and net loss experience using a projection of monthly delinquency performance, cash collections and losses. In addition to pre-charge-off cash collections and charge-off information, estimates of post-charge-off recoveries, including cash payments, amounts realized from the repossession of the products financed and payments received under credit insurance policies are also considered. We determine allowances for those accounts that are TDR based on the discounted present value of cash flows expected to be collected over the life of those accounts. The excess of the carrying amount over the discounted cash flow amount is recorded as an allowance for loss on those accounts. |
Interest Income on Customer Accounts Receivable [Policy Text Block] | Interest income on customer accounts receivable . Interest income is accrued using the interest method for installment contracts and is reflected in finance charges and other revenues. Typically, interest income is accrued until the contract or account is paid off or charged-off. We provide an allowance for estimated uncollectible interest. Interest income on installment contracts with our customers is calculated using the rule of 78s. In order to convert the interest income recognized to the interest method, we have recorded the excess earnings of rule of 78s over the interest method as deferred revenue on our balance sheets. This deferred interest will ultimately be brought into income as the accounts pay off or accounts amortize to the point that interest income under the interest method exceeds that which is being earned under rule of 78s. At October 31, 2015 and January 31, 2015 , there was $10.1 million and $11.2 million , respectively, of deferred interest included in deferred revenues and other credits and other long-term liabilities. We offer 12-month no-interest finance programs. If the customer is delinquent in making a scheduled monthly payment or does not repay the principal in full by the end of the no-interest program period (grace periods are provided), the account does not qualify for the no-interest provision and the terms of the account revert back to those of the executed installment contract resulting in interest over the entire term. Interest income is recognized based on our historical experience related to customers that fail to satisfy the requirements of the programs. We also offer 18- and 24-month equal-payment, no-interest finance programs to certain higher credit quality borrowers, which are discounted to their present value at origination, resulting in a reduction in sales and customer receivables, and the discount amount is amortized into finance charges and other revenues over the term of the contract. If a customer is delinquent in making a scheduled monthly payment (grace periods are provided), the account begins accruing interest based on the contract rate from the date of the last payment made, which is a higher rate than the discount rate. We recognize interest income on TDR accounts using the interest income method, which requires reporting interest income equal to the increase in the net carrying amount of the loan attributable to the passage of time. Cash proceeds and other adjustments are applied to the net carrying amount such that it always equals the present value of expected future cash flows. We typically only place accounts in non-accrual status when legally required. Payments received on non-accrual loans will be applied to principal and reduce the amount of the loan. Interest accrual is resumed on those accounts once a legally-mandated settlement arrangement is reached or other payment arrangements are made with the customer. At October 31, 2015 and January 31, 2015 , customer receivables carried in non-accrual status were $23.6 million and $13.7 million , respectively. At October 31, 2015 and January 31, 2015 , customer receivables that were past due 90 days or more and still accruing interest totaled $107.9 million and $97.1 million , respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments . Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels related to subjectivity associated with the inputs to fair value measurements as follows: • Level 1 – Quoted prices available in active markets for identical assets or liabilities • Level 2 – Pricing inputs not quoted in active markets but either directly or indirectly observable • Level 3 – Significant inputs to pricing that have little or no transparency with inputs requiring significant management judgment or estimation. The fair value of cash and cash equivalents, restricted cash, and accounts payable approximate their carrying amounts because of the short maturity of these instruments. The fair value of customer accounts receivables, determined using a Level 3 discounted cash flow analysis using data from the recent securitization transaction, approximates their carrying amount. At October 31, 2015 , the fair value of our Senior Notes, which was determined using Level 1 inputs, was $218.6 million as compared to the carrying value of $227.0 million , excluding the impact of the related discount. At October 31, 2015 , the fair value of the VIE's Class A Notes and Class B Notes, which were determined using Level 2 inputs based on inactive trading activity, approximates their carrying value. |
Repurchase Program | Repurchase Program. On September 9, 2015, we announced that the Board of Directors of the Company ("Board of Directors") authorized a repurchase program of up to an aggregate of $75.0 million of (i) shares of the Company's outstanding common stock; (ii) 7.250% Senior Notes Due 2022 (the "Senior Notes"); or (iii) a combination thereof. During the three months ended October 31, 2015, we purchased 1.9 million shares of common stock, using $51.6 million of the $75.0 million repurchase authorization. Additionally, we utilized $22.9 million of the repurchase authorization to acquire $23.0 million of face of value of our senior notes. As a result of the bond repurchases, we had a loss on extinguishment of approximately $0.5 million, primarily due to the write-off of related deferred costs. On November 2, 2015, we announced that the the Board of Directors authorized an additional $100.0 million towards the repurchase program for purchase of shares of the Company's outstanding common stock, Senior Notes, or a combination thereof. Subsequent to October 31, 2015, we purchased 3.3 million additional shares of common stock, using $80.6 million of the $100.0 million repurchase authorization. Common stock repurchases may be made from time to time on the open market or through privately negotiated transactions, at management’s discretion, based on market and business conditions. We have no obligation to repurchase shares under the authorization, and the timing and value of the shares that are repurchased will be at the discretion of management and will depend on a number of factors, including the price of the Company's common stock. We may suspend or discontinue repurchases at any time without notice. |
Stockholders' rights plan [Policy Text Block] | Stockholders' Rights Plan. On October 6, 2014, we adopted a stockholders' rights plan whereby the Board of Directors declared a dividend of one right for each outstanding share of the Company's common stock to stockholders of record on October 16, 2014. On September 2, 2015, the Board of Directors approved the termination of the Company’s stockholder rights plan, and the rights plan was terminated, effective September 10, 2015. |
Related Party Transactions Disclosure [Text Block] | Related Party Transactions. From time to time, we have engaged Stephens Inc. to act as our financial advisor. Stephens Inc. and its affiliates beneficially own shares of our common stock and one of our Board of Directors, Douglas H. Martin, is a Senior Managing Director of Stephens Inc. On March 31, 2015, we announced that we had engaged Stephens Inc., as a financial advisor to assist us with the process of pursuing a sale of all or a portion of the loan portfolio, or other refinancing of our loan portfolio. The disinterested members of our Board of Directors determined that it was in the Company’s best interest to engage Stephens Inc. in such capacity to assist us in analyzing and advising us with respect to the opportunity. The engagement of Stephens Inc. as financial advisor was approved by the independent members of our Board of Directors after full disclosure of the conflicts of interests of the related parties in the transaction. Douglas H. Martin did not participate in the approval process. During the three months ended October 31, 2015 , we paid Stephens Inc. a success fee of $1.1 million as a result of the close of the securitization transaction. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers , which provides a single comprehensive accounting standard for revenue recognition for contracts with customers and supersedes current guidance. Upon adoption of ASU 2014-09, entities are required to recognize revenue using the following comprehensive model: (1) identify contracts with customers, (2) identify the performance obligations in contracts, (3) determine transaction price, (4) allocate the transaction price to the performance obligations, and (5) recognize revenue as each performance obligation is satisfied. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date , which defers the effective date of ASU 2015-14 by one year and allows early adoption on a limited basis. ASU 2014-09 is now effective for us beginning in the first quarter of fiscal year 2019 and will result in retrospective application, either in the form of recasting all prior periods presented or a cumulative adjustment to equity in the period of adoption. We are currently assessing the impact the new standard will have on our financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis, which focuses on a reporting company’s consolidation evaluation to determine whether they should consolidate certain legal entities. ASU 2015-02 is effective for us beginning in the first quarter of fiscal year 2017 and allows early adoption, including adoption in an interim period. We early adopted ASU 2015-02 beginning with the quarter ended July 31, 2015, which did not have an impact to our financial statements. |
Reclassifications [Text Block] | Reclassifications. Certain reclassifications have been made to prior year fiscal year amounts to conform to the presentation in the current fiscal year. On the consolidated statement of operations, delivery, transportation and handling costs is shown separately and was reclassified out of selling, general and administrative expenses. On the consolidated statements of cash flows, tenant improvement allowances received from landlords, changes in other accounts receivables and changes in deferred rents is shown separately and was reclassified out of changes in other assets and accrued expenses. These reclassifications did not impact consolidated operating income, net income, or net cash used in operating activities. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Accounting Policies [Abstract] | |
Supplemental cash flow information | The following table provides additional cash flow information: Nine Months Ended (in thousands) 2015 2014 Non-cash investing and financing activities: Capital lease asset additions and related obligations $ 2,187 $ 304 Property and equipment purchases not yet paid $ 2,391 $ — Supplemental cash flow data: Cash interest paid $ 29,200 $ 11,913 Cash income taxes paid, net $ 21,393 $ 58,363 |
Shares outstanding for the earnings per share calculations | Earnings per Share . Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share include the potential dilutive effects of any stock options and restricted stock units granted, which is calculated using the treasury-stock method. The following table sets forth the shares outstanding used for the earnings per share calculations: Three Months Ended Nine Months Ended (in thousands) 2015 2014 2015 2014 Weighted average common shares outstanding - Basic 35,704 36,265 36,175 36,203 Dilutive effect of stock options and restricted stock units — — 519 725 Weighted average common shares outstanding - Diluted 35,704 36,265 36,694 36,928 |
Charges and Credits (Tables)
Charges and Credits (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Charges and Credits [Abstract] | |
Schedule of Charges and Credits [Table Text Block] | Charges and credits consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2015 2014 2015 2014 Store and facility closure and relocation costs (credits) $ 212 $ (141 ) $ 637 $ 3,105 Legal and professional fees related to the exploration of strategic alternatives and securities-related litigation 999 496 2,206 496 Executive management transition costs 1,329 — 1,329 — $ 2,540 $ 355 $ 4,172 $ 3,601 |
Supplemental Disclosure of Fi20
Supplemental Disclosure of Finance Charges and Other Revenue (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Supplemental Disclosure of Finance Charges and Other Revenue [Abstract] | |
Supplemental Disclosure of Finance Charges and Other Revenue [Text Block] | Finance Charges and Other Revenues Finance charges and other revenues consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2015 2014 2015 2014 Interest income and fees $ 58,961 $ 52,142 $ 171,763 $ 150,858 Insurance commissions 13,222 12,777 37,313 35,753 Other revenues 416 530 1,224 1,340 $ 72,599 $ 65,449 $ 210,300 $ 187,951 Interest income and fees and insurance commissions are derived from the credit segment operations, whereas other revenues is derived from the retail segment operations. For the three months ended October 31, 2015 and 2014 , interest income and fees was reduced by provisions for uncollectible interest of $10.0 million and $7.8 million , respectively. For the nine months ended October 31, 2015 and 2014 , interest income and fees was reduced by provisions for uncollectible interest of $27.4 million and $19.8 million , respectively. For the three months ended October 31, 2015 and 2014 , the amount included in interest income and fees related to TDR accounts was $3.5 million and $1.8 million , respectively. For the nine months ended October 31, 2015 and 2014 , the amount included in interest income and fees related to TDR accounts was $10.0 million and $4.9 million , respectively. |
Customer Accounts Receivable (T
Customer Accounts Receivable (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Receivables [Abstract] | |
Allowance for doubtful accounts and uncollectible interest for customer receivables | Customer accounts receivable consisted of the following: Total Outstanding Balance Customer Accounts Receivable 60 Days Past Due (1) Re-aged (1) (in thousands) October 31, January 31, October 31, January 31, October 31, January 31, Customer accounts receivable $ 1,391,795 $ 1,277,135 $ 122,040 $ 112,365 $ 100,937 $ 94,304 Restructured accounts 109,879 88,672 30,882 20,722 109,879 88,672 Total customer portfolio balance 1,501,674 1,365,807 $ 152,922 $ 133,087 $ 210,816 $ 182,976 Allowance for uncollectible accounts (180,533 ) (146,982 ) Allowance for short-term, no-interest programs (19,080 ) (17,474 ) Total customer accounts receivable, net 1,302,061 1,201,351 Short-term portion of customer accounts receivable, net (706,934 ) (643,094 ) Long-term portion of customer accounts receivable, net $ 595,127 $ 558,257 Securitized receivables held by the VIE $ 1,142,259 $ — $ 152,136 $ — $ 204,670 $ — Receivables not held by the VIE 359,415 1,365,807 786 133,087 6,146 182,976 Total customer portfolio balance $ 1,501,674 $ 1,365,807 $ 152,922 $ 133,087 $ 210,816 $ 182,976 (1) Due to the fact that an account can become past due after having been re-aged, accounts could be represented as both past due and re-aged. As of October 31, 2015 and January 31, 2015 , the amounts included within both past due and re-aged was $55.6 million and $44.9 million , respectively. As of October 31, 2015 and January 31, 2015 , the total customer portfolio balance past due one day or greater was $357.8 million and $316.0 million , respectively. These amounts include the 60 days past due balances shown. The following presents the activity in the allowance for doubtful accounts and uncollectible interest for customer receivables: Nine Months Ended October 31, 2015 Nine Months Ended October 31, 2014 (in thousands) Customer Accounts Receivable Restructured Accounts Total Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 118,786 $ 28,196 $ 146,982 $ 54,448 $ 17,353 $ 71,801 Provision (1) 146,587 37,710 184,297 131,806 21,903 153,709 Principal charge-offs (2) (107,590 ) (22,779 ) (130,369 ) (77,058 ) (12,404 ) (89,462 ) Interest charge-offs (19,613 ) (4,153 ) (23,766 ) (13,807 ) (2,223 ) (16,030 ) Recoveries (2) 2,797 592 3,389 10,896 1,754 12,650 Allowance at end of period $ 140,967 $ 39,566 $ 180,533 $ 106,285 $ 26,383 $ 132,668 Average total customer portfolio balance $ 1,325,324 $ 98,993 $ 1,424,317 $ 1,090,078 $ 57,715 $ 1,147,793 (1) Includes provision for uncollectible interest, which is included in finance charges and other revenues. (2) Charge-offs include the principal amount of losses (excluding accrued and unpaid interest). Recoveries include principal collections of previously charged-off balances for both periods shown and proceeds received from selling charged off accounts to third parties during the nine months ended October 31, 2014 (we did not sell charged off accounts during the current fiscal year). Net charge-offs are calculated as the net of principal charge-offs and recoveries. |
Accrual for Store Closures (Tab
Accrual for Store Closures (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Activity in accrual for store closures | The following table presents detail of the activity in the accrual for store closures: Nine Months Ended (in thousands) 2015 2014 Balance at beginning of period $ 2,556 $ 4,316 Accrual for additional closures 318 2,595 Adjustments (21 ) (216 ) Cash payments, net of sublease income (876 ) (3,880 ) Balance at end of period 1,977 2,815 Current portion, included in accrued expenses (473 ) (954 ) Long-term portion, included in other long-term liabilities $ 1,504 $ 1,861 |
Debt and Letters of Credit (Tab
Debt and Letters of Credit (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long term debt | Debt consisted of the following: (in thousands) October 31, January 31, Revolving credit facility $ — $ 528,112 Senior Notes 227,000 250,000 Class A Notes 767,751 — Class B Notes 165,900 — Other debt 2,708 933 Total debt 1,163,359 779,045 Less: Discount on debt (3,783 ) (4,635 ) Current portion of debt (830 ) (395 ) Long-term debt $ 1,158,746 $ 774,015 |
Covenant Compliance | A summary of the significant financial covenants that govern our revolving credit facility compared to our actual compliance status at October 31, 2015 is presented below: Actual Required Leverage Ratio must not exceed maximum 1.96 to 1.00 4.00:1.00 ABS Excluded Leverage Ratio must not exceed maximum 0.65 to 1.00 2.00:1.00 Cash Recovery Percent must exceed stated amount 4.73% 4.50% Capital Expenditures, net, must not exceed maximum $27.7 million $75.0 million |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of assets and liabilities held by the VIE | The following presents the assets and liabilities held by the VIE and that are included in our consolidated balance sheet: (in thousands) October 31, January 31, Assets: Customer accounts receivable: Customer accounts receivable $ 1,037,645 $ — Restructured accounts 104,614 — Allowance for uncollectible accounts (161,343 ) — Allowance for short-term, no-interest programs (16,414 ) — Total customer accounts receivable, net 964,502 — Restricted cash 97,924 — Deferred debt issuance costs 23,109 — Total assets $ 1,085,535 $ — Liabilities: Accrued interest $ 2,048 $ — Due to Conn's, Inc., net 2,434 — Deferred interest income 6,461 — Long-term debt: Class A Notes 767,751 — Class B Notes 165,900 — Total long-term debt 933,651 — Total liabilities $ 944,594 $ — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Segment Reporting [Abstract] | |
Financial information by segment | Financial information by segment is presented in the following tables: Three Months Ended October 31, 2015 Three Months Ended October 31, 2014 (in thousands) Retail Credit Total Retail Credit Total Revenues: Furniture and mattress $ 105,735 $ — $ 105,735 $ 86,820 $ — $ 86,820 Home appliance 86,434 — 86,434 82,811 — 82,811 Consumer electronic 70,263 — 70,263 73,722 — 73,722 Home office 26,108 — 26,108 28,380 — 28,380 Other 4,582 — 4,582 6,406 — 6,406 Product sales 293,122 — 293,122 278,139 — 278,139 Repair service agreement commissions 26,038 — 26,038 23,056 — 23,056 Service revenues 3,474 — 3,474 3,414 — 3,414 Total net sales 322,634 — 322,634 304,609 — 304,609 Finance charges and other revenues 416 72,183 72,599 531 64,918 65,449 Total revenues 323,050 72,183 395,233 305,140 64,918 370,058 Costs and expenses: Cost of goods sold, including warehousing and occupancy costs 186,807 — 186,807 178,976 — 178,976 Cost of service parts sold, including warehousing and occupancy costs 1,463 — 1,463 1,525 — 1,525 Delivery, transportation and handling costs 14,631 — 14,631 13,216 — 13,216 Selling, general and administrative expenses (1) 81,484 32,184 113,668 73,220 26,126 99,346 Provision for bad debts 120 58,088 58,208 54 71,965 72,019 Charges and credits 2,540 — 2,540 355 — 355 Total costs and expense 287,045 90,272 377,317 267,346 98,091 365,437 Operating income (loss) 36,005 (18,089 ) 17,916 37,794 (33,173 ) 4,621 Interest expense — 19,702 19,702 — 8,950 8,950 Loss on extinguishment of debt — 1,367 1,367 — — — Income (loss) before income taxes $ 36,005 $ (39,158 ) $ (3,153 ) $ 37,794 $ (42,123 ) $ (4,329 ) Nine Months Ended October 31, 2015 Nine Months Ended October 31, 2014 (in thousands) Retail Credit Total Retail Credit Total Revenues: Furniture and mattress $ 294,119 $ — $ 294,119 $ 249,085 $ — $ 249,085 Home appliance 267,796 — 267,796 244,281 — 244,281 Consumer electronic 211,375 — 211,375 209,110 — 209,110 Home office 71,033 — 71,033 76,377 — 76,377 Other 14,164 — 14,164 17,672 — 17,672 Product sales 858,487 — 858,487 796,525 — 796,525 Repair service agreement commissions 77,590 — 77,590 64,042 — 64,042 Service revenues 9,982 — 9,982 9,952 — 9,952 Total net sales 946,059 — 946,059 870,519 — 870,519 Finance charges and other revenues 1,224 209,076 210,300 1,340 186,611 187,951 Total revenues 947,283 209,076 1,156,359 871,859 186,611 1,058,470 Costs and expenses: Cost of goods sold, including warehousing and occupancy costs 547,403 — 547,403 508,475 — 508,475 Cost of service parts sold, including warehousing and occupancy costs 4,325 — 4,325 4,815 — 4,815 Delivery, transportation and handling costs 40,767 — 40,767 38,543 — 38,543 Selling, general and administrative expenses (1) 226,394 87,781 314,175 206,559 74,967 281,526 Provision for bad debts 513 156,884 157,397 98 133,764 133,862 Charges and credits 4,172 — 4,172 3,601 — 3,601 Total costs and expense 823,574 244,665 1,068,239 762,091 208,731 970,822 Operating income (loss) 123,709 (35,589 ) 88,120 109,768 (22,120 ) 87,648 Interest expense — 39,185 39,185 — 19,921 19,921 Loss on extinguishment of debt — 1,367 1,367 — — — Income (loss) before income taxes $ 123,709 $ (76,141 ) $ 47,568 $ 109,768 $ (42,041 ) $ 67,727 (1) Selling, general and administrative expenses include the direct expenses of the retail and credit operations, allocated overhead expenses and a charge to the credit segment to reimburse the retail segment for expenses it incurs related to occupancy, personnel, advertising and other direct costs of the retail segment that benefit the credit operations by sourcing credit customers and collecting payments. The reimbursement received by the retail segment from the credit segment is estimated using an annual rate of 2.5% times the average portfolio balance for each applicable period. The amount of overhead allocated to each segment was $3.7 million and $2.8 million for the three months ended October 31, 2015 and 2014 , respectively, and $10.6 million and $8.7 million for the nine months ended October 31, 2015 and 2014 , respectively. The amount of reimbursement made to the retail segment by the credit segment was $9.3 million and $7.7 million for the three months ended October 31, 2015 and 2014 , respectively, and $26.7 million and $21.5 million for the nine months ended October 31, 2015 and 2014 , respectively. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details) | Sep. 04, 2015USD ($) | Oct. 06, 2014right / shares | Nov. 30, 2015USD ($)shares | Sep. 30, 2015USD ($) | Oct. 31, 2015USD ($)$ / sharesshares | Oct. 31, 2014shares | Oct. 31, 2015USD ($)segment$ / sharesshares | Oct. 31, 2014shares | Sep. 09, 2015USD ($) | Sep. 02, 2015USD ($) | Jan. 31, 2015USD ($)$ / sharesshares | Jul. 01, 2014USD ($) |
Accounting Policies [Abstract] | ||||||||||||
Weighted average contractual annual percentage rate of customer receivables portfolio | 21.40% | 21.40% | ||||||||||
Schedule of Earnings Per Share [Line Items] | ||||||||||||
Cash collected as servicer of securitized receivables and remitted to VIE | $ 83,500,000 | |||||||||||
Restricted cash | $ 97,924,000 | $ 97,924,000 | $ 0 | |||||||||
Securitization of customer accounts receivables | $ 1,400,000,000 | |||||||||||
Number of Operating Segments | segment | 2 | |||||||||||
Long-term Debt, Gross | $ 1,163,359,000 | $ 1,163,359,000 | $ 779,045,000 | |||||||||
Shares outstanding for earnings (loss) per share calculations [Abstract] | ||||||||||||
Weighted average common shares outstanding - Basic (in shares) | shares | 35,704,000 | 36,265,000 | 36,175,000 | 36,203,000 | ||||||||
Common shares attributable to stock options and restricted stock units (in shares) | shares | 0 | 0 | 519,000 | 725,000 | ||||||||
Weighted average common shares outstanding - Diluted (in shares) | shares | 35,704,000 | 36,265,000 | 36,694,000 | 36,928,000 | ||||||||
Weighted average number of stock options and restricted stock units not included in the calculation of the dilutive effect of stock options and restricted stock units (in shares) | shares | 867,000 | 744,000 | 173,000 | 92,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Common stock, shares authorized (in shares) | shares | 100,000,000 | 100,000,000 | 100,000,000 | |||||||||
Stockholders' Rights Plan | ||||||||||||
Stockholder rights per share | right / shares | 1 | |||||||||||
Transfers Accounted for as Secured Borrowings, Assets, Carrying Amount | $ 1,400,000,000 | |||||||||||
Debt Instrument, Face Amount | 1,120,000,000 | |||||||||||
Proceeds from Securitizations of Consumer Loans | $ 1,000,000,000 | |||||||||||
Advance rate on securitized debt | 77.50% | |||||||||||
Purchase price as percent of customer receivables, net of allowances and deferred interest | 89.50% | |||||||||||
monthly servicing fee, annualized | 4.80% | |||||||||||
Common stock and Senior Note repurchase, Maximum | $ 75,000,000 | |||||||||||
Amount authorized to be repurchased | $ 75,000,000 | |||||||||||
Interest Income on Customer Accounts Receivable [Abstract] | ||||||||||||
Deferred Revenue | $ 10,100,000 | $ 10,100,000 | $ 11,200,000 | |||||||||
Financing Receivable, Recorded Investment, Nonaccrual Status | 23,600,000 | 23,600,000 | 13,700,000 | |||||||||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 107,900,000 | 107,900,000 | 97,100,000 | |||||||||
Stockholders' Rights Plan [Member] | Series A Junior Participating Preferred Stock [Member] | ||||||||||||
Stockholders' Rights Plan | ||||||||||||
Class of Warrant or Right, Eligible Purchase Ratio | 0.001 | |||||||||||
Senior Notes [Member] | ||||||||||||
Schedule of Earnings Per Share [Line Items] | ||||||||||||
Interest rate on notes (in hundredths) | 7.25% | |||||||||||
Long-term Debt, Gross | 227,000,000 | 227,000,000 | ||||||||||
Variable Interest Entity | ||||||||||||
Schedule of Earnings Per Share [Line Items] | ||||||||||||
Restricted cash | 14,426,000 | 14,426,000 | ||||||||||
Senior Notes [Member] | ||||||||||||
Schedule of Earnings Per Share [Line Items] | ||||||||||||
Interest rate on notes (in hundredths) | 7.25% | |||||||||||
Long-term Debt, Gross | 227,000,000 | 227,000,000 | $ 250,000,000 | |||||||||
Stockholders' Rights Plan | ||||||||||||
Debt Instrument, Face Amount | $ 250,000,000 | |||||||||||
Payments for debt repurchase | 22,900,000 | |||||||||||
Face value of debt repurchased | $ 23,000,000 | $ 23,000,000 | ||||||||||
Secured Debt [Member] | Variable Interest Entity | ||||||||||||
Stockholders' Rights Plan | ||||||||||||
Debt Instrument, Face Amount | 1,120,000,000 | |||||||||||
Net proceeds from issuance of debt | $ 1,080,000,000 | |||||||||||
Common Stock [Member] | ||||||||||||
Stockholders' Rights Plan | ||||||||||||
Shares repurchased | shares | 1,900,000 | |||||||||||
Value of shares repurchased | $ 51,600,000 | |||||||||||
Common Stock [Member] | Subsequent Event [Member] | ||||||||||||
Stockholders' Rights Plan | ||||||||||||
Amount authorized to be repurchased | $ 100,000,000 | |||||||||||
Shares repurchased | shares | 3,300,000 | |||||||||||
Value of shares repurchased | $ 80,600,000 | |||||||||||
Stephens Inc. [Member] | Success Fee of Securitization Transaction [Member] | ||||||||||||
Stockholders' Rights Plan | ||||||||||||
Success fee paid to related party | $ 1,000,000 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Non-cash investing and financing activities: | ||
Capital lease asset additions and related obligations | $ 2,187 | $ 304 |
Property and equipment purchases not yet paid | 2,391 | 0 |
Supplemental cash flow data: | ||
Cash interest paid | 29,200 | 11,913 |
Cash income taxes paid, net | $ 21,393 | $ 58,363 |
Charges and Credits (Details)
Charges and Credits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Charges and Credits [Abstract] | ||||
Store and facility closure and relocation costs (credits) | $ 212 | $ (141) | $ 637 | $ 3,105 |
Legal and professional fees related to the exploration of strategic alternatives and securities-related litigation | 999 | 496 | 2,206 | 496 |
Executive management transition costs | 1,329 | 0 | 1,329 | 0 |
Quarterly Financial Information, Quarterly Charges and Credits, Amount Affecting Comparability | $ 2,540 | $ 355 | $ 4,172 | $ 3,601 |
Supplemental Disclosure of Fi29
Supplemental Disclosure of Finance Charges and Other Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Summary of the classification of the amounts as Finance charges and other [Abstract] | ||||
Interest and Fee Income, Loans, Consumer | $ 58,961 | $ 52,142 | $ 171,763 | $ 150,858 |
Fees and Commissions | 13,222 | 12,777 | 37,313 | 35,753 |
Other | 416 | 530 | 1,224 | 1,340 |
Finance charges and other | 72,599 | 65,449 | 210,300 | 187,951 |
Provisions for uncollectible interest | 10,000 | 7,800 | 27,400 | 19,800 |
Interest income and fees on customer receivables related to TDR accounts | $ 3,500 | $ 1,800 | $ 10,000 | $ 4,900 |
Customer Accounts Receivable (D
Customer Accounts Receivable (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | |
Total Outstanding Balance | |||||
Customer Accounts Receivable | $ 1,501,674 | $ 1,365,807 | |||
Reaged | 210,816 | 182,976 | |||
Allowance for uncollectible accounts related to the credit portfolio | $ (146,982) | $ (71,801) | (180,533) | (146,982) | $ (132,668) |
Allowances for promotional credit programs | (19,080) | (17,474) | |||
Accounts Receivable, Net | 1,302,061 | 1,201,351 | |||
Short-term portion of customer accounts receivable, net | (706,934) | (643,094) | |||
Long-term customer accounts receivable, net | 595,127 | 558,257 | |||
Securitized receivables | 359,415 | 1,365,807 | |||
Securitized receivables reaged | 6,146 | 182,976 | |||
Total Customer Portfolio Balance | 1,501,674 | 1,365,807 | |||
Total Customer Portfolio Balance, Reaged | 210,816 | 182,976 | |||
Amounts included within past due and reaged accounts | 55,600 | 44,900 | |||
Total amount of customer receivables past due one day or greater | 357,800 | 316,000 | |||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||||
Allowance at beginning of period | (146,982) | (71,801) | |||
Provision | 184,297 | 153,709 | |||
Principal charge-offs | (130,369) | (89,462) | |||
Interest charge-offs | (23,766) | (16,030) | |||
Recoveries | 3,389 | 12,650 | |||
Allowance at end of period | (180,533) | (132,668) | |||
Average Total Customer Portfolio Balance | 1,424,317 | 1,147,793 | |||
Financing Receivable, Recorded Investment, Nonaccrual Status | 23,600 | 13,700 | |||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 107,900 | 97,100 | |||
Customer Accounts Receivable [Member] | |||||
Total Outstanding Balance | |||||
Customer Accounts Receivable | 1,391,795 | 1,277,135 | |||
Reaged | 100,937 | 94,304 | |||
Allowance for uncollectible accounts related to the credit portfolio | (118,786) | (54,448) | (140,967) | (118,786) | (106,285) |
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||||
Allowance at beginning of period | (118,786) | (54,448) | |||
Provision | 146,587 | 131,806 | |||
Principal charge-offs | (107,590) | (77,058) | |||
Interest charge-offs | (19,613) | (13,807) | |||
Recoveries | 2,797 | 10,896 | |||
Allowance at end of period | (140,967) | (106,285) | |||
Average Total Customer Portfolio Balance | 1,325,324 | 1,090,078 | |||
Restructured Accounts [Member] | |||||
Total Outstanding Balance | |||||
Customer Accounts Receivable | 109,879 | 88,672 | |||
Reaged | 109,879 | 88,672 | |||
Allowance for uncollectible accounts related to the credit portfolio | (28,196) | (17,353) | (39,566) | (28,196) | (26,383) |
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||||
Allowance at beginning of period | (28,196) | (17,353) | |||
Provision | 37,710 | 21,903 | |||
Principal charge-offs | (22,779) | (12,404) | |||
Interest charge-offs | (4,153) | (2,223) | |||
Recoveries | 592 | 1,754 | |||
Allowance at end of period | (39,566) | $ (26,383) | |||
Average Total Customer Portfolio Balance | 98,993 | $ 57,715 | |||
Financing Receivables, 60 Days Past Due [Member] | |||||
Total Outstanding Balance | |||||
Customer Accounts Receivable | 152,922 | 133,087 | |||
Securitized receivables | 786 | 133,087 | |||
Total Customer Portfolio Balance | 152,922 | 133,087 | |||
Financing Receivables, 60 Days Past Due [Member] | Customer Accounts Receivable [Member] | |||||
Total Outstanding Balance | |||||
Customer Accounts Receivable | 122,040 | 112,365 | |||
Financing Receivables, 60 Days Past Due [Member] | Restructured Accounts [Member] | |||||
Total Outstanding Balance | |||||
Customer Accounts Receivable | 30,882 | 20,722 | |||
Variable Interest Entity | |||||
Total Outstanding Balance | |||||
Allowance for uncollectible accounts related to the credit portfolio | 0 | (161,343) | 0 | ||
Allowances for promotional credit programs | (16,414) | 0 | |||
Accounts Receivable, Net | 964,502 | 0 | |||
Short-term portion of customer accounts receivable, net | (523,662) | 0 | |||
Long-term customer accounts receivable, net | 440,840 | 0 | |||
Securitized receivables | 1,142,259 | 0 | |||
Securitized receivables reaged | 204,670 | 0 | |||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||||
Allowance at beginning of period | 0 | ||||
Allowance at end of period | $ (161,343) | ||||
Variable Interest Entity | Customer Accounts Receivable [Member] | |||||
Total Outstanding Balance | |||||
Customer Accounts Receivable | 1,037,645 | ||||
Variable Interest Entity | Restructured Accounts [Member] | |||||
Total Outstanding Balance | |||||
Customer Accounts Receivable | 104,614 | 0 | |||
Variable Interest Entity | Financing Receivables, 60 Days Past Due [Member] | |||||
Total Outstanding Balance | |||||
Securitized receivables | $ 152,136 | $ 0 |
Accrual for Store Closures (Det
Accrual for Store Closures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Quarterly Financial Information, Quarterly Charges and Credits, Amount Affecting Comparability | $ 2,540 | $ 355 | $ 4,172 | $ 3,601 | ||
Detail of activity in the accrual for store closures [Abstract] | ||||||
Balance at beginning of period | 2,556 | 4,316 | ||||
Accrual for closures | 318 | 2,595 | ||||
Change in estimate | (21) | (216) | ||||
Cash payments | (876) | (3,880) | ||||
Balance at end of period | 1,977 | 2,815 | 1,977 | 2,815 | ||
Balance sheet presentation [Abstract] | ||||||
Accrued expenses | $ (473) | $ (954) | ||||
Other long-term liabilities | 1,504 | 1,861 | ||||
Restructuring Reserve, Total | $ 1,977 | $ 2,815 | $ 2,556 | $ 4,316 | $ 1,977 | $ 2,815 |
Debt and Letters of Credit (Det
Debt and Letters of Credit (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Nov. 30, 2015 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Nov. 01, 2015 | Sep. 04, 2015 | Jan. 31, 2015 | Jul. 01, 2014 | May. 01, 2014 | |
Long-term debt [Abstract] | ||||||||||
Long-term Debt, Gross | $ 1,163,359,000 | $ 1,163,359,000 | $ 779,045,000 | |||||||
Debt discount | (3,783,000) | (3,783,000) | (4,635,000) | |||||||
Less current portion of debt | (830,000) | (830,000) | (395,000) | |||||||
Long-term debt | 1,158,746,000 | 1,158,746,000 | 774,015,000 | |||||||
Amount of notes issued | $ 1,120,000,000 | |||||||||
Loss on extinguishment of debt | 1,367,000 | $ 0 | 1,367,000 | $ 0 | ||||||
Proceeds from issuance of senior notes, net of issuance costs | 0 | 243,400,000 | ||||||||
Interest expense | 19,702,000 | 8,950,000 | 39,185,000 | 19,921,000 | ||||||
Income before income taxes | (3,153,000) | $ (4,329,000) | 47,568,000 | $ 67,727,000 | ||||||
Asset-based Revolving Credit Facility [Member] | ||||||||||
Long-term debt [Abstract] | ||||||||||
Long-term Debt, Gross | 0 | 0 | 528,112,000 | |||||||
Amount available under asset based revolving credit facility | 269,500,000 | 269,500,000 | ||||||||
Outstanding letters of credit | 1,100,000 | 1,100,000 | ||||||||
Senior Notes [Member] | ||||||||||
Long-term debt [Abstract] | ||||||||||
Long-term Debt, Gross | 227,000,000 | 227,000,000 | 250,000,000 | |||||||
Amount of notes issued | $ 250,000,000 | |||||||||
Interest rate on notes (in hundredths) | 7.25% | |||||||||
Face value of debt repurchased | 23,000,000 | 23,000,000 | ||||||||
Payments for debt repurchase | 22,900,000 | |||||||||
Loss on extinguishment of debt | 500,000 | |||||||||
Effective interest rate | 7.80% | |||||||||
Events of default, acceleration for default, minimum amount | 25,000,000 | 25,000,000 | ||||||||
Events of default, judgment, minimum amount that is not discharged, bonded, or insured | 25,000,000 | 25,000,000 | ||||||||
Other Long Term Debt [Member] | ||||||||||
Long-term debt [Abstract] | ||||||||||
Long-term Debt, Gross | $ 2,708,000 | $ 2,708,000 | $ 933,000 | |||||||
Previous Supplemental Indenture [Member] | Senior Notes [Member] | ||||||||||
Long-term debt [Abstract] | ||||||||||
Restricted payment basket amount | $ 75,000,000 | |||||||||
Subsequent Event [Member] | Senior Notes [Member] | ||||||||||
Long-term debt [Abstract] | ||||||||||
Payment of aggregate consent fees | $ 3,800,000 | |||||||||
Subsequent Event [Member] | Supplemental Indenture [Member] | Senior Notes [Member] | ||||||||||
Long-term debt [Abstract] | ||||||||||
Restricted payment basket amount | $ 375,000,000 |
Debt and Letters of Credit - As
Debt and Letters of Credit - Asset Backed Notes (Details) - USD ($) $ in Millions | 1 Months Ended | |
Sep. 30, 2015 | Sep. 04, 2015 | |
Debt Instrument [Line Items] | ||
Amount of notes issued | $ 1,120 | |
Variable Interest Entity | Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Amount of notes issued | $ 1,120 | |
Net proceeds from issuance of debt | 1,080 | |
Variable Interest Entity | Secured Debt [Member] | Class A Notes [Member] | ||
Debt Instrument [Line Items] | ||
Amount of notes issued | $ 952.1 | |
Fixed annual rate | 4.565% | |
Effective interest rate | 7.50% | |
Variable Interest Entity | Secured Debt [Member] | Class B Notes [Member] | ||
Debt Instrument [Line Items] | ||
Amount of notes issued | $ 165.9 | |
Fixed annual rate | 8.50% | |
Effective interest rate | 13.30% |
Debt and Letters of Credit - Re
Debt and Letters of Credit - Revolving Credit Facility (Details) - Line of Credit [Member] | Oct. 30, 2015USD ($) | Oct. 29, 2015USD ($) |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Maximum capacity extended under credit facility | $ 810,000,000 | |
Total leverage ratio, ABS excluded | 2 | |
Minimum interest coverage rate | 2 | |
Accounts receivable advance rate | 75.00% | |
Cash recovery covenant | 4.25% | |
Inventory component of borrowing base | $ 175,000,000 | |
Write off debt issuance costs | 900,000 | |
Deferred debt issuance costs | 3,000,000 | |
Previous Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Total leverage ratio | 2 | |
Accounts receivable advance rate | 80.00% | |
Cash recovery covenant | 4.50% | |
Inventory component of borrowing base | $ 100,000,000 | |
Sub-Facility Letters of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Maximum capacity extended under credit facility | $ 40,000,000 | |
Minimum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Total leverage ratio | 4 | |
Unused capacity fee percentage | 0.25% | |
Maximum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Unused capacity fee percentage | 0.75% | |
LIBOR [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable basis spread | 1.00% | |
LIBOR [Member] | Minimum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable basis spread | 2.50% | |
LIBOR [Member] | Maximum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable basis spread | 3.00% | |
Alternate Base Rate [Member] | Minimum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable basis spread | 1.50% | |
Alternate Base Rate [Member] | Maximum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable basis spread | 2.00% | |
Federal Funds Rate [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable basis spread | 0.50% |
Debt and Letters of Credit - De
Debt and Letters of Credit - Debt Covenants (Details) | 9 Months Ended |
Oct. 31, 2015USD ($) | |
Line Of Credit Facility Covenant, Actual Results [Member] | |
Line of Credit Facility [Line Items] | |
Leverage Ratio must not exceed maximum | 1.96 |
ABS Excluded Leverage Ratio must not exceed maximum | 4.73% |
Cash Recovery Percent must exceed stated amount | 0.65 |
Capital Expenditures, net, must not exceed maximum | $ 27,700,000 |
Line Of Credit Facility Covenant [Member] | |
Line of Credit Facility [Line Items] | |
Leverage Ratio must not exceed maximum | 4 |
ABS Excluded Leverage Ratio must not exceed maximum | 4.50% |
Cash Recovery Percent must exceed stated amount | 2 |
Capital Expenditures, net, must not exceed maximum | $ 75,000,000 |
Variable Interest Entity - Addi
Variable Interest Entity - Additional Information - USD ($) $ in Millions | 1 Months Ended | |
Sep. 30, 2015 | Sep. 04, 2015 | |
Variable Interest Entity [Line Items] | ||
Securitization of customer accounts receivables | $ 1,400 | |
Amount of notes issued | $ 1,120 | |
Secured Debt [Member] | Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Amount of notes issued | $ 1,120 | |
Monthly fee percentage on outstanding balance | 4.75% |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
Customer accounts receivable: | ||||
Customer accounts receivable | $ 1,501,674 | $ 1,365,807 | ||
Allowance for uncollectible accounts | (180,533) | (146,982) | $ (132,668) | $ (71,801) |
Allowances for Promotional Credit Programs | 19,080 | 17,474 | ||
Total customer accounts receivable, net | 1,302,061 | 1,201,351 | ||
Total assets | 2,088,843 | 1,647,322 | ||
Liabilities: | ||||
Total liabilities | 1,453,635 | 993,652 | ||
Variable Interest Entity | ||||
Customer accounts receivable: | ||||
Allowance for uncollectible accounts | (161,343) | 0 | ||
Allowances for Promotional Credit Programs | 16,414 | 0 | ||
Total customer accounts receivable, net | 964,502 | 0 | ||
Restricted cash | 97,924 | 0 | ||
Deferred debt issuance costs | 23,109 | 0 | ||
Total assets | 1,085,535 | 0 | ||
Liabilities: | ||||
Accrued interest | 2,048 | 0 | ||
Due to Conn's, Inc. | 2,434 | 0 | ||
Deferred interest income | 6,461 | 0 | ||
Total long-term debt | 933,651 | 0 | ||
Total liabilities | 944,594 | 0 | ||
Secured Debt [Member] | Class A Notes [Member] | Variable Interest Entity | ||||
Liabilities: | ||||
Total long-term debt | 767,751 | 0 | ||
Secured Debt [Member] | Class B Notes [Member] | Variable Interest Entity | ||||
Liabilities: | ||||
Total long-term debt | 165,900 | 0 | ||
Accounts Receivable [Member] | ||||
Customer accounts receivable: | ||||
Customer accounts receivable | 1,391,795 | 1,277,135 | ||
Allowance for uncollectible accounts | (140,967) | (118,786) | (106,285) | (54,448) |
Accounts Receivable [Member] | Variable Interest Entity | ||||
Customer accounts receivable: | ||||
Customer accounts receivable | 1,037,645 | |||
Restructured Accounts [Member] | ||||
Customer accounts receivable: | ||||
Customer accounts receivable | 109,879 | 88,672 | ||
Allowance for uncollectible accounts | (39,566) | (28,196) | $ (26,383) | $ (17,353) |
Restructured Accounts [Member] | Variable Interest Entity | ||||
Customer accounts receivable: | ||||
Customer accounts receivable | $ 104,614 | $ 0 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 | |
Revenues [Abstract] | |||||
Product sales | $ 293,122 | $ 278,139 | $ 858,487 | $ 796,525 | |
Repair service agreement commissions | 26,038 | 23,056 | 77,590 | 64,042 | |
Service revenues | 3,474 | 3,414 | 9,982 | 9,952 | |
Total net sales | 322,634 | 304,609 | 946,059 | 870,519 | |
Finance charges and other | 72,599 | 65,449 | 210,300 | 187,951 | |
Revenues | 395,233 | 370,058 | 1,156,359 | 1,058,470 | |
Cost and expenses | |||||
Cost of goods sold, including warehousing and occupancy costs | 186,807 | 178,976 | 547,403 | 508,475 | |
Cost of service parts sold, including warehousing and occupancy costs | 1,463 | 1,525 | 4,325 | 4,815 | |
Shipping, Handling and Transportation Costs | 14,631 | 13,216 | 40,767 | 38,543 | |
Selling, general and administrative expense | 113,668 | 99,346 | 314,175 | 281,526 | |
Provision for bad debts | 58,208 | 72,019 | 157,397 | 133,862 | |
Quarterly Financial Information, Quarterly Charges and Credits, Amount Affecting Comparability | 2,540 | 355 | 4,172 | 3,601 | |
Total cost and expenses | 377,317 | 365,437 | 1,068,239 | 970,822 | |
Operating income | 17,916 | 4,621 | 88,120 | 87,648 | |
Interest expense | 19,702 | 8,950 | 39,185 | 19,921 | |
Loss on extinguishment of debt | 1,367 | 0 | 1,367 | 0 | |
Income before income taxes | (3,153) | (4,329) | 47,568 | 67,727 | |
Assets | 2,088,843 | $ 2,088,843 | $ 1,647,322 | ||
Estimated annual rate of reimbursement (in hundredths) | 2.50% | ||||
Allocation of overhead by operating segments | 3,700 | 2,800 | $ 10,600 | 8,700 | |
Amount of reimbursement made by operating segments | 9,300 | 7,700 | 26,700 | 21,500 | |
Retail [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 293,122 | 278,139 | 858,487 | 796,525 | |
Repair service agreement commissions | 26,038 | 23,056 | 77,590 | 64,042 | |
Service revenues | 3,474 | 3,414 | 9,982 | 9,952 | |
Total net sales | 322,634 | 304,609 | 946,059 | 870,519 | |
Finance charges and other | 416 | 531 | 1,224 | 1,340 | |
Revenues | 323,050 | 305,140 | 947,283 | 871,859 | |
Cost and expenses | |||||
Cost of goods sold, including warehousing and occupancy costs | 186,807 | 178,976 | 547,403 | 508,475 | |
Cost of service parts sold, including warehousing and occupancy costs | 1,463 | 1,525 | 4,325 | 4,815 | |
Shipping, Handling and Transportation Costs | 14,631 | 13,216 | 40,767 | 38,543 | |
Selling, general and administrative expense | 81,484 | 73,220 | 226,394 | 206,559 | |
Provision for bad debts | 120 | 54 | 513 | 98 | |
Quarterly Financial Information, Quarterly Charges and Credits, Amount Affecting Comparability | 2,540 | 355 | 4,172 | 3,601 | |
Total cost and expenses | 287,045 | 267,346 | 823,574 | 762,091 | |
Operating income | 36,005 | 37,794 | 123,709 | 109,768 | |
Interest expense | 0 | 0 | 0 | 0 | |
Loss on extinguishment of debt | 0 | 0 | 0 | 0 | |
Income before income taxes | 36,005 | 37,794 | 123,709 | 109,768 | |
Credit [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 0 | 0 | 0 | 0 | |
Repair service agreement commissions | 0 | 0 | 0 | 0 | |
Service revenues | 0 | 0 | 0 | 0 | |
Total net sales | 0 | 0 | 0 | 0 | |
Finance charges and other | 72,183 | 64,918 | 209,076 | 186,611 | |
Revenues | 72,183 | 64,918 | 209,076 | 186,611 | |
Cost and expenses | |||||
Cost of goods sold, including warehousing and occupancy costs | 0 | 0 | 0 | 0 | |
Cost of service parts sold, including warehousing and occupancy costs | 0 | 0 | 0 | 0 | |
Shipping, Handling and Transportation Costs | 0 | 0 | 0 | 0 | |
Selling, general and administrative expense | 32,184 | 26,126 | 87,781 | 74,967 | |
Provision for bad debts | 58,088 | 71,965 | 156,884 | 133,764 | |
Quarterly Financial Information, Quarterly Charges and Credits, Amount Affecting Comparability | 0 | 0 | 0 | 0 | |
Total cost and expenses | 90,272 | 98,091 | 244,665 | 208,731 | |
Operating income | (18,089) | (33,173) | (35,589) | (22,120) | |
Interest expense | 19,702 | 8,950 | 39,185 | 19,921 | |
Loss on extinguishment of debt | 1,367 | 0 | 1,367 | 0 | |
Income before income taxes | (39,158) | (42,123) | (76,141) | (42,041) | |
Furniture and Mattress [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 105,735 | 86,820 | 294,119 | 249,085 | |
Furniture and Mattress [Member] | Retail [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 105,735 | 86,820 | 294,119 | 249,085 | |
Furniture and Mattress [Member] | Credit [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 0 | 0 | 0 | 0 | |
Home Appliance [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 86,434 | 82,811 | 267,796 | 244,281 | |
Home Appliance [Member] | Retail [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 86,434 | 82,811 | 267,796 | 244,281 | |
Home Appliance [Member] | Credit [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 0 | 0 | 0 | 0 | |
Consumer Electronics [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 70,263 | 73,722 | 211,375 | 209,110 | |
Consumer Electronics [Member] | Retail [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 70,263 | 73,722 | 211,375 | 209,110 | |
Consumer Electronics [Member] | Credit [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 0 | 0 | 0 | 0 | |
Home Office [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 26,108 | 28,380 | 71,033 | 76,377 | |
Home Office [Member] | Retail [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 26,108 | 28,380 | 71,033 | 76,377 | |
Home Office [Member] | Credit [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 0 | 0 | 0 | 0 | |
Other Products [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 4,582 | 6,406 | 14,164 | 17,672 | |
Other Products [Member] | Retail [Member] | |||||
Revenues [Abstract] | |||||
Product sales | 4,582 | 6,406 | 14,164 | 17,672 | |
Other Products [Member] | Credit [Member] | |||||
Revenues [Abstract] | |||||
Product sales | $ 0 | $ 0 | $ 0 | $ 0 |