Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 31, 2019 | Mar. 18, 2019 | Jul. 31, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CONNS INC | ||
Entity Central Index Key | 0001223389 | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 681.8 | ||
Entity Common Stock, Shares Outstanding | 31,883,939 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jan. 31, 2019 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 5,912 | $ 9,286 |
Restricted cash (includes VIE balances of $57,475 and $85,322 respectively) | 59,025 | 86,872 |
Customer accounts receivable, net of allowance (includes VIE balances of $324,064 and $459,708, respectively) | 652,769 | 636,825 |
Other accounts receivable | 67,078 | 71,186 |
Inventories | 220,034 | 211,894 |
Income taxes receivable | 407 | 32,362 |
Prepaid expenses and other current assets | 9,169 | 31,592 |
Total current assets | 1,014,394 | 1,080,017 |
Long-term portion of customer accounts receivable, net of allowances (includes VIE balances of $230,901 and $455,002, respectively) | 686,344 | 650,608 |
Property and equipment, net | 148,983 | 143,152 |
Deferred income taxes | 27,535 | 21,565 |
Other assets | 7,651 | 5,457 |
Total assets | 1,884,907 | 1,900,799 |
Current liabilities: | ||
Current maturities of debt and capital lease obligations (includes VIE balances of $53,635 and $0, respectively) | 54,109 | 907 |
Accounts payable | 71,118 | 71,617 |
Accrued compensation and related expenses | 27,052 | 21,366 |
Accrued expenses | 54,381 | 44,807 |
Income taxes payable | 8,902 | 2,939 |
Deferred revenues and other credits | 22,006 | 22,475 |
Total current liabilities | 237,568 | 164,111 |
Deferred rent | 93,127 | 87,003 |
Long-term debt and capital lease obligations (includes VIE balances of $407,993 and $787,979 respectively) | 901,222 | 1,090,105 |
Other long-term liabilities | 33,015 | 24,512 |
Total liabilities | 1,264,932 | 1,365,731 |
Commitments and contingencies | ||
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, 100,000,000 shares authorized; 31,788,162 and 31,435,775 shares issued, respectively) | 318 | 314 |
Additional paid-in capital | 111,185 | 101,087 |
Retained earnings | 508,472 | 433,667 |
Total stockholders’ equity | 619,975 | 535,068 |
Total liabilities and stockholders’ equity | $ 1,884,907 | $ 1,900,799 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Restricted cash | $ 59,025 | $ 86,872 |
Customer accounts receivable, net of allowance (includes VIE balances of $324,064 and $459,708, respectively) | 652,769 | 636,825 |
Long-term customer accounts receivable, net | 686,344 | 650,608 |
Current maturities of debt and capital lease obligations | 54,109 | 907 |
Long-term debt and capital lease obligations | $ 901,222 | $ 1,090,105 |
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) | 31,788,162 | 31,435,775 |
VIE | ||
Restricted cash | $ 57,475 | $ 85,322 |
Customer accounts receivable, net of allowance (includes VIE balances of $324,064 and $459,708, respectively) | 324,064 | 459,708 |
Long-term customer accounts receivable, net | 230,901 | 455,002 |
Current maturities of debt and capital lease obligations | 53,635 | 0 |
Long-term debt and capital lease obligations | $ 407,993 | $ 787,979 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Revenues: | |||||||||||
Product sales | $ 1,078,635 | $ 1,077,874 | $ 1,186,197 | ||||||||
Repair service agreement commissions | 101,928 | 100,383 | 113,615 | ||||||||
Service revenues | 14,111 | 13,710 | 14,659 | ||||||||
Total net sales | 1,194,674 | 1,191,967 | 1,314,471 | ||||||||
Finance charges and other revenues | 355,139 | 324,064 | 282,377 | ||||||||
Total revenues | $ 432,982 | $ 373,824 | $ 384,620 | $ 358,387 | $ 420,386 | $ 373,172 | $ 366,647 | $ 355,826 | 1,549,813 | 1,516,031 | 1,596,848 |
Costs and expenses: | |||||||||||
Cost of goods sold | 195,033 | 166,886 | 173,627 | 166,589 | 200,497 | 175,591 | 172,306 | 171,950 | 702,135 | 720,344 | 823,082 |
Selling, general and administrative expense | 480,561 | 450,413 | 460,896 | ||||||||
Provision for bad debts | 198,082 | 216,875 | 242,294 | ||||||||
Charges and credits | 7,780 | 13,331 | 6,478 | ||||||||
Total costs and expenses | 1,388,558 | 1,400,963 | 1,532,750 | ||||||||
Operating income | 53,766 | 35,473 | 39,252 | 32,764 | 44,841 | 20,853 | 29,192 | 20,182 | 161,255 | 115,068 | 64,098 |
Interest expense | 62,704 | 80,160 | 98,615 | ||||||||
Loss on extinguishment of debt | 1,773 | 3,274 | 0 | ||||||||
Income (loss) before income taxes | 96,778 | 31,634 | (34,517) | ||||||||
Provision (benefit) for income taxes | 22,929 | 25,171 | (8,955) | ||||||||
Net income (loss) | $ 29,476 | $ 14,630 | $ 17,011 | $ 12,732 | $ 3,201 | $ 1,569 | $ 4,273 | $ (2,580) | $ 73,849 | $ 6,463 | $ (25,562) |
(Loss) earnings per share: | |||||||||||
Basic (in dollars per share) | $ 0.93 | $ 0.46 | $ 0.54 | $ 0.40 | $ 0.10 | $ 0.05 | $ 0.14 | $ (0.08) | $ 2.33 | $ 0.21 | $ (0.83) |
Diluted (in dollars per share) | $ 0.91 | $ 0.45 | $ 0.53 | $ 0.39 | $ 0.10 | $ 0.05 | $ 0.14 | $ (0.08) | $ 2.28 | $ 0.20 | $ (0.83) |
Weighted average common shares outstanding: | |||||||||||
Basic (in shares) | 31,668,370 | 31,192,439 | 30,776,479 | ||||||||
Diluted (in shares) | 32,374,375 | 31,777,823 | 30,776,479 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings |
Balance (in shares) at Jan. 31, 2016 | 30,630,389 | |||
Balance at Jan. 31, 2016 | $ 538,281 | $ 306 | $ 85,209 | $ 452,766 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of options and vesting of restricted stock, net of tax (in shares) | 230,752 | |||
Exercise of options and vesting of restricted stock, net of withholding tax | $ (695) | $ 3 | (698) | |
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 100,758 | 100,757 | ||
Issuance of common stock under Employee Stock Purchase Plan | $ 765 | $ 1 | 764 | |
Stock-based compensation | 5,001 | 5,001 | ||
Net income (loss) | (25,562) | (25,562) | ||
Balance (in shares) at Jan. 31, 2017 | 30,961,898 | |||
Balance at Jan. 31, 2017 | 517,790 | $ 310 | 90,276 | 427,204 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of options and vesting of restricted stock, net of tax (in shares) | 415,940 | |||
Exercise of options and vesting of restricted stock, net of withholding tax | $ 1,499 | $ 3 | 1,496 | |
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 57,937 | 57,937 | ||
Issuance of common stock under Employee Stock Purchase Plan | $ 636 | $ 1 | 635 | |
Stock-based compensation | 8,680 | 8,680 | ||
Net income (loss) | 6,463 | 6,463 | ||
Balance (in shares) at Jan. 31, 2018 | 31,435,775 | |||
Balance at Jan. 31, 2018 | 535,068 | $ 314 | 101,087 | 433,667 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of options and vesting of restricted stock, net of tax (in shares) | 317,465 | |||
Exercise of options and vesting of restricted stock, net of withholding tax | $ (2,954) | $ 3 | (2,957) | |
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 34,922 | 34,922 | ||
Issuance of common stock under Employee Stock Purchase Plan | $ 839 | $ 1 | 838 | |
Stock-based compensation | 12,217 | 12,217 | ||
Net income (loss) | 73,849 | 73,849 | ||
Balance (in shares) at Jan. 31, 2019 | 31,788,162 | |||
Balance at Jan. 31, 2019 | $ 619,975 | $ 318 | $ 111,185 | $ 508,472 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 73,849 | $ 6,463 | $ (25,562) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation | 31,584 | 30,806 | 28,846 |
Impairment from disposal | 0 | 0 | 1,986 |
Amortization of debt issuance costs | 10,640 | 16,712 | 24,044 |
Provision for bad debts and uncollectible interest | 250,076 | 261,662 | 281,872 |
Stock-based compensation expense | 12,217 | 8,680 | 5,001 |
Charges, net of credits, for store and facility closures and relocations | 0 | 1,479 | 1,089 |
Deferred income taxes | (6,224) | 49,878 | (1,223) |
Loss (gain) from current and deferred sale/disposal of property and equipment | (809) | 5,529 | (490) |
Tenant improvement allowances received from landlords | 16,821 | 7,082 | 24,274 |
Change in operating assets and liabilities: | |||
Customer accounts receivable | (300,745) | (230,201) | (224,363) |
Other accounts receivables | 5,582 | (2,917) | 16,601 |
Inventories | (8,140) | (47,038) | 37,113 |
Other assets | 20,950 | (15,474) | 308 |
Accounts payable | (499) | (31,220) | 18,434 |
Accrued expenses | 11,158 | 25,100 | (904) |
Income taxes | 49,685 | (30,590) | 7,961 |
Deferred rent, revenues and other credits | (14,344) | (5,429) | 10,184 |
Net cash provided by operating activities | 151,801 | 50,522 | 205,171 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (32,814) | (16,918) | (46,556) |
Proceeds from sales of property and equipment | 0 | 0 | 10,806 |
Net cash used in investing activities | (32,814) | (16,918) | (35,750) |
Cash flows from financing activities: | |||
Proceeds from issuance of asset-backed notes | 358,300 | 1,042,034 | 1,067,850 |
Payments on asset-backed notes | (739,875) | (1,000,027) | (1,032,842) |
Borrowings under revolving credit facility | 1,836,822 | 1,717,012 | 724,697 |
Payments on revolving credit facility | (1,647,322) | (1,817,512) | (876,404) |
Borrowings from warehouse facility | 173,286 | 79,940 | 0 |
Payments on warehouse facility | (119,650) | (79,940) | 0 |
Payment of debt issuance costs and amendment fees | (7,418) | (13,874) | (9,716) |
Proceeds from stock issued under employee benefit plans | 1,237 | 3,318 | 1,268 |
Tax payments associated with equity-based compensation transactions | (3,342) | (1,182) | (40) |
Payment from extinguishment of debt | (1,178) | (836) | 0 |
Other | (1,068) | (643) | (800) |
Net cash used in financing activities | (150,208) | (71,710) | (125,987) |
Net change in cash, cash equivalents and restricted cash | (31,221) | (38,106) | 43,434 |
Cash, cash equivalents and restricted cash, beginning of period | 96,158 | 134,264 | 90,830 |
Cash, cash equivalents and restricted cash, end of period | 64,937 | 96,158 | 134,264 |
Non-cash investing and financing activities: | |||
Capital lease asset additions and related obligations | 1,193 | 3,196 | 704 |
Property and equipment purchases not yet paid | 5,557 | 2,070 | 857 |
Supplemental cash flow data: | |||
Cash interest paid | 50,568 | 63,713 | 71,239 |
Cash income taxes paid (refunded), net | $ (20,447) | $ 3,083 | $ (15,750) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Business. Conn’s, Inc., a Delaware corporation, is a holding company with no independent assets or operations other than its investments in its subsidiaries. References to “we,” “our,” “us,” “the Company,” “Conn’s” or “CONN” refer to Conn’s, Inc. and, as apparent from the context, its subsidiaries. Conn’s is a leading specialty retailer that offers a broad selection of quality, branded durable consumer goods and related services in addition to proprietary credit solutions 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 credit alternatives. We operate two reportable segments: retail and credit. Our retail stores bear the “Conn’s HomePlus” name with all of our stores providing the same products and services to a common customer group. Our 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 to our retail customers. The retail segment is not involved in credit approval decisions or collection efforts. Our management evaluates performance and allocates resources based on the operating results of the retail and credit segments. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and prevailing industry practices. 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. Principles of Consolidation. The consolidated financial statements include the accounts of Conn’s, Inc. and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. Variable Interest Entities. Variable Interest Entities (“VIEs”) are consolidated if the Company is the primary beneficiary. The primary beneficiary of a VIE is the party that has (i) the power to direct the activities that most significantly impact the performance of the VIE and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We securitize customer accounts receivables by transferring the receivables to various bankruptcy-remote VIEs. We retain the servicing of the securitized portfolio and have a variable interest in each corresponding VIE by holding the residual equity. We have determined that we are the primary beneficiary of each respective 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 potentially could be significant. As a result, we consolidate the respective VIEs within our consolidated financial statements. Refer to Note 6, Debt and Capital Lease Obligations , and Note 13, Variable Interest Entities , for additional information. Use of Estimates. The preparation of financial statements in accordance with GAAP requires management to make informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ, even significantly, from these estimates. Management evaluates its estimates and related assumptions regularly, including those related to the allowance for doubtful accounts and allowances for no-interest option credit programs, which are particularly sensitive given the size of our customer portfolio balance. Cash and Cash Equivalents. As of January 31, 2019 and 2018 , cash and cash equivalents included cash, credit card deposits in transit, and highly liquid debt instruments purchased with a maturity date of three months or less. Credit card deposits in transit included in cash and cash equivalents were $2.5 million and $2.0 million as of January 31, 2019 and 2018 , respectively. Restricted Cash. The restricted cash balance as of January 31, 2019 and 2018 includes $45.3 million and $58.1 million , respectively, of cash we collected as servicer on the securitized receivables that was subsequently remitted to the VIEs and $12.2 million and $27.2 million , respectively, of cash held by the VIEs as additional collateral for the asset-backed notes. Customer Accounts Receivable. Customer accounts receivable reported in the Consolidated Balance Sheet includes total receivables managed, including both those transferred to the VIEs and those not transferred to the VIEs. Customer accounts receivable are recognized at the time the customer takes possession of the product. 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 accounts receivable include the net of unamortized deferred fees charged to customers and origination costs. 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 along with interest accrued subsequent to the last payment. 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 VIEs. The loan modifications are intended to maximize net cash flow after expenses and avoid the need to exercise legal remedies available to us. We may extend or “re-age” a portion of our customer accounts, which involves modifying the payment terms to defer a portion of the cash payments due. Our re-aging of customer accounts does not change the interest rate or the total principal amount due from the customer and typically does not reduce the monthly contractual payments. To a much lesser extent, we may provide the customer the ability to refinance their account, which typically does not change the interest rate or the total principal amount due from the customer but does reduce the monthly contractual payments and extend the term. We consider accounts that have been re-aged in excess of three months or refinanced as Troubled Debt Restructurings (“TDR” or “Restructured Accounts”). Interest Income on Customer Accounts Receivable. Interest income, which includes interest income and amortization of deferred fees and origination costs, is recorded using the interest method and is reflected in finance charges and other revenues. Typically, interest income is recorded until the customer account is paid off or charged-off, and we provide an allowance for estimated uncollectible interest. Any contractual interest income received from customers in excess of the interest income calculated using the interest method is recorded as deferred revenue on our balance sheets. At January 31, 2019 and 2018 , there were $11.2 million and $12.5 million , respectively, of deferred interest included in deferred revenues and other credits and other long-term liabilities. The deferred interest will ultimately be brought into income as the accounts pay off or charge-off. We offer a 12 -month no -interest option program. 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 option program period (grace periods are provided), the account does not qualify for the no-interest provision and none of the interest earned is waived. Interest income is recognized based on estimated accrued interest earned to date on all no -interest option finance programs with an offsetting reserve for those customers expected to satisfy the requirements of the program based on our historical experience. 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 equals the present value of expected future cash flows. We place accounts in non-accrual status when legally required. Payments received on non-accrual loans will be applied to principal and reduce the balance of the loan. At January 31, 2019 and 2018 , the carrying value of customer accounts receivable in non-accrual status was $13.9 million and $16.8 million , respectively. At January 31, 2019 and 2018 , the carrying value of customer accounts receivable that were past due 90 days or more and still accruing interest totaled $106.5 million and $103.6 million , respectively. At January 31, 2019 and January 31, 2018 , the carrying value of customer accounts receivable in a bankruptcy status that were less than 60 days past due of $12.0 million and $14.4 million , respectively, were included within the customer receivables balance carried in non-accrual status. Allowance for Doubtful Accounts. The determination of the amount of the allowance for bad debts is, by nature, highly complex and subjective. Future events that are inherently uncertain could result in material changes to the level of the allowance for bad debts. General economic conditions, changes to state or federal regulations and a variety of other factors that affect the ability of borrowers to service their debts or our ability to collect will impact the future performance of the portfolio. We establish an allowance for doubtful accounts, including estimated uncollectible interest, to cover probable and estimable losses on our customer accounts receivable resulting from the failure of customers to make contractual payments. Our customer accounts receivable portfolio balance consists of a large number of relatively small, homogeneous accounts. None of our accounts are large enough to warrant individual evaluation for impairment. We record an allowance for doubtful accounts on our non-TDR customer accounts receivable that we expect to charge-off over the next 12 months based on historical gross charge-off rates over the last 24 months. We incorporate an adjustment to historical gross charge-off rates for a scaled factor of the year-over-year change in six month average first payment default rates and the year-over-year change in the balance of customer accounts receivable that are 60 days or more past due. In addition to adjusted historical gross charge-off rates, estimates of post-charge-off recoveries, including cash payments from customers, amounts realized from the repossession of the products financed, sales tax recoveries from taxing jurisdictions, and payments received under credit insurance and repair service agreement (“RSA”) policies are also considered. Qualitative adjustments are made to the allowance for bad debts when, based on management’s judgment, there are internal or external factors impacting probable incurred losses not taken into account by the quantitative calculations. These qualitative considerations are based on the following factors: changes in lending policies and procedures, changes in economic and business conditions, changes in the nature and volume of the portfolio, changes in lending management, changes in credit quality statistics, changes in concentrations of credit and other internal or external factor changes. We utilize an economic qualitative adjustment based on changes in unemployment rates if current unemployment rates in our markets are worse than they were on average over the last 24 months. We also qualitatively limit the impact of changes in first payment default rates and changes in delinquency when those changes result in a decrease to the allowance for bad debts based on a measure of the dispersion of historical charge-off rates. At January 31, 2019, we utilized a qualitative factor related to changes in the nature of the portfolio. 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 based primarily on the performance of TDR loans over the last 24 months. The cash flows are discounted based on the weighted-average effective interest rate of the TDR accounts. The excess of the carrying amount over the discounted cash flow amount is recorded as an allowance for loss on those accounts . Inventories. Inventories consist of merchandise purchased for resale and service parts and are recorded at the lower of cost or net realizable value. The carrying value of the inventory is reduced to its net realizable value for any product lines with excess of carrying amount, typically weighted-average cost, over the amount we expect to realize from the ultimate sale or other disposition of the inventory, with a corresponding charge to cost of sales. The write-down of inventory to net realizable value is estimated based on assumptions regarding inventory aging and historical product sales. Vendor Allowances. We receive funds from vendors for price protection, product rebates (earned upon purchase or sale of product), marketing, and promotion programs, collectively referred to as vendor allowances, which are recorded on an accrual basis. We estimate the vendor allowances to accrue based on the progress of satisfying the terms of the programs based on actual and projected sales or purchase of qualifying products. If the programs are related to product purchases, the vendor allowances are recorded as a reduction of product cost in inventory still on hand with any remaining amounts recorded as a reduction of cost of goods sold. During the years ended January 31, 2019 , 2018 and 2017 , we recorded $143.3 million , $153.0 million and $162.5 million , respectively, as reductions in cost of goods sold from vendor allowances. Property and Equipment. Property and equipment, including any major additions and improvements to property and equipment, are recorded at cost. Normal repairs and maintenance that do not materially extend the life of property and equipment are expensed as incurred. Depreciation, which includes amortization of capitalized leases, is computed using the straight-line method over the estimated useful lives of the assets, or in the case of leasehold improvements, over the shorter of the estimated useful lives or the remaining terms of the leases. Internal-Use Software Costs. Costs related to software developed or obtained for internal use and cloud-based computing arrangements are expensed as incurred until the application development stage has been reached. Once the application development stage has been reached, certain qualifying costs are capitalized until the software is ready for its intended use. For the year ended January 31, 2018, we incurred a $5.9 million loss from the write-off of previously capitalized costs for a software project that was abandoned during fiscal year 2018 related to the implementation of a new point of sale system that began in fiscal year 2013. Impairment of Long-Lived Assets. Long-lived assets are evaluated for impairment, primarily at the retail store level. We monitor store performance in order to assess if events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The most likely condition that would necessitate an assessment would be an adverse change in historical and estimated future results of a retail store’s performance. For property and equipment held and used, we recognize an impairment loss if the carrying amount is not recoverable through its undiscounted cash flows and measure the impairment loss based on the difference between the carrying amount and estimated fair value. For the years ended January 31, 2019 , 2018 and 2017 , no impairment charges were recorded. Debt Issuance Costs. Costs that are direct and incremental to debt issuance are deferred and amortized to interest expense using the effective interest method over the expected life of the debt. All other costs related to debt issuance are expensed as incurred. We present debt issuance costs associated with long-term debt as a reduction of the carrying amount of the debt. Unamortized costs related to the Revolving Credit Facility, as defined in Note 6, Debt and Capital Lease Obligations , are included in other assets on our Consolidated Balance Sheet and were $6.1 million and $5.2 million as of January 31, 2019 and 2018 , respectively. Expense Classifications. We record as cost of goods sold, the direct cost of products and parts sold and related costs for delivery, transportation and handling, inbound freight, receiving, inspection, and other costs associated with the operations of our distribution system, including occupancy related to our warehousing operations. The costs associated with our merchandising, advertising, sales commissions, and all store occupancy costs, are included in selling, general and administrative expense (“SG&A”). Advertising Costs. Advertising costs are expensed as incurred. For fiscal years 2019 , 2018 and 2017 , advertising expense was $80.5 million , $86.8 million and $92.9 million , respectively. Stock-based Compensation. Stock-based compensation expense is recorded, net of estimated forfeitures, for share-based compensation awards over the requisite service period using the straight-line method. An adjustment is made to compensation cost for any difference between the estimated forfeitures and the actual forfeitures related to the awards. For equity-classified share-based compensation awards, expense is recognized based on the grant-date fair value. For stock option grants, we use the Black-Scholes model to determine fair value. For grants of restricted stock units, the fair value of the grant is the market value of our stock at the date of issuance. For grants of performance-based restricted stock units, the fair value of the grant is the market value of our stock at the date of issuance adjusted for a market condition, a performance condition and a service condition. Self-insurance. We are self-insured for certain losses relating to group health, workers’ compensation, automobile, general and product liability claims. We have stop-loss coverage to limit the exposure arising from these claims. Self-insurance losses for claims filed and claims incurred, but not reported, are accrued based upon our estimates of the net aggregate liability for claims incurred using development factors based on historical experience. Income Taxes. We are subject to U.S. federal income tax as well as income tax in multiple state jurisdictions. We follow the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between GAAP and tax bases of assets and liabilities and for operating loss and tax credit carryforwards, as measured using the enacted tax rates expected to be in effect when the temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period in which the enactment occurs. A valuation allowance is provided when it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become realizable. To the extent penalties and interest are incurred, we record these charges as a component of our provision for income taxes. We review and update our tax positions as necessary to add any new uncertain tax positions taken, or to remove previously identified uncertain positions that have been adequately resolved. Additionally, uncertain positions may be remeasured as warranted by changes in facts or law. Accounting for uncertain tax positions requires estimating the amount, timing and likelihood of ultimate settlement. Leases. We lease most of our current store locations and certain of our facilities and operating equipment under operating leases. The fixed, non-cancelable terms of our real estate leases are generally five to 15 years and generally include renewal options that allow us to extend the term beyond the initial non-cancelable term. Most of the real estate leases require payment of real estate taxes, insurance and certain common area maintenance costs in addition to future minimum lease payments. Equipment leases generally provide for initial lease terms of three to five years and provide for a purchase right at the end of the lease term at the then fair market value of the equipment. As of January 31, 2019 and 2018 , deferred rent related to lease agreements with escalating rent payments and rent holiday was $27.7 million and $26.9 million , respectively. Certain of our operating leases contain predetermined fixed escalations of the minimum rental payments over the lease. For these leases, we recognize the related rental expense on a straight-line basis over the term of the lease, which commences for accounting purposes on the date we take possession of the leased store. Possession generally occurs prior to making any lease payments and approximately 90 to 120 days prior to the opening of a store. In the early years of a lease with rent escalations, the recorded rent expense will exceed the actual cash payments. The amount of rent expense that exceeds the cash payments is recorded as deferred rent in the Consolidated Balance Sheet. In the later years of a lease with rent escalations, the recorded rent expense will be less than the actual cash payments. The amount of cash payments that exceed the rent expense is then recorded as a reduction to deferred rent. Additionally, certain operating leases contain tenant allowance provisions, which obligate the landlord to remit cash to us as an incentive to enter into the lease agreement. We record the amount to be remitted by the landlord as a tenant allowance receivable as we earn it under the terms of the contract. At the same time, we record deferred rent in an equal amount in the Consolidated Balance Sheet. The tenant allowance receivable is reduced as cash is received from the landlord, while the deferred rent is amortized as a reduction to rent expense over the lease term. As of January 31, 2019 and 2018 , deferred rent related to tenant allowances, including both current and long-term portions, was $77.8 million and $69.7 million , respectively. Earnings per Share. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effects of any stock options, restricted stock unit awards (“RSUs”) and performance stock awards (“PSUs”), which are calculated using the treasury-stock method. The following table sets forth the shares outstanding for the earnings per share calculations: Year Ended January 31, 2019 2018 2017 Weighted-average common shares outstanding - Basic 31,668,370 31,192,439 30,776,479 Dilutive effect of stock options and restricted stock units 706,005 585,384 — Weighted-average common shares outstanding - Diluted 32,374,375 31,777,823 30,776,479 For the years ended January 31, 2019 , 2018 and 2017 , the weighted-average number of stock options and RSUs not included in the calculation due to their anti-dilutive effect, was 578,951 , 278,740 and 735,456 , respectively. Contingencies. An estimated loss from a contingency is recorded if it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Gain contingencies are not recorded until realization is assured beyond a reasonable doubt. Legal costs related to loss contingencies are expensed as incurred. 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 – Inputs represent unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (for example, quoted market prices for similar assets or liabilities in active markets or quoted market prices for identical assets or liabilities in markets not considered to be active, inputs other than quoted prices that are observable for the asset or liability, or market-corroborated inputs). • Level 3 – Inputs that are not observable from objective sources such as our internally developed assumptions used in pricing an asset or liability (for example, an estimate of future cash flows used in our internally developed present value of future cash flows model that underlies the fair-value measurement). In determining fair value, we use observable market data when available, or models that incorporate observable market data. When we are required to measure fair value and there is not a market-observable price for the asset or liability or for a similar asset or liability, we use the cost or income approach depending on the quality of information available to support management’s assumptions. The cost approach is based on management’s best estimate of the current asset replacement cost. The income approach is based on management’s best assumptions regarding expectations of future net cash flows and discounts the expected cash flows using a commensurate risk-adjusted discount rate. Such evaluations involve significant judgment, and the results are based on expected future events or conditions such as sales prices, economic and regulatory climates, and other factors, most of which are often outside of management’s control. However, we believe assumptions used reflect a market participant’s view of long-term prices, costs, and other factors and are consistent with assumptions used in our business plans and investment decisions. In arriving at fair-value estimates, we use relevant observable inputs available for the valuation technique employed. If a fair-value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement is characterized based on the lowest level of input that is significant to the fair-value measurement. 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 receivable, determined using a Level 3 discounted cash flow analysis, approximates their carrying value, net of the allowance for doubtful accounts. The fair value of our Revolving Credit Facility approximates carrying value based on the current borrowing rate for similar types of borrowing arrangements. At January 31, 2019 , the fair value of the Senior Notes outstanding, which was determined using Level 1 inputs, was $221.9 million as compared to the carrying value of $227.0 million , excluding the impact of the related discount. At January 31, 2019 , the fair value of the asset-backed notes approximates their carrying value and was determined using Level 2 inputs based on inactive trading activity. Recent Accounting Pronouncements Adopted. In May 2014, the FASB issued 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 such contracts, (3) determine transaction price, (4) allocate the transaction price to the performance obligations, and (5) recognize revenue as each performance obligation is satisfied. The FASB also issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ; ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing ; ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting ; and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , all of which were issued to improve and clarify the guidance in ASU 2014-09. Effective February 1, 2018, the Company adopted these ASUs using the modified retrospective method applied to those contracts that were not completed as of February 1, 2018, with no restatement of comparative periods. Results for reporting periods beginning after February 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting policies under ASC Topic 605. We recognized a net after-tax cumulative effect adjustment to retained earnings of $1.0 million as of February 1, 2018. The details of our current revenue recognition policy, as well as the change due to ASC Topic 606, are described below. Revenue Recognition. The Company has the following material revenue streams: the sale of products (e.g. appliances, electronics) including delivery; the sale of third party warranty and insurance programs, including retrospective income; service income; interest income generated from the financing of point of sale transactions; and volume rebate incentives received from a third party financer. Interest income related to our customer accounts receivable balance and loan origination costs (including sales commissions) meet the scope exception of ASC 606 and are therefore not impacted by the adoption of this standard. For our twelve month no-interest option program, as a practical expedient acceptable under ASC 606, we do not adjust for the time value of money. Sale of Products Including Delivery: The Company has a single performance obligation associated with these contracts: the delivery of the product to the customer, at which point control transfers. Revenue for the sale of products is recognized at the time of delivery, net of any adjustments for sales incentives such as discounts, coupons, rebates or other free products or services. Sales financed through third-party no-interest option programs typically require us to pay a fee to the third party on each completed sale, which is recorded as a reduction of net sales in the retail segment. Sale of Third Party Warranty and Insurance Programs, Including Retrospective Income: We sell RSA and credit insurance contracts on behalf of unrelated third-parties. The Company has a single performance obligation associated with these contracts: the delivery of the product to the customer, at which point control transfers. Commissions related to these contracts are recognized in revenue upon delivery of the product. We also may serve as the administrator of the RSAs sold and defer 5% of the revenue received from the sale of RSAs as compensation for this performance obligation as 5% represents the estimated stand-alone sales price to serve as the administrator. The deferred RSA administration fee is recorded in income ratably over the life of the RSA contract sold. Retrospective income on RSA contracts is recognized upon delivery of the product based on an estimate of claims and is adjusted throughout the life of the contracts as actual claims materialize. Retrospective income on insurance contracts is recognized when ea |
Customer Accounts Receivable
Customer Accounts Receivable | 12 Months Ended |
Jan. 31, 2019 | |
Receivables [Abstract] | |
Customer Account Receivable | Customer Accounts Receivable Customer accounts receivable consisted of the following: (in thousands) January 31, January 31, Customer accounts receivable portfolio balance $ 1,589,828 $ 1,527,862 Deferred fees and origination costs, net (16,579 ) (15,897 ) Allowance for no-interest option credit programs (19,257 ) (20,960 ) Allowance for uncollectible interest (15,555 ) (10,966 ) Carrying value of customer accounts receivable 1,538,437 1,480,039 Allowance for bad debts (199,324 ) (192,606 ) Carrying value of customer accounts receivable, net of allowance for bad debts 1,339,113 1,287,433 Short-term portion of customer accounts receivable, net $ (652,769 ) $ (636,825 ) Long-term customer accounts receivable, net $ 686,344 $ 650,608 Carrying Value (in thousands) January 31, January 31, Customer accounts receivable 60+ days past due (1) $ 146,188 $ 143,713 Re-aged customer accounts receivable (2)(3) 395,576 364,768 Restructured customer accounts receivable (4) 183,641 152,784 (1) As of January 31, 2019 and 2018 , the carrying value of customer accounts receivable past due one day or greater was $420.9 million and $390.0 million , respectively. These amounts include the 60+ days past due balances shown above. (2) The re-aged carrying value as of January 31, 2019 and 2018 includes $92.4 million and $76.9 million in carrying value that are both 60+ days past due and re-aged. (3) The re-aged carrying value as of January 31, 2019 and 2018 includes $26.5 million and $59.8 million in first time re-ages related to customers within FEMA-designated Hurricane Harvey disaster areas. (4) The restructured carrying value as of January 31, 2019 and 2018 includes $43.9 million and $37.1 million in carrying value that are both 60+ days past due and restructured. The following presents the activity in our allowance for doubtful accounts and uncollectible interest for customer accounts receivable: January 31, 2019 (in thousands) Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 148,856 $ 54,716 $ 203,572 Provision (1) 174,552 74,514 249,066 Principal charge-offs (2) (157,789 ) (55,024 ) (212,813 ) Interest charge-offs (32,432 ) (11,310 ) (43,742 ) Recoveries (2) 13,936 4,860 18,796 Allowance at end of period $ 147,123 $ 67,756 $ 214,879 Average total customer portfolio balance $ 1,355,011 $ 171,717 $ 1,526,728 January 31, 2018 (in thousands) Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 158,992 $ 51,183 $ 210,175 Provision (1) 189,786 71,047 260,833 Principal charge-offs (2) (177,682 ) (60,003 ) (237,685 ) Interest charge-offs (30,379 ) (10,259 ) (40,638 ) Recoveries (2) 8,139 2,748 10,887 Allowance at end of period $ 148,856 $ 54,716 $ 203,572 Average total customer portfolio balance $ 1,357,455 $ 143,245 $ 1,500,700 January 31, 2017 (in thousands) Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 149,227 $ 41,763 $ 190,990 Provision (1) 219,084 62,788 281,872 Principal charge-offs (2) (183,235 ) (46,710 ) (229,945 ) Interest charge-offs (30,686 ) (7,832 ) (38,518 ) Recoveries (2) 4,602 1,174 5,776 Allowance at end of period $ 158,992 $ 51,183 $ 210,175 Average total customer portfolio balance $ 1,423,445 $ 129,030 $ 1,552,475 (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 the principal amount collected during the period for previously charged-off balances. Net charge-offs are calculated as the net of principal charge-offs and recoveries. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following: Estimated January 31, (dollars in thousands) Useful Lives 2019 2018 Land — $ 4,130 $ 4,146 Buildings 30 years 1,748 1,748 Leasehold improvements 5 to 15 years 246,404 222,781 Equipment and fixtures 3 to 5 years 78,562 67,710 Capital leases 3 to 20 years 9,646 8,527 Construction in progress — 9,696 8,097 350,186 313,009 Less accumulated depreciation (201,203 ) (169,857 ) $ 148,983 $ 143,152 Depreciation expense was approximately $31.6 million , $30.8 million and $28.8 million for the years ended January 31, 2019 , 2018 and 2017 , respectively. Construction in progress is comprised primarily of the construction of leasehold improvements related to unopened retail stores and internal-use software under development. Capital lease assets primarily include retail locations. |
Charges and Credits
Charges and Credits | 12 Months Ended |
Jan. 31, 2019 | |
Charges and Credits [Abstract] | |
Charges and Credits | Charges and Credits Charges and credits consisted of the following: Year Ended January 31, (in thousands) 2019 2018 2017 Store and facility closure and relocation costs $ — $ 2,381 $ 1,089 Legal and professional fees and related reserves associated with the exploration of strategic alternatives, securities-related litigation, a legal judgment and other legal matters 5,100 1,177 101 Indirect tax audit reserve 1,943 2,595 1,434 Impairment from disposal — — 1,986 Employee severance and executive management transition costs 737 1,317 1,868 Write-off of capitalized software costs — 5,861 — $ 7,780 $ 13,331 $ 6,478 During the year ended January 31, 2019 , we recorded a contingency reserve related to a regulatory matter, a charge related to an increase in our indirect tax audit reserve, severance costs related to a change in the executive management team and costs related to the TF LoanCo (“TFL”) judgment. Refer to Note 12, Contingencies , for additional information about the TFL judgment. During the year ended January 31, 2018 , we incurred exit costs associated with reducing the square footage of a distribution center and consolidating our corporate headquarters, severance costs related to a change in the executive management team, a charge related to an increase in our indirect tax audit reserve, a loss from the write-off of previously capitalized costs for a software project that was abandoned during fiscal year 2018 related to the implementation of a new point of sale system that began in fiscal year 2013, and contingency reserves related to legal matters. During the year ended January 31, 2017 , we incurred severance costs related to a change in the executive management team and impairments from disposals, which included the write-off of leasehold improvements for one store we relocated prior to the end of the useful life of the leasehold improvements, costs for a terminated store project prior to starting construction, legal and professional fees related to the exploration of strategic alternatives and securities-related litigation, costs associated with store and facility closures and relocations, charges related to increases in our indirect tax audit reserve, and transition costs due to changes in the executive management team. |
Finance Charges and Other Reven
Finance Charges and Other Revenues | 12 Months Ended |
Jan. 31, 2019 | |
Supplemental Disclosure of Finance Charges and Other Revenue [Abstract] | |
Finance Charges and Other Revenue | Finance Charges and Other Revenues Finance charges and other revenues consisted of the following: Year Ended January 31, (in thousands) 2019 2018 2017 Interest income and fees $ 325,136 $ 289,005 $ 238,386 Insurance income 29,556 34,718 42,422 Other revenues 447 341 1,569 Total finance charges and other revenues $ 355,139 $ 324,064 $ 282,377 Interest income and fees and insurance income are derived from the credit segment operations, whereas other revenues are derived from the retail segment operations. Insurance income is comprised of sales commissions from third-party insurance companies that are recognized when coverage is sold and retrospective income paid by the insurance carrier if insurance claims are less than earned premiums. For the years ended January 31, 2019 , 2018 and 2017 , interest income and fees reflected provisions for uncollectible interest of $52.0 million , $44.8 million and $40.6 million , respectively. The amount included in interest income and fees related to TDR accounts for the years ended January 31, 2019 , 2018 and 2017 is $27.2 million , $19.3 million and $17.3 million , respectively. |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 12 Months Ended |
Jan. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Capital Lease Obligations | Debt and Capital Lease Obligations Debt and capital lease obligations consisted of the following: January 31, (in thousands) 2019 2018 Revolving Credit Facility $ 266,500 $ 77,000 Senior Notes 227,000 227,000 2016-B VIE Asset-backed Class B Notes — 73,589 2017-A VIE Asset-backed Class A Notes — 59,794 2017-A VIE Asset-backed Class B Notes — 106,270 2017-A VIE Asset-backed Class C Notes — 50,340 2017-B VIE Asset-backed Class A Notes — 292,663 2017-B VIE Asset-backed Class B Notes 98,297 132,180 2017-B VIE Asset-backed Class C Notes 78,640 78,640 2018-A VIE Asset-backed Class A Notes 105,971 — 2018-A VIE Asset-backed Class B Notes 63,908 — 2018-A VIE Asset-backed Class C Notes 63,908 — Warehouse Notes 53,635 — Capital lease obligations 5,075 4,949 Total debt and capital lease obligations 962,934 1,102,425 Less: Discount on debt (1,966 ) (2,527 ) Deferred debt issuance costs (5,637 ) (8,886 ) Current maturities of long-term debt and capital lease obligations (54,109 ) (907 ) Long-term debt and capital lease obligations $ 901,222 $ 1,090,105 Future maturities of debt, excluding capital lease obligations, as of January 31, 2019 are as follows: (in thousands) Year Ended January 31, 2020 $ 53,635 2021 — 2022 98,297 2023 805,927 2024 — Total $ 957,859 Senior Notes. On July 1, 2014, we issued $250.0 million of unsecured Senior Notes due July 2022 bearing interest at 7.25% , (the “Senior Notes”) pursuant to an indenture dated July 1, 2014 (as amended, 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 the discount and issuance costs 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 (“restricted payments”); (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. Specifically, limitations on restricted payments are only effective if one or more of the following occurred: (1) a default were to exist under the Indenture, (2) we could not satisfy a debt incurrence test, and (3) the aggregate amount of restricted payments, excluding certain restricted payments permitted under the Indenture, exceeds the sum of (i) 50% of Consolidated Net Income (as defined in the Indenture) from November 1, 2015 to the end of the most recent fiscal quarter, (ii) 100% of net cash proceeds and the fair market value of certain capital stock and other property received in or exchanged for the sale or issuance of Capital Stock (as defined in the Indenture), (iii) amount by which certain indebtedness is reduced upon conversion or exchange for Capital Stock and (iv) certain reductions in Restricted Investments (as defined in the Indenture) (the sum of clauses (i) through (iv) as of January 31, 2019, the “Consolidated Net Income Threshold Amount”). These limitations, however, are subject to certain permitted exceptions, including (1) an exception that permits restricted payments regardless of dollar amount so long as, after giving pro forma effect to such dividends and other restricted payments, we would have had a leverage ratio, as defined in the Indenture, of less than or equal to 2.50 to 1.0 and (2) a general exception that permits the payment of up to $375.0 million in restricted payments not otherwise permitted under the Indenture (the “Permitted Distribution Amount”). As a result of the sum of the Consolidated Net Income Threshold Amount and Permitted Distribution Amount, as of January 31, 2019 , $228.4 million would have been free from the distribution restriction. 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 fail to make payment of other indebtedness prior to the expiration of any applicable grace period or upon acceleration of indebtedness prior to its stated maturity date 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. Asset-backed Notes. From time to time, we securitize customer accounts receivables by transferring the receivables to various bankruptcy-remote VIEs. In turn, the VIEs issue asset-backed notes secured by the transferred customer accounts receivables and restricted cash held by the VIEs. Under the terms of the securitization transactions, all cash collections and other cash proceeds of the customer receivables go first to the servicer and the holders of issued notes, and then to us as the holder of non-issued notes, if any, and residual equity. We retain the servicing of the securitized portfolios and receive a monthly fee of 4.75% (annualized) based on the outstanding balance of the securitized receivables. In addition, we, rather than the VIEs, retain all credit insurance income together with certain recoveries related to credit insurance and repair service agreements on charge-offs of the securitized receivables, which are reflected as a reduction to net charge-offs on a consolidated basis. The asset-backed 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 respective asset-backed notes, the payment of the outstanding amounts may 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 asset-backed notes, or if the receivables are liquidated, all liquidation proceeds could be directed solely to repayment of the asset-backed notes as governed by the respective terms of the asset-backed notes. The holders of the asset-backed notes have no recourse to assets outside of the VIEs. Events of default include, but are not limited to, failure to make required payments on the asset-backed notes or specified bankruptcy-related events. The asset-backed notes outstanding as of January 31, 2019 consisted of the following: Asset-Backed Notes Original Principal Amount Original Net Proceeds (1) Current Principal Amount Issuance Date Maturity Date Contractual Interest Rate Effective Interest Rate (2) 2017-B Class B Notes $ 132,180 $ 131,281 $ 98,297 12/20/2017 4/15/2021 4.52% 5.24% 2017-B Class C Notes 78,640 77,843 78,640 12/20/2017 11/15/2022 5.95% 6.34% 2018-A Class A Notes 219,200 217,832 105,971 8/15/2018 1/17/2023 3.25% 4.57% 2018-A Class B Notes 69,550 69,020 63,908 8/15/2018 1/17/2023 4.65% 5.43% 2018-A Class C Notes 69,550 68,850 63,908 8/15/2018 1/17/2023 6.02% 6.80% Warehouse Notes 121,060 118,972 53,635 7/16/2018 1/15/2020 Index + 2.50% 6.41% Total $ 690,180 $ 683,798 $ 464,359 (1) After giving effect to debt issuance costs and restricted cash held by the VIEs. (2) For the year ended January 31, 2019 , and inclusive of the impact of changes in timing of actual and expected cash flows. On February 15, 2018, affiliates of the Company closed on a $52.2 million financing under a receivables warehouse financing transaction entered into on February 6, 2018 (the “Warehouse Notes”). The net proceeds of the Warehouse Notes were used to prepay in full the Series 2016-B Class B Notes (the “2016-B Redeemed Notes”) that were still outstanding as of February 15, 2018. On February 15, 2018, the Company completed the redemption of the 2016-B Redeemed Notes at an aggregate redemption price of $73.6 million (which was equal to the entire outstanding principal of, plus accrued interest and the call premiums on, the 2016-B Redeemed Notes). The net funds used to call the notes was $50.3 million, which is equal to the redemption price less adjustments of $23.3 million for funds held in reserve and collection accounts in accordance with the terms of the applicable indenture governing the 2016-B Redeemed Notes. The difference between the net proceeds of the Warehouse Notes and the carrying value of the 2016-B Redeemed Notes at redemption was used to fund fees, expenses and a reserve account related to the Warehouse facility. In connection with the early redemption of the 2016-B Redeemed Notes, we wrote-off $0.4 million as a loss on extinguishment of debt. On July 16, 2018, affiliates of the Company closed on $121.1 million of additional financing under a receivables warehouse financing transaction entered into on July 9, 2018 (the “Additional Funding”). The net proceeds of the Additional Funding were used to prepay in full the Series 2017-A Class B and C Notes (the “2017-A Redeemed Notes”) that were still outstanding as of July 16, 2018. On July 16, 2018, the Company completed the redemption of the 2017-A Redeemed Notes at an aggregate redemption price of $127.2 million (which was equal to the entire outstanding principal of, plus accrued interest and the call premiums on the 2017-A Redeemed Notes). The net funds used to call the notes was $119.0 million, which is equal to the redemption price less adjustments of $8.2 million for funds held in reserve and collection accounts in accordance with the terms of the applicable indenture governing the 2017-A Redeemed Notes. The difference between the net proceeds of the Additional Funding and the carrying value of the 2017-A Redeemed Notes at redemption was used to fund fees, expenses and a reserve account related to the warehouse facility. In connection with the early redemption of the 2017-A Redeemed Notes, we wrote-off $1.2 million as a loss on extinguishment of debt. On August 15, 2018, an affiliate of the Company (the “Issuer”) completed the issuance and sale of asset-backed notes at a face amount of $358.3 million secured by the transferred customer accounts receivables and restricted cash held by a VIE, which resulted in net proceeds to us of $355.7 million, net of transaction costs and restricted cash held by the VIE. Net proceeds from the offering were used to repay indebtedness under the Revolving Credit Facility and for other general corporate purposes. The asset-backed notes mature on January 17, 2023 and consist of $219.2 million of the Issuer’s 3.25% Asset Backed Fixed Rate Notes, Series 2018-A, Class A, $69.6 million of the Issuer’s 4.65% Asset Backed Fixed Rate Notes, Series 2018-A, Class B, and $69.6 million of the Issuer’s 6.02% Asset Backed Fixed Rate Notes, Series 2018-A, Class C. Revolving Credit Facility. On May 23, 2018, Conn’s, Inc. and certain of its subsidiaries (the “Borrowers”) entered into a Fourth Amendment to the Fourth Amended and Restated Loan and Security Agreement (the “Fourth Amendment”), dated as of October 30, 2015, with certain lenders, which provides for a $650.0 million asset-based revolving credit facility (the “Revolving Credit Facility”) under which credit availability is subject to a borrowing base. The Fourth Amendment, among other things, (a) extends the maturity date of the credit facility to May 23, 2022; (b) provides for a reduction in the aggregate commitments from $750 million to $650 million; (c) amends the method by which the applicable margin is calculated to be based on the total leverage ratio (ratio of total liabilities less the sum of qualified cash and ABS qualified cash to tangible net worth), with the applicable margin ranging from 2.50% to 3.25% for LIBOR loans and from 1.50% to 2.25% for base rate loans; (d) eliminates a $10 million availability block in calculating the borrowing base; (e) increases the maximum accounts receivable advance rate from 75% to 80%; (f) decreases the maximum unused line fee by 25 basis points, from 75 basis points to 50 basis points; (g) eliminates the cash recovery covenant; (h) modifies the maximum inventory component of the borrowing base from $175 million to 33.33% of revolving loan commitments in effect; (i) modifies the interest coverage covenant such that the minimum interest coverage on a trailing two quarter basis is 1.5x and the minimum interest coverage during any single quarter is 1.0x; (j) increases the maximum capital expenditures from $75 million to $100 million during any period of four consecutive fiscal quarters; and (k) modifies the ability of the Company to effect future securitizations of its customer receivables portfolio, including adding the ability of the Company to enter into revolving ABS transactions. Subsequent to the adoption of the Fourth Amendment, loans under the Revolving Credit Facility bear interest, at our option, at a rate equal to LIBOR plus the applicable margin ranging from 2.50% to 3.25% per annum (depending on a pricing grid determined by our total leverage ratio) or the alternate base rate plus a margin ranging from 1.50% to 2.25% per annum (depending on a pricing grid determined by our total leverage ratio). The alternate base rate is the greatest 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 is available for future borrowings or letters of credit at a rate ranging from 0.25% to 0.50% per annum, depending on the average outstanding balance and letters of credit of the Revolving Credit Facility in the immediately preceding quarter. The weighted-average interest rate on borrowings outstanding and including unused line fees under the Revolving Credit Facility was 6.9% for the year ended January 31, 2019 . The 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 VIEs. As of January 31, 2019 , we had immediately available borrowing capacity of $381.0 million under our Revolving Credit Facility, net of standby letters of credit issued of $2.5 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 restricts our ability to make dividends and distributions unless no event of default exists and a liquidity test is satisfied. Subsidiaries of the Company may pay dividends and make distributions to the Company and other obligors under the Revolving Credit Facility without restriction. As of January 31, 2019 , we were restricted from making distributions, including repayments of the Senior Notes or other distributions, in excess of $223.0 million as a result of the Revolving Credit Facility distribution restrictions. 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, as amended, at January 31, 2019 . A summary of the significant financial covenants that govern our Revolving Credit Facility, as amended, compared to our actual compliance status at January 31, 2019 is presented below: Actual Required Interest Coverage Ratio for the quarter must equal or exceed minimum 5.08:1.00 1.00:1.00 Interest Coverage Ratio for the trailing two quarters must equal or exceed minimum 4.59:1.00 1.50:1.00 Leverage Ratio must not exceed maximum 1.94:1.00 4.00:1.00 ABS Excluded Leverage Ratio must not exceed maximum 1.28:1.00 2.00:1.00 Capital Expenditures, net, must not exceed maximum $16.0 million $100.0 million All capitalized terms in the above table are defined by the Revolving Credit Facility and may or may not agree directly to the financial statement captions in this document. The covenants are calculated quarterly, except for capital expenditures, which is calculated for a period of four consecutive fiscal quarters, as of the end of each fiscal quarter. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Deferred tax assets and liabilities consisted of the following: January 31, (in thousands) 2019 2018 Deferred tax assets: Allowance for doubtful accounts $ 22,637 $ 19,325 Deferred rent 6,200 5,839 Deferred gains on sale-leaseback transactions 1,447 1,598 Deferred revenue 908 1,240 Indirect tax reserve 3,025 — Inventories 1,711 2,126 Stock-based compensation 1,825 1,439 State net operating loss carryforwards 1,127 1,207 Other 3,093 3,534 Total deferred tax assets 41,973 36,308 Deferred tax liabilities: Vendor prepayments (1,066 ) (4,723 ) Sales tax receivable (4,155 ) (3,649 ) Property and equipment (8,694 ) (6,275 ) Other (523 ) (96 ) Total deferred tax liabilities (14,438 ) (14,743 ) Net deferred tax asset $ 27,535 $ 21,565 Our state net operating loss carryforwards begin to expire starting with fiscal year 2028. Realization of our deferred tax asset ultimately depends on the existence of sufficient taxable income, which may include future taxable income and tax planning strategies. Based on the weight of available evidence at January 31, 2019 , we believe that it is more likely than not that we will generate sufficient taxable income to utilize our entire deferred tax asset prior to its expiration. Provision for income taxes consisted of the following: Year Ended January 31, (in thousands) 2019 2018 2017 Current: Federal $ 29,919 $ (25,891 ) $ (11,251 ) State 2,308 1,184 3,519 Total current 32,227 (24,707 ) (7,732 ) Deferred: Federal (9,419 ) 49,536 (1,435 ) State 121 342 212 Total deferred (9,298 ) 49,878 (1,223 ) Provision (benefit) for income taxes $ 22,929 $ 25,171 $ (8,955 ) A reconciliation of the provision (benefit) for income taxes at the U.S. federal statutory tax rate and the total tax provision (benefit) for each of the periods presented in the statements of operations follows: Year Ended January 31, (in thousands) 2019 2018 2017 Income tax provision (benefit) at U.S. federal statutory rate (1) $ 20,323 $ 10,696 $ (12,081 ) State income taxes, net of federal benefit 2,068 1,910 2,363 Tax Act and other deferred tax adjustments — 13,387 771 Provision to return adjustments — (1,142 ) — Employee benefits 1,096 — — Other (558 ) 320 (8 ) Provision (benefit) for income taxes $ 22,929 $ 25,171 $ (8,955 ) (1) As a result of the Tax Act, the Company recorded a $0.3 million current income tax benefit in the fourth quarter of fiscal year 2018 as a result of using a 33.81% blended statutory rate for fiscal year 2018 instead of the prior statutory rate of 35%. Federal tax returns for fiscal years subsequent to January 31, 2015, remain subject to examination. Generally, state tax returns for fiscal years subsequent to January 31, 2015 remain subject to examination. On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act (the “Tax Act”), the Tax Act was signed into law. Upon enactment, the Company recognized a provisional and one-time deferred tax expense of $13.4 million due to the remeasurement of its deferred tax assets and liabilities based on the reduction of the statutory rate to 21%. During the current fiscal year, the Company completed its analysis of the impact of the Tax Act and determined that no material adjustment was needed to the provisional amount. Changes in the balance of unrecognized tax benefits, including interest and penalties on uncertain tax positions, were as follows: Year Ended January 31, (in thousands) 2019 2018 2017 Balance at February 1 $ — $ — $ — Increases related to prior year tax positions (12,084 ) — — Decreases related to prior year tax positions 459 — — Balance at January 31 $ (11,625 ) $ — $ — As of January 31, 2019 , there are $3.5 million of unrecognized tax benefits that if recognized would favorably affect the Company’s annual effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. During the year ended January 31, 2019 , the Company recognized interest and penalties of approximately $0.1 million , which is the same amount it has accrued as of January 31, 2019 . |
Leases
Leases | 12 Months Ended |
Jan. 31, 2019 | |
Leases, Operating [Abstract] | |
Leases | Leases For the years ended January 31, 2019 , 2018 and 2017 , total rent expense was $52.7 million , $51.4 million and $50.9 million , respectively. As of January 31, 2019 , our future minimum lease payments are as follows: (in thousands) Operating Leases Capital Leases Year ending January 31, 2020 $ 68,678 $ 1,040 2021 71,462 724 2022 69,802 723 2023 67,935 470 2024 62,721 639 Thereafter 172,827 3,703 Total $ 513,425 7,299 Less - interest on capital lease obligations (2,224 ) Total principal payable on capital lease obligations 5,075 Less - current maturities (744 ) Long-term capital lease obligations $ 4,331 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jan. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation On May 25, 2016, our stockholders approved the Conn’s, Inc. 2016 Omnibus Incentive Plan (“2016 Plan”), which replaced our 2011 Omnibus Incentive Plan (“2011 Plan”) and our Amended and Restated 2003 Incentive Stock Option Plan (“2003 Plan”). The 2016 Plan, as originally adopted, provided for 1,200,000 shares of Company common stock available for issuance. Shares subject to an award under the 2016 Plan, the 2011 Plan or the 2003 Plan that lapse, expire, are forfeited or terminated, or are settled in cash will again become available for future grant under the 2016 Plan. Shares will not become available for future grant under the 2016 Plan if delivered or withheld to pay withholding taxes or the exercise price of an option or repurchased on the open market with the proceeds of an option exercise. On May 31, 2017, our shareholders approved an amendment to the 2016 Plan authorizing an additional 1,400,000 shares of Company common stock for awards. Our 2016 Plan is an equity-based compensation plan that allows for the grant of a variety of awards, including stock options, restricted stock awards, RSUs, PSUs, stock appreciation rights and performance and cash awards. Awards are generally granted once per year, with the amount and type of awards determined by the Compensation Committee of our Board of Directors (the “Committee”). Stock options and RSUs are subject to early termination provisions but generally vest over periods of one to five years from the date of grant. Stock options under the various plans are issued with exercise prices equal to the market value on the date of the grant and, typically, expire ten years after the date of grant. In the event of a change in control of the Company, as defined in the 2016 Plan, the Board of Directors of the Company (“Board of Directors”) may cause some or all outstanding awards to fully or partially vest, either upon the change in control or upon a subsequent termination of employment or service, and may provide that any applicable performance criteria be deemed satisfied at the target or any other level. The Board of Directors may also cause outstanding awards to terminate in exchange for a cash or stock payment or to be substituted or assumed by the surviving corporation. We also continue to maintain the 2003 Non-Employee Director Stock Option Plan and 2011 Non-Employee Director Restricted Stock Plan. As of January 31, 2019 , shares authorized for future issuance were: 670,125 under the 2016 Plan; 120,000 under the 2003 Non-Employee Director Stock Option Plan; and 82,388 under the 2011 Non-Employee Director Restricted Stock Plan. Stock-Based Compensation Expense. Total stock-based compensation expense, recognized primarily in SG&A, from stock-based compensation consisted of the following: Year Ended January 31, (in thousands) 2019 2018 2017 Stock options $ 3,414 $ 236 $ 173 RSUs 8,540 7,622 4,282 Employee stock purchase plan 263 220 329 Accelerated RSU expense charged to severance — 602 217 $ 12,217 $ 8,680 $ 5,001 During the years ended January 31, 2019 , 2018 , and 2017 , we recognized tax benefits related to stock-based compensation of $1.7 million , $1.7 million and $1.6 million , respectively. As of January 31, 2019 , the total unrecognized compensation cost related to all unvested stock-based compensation awards was $23.9 million and is expected to be recognized over a weighted-average period of 2.4 years. The total fair value of RSUs and stock options vested during fiscal years 2019 , 2018 and 2017 was $12.6 million , $6.0 million and $1.9 million , respectively, based on the market price at the vesting date. Stock Options. During fiscal year 2019, 620,166 stock options were awarded with an exercise price of $32.35 per share. The stock options awarded vest in equal installments three and four years from the date of grant and expire ten years from the date of grant. The fair values of the stock options at grant date ranged from $20.00 to $21.67 per share. The fair values of the stock option awards were determined using the Black-Scholes option pricing model. The weighted-average assumptions for the option awards granted in fiscal year 2019 included expected volatility of 68% , an expected term of six to seven years and risk-free interest rate of 2.69% . No dividend yield was included in the weighted-average assumptions for the option awards granted in fiscal year 2019. No stock options were awarded during fiscal year 2018 . During fiscal year 2017 , 100,000 stock options were awarded with a range of exercise prices between $12.65 and $25.30 per share. The stock options awarded vest in equal installments over a four -year period and expire 10 years from the date of grant. The fair values of the stock options at grant date ranged from $8.97 to $10.03 . The fair values of the stock option awards were determined using the Black-Scholes option pricing model. The weighted-average assumptions for the option awards granted in fiscal year 2017 included expected volatility of 75.1% , an expected term of ten years and risk-free interest rate of 2.46% . No dividend yield was included in the weighted-average assumptions for the option awards granted in fiscal year 2017. The following table summarizes the activity for outstanding stock options: Shares Under Option Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Outstanding, January 31, 2018 189,485 $ 14.39 Granted 620,166 $ 32.35 Exercised (32,620 ) $ 12.23 Forfeited and expired (4,300 ) $ 5.46 Outstanding, January 31, 2019 772,731 $ 28.94 8.4 years Vested and expected to vest, January 31, 2019 772,731 $ 28.94 8.4 years Exercisable, January 31, 2019 102,564 $ 13.21 4.4 years During the years ended January 31, 2019 , 2018 and 2017 , the total intrinsic value of stock options exercised was $0.4 million , $2.3 million and $1.0 million , respectively. The aggregate intrinsic value of stock options outstanding, vested and expected to vest and exercisable at January 31, 2019 was approximately $1.0 million . The total fair value of common stock options vested during fiscal years 2019 , 2018 and 2017 was $0.5 million , $0.9 million and $0.3 million , respectively, based on the market price at the vesting date. Restricted Stock Units. The restricted stock program consists of a combination of performance-based RSUs and time-based RSUs. The number of performance-based RSUs issued under the program is dependent upon a measurement of earnings before interest, taxes, depreciation and amortization (“EBITDA”) target for the period identified in the grant, which is three years. In the event EBITDA exceeds the respective predefined target, shares for up to a maximum of 150% of the target award may be granted. In the event the EBITDA falls below the respective predefined target, a reduced number of shares may be granted. If the EBITDA falls below the respective threshold performance level, no shares will be granted. The performance-based RSUs vest on predetermined schedules, which occur over three years. The time-based RSUs vest on a straight-line basis over their term, which is generally three to five years . The following table summarizes the activity for RSUs: Time-Based RSUs Performance-Based RSUs Number of Units Weighted-Average Grant Date Fair Value Number of Units Weighted-Average Grant Date Fair Value Total Number of Units Balance, January 31, 2018 1,222,009 $ 15.52 615,174 $ 11.78 1,837,183 Granted 272,973 $ 27.90 — $ — 272,973 Vested and converted to common stock (390,478 ) $ 15.62 — $ — (390,478 ) Forfeited (220,229 ) $ 17.83 (148,174 ) $ 12.26 (368,403 ) Balance, January 31, 2019 884,275 $ 18.73 467,000 $ 11.66 1,351,275 The total fair value of restricted shares vested during fiscal years 2019 , 2018 and 2017 was $12.1 million , $5.1 million , and $1.6 million , respectively, based on the market price at the vesting date. The total fair value of restricted shares granted during fiscal years 2019 , 2018 and 2017 was $7.6 million , $17.2 million and $8.2 million , respectively. Employee Stock Purchase Plan. Our Employee Stock Purchase Plan is available to our employees, subject to minimum employment conditions and maximum compensation limitations. At the end of each calendar quarter, employee contributions are used to acquire shares of common stock at 85% of the lower of the fair market value of the common stock on the first or last day of the calendar quarter. During the years ended January 31, 2019 , 2018 and 2017 , we issued 34,922 , 57,937 and 100,758 shares of common stock, respectively, to employees participating in the plan, leaving 771,722 shares remaining reserved for future issuance under the plan as of January 31, 2019 . |
Significant Vendors
Significant Vendors | 12 Months Ended |
Jan. 31, 2019 | |
Significant Vendors [Abstract] | |
Significant Vendors | Significant Vendors As shown in the table below, a significant portion of our merchandise purchases were made from six vendors: Year Ended January 31, 2019 2018 2017 Vendor A 25.3 % 27.6 % 26.5 % Vendor B 16.1 14.8 17.6 Vendor C 7.0 6.5 5.8 Vendor D 6.7 5.3 5.4 Vendor E 5.2 4.1 4.0 Vendor F 5.0 3.8 3.7 65.3 % 62.1 % 63.0 % The vendors shown above represent the top six vendors with the highest volume in each period shown. The same vendor may not necessarily be represented in all periods presented. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Jan. 31, 2019 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Defined Contribution Plan We have established a defined contribution 401(k) plan for eligible employees. Prior to January 1, 2018, employees could contribute up to 20% of their eligible pretax compensation to the plan and we matched 100% of the first 3% of the employees’ contributions. Effective January 1, 2018, employees may contribute up to 50% of their eligible pretax compensation to the plan and we match 100% of the first 3% of the employees’ contributions and an additional 50% of the next 2% of the employees’ contributions. At our option, we may make supplemental contributions to the plan, but have no t made such supplemental contributions in the past three years. The matching contributions made by us totaled $1.4 million , $1.1 million and $1.1 million during the years ended January 31, 2019 , 2018 and 2017 , respectively. |
Contingencies
Contingencies | 12 Months Ended |
Jan. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Securities Litigation. We and two of our former executive officers were defendants in a consolidated securities class action lawsuit pending in the United States District Court for the Southern District of Texas (the “Court”), captioned In re Conn’s Inc. Securities Litigation, Cause No. 14-CV-00548 (the “Consolidated Securities Action”). The plaintiffs in the Consolidated Securities Action alleged that the defendants made false and misleading statements or failed to disclose material adverse facts about our business, operations, and prospects. They alleged violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and sought to certify a class of all persons and entities that purchased or otherwise acquired Conn’s common stock or call options, or sold or wrote Conn’s put options between April 3, 2013 and December 9, 2014. On June 14, 2018, the parties filed a motion for preliminary approval of a settlement for the Consolidated Securities Action. The Court granted preliminary approval of the settlement terms and stayed the Consolidated Securities Action on June 28, 2018. The $22.5 million settlement was funded solely by proceeds from our insurance carriers. As part of the settlement, we, along with the other executive officer defendants, have denied and continue to deny any wrongdoing giving rise to any liability or violation of the law, including the U.S. securities laws, as well as each and every one of the claims alleged by plaintiffs in the Consolidated Securities Action. The Court held a final settlement approval hearing on October 11, 2018 and that same day the Court signed its Final Order and Judgment approving the terms of the settlement of the Consolidated Securities Action. The United States Fifth Circuit Court of Appeals dismissed the appeal on November 15, 2018. All claims of class members who did not opt out of the Consolidated Securities Action were settled and dismissed. MicroCapital Fund, LP, MicroCapital Fund Ltd, and MicroCapital LLC (collectively “MicroCapital”) provided notice that they were opting out of the class action. On April 2, 2018, MicroCapital filed a lawsuit (the “MicroCapital Lawsuit”) against us and certain of our former executive officers in the Court, Cause No. 4:18-CV-01020 (the “MicroCapital Action”). The plaintiffs in this action allege that the defendants made false and misleading statements or failed to disclose material facts about our credit and underwriting practices, accounting and internal controls. Plaintiffs allege violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, Texas and Connecticut common law fraud, and Texas common law negligent misrepresentation against all defendants; as well as section 20A of the Securities Exchange Act of 1934; and Connecticut common law negligent misrepresentation against certain defendants arising from plaintiffs’ purchase of Conn’s, Inc. securities between April 3, 2013 and February 20, 2014. The complaint does not specify the amount of damages sought. On November 6, 2018, defendants filed a motion to dismiss plaintiff’s complaint and briefs were filed with the Court on or about January 16, 2019. The Court’s ruling is pending. We intend to vigorously defend our interests in the MicroCapital Action. It is not possible at this time to predict the timing or outcome of this litigation, and we cannot reasonably estimate the possible loss or range of possible loss from these claims. Derivative Litigation. On December 1, 2014, an alleged shareholder, purportedly on behalf of the Company, filed a derivative shareholder lawsuit against us and certain of our current and former directors and former executive officers in the Court, captioned as Robert Hack, derivatively on behalf of Conn’s, Inc., v. Theodore M. Wright (former executive officer and former director), Bob L. Martin, Jon E.M. Jacoby (former director), Kelly M. Malson, Douglas H. Martin, David Schofman, Scott L. Thompson (former director), Brian Taylor (former executive officer) and Michael J. Poppe (former executive officer) 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. Setting forth substantially similar claims against the same defendants, on February 25, 2015, an additional federal derivative action, captioned 95250 Canada LTEE, derivatively on Behalf of Conn’s, Inc. v. Wright et al., Cause No. 4:15-cv-00521, was filed in the Court, which has been consolidated with the Original Derivative Action. The Court previously approved a stipulation among the parties to stay the action pending resolution of the Consolidated Securities Action. The stay was lifted on November 1, 2018, and the defendants filed a motion to dismiss plaintiff’s complaint. Briefs were filed with the Court on or about December 3, 2018. The Court’s ruling is pending. Another derivative action was filed on January 27, 2015, captioned as Richard A. Dohn v. Wright, et al., Cause No. 2015-04405, in the 281st Judicial District Court, Harris County, Texas. This action makes substantially similar allegations to the Original Derivative Action against the same defendants. We received a copy of the proposed amended petition on October 12, 2018, but the amended proposed petition has not yet been filed. The parties jointly requested a stay on this case pending the Original Derivative Action. This case remains stayed until at least April 31, 2019. Prior to filing a lawsuit, an alleged shareholder, Robert J. Casey II (“Casey”), submitted a demand under Delaware law, which our Board of Directors refused. On May 19, 2016, Casey, purportedly on behalf of the Company, filed a lawsuit against us and certain of our current and former directors and former executive officers in the 55th Judicial District Court, Harris County, Texas, captioned as Casey, derivatively on behalf of Conn’s, Inc., v. Theodore M. Wright (former executive officer and former director), Michael J. Poppe (former executive officer), Brian Taylor (former executive officer), Bob L. Martin, Jon E.M. Jacoby (former director), Kelly M. Malson, Douglas H. Martin, David Schofman, Scott L. Thompson (former director) and William E. Saunders Jr., and Conn’s, Inc., Cause No. 2016-33135. The complaint asserts claims for breach of fiduciary duties and unjust enrichment based on substantially similar factual allegations as those asserted in the Original Derivative Action. The complaint does not specify the amount of damages sought. No further activity has occurred in this case since the Final Order and Judgment was entered in the Consolidated Securities Action. Other than Casey, none of the plaintiffs in the other 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. It is not possible at this time to predict the timing or outcome of any of this litigation, and we cannot reasonably estimate the possible loss or range of possible loss from these claims. Regulatory Matters. We are continuing to cooperate with the Securities and Exchange Commission’s (“SEC”) investigation of our underwriting policies and bad debt provisions, which began in November 2014. 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. TF LoanCo. In April 2014, Conn’s entered into an agreement with TFL to sell Conn’s charged-off accounts. In August 2014, Conn’s sued TFL for breach of contract in the U.S. District Court (“Court”). TFL filed counterclaims. In October 2016, the Court issued a decision in favor of Conn’s on all claims against TFL. TFL appealed the Court’s decision. On September 10, 2018, the U.S. Court of Appeals for the Fifth Circuit unanimously reversed the Court’s decision and entered a judgment (the “TFL Judgment”) in favor of TFL which required Conn’s to pay approximately $4.8 million , which includes the purchase price, statutory pre-judgment interest and attorney’s fees to TFL. The TFL Judgment was recognized as a charge during the three months ended October 31, 2018. 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 us. 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. The Company believes that any probable and reasonably estimable loss associated with the foregoing has been adequately reflected in the accompanying financial statements. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Jan. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities From time to time, we securitize customer accounts receivables by transferring the receivables to various bankruptcy-remote VIEs. Under the terms of the respective securitization transactions, all cash collections and other cash proceeds of the customer receivables go first to the servicer and the holders of the asset-backed notes, and then to the residual equity holder. We retain the servicing of the securitized portfolio and receive 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, rather than the VIEs, will retain certain credit insurance income together with certain recoveries related to credit insurance and RSAs 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 VIEs. We consolidate VIEs when we determine that we are the primary beneficiary of these VIEs, we have the power to direct the activities that most significantly impact the performance of the VIEs and our obligation to absorb losses and the right to receive residual returns are significant. The following table presents the assets and liabilities held by the VIEs (for legal purposes, the assets and liabilities of the VIEs will remain distinct from Conn’s, Inc.): (in thousands) January 31, January 31, Assets: Restricted cash $ 57,475 $ 85,322 Due from Conn’s, Inc., net 5,504 15,212 Customer accounts receivable: Customer accounts receivable 538,826 987,418 Restructured accounts 135,834 97,967 Allowance for uncollectible accounts (106,327 ) (143,115 ) Allowance for no-interest option credit programs (8,047 ) (18,228 ) Deferred fees and origination costs (5,321 ) (9,332 ) Total customer accounts receivable, net 554,965 914,710 Total assets $ 617,944 $ 1,015,244 Liabilities: Accrued expenses $ 3,939 $ 6,723 Other liabilities 5,513 10,639 Short-term debt: Warehouse Notes 53,635 — Long-term debt: 2016-B Class B Notes — 73,589 2017-A Class A Notes — 59,794 2017-A Class B Notes — 106,270 2017-A Class C Notes — 50,340 2017-B Class A Notes — 292,663 2017-B Class B Notes 98,297 132,180 2017-B Class C Notes 78,640 78,640 2018-A Class A Notes 105,971 — 2018-A Class B Notes 63,908 — 2018-A Class C Notes 63,908 — 410,724 793,476 Less deferred debt issuance costs (2,731 ) (5,497 ) Total debt 461,628 787,979 Total liabilities $ 471,080 $ 805,341 The assets of the VIEs serve as collateral for the obligations of the VIEs. The holders of asset-backed notes have no recourse to assets outside of the respective VIEs. |
Segment Information
Segment Information | 12 Months Ended |
Jan. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Operating segments are defined as components of an enterprise that engage in business activities and for which discrete financial information is available that is evaluated on a regular basis by the chief operating decision maker to make decisions about how to allocate resources and assess performance. We are a leading specialty retailer and offer a broad selection of quality, branded durable consumer goods and related services in addition to a proprietary credit solution for our core credit-constrained consumers. We have two operating segments: (i) retail and (ii) credit. Our operating segments complement one another. The retail segment operates primarily through our stores and website. Our retail segment 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 segment offers affordable financing solutions to a large, under-served population of credit-constrained consumers who typically have limited credit alternatives. Our operating segments provide customers the opportunity to comparison shop across brands with confidence in our competitive prices as well as affordable monthly payment options, next day delivery and installation in the majority of our markets, and product repair service. The operating segments follow the same accounting policies used in our consolidated financial statements. We evaluate a segment’s performance based upon operating income before taxes. SG&A includes 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 which benefit the credit operations by sourcing credit customers and collecting payments. The reimbursement received by the retail segment from the credit segment is calculated using an annual rate of 2.5% times the average portfolio balance for each applicable period. As of January 31, 2019 , we operated retail stores in 14 states with no operations outside of the United States. No single customer accounts for more than 10% of our total revenues. Financial information by segment is presented in the following tables: Year Ended January 31, 2019 (in thousands) Retail Credit Total Revenues: Furniture and mattress $ 382,975 $ — $ 382,975 Home appliance 332,609 — 332,609 Consumer electronics 262,088 — 262,088 Home office 86,260 — 86,260 Other 14,703 — 14,703 Product sales 1,078,635 — 1,078,635 Repair service agreement commissions 101,928 — 101,928 Service revenues 14,111 — 14,111 Total net sales 1,194,674 — 1,194,674 Finance charges and other revenues 447 354,692 355,139 Total revenues 1,195,121 354,692 1,549,813 Costs and expenses: Cost of goods sold 702,135 — 702,135 Selling, general and administrative expense (1) 328,628 151,933 480,561 Provision for bad debts 1,009 197,073 198,082 Charges and credits 2,980 4,800 7,780 Total costs and expenses 1,034,752 353,806 1,388,558 Operating income 160,369 886 161,255 Interest expense — 62,704 62,704 Loss on extinguishment of debt — 1,773 1,773 Income (loss) before income taxes $ 160,369 $ (63,591 ) $ 96,778 Additional Disclosures: Property and equipment additions $ 36,110 $ 1,384 $ 37,494 Depreciation expense $ 30,739 $ 845 $ 31,584 January 31, 2019 (in thousands) Retail Credit Total Total assets $ 405,542 $ 1,479,365 $ 1,884,907 Year Ended January 31, 2018 (in thousands) Retail Credit Total Revenues: Furniture and mattress $ 393,853 $ — $ 393,853 Home appliance 337,538 — 337,538 Consumer electronics 248,727 — 248,727 Home office 80,330 — 80,330 Other 17,426 — 17,426 Product sales 1,077,874 — 1,077,874 Repair service agreement commissions 100,383 — 100,383 Service revenues 13,710 — 13,710 Total net sales 1,191,967 — 1,191,967 Finance charges and other revenues 341 323,723 324,064 Total revenues 1,192,308 323,723 1,516,031 Costs and expenses: Cost of goods sold 720,344 — 720,344 Selling, general and administrative expense (1) 316,325 134,088 450,413 Provision for bad debts 829 216,046 216,875 Charges and credits 13,331 — 13,331 Total costs and expenses 1,050,829 350,134 1,400,963 Operating income (loss) 141,479 (26,411 ) 115,068 Interest expense — 80,160 80,160 Loss on extinguishment of debt — 3,274 3,274 Income (loss) before income taxes $ 141,479 $ (109,845 ) $ 31,634 Additional Disclosures: Property and equipment additions $ 21,285 $ 42 $ 21,327 Depreciation expense $ 30,065 $ 741 $ 30,806 January 31, 2018 (in thousands) Retail Credit Total Total assets $ 344,327 $ 1,556,472 $ 1,900,799 Year Ended January 31, 2017 (in thousands) Retail Credit Total Revenues: Furniture and mattress $ 421,055 $ — $ 421,055 Home appliance 358,771 — 358,771 Consumer electronics 293,685 — 293,685 Home office 92,404 — 92,404 Other 20,282 — 20,282 Product sales 1,186,197 — 1,186,197 Repair service agreement commissions 113,615 — 113,615 Service revenues 14,659 — 14,659 Total net sales 1,314,471 — 1,314,471 Finance charges and other revenues 1,569 280,808 282,377 Total revenues 1,316,040 280,808 1,596,848 Costs and expenses: Cost of goods sold 823,082 — 823,082 Selling, general and administrative expense (1) 326,078 134,818 460,896 Provision for bad debts 990 241,304 242,294 Charges and credits 6,478 — 6,478 Total costs and expenses 1,156,628 376,122 1,532,750 Operating income (loss) 159,412 (95,314 ) 64,098 Interest expense — 98,615 98,615 Income (loss) before income taxes $ 159,412 $ (193,929 ) $ (34,517 ) Additional Disclosures: Property and equipment additions $ 43,460 $ 182 $ 43,642 Depreciation expense $ 28,063 $ 783 $ 28,846 January 31, 2017 (in thousands) Retail Credit Total Total assets $ 332,611 $ 1,608,523 $ 1,941,134 (1) For the years ended January 31, 2019 , 2018 and 2017 , the amount of overhead allocated to each segment reflected in SG&A was $36.4 million , $27.6 million and $24.5 million , respectively. For the years ended January 31, 2019 , 2018 and 2017 , the amount of reimbursement made to the retail segment by the credit segment was $38.1 million , $37.4 million and $38.8 million , respectively. |
Guarantor Financial Information
Guarantor Financial Information | 12 Months Ended |
Jan. 31, 2019 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Guarantor Financial Information | Guarantor Financial Information Conn’s, Inc. is a holding company with no independent assets or operations other than its investments in its subsidiaries. The Senior Notes, which were issued by Conn’s, Inc., are fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Guarantors. As of January 31, 2019 and 2018, the direct or indirect subsidiaries of Conn’s, Inc. that were not Guarantors (the “Non-Guarantor Subsidiaries”) were the VIEs and minor subsidiaries. There are no restrictions under the Indenture on the ability of any of the Guarantors to transfer funds to Conn’s, Inc. in the form of dividends or distributions. The following financial information presents the Consolidated Balance Sheet, Statement of Operations, and Statement of Cash Flows for Conn’s, Inc. (the issuer of the Senior Notes), the Guarantors, and the Non-Guarantor Subsidiaries, together with certain eliminations. Investments in subsidiaries are accounted for by the parent company using the equity method for purposes of this presentation. Results of operations of subsidiaries are therefore reflected in the parent company’s investment accounts and operations. The consolidated financial information includes financial data for: (i) Conn’s, Inc. (on a parent-only basis), (ii) Guarantors, (iii) Non-Guarantor Subsidiaries, and (iv) the parent company and the subsidiaries on a consolidated basis at January 31, 2019 and 2018 (after the elimination of intercompany balances and transactions). Consolidated Balance Sheets as of January 31, 2019 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 5,912 $ — $ — $ 5,912 Restricted cash — 1,550 57,475 — 59,025 Customer accounts receivable, net of allowances — 328,705 324,064 — 652,769 Other accounts receivable — 67,078 — — 67,078 Inventories — 220,034 — — 220,034 Other current assets — 12,344 5,504 (8,272 ) 9,576 Total current assets — 635,623 387,043 (8,272 ) 1,014,394 Investment in and advances to subsidiaries 815,524 146,864 — (962,388 ) — Long-term portion of customer accounts receivable, net of allowance — 455,443 230,901 — 686,344 Property and equipment, net — 148,983 — — 148,983 Deferred income taxes 27,535 — — — 27,535 Other assets — 7,651 — — 7,651 Total assets $ 843,059 $ 1,394,564 $ 617,944 $ (970,660 ) $ 1,884,907 Liabilities and Stockholders’ Equity Current liabilities: Current maturities of debt and capital lease obligations $ — $ 474 $ 53,635 $ — $ 54,109 Accounts payable — 71,118 — — 71,118 Accrued expenses 686 88,478 3,939 (2,768 ) 90,335 Other current liabilities — 24,918 2,592 (5,504 ) 22,006 Total current liabilities 686 184,988 60,166 (8,272 ) 237,568 Deferred rent — 93,127 — — 93,127 Long-term debt and capital lease obligations 222,398 270,831 407,993 — 901,222 Other long-term liabilities — 30,094 2,921 — 33,015 Total liabilities 223,084 579,040 471,080 (8,272 ) 1,264,932 Total stockholders’ equity 619,975 815,524 146,864 (962,388 ) 619,975 Total liabilities and stockholders’ equity $ 843,059 $ 1,394,564 $ 617,944 $ (970,660 ) $ 1,884,907 Deferred income taxes related to tax attributes of the Guarantors and Non-Guarantor Subsidiaries are reflected under Conn’s, Inc. Consolidated Statements of Operations for the year ended January 31, 2019 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 1,194,674 $ — $ — $ 1,194,674 Finance charges and other revenues — 193,583 161,556 — 355,139 Servicing fee revenue — 40,947 — (40,947 ) — Total revenues — 1,429,204 161,556 (40,947 ) 1,549,813 Costs and expenses: Cost of goods sold — 702,135 — — 702,135 Selling, general and administrative expense — 479,995 41,513 (40,947 ) 480,561 Provision for bad debts — 68,056 130,026 — 198,082 Charges and credits — 7,780 — — 7,780 Total costs and expenses — 1,257,966 171,539 (40,947 ) 1,388,558 Operating income (loss) — 171,238 (9,983 ) — 161,255 Interest expense 17,782 12,498 32,424 — 62,704 Loss on extinguishment of debt — 142 1,631 — 1,773 Income (loss) before income taxes (17,782 ) 158,598 (44,038 ) — 96,778 Provision (benefit) for income taxes (4,213 ) 37,577 (10,435 ) — 22,929 Net income (loss) (13,569 ) 121,021 (33,603 ) — 73,849 Income (loss) from consolidated subsidiaries 87,418 (33,603 ) — (53,815 ) — Consolidated net income (loss) $ 73,849 $ 87,418 $ (33,603 ) $ (53,815 ) $ 73,849 Consolidated Statements of Cash Flows for the year ended January 31, 2019 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ (1,237 ) $ 18,201 $ 134,837 $ — $ 151,801 Cash flows from investing activities: Purchase of customer accounts receivables — — (525,846 ) 525,846 — Sale of customer accounts receivables — — 525,846 (525,846 ) — Purchase of property and equipment — (32,814 ) — — (32,814 ) Net cash provided by (used in) investing activities — (32,814 ) — — (32,814 ) Cash flows from financing activities: Proceeds from issuance of asset-backed notes — — 358,300 — 358,300 Payments on asset-backed notes — (169,443 ) (570,432 ) — (739,875 ) Borrowings from Revolving Credit Facility — 1,836,822 — — 1,836,822 Payments on Revolving Credit Facility — (1,647,322 ) — — (1,647,322 ) Borrowings from warehouse facility — — 173,286 — 173,286 Payments of debt issuance costs and amendment fees — (3,230 ) (4,188 ) — (7,418 ) Payments on warehouse facility — — (119,650 ) — (119,650 ) Proceeds from stock issued under employee benefit plans 1,237 — — — 1,237 Tax payments associated with equity-based compensation transactions — (3,342 ) — — (3,342 ) Payments from extinguishment of debt — (1,178 ) — — (1,178 ) Other — (1,068 ) — — (1,068 ) Net cash provided by (used in) financing activities 1,237 11,239 (162,684 ) — (150,208 ) Net change in cash, cash equivalents and restricted cash — (3,374 ) (27,847 ) — (31,221 ) Cash, cash equivalents and restricted cash, beginning of period — 10,836 85,322 — 96,158 Cash, cash equivalents and restricted cash, end of period $ — $ 7,462 $ 57,475 $ — $ 64,937 Consolidated Balance Sheets as of January 31, 2018 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 9,286 $ — $ — $ 9,286 Restricted cash — 1,550 85,322 — 86,872 Customer accounts receivable, net of allowances — 177,117 459,708 — 636,825 Other accounts receivable — 71,186 — — 71,186 Inventories — 211,894 — — 211,894 Other current assets — 68,621 15,212 (19,879 ) 63,954 Total current assets — 539,654 560,242 (19,879 ) 1,080,017 Investment in and advances to subsidiaries 735,272 209,903 — (945,175 ) — Long-term portion of customer accounts receivable, net of allowance — 195,606 455,002 — 650,608 Property and equipment, net — 143,152 — — 143,152 Deferred income taxes 21,565 — — — 21,565 Other assets — 5,457 — — 5,457 Total assets $ 756,837 $ 1,093,772 $ 1,015,244 $ (965,054 ) $ 1,900,799 Liabilities and Stockholders’ Equity Current liabilities: Current maturities of debt and capital lease obligations $ — $ 907 $ — $ — $ 907 Accounts payable — 71,617 — — 71,617 Accrued expenses 686 66,370 6,723 (4,667 ) 69,112 Other current liabilities — 32,685 5,002 (15,212 ) 22,475 Total current liabilities 686 171,579 11,725 (19,879 ) 164,111 Deferred rent — 87,003 — — 87,003 Long-term debt and capital lease obligations 221,083 81,043 787,979 — 1,090,105 Other long-term liabilities — 18,875 5,637 — 24,512 Total liabilities 221,769 358,500 805,341 (19,879 ) 1,365,731 Total stockholders’ equity 535,068 735,272 209,903 (945,175 ) 535,068 Total liabilities and stockholders’ equity $ 756,837 $ 1,093,772 $ 1,015,244 $ (965,054 ) $ 1,900,799 Consolidated Statement of Operations for the year ended January 31, 2018 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 1,191,967 $ — $ — $ 1,191,967 Finance charges and other revenues — 173,539 150,525 — 324,064 Servicing fee revenue — 63,372 — (63,372 ) — Total revenues — 1,428,878 150,525 (63,372 ) 1,516,031 Costs and expenses: Cost of goods sold — 720,344 — — 720,344 Selling, general and administrative expense — 460,698 53,087 (63,372 ) 450,413 Provision for bad debts — 42,677 174,198 — 216,875 Charges and credits — 13,331 — — 13,331 Total costs and expenses — 1,237,050 227,285 (63,372 ) 1,400,963 Operating income (loss) — 191,828 (76,760 ) — 115,068 Interest expense 17,772 15,978 46,410 — 80,160 Loss on extinguishment of debt — 349 2,925 — 3,274 Income (loss) before income taxes (17,772 ) 175,501 (126,095 ) — 31,634 Provision (benefit) for income taxes (14,141 ) 139,647 (100,335 ) — 25,171 Net income (loss) (3,631 ) 35,854 (25,760 ) — 6,463 Income (loss) from consolidated subsidiaries 10,094 (25,760 ) — 15,666 — Consolidated net income (loss) $ 6,463 $ 10,094 $ (25,760 ) $ 15,666 $ 6,463 Consolidated Statement of Cash Flows for the year ended January 31, 2018 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ (3,318 ) $ (925,182 ) $ 979,022 $ — $ 50,522 Cash flows from investing activities: Purchase of customer accounts receivables — — (1,112,903 ) 1,112,903 — Sale of customer accounts receivables — 1,112,903 — (1,112,903 ) — Purchase of property and equipment — (16,918 ) — — (16,918 ) Net cash provided by (used in) investing activities — 1,095,985 (1,112,903 ) — (16,918 ) Cash flows from financing activities: Proceeds from issuance of asset-backed notes — — 1,042,034 — 1,042,034 Payments on asset-backed notes — (77,104 ) (922,923 ) — (1,000,027 ) Borrowings from Revolving Credit Facility — 1,717,012 — — 1,717,012 Payments on Revolving Credit Facility — (1,817,512 ) — — (1,817,512 ) Payments of debt issuance costs and amendment fees — (3,268 ) (10,606 ) — (13,874 ) Proceeds from stock issued under employee benefit plans 3,318 — — — 3,318 Tax payments associated with equity-based compensation transactions — (1,182 ) — — (1,182 ) Payments from extinguishment of debt — (836 ) — — (836 ) Other — (643 ) — — (643 ) Net cash provided by (used in) financing activities 3,318 (183,533 ) 108,505 — (71,710 ) Net change in cash, cash equivalents and restricted cash — (12,730 ) (25,376 ) — (38,106 ) Cash, cash equivalents and restricted cash, beginning of period — 23,566 110,698 — 134,264 Cash, cash equivalents and restricted cash, end of period $ — $ 10,836 $ 85,322 $ — $ 96,158 Consolidated Statement of Operations for the year ended January 31, 2017 . (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 1,314,471 $ — $ — $ 1,314,471 Finance charges and other revenues — 117,028 165,349 — 282,377 Servicing fee revenue — 60,149 — (60,149 ) — Total revenues — 1,491,648 165,349 (60,149 ) 1,596,848 Costs and expenses: Cost of goods sold — 823,082 — — 823,082 Selling, general and administrative expense — 460,076 60,969 (60,149 ) 460,896 Provision for bad debts — 6,974 235,320 — 242,294 Charges and credits — 6,478 — — 6,478 Total costs and expenses — 1,296,610 296,289 (60,149 ) 1,532,750 Operating income (loss) — 195,038 (130,940 ) — 64,098 Interest expense 17,708 13,379 67,528 — 98,615 Loss on extinguishment of debt — — — — — Income (loss) before income taxes (17,708 ) 181,659 (198,468 ) — (34,517 ) Provision (benefit) for income taxes (4,594 ) 47,129 (51,490 ) — (8,955 ) Net income (loss) (13,114 ) 134,530 (146,978 ) — (25,562 ) Income (loss) from consolidated subsidiaries (12,448 ) (146,978 ) — 159,422 — Consolidated net income (loss) $ (25,562 ) $ (12,448 ) $ (146,978 ) $ 159,422 $ (25,562 ) Consolidated Statement of Cash Flows for the year ended January 31, 2017 . (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ (1,268 ) $ (723,018 ) $ 929,457 $ — $ 205,171 Cash flows from investing activities: Purchase of customer accounts receivables — — (923,842 ) 923,842 — Sale of customer accounts receivables — 923,842 — (923,842 ) — Purchase of property and equipment — (46,556 ) — — (46,556 ) Proceeds from sales of property — 10,806 — — 10,806 Net cash provided by (used in) investing activities — 888,092 (923,842 ) — (35,750 ) Cash flows from financing activities: Proceeds from issuance of asset-backed notes — — 1,067,850 — 1,067,850 Payments on asset-backed notes — — (1,032,842 ) — (1,032,842 ) Borrowings from Revolving Credit Facility — 724,697 — — 724,697 Payments on Revolving Credit Facility — (876,404 ) — — (876,404 ) Payments of debt issuance costs and amendment fees — (1,215 ) (8,501 ) — (9,716 ) Proceeds from stock issued under employee benefit plans 1,268 — — — 1,268 Tax payments associated with equity-based compensation transactions — (40 ) — — (40 ) Other — (800 ) — — (800 ) Net cash provided by (used in) financing activities 1,268 (153,762 ) 26,507 — (125,987 ) Net change in cash, cash equivalents and restricted cash — 11,312 32,122 — 43,434 Cash, cash equivalents and restricted cash, beginning of period — 12,254 78,576 — 90,830 Cash, cash equivalents and restricted cash, end of period $ — $ 23,566 $ 110,698 $ — $ 134,264 |
Quarterly Information (Unaudite
Quarterly Information (Unaudited) | 12 Months Ended |
Jan. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Information (Unaudited) | Quarterly Information (Unaudited) The following tables set forth certain quarterly financial data for the years ended January 31, 2019 and 2018 that have been prepared on a consistent basis as the accompanying audited consolidated financial statements and include all adjustments necessary for a fair presentation, in all material respects, of the information shown: (dollars in thousands, except per share amounts) Fiscal Year 2019 Quarter Ended April 30 July 31 October 31 January 31 Revenues: Retail Segment $ 275,770 $ 296,411 $ 284,053 $ 338,887 Credit Segment 82,617 88,209 89,771 94,095 Total revenues $ 358,387 $ 384,620 $ 373,824 $ 432,982 Percent of annual revenues 23.1 % 24.8 % 24.1 % 28.0 % Costs and expenses: Cost of goods sold $ 166,589 $ 173,627 $ 166,886 $ 195,033 Operating income (loss): Retail Segment $ 31,169 $ 39,238 $ 35,250 $ 54,712 Credit Segment 1,595 14 223 (946 ) Total operating income $ 32,764 $ 39,252 $ 35,473 $ 53,766 Net income $ 12,732 $ 17,011 $ 14,630 $ 29,476 Income per share: Basic (1) $ 0.40 $ 0.54 $ 0.46 $ 0.93 Diluted (1) $ 0.39 $ 0.53 $ 0.45 $ 0.91 Fiscal Year 2018 (dollars in thousands, except per share amounts) Quarter Ended April 30 July 31 October 31 January 31 Revenues: Retail Segment $ 279,365 $ 286,505 $ 291,903 $ 334,535 Credit Segment 76,461 80,142 81,269 85,851 Total revenues $ 355,826 $ 366,647 $ 373,172 $ 420,386 Percent of annual revenues 23.5 % 24.2 % 24.6 % 27.7 % Costs and expenses: Cost of goods sold $ 171,950 $ 172,306 $ 175,591 $ 200,497 Operating income (loss): Retail Segment $ 32,011 $ 31,299 $ 29,586 $ 48,583 Credit Segment (11,829 ) (2,107 ) (8,733 ) (3,742 ) Total operating income $ 20,182 $ 29,192 $ 20,853 $ 44,841 Net income (loss) $ (2,580 ) $ 4,273 $ 1,569 $ 3,201 Income (loss) per share Basic (1) $ (0.08 ) $ 0.14 $ 0.05 $ 0.10 Diluted (1) $ (0.08 ) $ 0.14 $ 0.05 $ 0.10 (1) The sum of the quarterly earnings per share amounts may not equal the fiscal year amount due to rounding and use of weighted-average shares outstanding. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Business Activities | Business. Conn’s, Inc., a Delaware corporation, is a holding company with no independent assets or operations other than its investments in its subsidiaries. References to “we,” “our,” “us,” “the Company,” “Conn’s” or “CONN” refer to Conn’s, Inc. and, as apparent from the context, its subsidiaries. Conn’s is a leading specialty retailer that offers a broad selection of quality, branded durable consumer goods and related services in addition to proprietary credit solutions 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 credit alternatives. We operate two reportable segments: retail and credit. Our retail stores bear the “Conn’s HomePlus” name with all of our stores providing the same products and services to a common customer group. Our 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 to our retail customers. The retail segment is not involved in credit approval decisions or collection efforts. Our management evaluates performance and allocates resources based on the operating results of the retail and credit segments. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and prevailing industry practices. |
Fiscal Year | 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. |
Principles of Consolidation | Principles of Consolidation. The consolidated financial statements include the accounts of Conn’s, Inc. and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities. Variable Interest Entities (“VIEs”) are consolidated if the Company is the primary beneficiary. The primary beneficiary of a VIE is the party that has (i) the power to direct the activities that most significantly impact the performance of the VIE and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We securitize customer accounts receivables by transferring the receivables to various bankruptcy-remote VIEs. We retain the servicing of the securitized portfolio and have a variable interest in each corresponding VIE by holding the residual equity. We have determined that we are the primary beneficiary of each respective 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 potentially could be significant. As a result, we consolidate the respective VIEs within our consolidated financial statements. |
Use of Estimates | Use of Estimates. The preparation of financial statements in accordance with GAAP requires management to make informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ, even significantly, from these estimates. Management evaluates its estimates and related assumptions regularly, including those related to the allowance for doubtful accounts and allowances for no-interest option credit programs, which are particularly sensitive given the size of our customer portfolio balance. |
Cash and Cash Equivalents | Cash and Cash Equivalents. As of January 31, 2019 and 2018 , cash and cash equivalents included cash, credit card deposits in transit, and highly liquid debt instruments purchased with a maturity date of three months or less. |
Restricted cash | Restricted Cash. The restricted cash balance as of January 31, 2019 and 2018 includes $45.3 million and $58.1 million , respectively, of cash we collected as servicer on the securitized receivables that was subsequently remitted to the VIEs and $12.2 million and $27.2 million , respectively, of cash held by the VIEs as additional collateral for the asset-backed notes. |
Customer accounts receivable | Customer Accounts Receivable. Customer accounts receivable reported in the Consolidated Balance Sheet includes total receivables managed, including both those transferred to the VIEs and those not transferred to the VIEs. Customer accounts receivable are recognized at the time the customer takes possession of the product. 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 accounts receivable include the net of unamortized deferred fees charged to customers and origination costs. 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 along with interest accrued subsequent to the last payment. 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 VIEs. The loan modifications are intended to maximize net cash flow after expenses and avoid the need to exercise legal remedies available to us. We may extend or “re-age” a portion of our customer accounts, which involves modifying the payment terms to defer a portion of the cash payments due. Our re-aging of customer accounts does not change the interest rate or the total principal amount due from the customer and typically does not reduce the monthly contractual payments. To a much lesser extent, we may provide the customer the ability to refinance their account, which typically does not change the interest rate or the total principal amount due from the customer but does reduce the monthly contractual payments and extend the term. We consider accounts that have been re-aged in excess of three months or refinanced as Troubled Debt Restructurings (“TDR” or “Restructured Accounts”). |
Interest Income on Customer Accounts Receivable | Interest Income on Customer Accounts Receivable. Interest income, which includes interest income and amortization of deferred fees and origination costs, is recorded using the interest method and is reflected in finance charges and other revenues. Typically, interest income is recorded until the customer account is paid off or charged-off, and we provide an allowance for estimated uncollectible interest. Any contractual interest income received from customers in excess of the interest income calculated using the interest method is recorded as deferred revenue on our balance sheets. At January 31, 2019 and 2018 , there were $11.2 million and $12.5 million , respectively, of deferred interest included in deferred revenues and other credits and other long-term liabilities. The deferred interest will ultimately be brought into income as the accounts pay off or charge-off. We offer a 12 -month no -interest option program. 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 option program period (grace periods are provided), the account does not qualify for the no-interest provision and none of the interest earned is waived. Interest income is recognized based on estimated accrued interest earned to date on all no -interest option finance programs with an offsetting reserve for those customers expected to satisfy the requirements of the program based on our historical experience. 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 equals the present value of expected future cash flows. We place accounts in non-accrual status when legally required. Payments received on non-accrual loans will be applied to principal and reduce the balance of the loan. |
Allowance for doubtful accounts | Allowance for Doubtful Accounts. The determination of the amount of the allowance for bad debts is, by nature, highly complex and subjective. Future events that are inherently uncertain could result in material changes to the level of the allowance for bad debts. General economic conditions, changes to state or federal regulations and a variety of other factors that affect the ability of borrowers to service their debts or our ability to collect will impact the future performance of the portfolio. We establish an allowance for doubtful accounts, including estimated uncollectible interest, to cover probable and estimable losses on our customer accounts receivable resulting from the failure of customers to make contractual payments. Our customer accounts receivable portfolio balance consists of a large number of relatively small, homogeneous accounts. None of our accounts are large enough to warrant individual evaluation for impairment. We record an allowance for doubtful accounts on our non-TDR customer accounts receivable that we expect to charge-off over the next 12 months based on historical gross charge-off rates over the last 24 months. We incorporate an adjustment to historical gross charge-off rates for a scaled factor of the year-over-year change in six month average first payment default rates and the year-over-year change in the balance of customer accounts receivable that are 60 days or more past due. In addition to adjusted historical gross charge-off rates, estimates of post-charge-off recoveries, including cash payments from customers, amounts realized from the repossession of the products financed, sales tax recoveries from taxing jurisdictions, and payments received under credit insurance and repair service agreement (“RSA”) policies are also considered. Qualitative adjustments are made to the allowance for bad debts when, based on management’s judgment, there are internal or external factors impacting probable incurred losses not taken into account by the quantitative calculations. These qualitative considerations are based on the following factors: changes in lending policies and procedures, changes in economic and business conditions, changes in the nature and volume of the portfolio, changes in lending management, changes in credit quality statistics, changes in concentrations of credit and other internal or external factor changes. We utilize an economic qualitative adjustment based on changes in unemployment rates if current unemployment rates in our markets are worse than they were on average over the last 24 months. We also qualitatively limit the impact of changes in first payment default rates and changes in delinquency when those changes result in a decrease to the allowance for bad debts based on a measure of the dispersion of historical charge-off rates. At January 31, 2019, we utilized a qualitative factor related to changes in the nature of the portfolio. 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 based primarily on the performance of TDR loans over the last 24 months. The cash flows are discounted based on the weighted-average effective interest rate of the TDR accounts. The excess of the carrying amount over the discounted cash flow amount is recorded as an allowance for loss on those accounts . |
Inventories | Inventories. Inventories consist of merchandise purchased for resale and service parts and are recorded at the lower of cost or net realizable value. The carrying value of the inventory is reduced to its net realizable value for any product lines with excess of carrying amount, typically weighted-average cost, over the amount we expect to realize from the ultimate sale or other disposition of the inventory, with a corresponding charge to cost of sales. The write-down of inventory to net realizable value is estimated based on assumptions regarding inventory aging and historical product sales. |
Vendor Allowances | Vendor Allowances. We receive funds from vendors for price protection, product rebates (earned upon purchase or sale of product), marketing, and promotion programs, collectively referred to as vendor allowances, which are recorded on an accrual basis. We estimate the vendor allowances to accrue based on the progress of satisfying the terms of the programs based on actual and projected sales or purchase of qualifying products. If the programs are related to product purchases, the vendor allowances are recorded as a reduction of product cost in inventory still on hand with any remaining amounts recorded as a reduction of cost of goods sold. |
Property and Equipment | Property and Equipment. Property and equipment, including any major additions and improvements to property and equipment, are recorded at cost. Normal repairs and maintenance that do not materially extend the life of property and equipment are expensed as incurred. Depreciation, which includes amortization of capitalized leases, is computed using the straight-line method over the estimated useful lives of the assets, or in the case of leasehold improvements, over the shorter of the estimated useful lives or the remaining terms of the leases. |
Internal-Use Software Costs | Internal-Use Software Costs. Costs related to software developed or obtained for internal use and cloud-based computing arrangements are expensed as incurred until the application development stage has been reached. Once the application development stage has been reached, certain qualifying costs are capitalized until the software is ready for its intended use. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets. Long-lived assets are evaluated for impairment, primarily at the retail store level. We monitor store performance in order to assess if events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The most likely condition that would necessitate an assessment would be an adverse change in historical and estimated future results of a retail store’s performance. For property and equipment held and used, we recognize an impairment loss if the carrying amount is not recoverable through its undiscounted cash flows and measure the impairment loss based on the difference between the carrying amount and estimated fair value. |
Debt Issuance Costs | Debt Issuance Costs. Costs that are direct and incremental to debt issuance are deferred and amortized to interest expense using the effective interest method over the expected life of the debt. All other costs related to debt issuance are expensed as incurred. We present debt issuance costs associated with long-term debt as a reduction of the carrying amount of the debt. |
Expense Classifications | Expense Classifications. We record as cost of goods sold, the direct cost of products and parts sold and related costs for delivery, transportation and handling, inbound freight, receiving, inspection, and other costs associated with the operations of our distribution system, including occupancy related to our warehousing operations. The costs associated with our merchandising, advertising, sales commissions, and all store occupancy costs, are included in selling, general and administrative expense (“SG&A”). |
Advertising Costs | Advertising Costs. Advertising costs are expensed as incurred. |
Stock-Based Compensation | Stock-based Compensation. Stock-based compensation expense is recorded, net of estimated forfeitures, for share-based compensation awards over the requisite service period using the straight-line method. An adjustment is made to compensation cost for any difference between the estimated forfeitures and the actual forfeitures related to the awards. For equity-classified share-based compensation awards, expense is recognized based on the grant-date fair value. For stock option grants, we use the Black-Scholes model to determine fair value. For grants of restricted stock units, the fair value of the grant is the market value of our stock at the date of issuance. For grants of performance-based restricted stock units, the fair value of the grant is the market value of our stock at the date of issuance adjusted for a market condition, a performance condition and a service condition. |
Self-insurance | Self-insurance. We are self-insured for certain losses relating to group health, workers’ compensation, automobile, general and product liability claims. We have stop-loss coverage to limit the exposure arising from these claims. Self-insurance losses for claims filed and claims incurred, but not reported, are accrued based upon our estimates of the net aggregate liability for claims incurred using development factors based on historical experience. |
Income Taxes | Income Taxes. We are subject to U.S. federal income tax as well as income tax in multiple state jurisdictions. We follow the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between GAAP and tax bases of assets and liabilities and for operating loss and tax credit carryforwards, as measured using the enacted tax rates expected to be in effect when the temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period in which the enactment occurs. A valuation allowance is provided when it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become realizable. To the extent penalties and interest are incurred, we record these charges as a component of our provision for income taxes. We review and update our tax positions as necessary to add any new uncertain tax positions taken, or to remove previously identified uncertain positions that have been adequately resolved. Additionally, uncertain positions may be remeasured as warranted by changes in facts or law. Accounting for uncertain tax positions requires estimating the amount, timing and likelihood of ultimate settlement. |
Leases | Leases. We lease most of our current store locations and certain of our facilities and operating equipment under operating leases. The fixed, non-cancelable terms of our real estate leases are generally five to 15 years and generally include renewal options that allow us to extend the term beyond the initial non-cancelable term. Most of the real estate leases require payment of real estate taxes, insurance and certain common area maintenance costs in addition to future minimum lease payments. Equipment leases generally provide for initial lease terms of three to five years and provide for a purchase right at the end of the lease term at the then fair market value of the equipment. As of January 31, 2019 and 2018 , deferred rent related to lease agreements with escalating rent payments and rent holiday was $27.7 million and $26.9 million , respectively. Certain of our operating leases contain predetermined fixed escalations of the minimum rental payments over the lease. For these leases, we recognize the related rental expense on a straight-line basis over the term of the lease, which commences for accounting purposes on the date we take possession of the leased store. Possession generally occurs prior to making any lease payments and approximately 90 to 120 days prior to the opening of a store. In the early years of a lease with rent escalations, the recorded rent expense will exceed the actual cash payments. The amount of rent expense that exceeds the cash payments is recorded as deferred rent in the Consolidated Balance Sheet. In the later years of a lease with rent escalations, the recorded rent expense will be less than the actual cash payments. The amount of cash payments that exceed the rent expense is then recorded as a reduction to deferred rent. Additionally, certain operating leases contain tenant allowance provisions, which obligate the landlord to remit cash to us as an incentive to enter into the lease agreement. We record the amount to be remitted by the landlord as a tenant allowance receivable as we earn it under the terms of the contract. At the same time, we record deferred rent in an equal amount in the Consolidated Balance Sheet. The tenant allowance receivable is reduced as cash is received from the landlord, while the deferred rent is amortized as a reduction to rent expense over the lease term. |
Earnings per Share | Earnings per Share. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effects of any stock options, restricted stock unit awards (“RSUs”) and performance stock awards (“PSUs”), which are calculated using the treasury-stock method. |
Contingencies | Contingencies. An estimated loss from a contingency is recorded if it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Gain contingencies are not recorded until realization is assured beyond a reasonable doubt. Legal costs related to loss contingencies are expensed as incurred. |
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 – Inputs represent unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (for example, quoted market prices for similar assets or liabilities in active markets or quoted market prices for identical assets or liabilities in markets not considered to be active, inputs other than quoted prices that are observable for the asset or liability, or market-corroborated inputs). • Level 3 – Inputs that are not observable from objective sources such as our internally developed assumptions used in pricing an asset or liability (for example, an estimate of future cash flows used in our internally developed present value of future cash flows model that underlies the fair-value measurement). In determining fair value, we use observable market data when available, or models that incorporate observable market data. When we are required to measure fair value and there is not a market-observable price for the asset or liability or for a similar asset or liability, we use the cost or income approach depending on the quality of information available to support management’s assumptions. The cost approach is based on management’s best estimate of the current asset replacement cost. The income approach is based on management’s best assumptions regarding expectations of future net cash flows and discounts the expected cash flows using a commensurate risk-adjusted discount rate. Such evaluations involve significant judgment, and the results are based on expected future events or conditions such as sales prices, economic and regulatory climates, and other factors, most of which are often outside of management’s control. However, we believe assumptions used reflect a market participant’s view of long-term prices, costs, and other factors and are consistent with assumptions used in our business plans and investment decisions. In arriving at fair-value estimates, we use relevant observable inputs available for the valuation technique employed. If a fair-value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement is characterized based on the lowest level of input that is significant to the fair-value measurement. 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 receivable, determined using a Level 3 discounted cash flow analysis, approximates their carrying value, net of the allowance for doubtful accounts. The fair value of our Revolving Credit Facility approximates carrying value based on the current borrowing rate for similar types of borrowing arrangements. |
Revenue Recognition | Revenue Recognition. The Company has the following material revenue streams: the sale of products (e.g. appliances, electronics) including delivery; the sale of third party warranty and insurance programs, including retrospective income; service income; interest income generated from the financing of point of sale transactions; and volume rebate incentives received from a third party financer. Interest income related to our customer accounts receivable balance and loan origination costs (including sales commissions) meet the scope exception of ASC 606 and are therefore not impacted by the adoption of this standard. For our twelve month no-interest option program, as a practical expedient acceptable under ASC 606, we do not adjust for the time value of money. Sale of Products Including Delivery: The Company has a single performance obligation associated with these contracts: the delivery of the product to the customer, at which point control transfers. Revenue for the sale of products is recognized at the time of delivery, net of any adjustments for sales incentives such as discounts, coupons, rebates or other free products or services. Sales financed through third-party no-interest option programs typically require us to pay a fee to the third party on each completed sale, which is recorded as a reduction of net sales in the retail segment. Sale of Third Party Warranty and Insurance Programs, Including Retrospective Income: We sell RSA and credit insurance contracts on behalf of unrelated third-parties. The Company has a single performance obligation associated with these contracts: the delivery of the product to the customer, at which point control transfers. Commissions related to these contracts are recognized in revenue upon delivery of the product. We also may serve as the administrator of the RSAs sold and defer 5% of the revenue received from the sale of RSAs as compensation for this performance obligation as 5% represents the estimated stand-alone sales price to serve as the administrator. The deferred RSA administration fee is recorded in income ratably over the life of the RSA contract sold. Retrospective income on RSA contracts is recognized upon delivery of the product based on an estimate of claims and is adjusted throughout the life of the contracts as actual claims materialize. Retrospective income on insurance contracts is recognized when earned as that is the point at which we no longer believe a significant reversal of income is probable as the consideration is highly susceptible to factors outside of our influence. Service Income: The Company has a single performance obligation associated with these contracts: the servicing of the RSA claims. Service revenues are recognized at the time service is provided to the customer. Volume Rebate Incentive: As part of our agreement with our third-party provider of no-interest option programs, we may receive a volume rebate incentive based on the total dollar value of sales made under our third-party provider. The Company has a single performance obligation associated with this contract: the delivery of the product to the customer, at which point control transfers. Revenue for the volume rebate incentive is recognized upon delivery of the product to the customer based on the projected total annual dollar value of sales to be made under our third-party provider. ASC 606 requires disaggregation of revenue recognized from contracts with customers to depict how the nature, amount, timing and uncertainty of revenue is affected by economic factors. The Company concluded that the disaggregated discrete financial information presented in Note 14, Segment Information , and Note 5, Finance Charges and Other Revenues , reviewed by our chief operating decision maker in evaluating the financial performance of our operating segments adequately addresses the disaggregation of revenue requirements of ASC 606. Deferred Revenue. Deferred revenue related to contracts with customers as defined by ASC 606 consists of deferred customer deposits and deferred RSA administration fees. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted. In May 2014, the FASB issued 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 such contracts, (3) determine transaction price, (4) allocate the transaction price to the performance obligations, and (5) recognize revenue as each performance obligation is satisfied. The FASB also issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ; ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing ; ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting ; and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , all of which were issued to improve and clarify the guidance in ASU 2014-09. Effective February 1, 2018, the Company adopted these ASUs using the modified retrospective method applied to those contracts that were not completed as of February 1, 2018, with no restatement of comparative periods. Results for reporting periods beginning after February 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting policies under ASC Topic 605. We recognized a net after-tax cumulative effect adjustment to retained earnings of $1.0 million as of February 1, 2018. The details of our current revenue recognition policy, as well as the change due to ASC Topic 606, are described below. Revenue Recognition. The Company has the following material revenue streams: the sale of products (e.g. appliances, electronics) including delivery; the sale of third party warranty and insurance programs, including retrospective income; service income; interest income generated from the financing of point of sale transactions; and volume rebate incentives received from a third party financer. Interest income related to our customer accounts receivable balance and loan origination costs (including sales commissions) meet the scope exception of ASC 606 and are therefore not impacted by the adoption of this standard. For our twelve month no-interest option program, as a practical expedient acceptable under ASC 606, we do not adjust for the time value of money. Sale of Products Including Delivery: The Company has a single performance obligation associated with these contracts: the delivery of the product to the customer, at which point control transfers. Revenue for the sale of products is recognized at the time of delivery, net of any adjustments for sales incentives such as discounts, coupons, rebates or other free products or services. Sales financed through third-party no-interest option programs typically require us to pay a fee to the third party on each completed sale, which is recorded as a reduction of net sales in the retail segment. Sale of Third Party Warranty and Insurance Programs, Including Retrospective Income: We sell RSA and credit insurance contracts on behalf of unrelated third-parties. The Company has a single performance obligation associated with these contracts: the delivery of the product to the customer, at which point control transfers. Commissions related to these contracts are recognized in revenue upon delivery of the product. We also may serve as the administrator of the RSAs sold and defer 5% of the revenue received from the sale of RSAs as compensation for this performance obligation as 5% represents the estimated stand-alone sales price to serve as the administrator. The deferred RSA administration fee is recorded in income ratably over the life of the RSA contract sold. Retrospective income on RSA contracts is recognized upon delivery of the product based on an estimate of claims and is adjusted throughout the life of the contracts as actual claims materialize. Retrospective income on insurance contracts is recognized when earned as that is the point at which we no longer believe a significant reversal of income is probable as the consideration is highly susceptible to factors outside of our influence. Service Income: The Company has a single performance obligation associated with these contracts: the servicing of the RSA claims. Service revenues are recognized at the time service is provided to the customer. Volume Rebate Incentive: As part of our agreement with our third-party provider of no-interest option programs, we may receive a volume rebate incentive based on the total dollar value of sales made under our third-party provider. The Company has a single performance obligation associated with this contract: the delivery of the product to the customer, at which point control transfers. Revenue for the volume rebate incentive is recognized upon delivery of the product to the customer based on the projected total annual dollar value of sales to be made under our third-party provider. ASC 606 requires disaggregation of revenue recognized from contracts with customers to depict how the nature, amount, timing and uncertainty of revenue is affected by economic factors. The Company concluded that the disaggregated discrete financial information presented in Note 14, Segment Information , and Note 5, Finance Charges and Other Revenues , reviewed by our chief operating decision maker in evaluating the financial performance of our operating segments adequately addresses the disaggregation of revenue requirements of ASC 606. Deferred Revenue. Deferred revenue related to contracts with customers as defined by ASC 606 consists of deferred customer deposits and deferred RSA administration fees. During the twelve months ended January 31, 2019 , we recognized $1.8 million of revenue for customer deposits deferred as of the beginning of the period. During the twelve months ended January 31, 2019 , we recognized $5.4 million of revenue for RSA administrative fees deferred as of the beginning of the period. Changes in Revenue Recognition Due to ASC 606. The adoption of ASC 606 resulted in a change to our accounting policy related to retrospective income on RSAs. We participate in profit sharing agreements with the underwriters of our RSA products, payment from which is contingent upon the actual performance of the portfolio of the RSAs sold. Prior to the adoption of ASC 606, we recognized this revenue and related receivable as the amount due to us at each reporting date based on the performance of the portfolio through such date. The Company concluded that this retrospective income represents variable consideration under ASC 606 for which the Company’s performance obligation is satisfied when the RSA is sold to the customer. Under ASC 606, an estimate of variable consideration, subject to constraints, is to be included in the transaction price and recognized when or as the performance obligation is satisfied. As a result of the adoption of ASC 606, the Company changed its accounting policy related to retrospective income on RSAs to record an estimate of retrospective income when the RSA is sold, subject to constraints in the estimate. The Company’s estimate of the amount of variable consideration is recorded as a contract asset, representing a conditional right to payment, and is included within other accounts receivable in the Consolidated Balance Sheet. The estimated contract asset will be reassessed at the end of each reporting period, with changes thereto recorded as adjustments to revenue. The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet as a result of the adoption of ASC 606 were as follows (in thousands): Impact of Adoption of ASC 606 (in thousands) Balance at January 31, 2018 Adjustments due to ASC 606 Balance at February 1, 2018 Assets Other Accounts Receivable $ 71,186 $ 1,210 $ 72,396 Deferred Income Taxes 21,565 (254 ) 21,311 Stockholder’s Equity $ 535,068 $ 956 $ 536,024 The adoption of ASC 606 did not have a material impact on the consolidated financial statements for the year ended January 31, 2018 and no comparative financial statements are presented. Internal Controls. As a result of the adoption of ASC 606, we evaluated our internal control framework and there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 requires that the statement of cash flows provides the change in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. We hold restricted cash related to our asset backed security transactions and lending license requirements. Effective February 1, 2018, the Company retrospectively adopted this ASU which resulted in us no longer presenting the changes in restricted cash balances as a component of cash flows from financing activities but instead including the balances of both current and long-term restricted cash with cash and cash equivalents in total cash, cash equivalents and restricted cash for the beginning and end of the periods presented. The total cash flow impact for the year ended January 31, 2017 was an decrease in the cash used in financing activities of $32.1 million . The total cash flow impact for the year ended January 31, 2018 was an increase in the cash used in financing activities of $23.8 million . The balances of cash and cash equivalents and restricted cash are separately presented within the Consolidated Balance Sheet as of January 31, 2018 . In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows to reduce diversity in practice. Among other things, debt prepayment or debt extinguishment costs will be presented as cash outflows for financing activities on the statement of cash flows. Effective February 1, 2018, the Company retrospectively adopted the ASU, which resulted in us no longer presenting the cash payment for debt extinguishment costs as a component of cash flows from operating activities, but instead including the cash payment as a component of cash flows from financing activities. The adoption of this ASU resulted in the reclassification of $0.8 million in payment on extinguishment of debt previously classified as a cash outflow from operating activities to a cash outflow from financing activities for the year ended January 31, 2018 . There was no impact for the year ended January 31, 2017 . Recent Accounting Pronouncements Yet To Be Adopted. In February 2016 the FASB issued ASU 2016-02, Leases (Topic 842), which will change how lessees account for leases. For most leases, a liability will be recorded on the balance sheet based on the present value of future lease obligations with a corresponding right-of-use asset. Primarily for those leases currently classified by us as operating leases, we will recognize a single lease cost on a straight line basis based on the combined amortization of the lease obligation and the right-of-use asset. Other leases will be required to be accounted for as financing arrangements similar to how we currently account for capital leases. We are the lessee under various lease agreements for our retail stores and equipment that are currently accounted for as operating leases as discussed in Note 8, Leases. On transition, we will recognize a cumulative-effect adjustment to the retained earnings on the opening balance sheet in the period of adoption using a modified retrospective approach. Based on our preliminary assessment, we believe the adoption of this ASU will have a material impact on our Consolidated Balance Sheet as we will be required to report additional leases on our Consolidated Balance Sheet. The Company plans to elect certain optional practical expedients which include the option to retain the current classification of leases entered into prior to February 1, 2019, and thus does not anticipate a material impact to the Consolidated Statements of Operations or Consolidated Statements of Cash Flows. The Company also plans to adopt an optional transition method finalized by the FASB in July 2018 that waives the requirement to apply this ASU in the comparative periods presented within the financial statements in the year of adoption. The Company expects to be affected by the transition guidance related to recognition of deferred gains recorded under previous sale and operating leaseback transactions, which requires the company to recognize deferred gains not resulting from off-market terms as a cumulative-effect adjustment to retained earnings upon adoption of ASU 2016-02. The Company is also evaluating and implementing changes to our accounting policies, processes, and internal controls to ensure compliance with the standard’s reporting and disclosure requirements as well as implementing a new lease accounting module within its lease management system to support the new accounting requirements. We will adopt the new standard in the first quarter of fiscal year 2020 and anticipate that the adoption will result in the recognition of an additional right-of-use asset and operating lease liability under noncancelable operating leases, net of deferred rent payments and tenant improvement allowances, ranging from approximately $200 million to $260 million as of the date of the adoption. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The standard will become effective for us in the first quarter of fiscal year 2021 and early adoption is permitted beginning in the first quarter of fiscal year 2020. We have formed a cross-functional working group comprised of individuals from various functional areas including credit, finance, accounting, and information technology. While we are currently evaluating the likely impact the adoption of this ASU will have on our consolidated financial statements, the adoption of ASU 2016-13 is likely to result in a material increase in the allowance for loan losses as a result of changing from an “incurred loss” model, which encompasses allowances for current known and inherent losses within the portfolio, to an “expected loss” model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Shares outstanding for the earnings (loss) per share calculations | The following table sets forth the shares outstanding for the earnings per share calculations: Year Ended January 31, 2019 2018 2017 Weighted-average common shares outstanding - Basic 31,668,370 31,192,439 30,776,479 Dilutive effect of stock options and restricted stock units 706,005 585,384 — Weighted-average common shares outstanding - Diluted 32,374,375 31,777,823 30,776,479 |
Cumulative effect of the changes for adoption of Topic 606 | The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet as a result of the adoption of ASC 606 were as follows (in thousands): Impact of Adoption of ASC 606 (in thousands) Balance at January 31, 2018 Adjustments due to ASC 606 Balance at February 1, 2018 Assets Other Accounts Receivable $ 71,186 $ 1,210 $ 72,396 Deferred Income Taxes 21,565 (254 ) 21,311 Stockholder’s Equity $ 535,068 $ 956 $ 536,024 |
Customer Accounts Receivable (T
Customer Accounts Receivable (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Receivables [Abstract] | |
Schedule of customer accounts receivable | Customer accounts receivable consisted of the following: (in thousands) January 31, January 31, Customer accounts receivable portfolio balance $ 1,589,828 $ 1,527,862 Deferred fees and origination costs, net (16,579 ) (15,897 ) Allowance for no-interest option credit programs (19,257 ) (20,960 ) Allowance for uncollectible interest (15,555 ) (10,966 ) Carrying value of customer accounts receivable 1,538,437 1,480,039 Allowance for bad debts (199,324 ) (192,606 ) Carrying value of customer accounts receivable, net of allowance for bad debts 1,339,113 1,287,433 Short-term portion of customer accounts receivable, net $ (652,769 ) $ (636,825 ) Long-term customer accounts receivable, net $ 686,344 $ 650,608 Carrying Value (in thousands) January 31, January 31, Customer accounts receivable 60+ days past due (1) $ 146,188 $ 143,713 Re-aged customer accounts receivable (2)(3) 395,576 364,768 Restructured customer accounts receivable (4) 183,641 152,784 (1) As of January 31, 2019 and 2018 , the carrying value of customer accounts receivable past due one day or greater was $420.9 million and $390.0 million , respectively. These amounts include the 60+ days past due balances shown above. (2) The re-aged carrying value as of January 31, 2019 and 2018 includes $92.4 million and $76.9 million in carrying value that are both 60+ days past due and re-aged. (3) The re-aged carrying value as of January 31, 2019 and 2018 includes $26.5 million and $59.8 million in first time re-ages related to customers within FEMA-designated Hurricane Harvey disaster areas. (4) The restructured carrying value as of January 31, 2019 and 2018 includes $43.9 million and $37.1 million in carrying value that are both 60+ days past due and restructured. |
Allowance for doubtful accounts and uncollectible interest for customer receivables | The following presents the activity in our allowance for doubtful accounts and uncollectible interest for customer accounts receivable: January 31, 2019 (in thousands) Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 148,856 $ 54,716 $ 203,572 Provision (1) 174,552 74,514 249,066 Principal charge-offs (2) (157,789 ) (55,024 ) (212,813 ) Interest charge-offs (32,432 ) (11,310 ) (43,742 ) Recoveries (2) 13,936 4,860 18,796 Allowance at end of period $ 147,123 $ 67,756 $ 214,879 Average total customer portfolio balance $ 1,355,011 $ 171,717 $ 1,526,728 January 31, 2018 (in thousands) Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 158,992 $ 51,183 $ 210,175 Provision (1) 189,786 71,047 260,833 Principal charge-offs (2) (177,682 ) (60,003 ) (237,685 ) Interest charge-offs (30,379 ) (10,259 ) (40,638 ) Recoveries (2) 8,139 2,748 10,887 Allowance at end of period $ 148,856 $ 54,716 $ 203,572 Average total customer portfolio balance $ 1,357,455 $ 143,245 $ 1,500,700 January 31, 2017 (in thousands) Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 149,227 $ 41,763 $ 190,990 Provision (1) 219,084 62,788 281,872 Principal charge-offs (2) (183,235 ) (46,710 ) (229,945 ) Interest charge-offs (30,686 ) (7,832 ) (38,518 ) Recoveries (2) 4,602 1,174 5,776 Allowance at end of period $ 158,992 $ 51,183 $ 210,175 Average total customer portfolio balance $ 1,423,445 $ 129,030 $ 1,552,475 (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 the principal amount collected during the period for previously charged-off balances. Net charge-offs are calculated as the net of principal charge-offs and recoveries. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of the following: Estimated January 31, (dollars in thousands) Useful Lives 2019 2018 Land — $ 4,130 $ 4,146 Buildings 30 years 1,748 1,748 Leasehold improvements 5 to 15 years 246,404 222,781 Equipment and fixtures 3 to 5 years 78,562 67,710 Capital leases 3 to 20 years 9,646 8,527 Construction in progress — 9,696 8,097 350,186 313,009 Less accumulated depreciation (201,203 ) (169,857 ) $ 148,983 $ 143,152 |
Charges and Credits (Tables)
Charges and Credits (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Charges and Credits [Abstract] | |
Schedule of Charges and Credits | Charges and credits consisted of the following: Year Ended January 31, (in thousands) 2019 2018 2017 Store and facility closure and relocation costs $ — $ 2,381 $ 1,089 Legal and professional fees and related reserves associated with the exploration of strategic alternatives, securities-related litigation, a legal judgment and other legal matters 5,100 1,177 101 Indirect tax audit reserve 1,943 2,595 1,434 Impairment from disposal — — 1,986 Employee severance and executive management transition costs 737 1,317 1,868 Write-off of capitalized software costs — 5,861 — $ 7,780 $ 13,331 $ 6,478 |
Finance Charges and Other Rev_2
Finance Charges and Other Revenues (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Supplemental Disclosure of Finance Charges and Other Revenue [Abstract] | |
Summary of finance charges and other revenues | Finance charges and other revenues consisted of the following: Year Ended January 31, (in thousands) 2019 2018 2017 Interest income and fees $ 325,136 $ 289,005 $ 238,386 Insurance income 29,556 34,718 42,422 Other revenues 447 341 1,569 Total finance charges and other revenues $ 355,139 $ 324,064 $ 282,377 |
Debt and Capital Lease Obliga_2
Debt and Capital Lease Obligations (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long term debt | Debt and capital lease obligations consisted of the following: January 31, (in thousands) 2019 2018 Revolving Credit Facility $ 266,500 $ 77,000 Senior Notes 227,000 227,000 2016-B VIE Asset-backed Class B Notes — 73,589 2017-A VIE Asset-backed Class A Notes — 59,794 2017-A VIE Asset-backed Class B Notes — 106,270 2017-A VIE Asset-backed Class C Notes — 50,340 2017-B VIE Asset-backed Class A Notes — 292,663 2017-B VIE Asset-backed Class B Notes 98,297 132,180 2017-B VIE Asset-backed Class C Notes 78,640 78,640 2018-A VIE Asset-backed Class A Notes 105,971 — 2018-A VIE Asset-backed Class B Notes 63,908 — 2018-A VIE Asset-backed Class C Notes 63,908 — Warehouse Notes 53,635 — Capital lease obligations 5,075 4,949 Total debt and capital lease obligations 962,934 1,102,425 Less: Discount on debt (1,966 ) (2,527 ) Deferred debt issuance costs (5,637 ) (8,886 ) Current maturities of long-term debt and capital lease obligations (54,109 ) (907 ) Long-term debt and capital lease obligations $ 901,222 $ 1,090,105 |
Aggregate maturities of long-term debt | Future maturities of debt, excluding capital lease obligations, as of January 31, 2019 are as follows: (in thousands) Year Ended January 31, 2020 $ 53,635 2021 — 2022 98,297 2023 805,927 2024 — Total $ 957,859 |
Schedule of asset-backed notes | The asset-backed notes outstanding as of January 31, 2019 consisted of the following: Asset-Backed Notes Original Principal Amount Original Net Proceeds (1) Current Principal Amount Issuance Date Maturity Date Contractual Interest Rate Effective Interest Rate (2) 2017-B Class B Notes $ 132,180 $ 131,281 $ 98,297 12/20/2017 4/15/2021 4.52% 5.24% 2017-B Class C Notes 78,640 77,843 78,640 12/20/2017 11/15/2022 5.95% 6.34% 2018-A Class A Notes 219,200 217,832 105,971 8/15/2018 1/17/2023 3.25% 4.57% 2018-A Class B Notes 69,550 69,020 63,908 8/15/2018 1/17/2023 4.65% 5.43% 2018-A Class C Notes 69,550 68,850 63,908 8/15/2018 1/17/2023 6.02% 6.80% Warehouse Notes 121,060 118,972 53,635 7/16/2018 1/15/2020 Index + 2.50% 6.41% Total $ 690,180 $ 683,798 $ 464,359 (1) After giving effect to debt issuance costs and restricted cash held by the VIEs. (2) For the year ended January 31, 2019 , and inclusive of the impact of changes in timing of actual and expected cash flows. |
Schedule of debt covenants | A summary of the significant financial covenants that govern our Revolving Credit Facility, as amended, compared to our actual compliance status at January 31, 2019 is presented below: Actual Required Interest Coverage Ratio for the quarter must equal or exceed minimum 5.08:1.00 1.00:1.00 Interest Coverage Ratio for the trailing two quarters must equal or exceed minimum 4.59:1.00 1.50:1.00 Leverage Ratio must not exceed maximum 1.94:1.00 4.00:1.00 ABS Excluded Leverage Ratio must not exceed maximum 1.28:1.00 2.00:1.00 Capital Expenditures, net, must not exceed maximum $16.0 million $100.0 million |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Deferred tax assets and liabilities | Deferred tax assets and liabilities consisted of the following: January 31, (in thousands) 2019 2018 Deferred tax assets: Allowance for doubtful accounts $ 22,637 $ 19,325 Deferred rent 6,200 5,839 Deferred gains on sale-leaseback transactions 1,447 1,598 Deferred revenue 908 1,240 Indirect tax reserve 3,025 — Inventories 1,711 2,126 Stock-based compensation 1,825 1,439 State net operating loss carryforwards 1,127 1,207 Other 3,093 3,534 Total deferred tax assets 41,973 36,308 Deferred tax liabilities: Vendor prepayments (1,066 ) (4,723 ) Sales tax receivable (4,155 ) (3,649 ) Property and equipment (8,694 ) (6,275 ) Other (523 ) (96 ) Total deferred tax liabilities (14,438 ) (14,743 ) Net deferred tax asset $ 27,535 $ 21,565 |
Components of provision (benefit) for income taxes | Provision for income taxes consisted of the following: Year Ended January 31, (in thousands) 2019 2018 2017 Current: Federal $ 29,919 $ (25,891 ) $ (11,251 ) State 2,308 1,184 3,519 Total current 32,227 (24,707 ) (7,732 ) Deferred: Federal (9,419 ) 49,536 (1,435 ) State 121 342 212 Total deferred (9,298 ) 49,878 (1,223 ) Provision (benefit) for income taxes $ 22,929 $ 25,171 $ (8,955 ) |
Reconciliation of tax provision at statutory rate | A reconciliation of the provision (benefit) for income taxes at the U.S. federal statutory tax rate and the total tax provision (benefit) for each of the periods presented in the statements of operations follows: Year Ended January 31, (in thousands) 2019 2018 2017 Income tax provision (benefit) at U.S. federal statutory rate (1) $ 20,323 $ 10,696 $ (12,081 ) State income taxes, net of federal benefit 2,068 1,910 2,363 Tax Act and other deferred tax adjustments — 13,387 771 Provision to return adjustments — (1,142 ) — Employee benefits 1,096 — — Other (558 ) 320 (8 ) Provision (benefit) for income taxes $ 22,929 $ 25,171 $ (8,955 ) (1) As a result of the Tax Act, the Company recorded a $0.3 million current income tax benefit in the fourth quarter of fiscal year 2018 as a result of using a 33.81% blended statutory rate for fiscal year 2018 instead of the prior statutory rate of 35%. |
Changes in balance of unrecognized tax benefits | Changes in the balance of unrecognized tax benefits, including interest and penalties on uncertain tax positions, were as follows: Year Ended January 31, (in thousands) 2019 2018 2017 Balance at February 1 $ — $ — $ — Increases related to prior year tax positions (12,084 ) — — Decreases related to prior year tax positions 459 — — Balance at January 31 $ (11,625 ) $ — $ — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Leases, Operating [Abstract] | |
Schedule of future minimum base rental payments | As of January 31, 2019 , our future minimum lease payments are as follows: (in thousands) Operating Leases Capital Leases Year ending January 31, 2020 $ 68,678 $ 1,040 2021 71,462 724 2022 69,802 723 2023 67,935 470 2024 62,721 639 Thereafter 172,827 3,703 Total $ 513,425 7,299 Less - interest on capital lease obligations (2,224 ) Total principal payable on capital lease obligations 5,075 Less - current maturities (744 ) Long-term capital lease obligations $ 4,331 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of share-based compensation expense | Total stock-based compensation expense, recognized primarily in SG&A, from stock-based compensation consisted of the following: Year Ended January 31, (in thousands) 2019 2018 2017 Stock options $ 3,414 $ 236 $ 173 RSUs 8,540 7,622 4,282 Employee stock purchase plan 263 220 329 Accelerated RSU expense charged to severance — 602 217 $ 12,217 $ 8,680 $ 5,001 |
Summary of incentive stock option plan activity | The following table summarizes the activity for outstanding stock options: Shares Under Option Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Outstanding, January 31, 2018 189,485 $ 14.39 Granted 620,166 $ 32.35 Exercised (32,620 ) $ 12.23 Forfeited and expired (4,300 ) $ 5.46 Outstanding, January 31, 2019 772,731 $ 28.94 8.4 years Vested and expected to vest, January 31, 2019 772,731 $ 28.94 8.4 years Exercisable, January 31, 2019 102,564 $ 13.21 4.4 years |
Summary of the restricted stock units granted under the Omnibus Incentive Plan activity | The following table summarizes the activity for RSUs: Time-Based RSUs Performance-Based RSUs Number of Units Weighted-Average Grant Date Fair Value Number of Units Weighted-Average Grant Date Fair Value Total Number of Units Balance, January 31, 2018 1,222,009 $ 15.52 615,174 $ 11.78 1,837,183 Granted 272,973 $ 27.90 — $ — 272,973 Vested and converted to common stock (390,478 ) $ 15.62 — $ — (390,478 ) Forfeited (220,229 ) $ 17.83 (148,174 ) $ 12.26 (368,403 ) Balance, January 31, 2019 884,275 $ 18.73 467,000 $ 11.66 1,351,275 |
Significant Vendors (Tables)
Significant Vendors (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Significant Vendors [Abstract] | |
Vendor portion of the Company's merchandise purchases | As shown in the table below, a significant portion of our merchandise purchases were made from six vendors: Year Ended January 31, 2019 2018 2017 Vendor A 25.3 % 27.6 % 26.5 % Vendor B 16.1 14.8 17.6 Vendor C 7.0 6.5 5.8 Vendor D 6.7 5.3 5.4 Vendor E 5.2 4.1 4.0 Vendor F 5.0 3.8 3.7 65.3 % 62.1 % 63.0 % |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following table presents the assets and liabilities held by the VIEs (for legal purposes, the assets and liabilities of the VIEs will remain distinct from Conn’s, Inc.): (in thousands) January 31, January 31, Assets: Restricted cash $ 57,475 $ 85,322 Due from Conn’s, Inc., net 5,504 15,212 Customer accounts receivable: Customer accounts receivable 538,826 987,418 Restructured accounts 135,834 97,967 Allowance for uncollectible accounts (106,327 ) (143,115 ) Allowance for no-interest option credit programs (8,047 ) (18,228 ) Deferred fees and origination costs (5,321 ) (9,332 ) Total customer accounts receivable, net 554,965 914,710 Total assets $ 617,944 $ 1,015,244 Liabilities: Accrued expenses $ 3,939 $ 6,723 Other liabilities 5,513 10,639 Short-term debt: Warehouse Notes 53,635 — Long-term debt: 2016-B Class B Notes — 73,589 2017-A Class A Notes — 59,794 2017-A Class B Notes — 106,270 2017-A Class C Notes — 50,340 2017-B Class A Notes — 292,663 2017-B Class B Notes 98,297 132,180 2017-B Class C Notes 78,640 78,640 2018-A Class A Notes 105,971 — 2018-A Class B Notes 63,908 — 2018-A Class C Notes 63,908 — 410,724 793,476 Less deferred debt issuance costs (2,731 ) (5,497 ) Total debt 461,628 787,979 Total liabilities $ 471,080 $ 805,341 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Segment Reporting [Abstract] | |
Financial information by segment | Financial information by segment is presented in the following tables: Year Ended January 31, 2019 (in thousands) Retail Credit Total Revenues: Furniture and mattress $ 382,975 $ — $ 382,975 Home appliance 332,609 — 332,609 Consumer electronics 262,088 — 262,088 Home office 86,260 — 86,260 Other 14,703 — 14,703 Product sales 1,078,635 — 1,078,635 Repair service agreement commissions 101,928 — 101,928 Service revenues 14,111 — 14,111 Total net sales 1,194,674 — 1,194,674 Finance charges and other revenues 447 354,692 355,139 Total revenues 1,195,121 354,692 1,549,813 Costs and expenses: Cost of goods sold 702,135 — 702,135 Selling, general and administrative expense (1) 328,628 151,933 480,561 Provision for bad debts 1,009 197,073 198,082 Charges and credits 2,980 4,800 7,780 Total costs and expenses 1,034,752 353,806 1,388,558 Operating income 160,369 886 161,255 Interest expense — 62,704 62,704 Loss on extinguishment of debt — 1,773 1,773 Income (loss) before income taxes $ 160,369 $ (63,591 ) $ 96,778 Additional Disclosures: Property and equipment additions $ 36,110 $ 1,384 $ 37,494 Depreciation expense $ 30,739 $ 845 $ 31,584 January 31, 2019 (in thousands) Retail Credit Total Total assets $ 405,542 $ 1,479,365 $ 1,884,907 Year Ended January 31, 2018 (in thousands) Retail Credit Total Revenues: Furniture and mattress $ 393,853 $ — $ 393,853 Home appliance 337,538 — 337,538 Consumer electronics 248,727 — 248,727 Home office 80,330 — 80,330 Other 17,426 — 17,426 Product sales 1,077,874 — 1,077,874 Repair service agreement commissions 100,383 — 100,383 Service revenues 13,710 — 13,710 Total net sales 1,191,967 — 1,191,967 Finance charges and other revenues 341 323,723 324,064 Total revenues 1,192,308 323,723 1,516,031 Costs and expenses: Cost of goods sold 720,344 — 720,344 Selling, general and administrative expense (1) 316,325 134,088 450,413 Provision for bad debts 829 216,046 216,875 Charges and credits 13,331 — 13,331 Total costs and expenses 1,050,829 350,134 1,400,963 Operating income (loss) 141,479 (26,411 ) 115,068 Interest expense — 80,160 80,160 Loss on extinguishment of debt — 3,274 3,274 Income (loss) before income taxes $ 141,479 $ (109,845 ) $ 31,634 Additional Disclosures: Property and equipment additions $ 21,285 $ 42 $ 21,327 Depreciation expense $ 30,065 $ 741 $ 30,806 January 31, 2018 (in thousands) Retail Credit Total Total assets $ 344,327 $ 1,556,472 $ 1,900,799 Year Ended January 31, 2017 (in thousands) Retail Credit Total Revenues: Furniture and mattress $ 421,055 $ — $ 421,055 Home appliance 358,771 — 358,771 Consumer electronics 293,685 — 293,685 Home office 92,404 — 92,404 Other 20,282 — 20,282 Product sales 1,186,197 — 1,186,197 Repair service agreement commissions 113,615 — 113,615 Service revenues 14,659 — 14,659 Total net sales 1,314,471 — 1,314,471 Finance charges and other revenues 1,569 280,808 282,377 Total revenues 1,316,040 280,808 1,596,848 Costs and expenses: Cost of goods sold 823,082 — 823,082 Selling, general and administrative expense (1) 326,078 134,818 460,896 Provision for bad debts 990 241,304 242,294 Charges and credits 6,478 — 6,478 Total costs and expenses 1,156,628 376,122 1,532,750 Operating income (loss) 159,412 (95,314 ) 64,098 Interest expense — 98,615 98,615 Income (loss) before income taxes $ 159,412 $ (193,929 ) $ (34,517 ) Additional Disclosures: Property and equipment additions $ 43,460 $ 182 $ 43,642 Depreciation expense $ 28,063 $ 783 $ 28,846 January 31, 2017 (in thousands) Retail Credit Total Total assets $ 332,611 $ 1,608,523 $ 1,941,134 (1) For the years ended January 31, 2019 , 2018 and 2017 , the amount of overhead allocated to each segment reflected in SG&A was $36.4 million , $27.6 million and $24.5 million , respectively. For the years ended January 31, 2019 , 2018 and 2017 , the amount of reimbursement made to the retail segment by the credit segment was $38.1 million , $37.4 million and $38.8 million , respectively. |
Guarantor Financial Informati_2
Guarantor Financial Information (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidated Balance Sheet | Consolidated Balance Sheets as of January 31, 2019 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 5,912 $ — $ — $ 5,912 Restricted cash — 1,550 57,475 — 59,025 Customer accounts receivable, net of allowances — 328,705 324,064 — 652,769 Other accounts receivable — 67,078 — — 67,078 Inventories — 220,034 — — 220,034 Other current assets — 12,344 5,504 (8,272 ) 9,576 Total current assets — 635,623 387,043 (8,272 ) 1,014,394 Investment in and advances to subsidiaries 815,524 146,864 — (962,388 ) — Long-term portion of customer accounts receivable, net of allowance — 455,443 230,901 — 686,344 Property and equipment, net — 148,983 — — 148,983 Deferred income taxes 27,535 — — — 27,535 Other assets — 7,651 — — 7,651 Total assets $ 843,059 $ 1,394,564 $ 617,944 $ (970,660 ) $ 1,884,907 Liabilities and Stockholders’ Equity Current liabilities: Current maturities of debt and capital lease obligations $ — $ 474 $ 53,635 $ — $ 54,109 Accounts payable — 71,118 — — 71,118 Accrued expenses 686 88,478 3,939 (2,768 ) 90,335 Other current liabilities — 24,918 2,592 (5,504 ) 22,006 Total current liabilities 686 184,988 60,166 (8,272 ) 237,568 Deferred rent — 93,127 — — 93,127 Long-term debt and capital lease obligations 222,398 270,831 407,993 — 901,222 Other long-term liabilities — 30,094 2,921 — 33,015 Total liabilities 223,084 579,040 471,080 (8,272 ) 1,264,932 Total stockholders’ equity 619,975 815,524 146,864 (962,388 ) 619,975 Total liabilities and stockholders’ equity $ 843,059 $ 1,394,564 $ 617,944 $ (970,660 ) $ 1,884,907 Consolidated Balance Sheets as of January 31, 2018 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 9,286 $ — $ — $ 9,286 Restricted cash — 1,550 85,322 — 86,872 Customer accounts receivable, net of allowances — 177,117 459,708 — 636,825 Other accounts receivable — 71,186 — — 71,186 Inventories — 211,894 — — 211,894 Other current assets — 68,621 15,212 (19,879 ) 63,954 Total current assets — 539,654 560,242 (19,879 ) 1,080,017 Investment in and advances to subsidiaries 735,272 209,903 — (945,175 ) — Long-term portion of customer accounts receivable, net of allowance — 195,606 455,002 — 650,608 Property and equipment, net — 143,152 — — 143,152 Deferred income taxes 21,565 — — — 21,565 Other assets — 5,457 — — 5,457 Total assets $ 756,837 $ 1,093,772 $ 1,015,244 $ (965,054 ) $ 1,900,799 Liabilities and Stockholders’ Equity Current liabilities: Current maturities of debt and capital lease obligations $ — $ 907 $ — $ — $ 907 Accounts payable — 71,617 — — 71,617 Accrued expenses 686 66,370 6,723 (4,667 ) 69,112 Other current liabilities — 32,685 5,002 (15,212 ) 22,475 Total current liabilities 686 171,579 11,725 (19,879 ) 164,111 Deferred rent — 87,003 — — 87,003 Long-term debt and capital lease obligations 221,083 81,043 787,979 — 1,090,105 Other long-term liabilities — 18,875 5,637 — 24,512 Total liabilities 221,769 358,500 805,341 (19,879 ) 1,365,731 Total stockholders’ equity 535,068 735,272 209,903 (945,175 ) 535,068 Total liabilities and stockholders’ equity $ 756,837 $ 1,093,772 $ 1,015,244 $ (965,054 ) $ 1,900,799 |
Condensed Consolidated Statement of Operations | Consolidated Statements of Operations for the year ended January 31, 2019 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 1,194,674 $ — $ — $ 1,194,674 Finance charges and other revenues — 193,583 161,556 — 355,139 Servicing fee revenue — 40,947 — (40,947 ) — Total revenues — 1,429,204 161,556 (40,947 ) 1,549,813 Costs and expenses: Cost of goods sold — 702,135 — — 702,135 Selling, general and administrative expense — 479,995 41,513 (40,947 ) 480,561 Provision for bad debts — 68,056 130,026 — 198,082 Charges and credits — 7,780 — — 7,780 Total costs and expenses — 1,257,966 171,539 (40,947 ) 1,388,558 Operating income (loss) — 171,238 (9,983 ) — 161,255 Interest expense 17,782 12,498 32,424 — 62,704 Loss on extinguishment of debt — 142 1,631 — 1,773 Income (loss) before income taxes (17,782 ) 158,598 (44,038 ) — 96,778 Provision (benefit) for income taxes (4,213 ) 37,577 (10,435 ) — 22,929 Net income (loss) (13,569 ) 121,021 (33,603 ) — 73,849 Income (loss) from consolidated subsidiaries 87,418 (33,603 ) — (53,815 ) — Consolidated net income (loss) $ 73,849 $ 87,418 $ (33,603 ) $ (53,815 ) $ 73,849 Consolidated Statement of Operations for the year ended January 31, 2018 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 1,191,967 $ — $ — $ 1,191,967 Finance charges and other revenues — 173,539 150,525 — 324,064 Servicing fee revenue — 63,372 — (63,372 ) — Total revenues — 1,428,878 150,525 (63,372 ) 1,516,031 Costs and expenses: Cost of goods sold — 720,344 — — 720,344 Selling, general and administrative expense — 460,698 53,087 (63,372 ) 450,413 Provision for bad debts — 42,677 174,198 — 216,875 Charges and credits — 13,331 — — 13,331 Total costs and expenses — 1,237,050 227,285 (63,372 ) 1,400,963 Operating income (loss) — 191,828 (76,760 ) — 115,068 Interest expense 17,772 15,978 46,410 — 80,160 Loss on extinguishment of debt — 349 2,925 — 3,274 Income (loss) before income taxes (17,772 ) 175,501 (126,095 ) — 31,634 Provision (benefit) for income taxes (14,141 ) 139,647 (100,335 ) — 25,171 Net income (loss) (3,631 ) 35,854 (25,760 ) — 6,463 Income (loss) from consolidated subsidiaries 10,094 (25,760 ) — 15,666 — Consolidated net income (loss) $ 6,463 $ 10,094 $ (25,760 ) $ 15,666 $ 6,463 |
Condensed Consolidated Statement of Cash Flows | Consolidated Statements of Cash Flows for the year ended January 31, 2019 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ (1,237 ) $ 18,201 $ 134,837 $ — $ 151,801 Cash flows from investing activities: Purchase of customer accounts receivables — — (525,846 ) 525,846 — Sale of customer accounts receivables — — 525,846 (525,846 ) — Purchase of property and equipment — (32,814 ) — — (32,814 ) Net cash provided by (used in) investing activities — (32,814 ) — — (32,814 ) Cash flows from financing activities: Proceeds from issuance of asset-backed notes — — 358,300 — 358,300 Payments on asset-backed notes — (169,443 ) (570,432 ) — (739,875 ) Borrowings from Revolving Credit Facility — 1,836,822 — — 1,836,822 Payments on Revolving Credit Facility — (1,647,322 ) — — (1,647,322 ) Borrowings from warehouse facility — — 173,286 — 173,286 Payments of debt issuance costs and amendment fees — (3,230 ) (4,188 ) — (7,418 ) Payments on warehouse facility — — (119,650 ) — (119,650 ) Proceeds from stock issued under employee benefit plans 1,237 — — — 1,237 Tax payments associated with equity-based compensation transactions — (3,342 ) — — (3,342 ) Payments from extinguishment of debt — (1,178 ) — — (1,178 ) Other — (1,068 ) — — (1,068 ) Net cash provided by (used in) financing activities 1,237 11,239 (162,684 ) — (150,208 ) Net change in cash, cash equivalents and restricted cash — (3,374 ) (27,847 ) — (31,221 ) Cash, cash equivalents and restricted cash, beginning of period — 10,836 85,322 — 96,158 Cash, cash equivalents and restricted cash, end of period $ — $ 7,462 $ 57,475 $ — $ 64,937 Consolidated Statement of Cash Flows for the year ended January 31, 2018 (in thousands) Conn’s, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ (3,318 ) $ (925,182 ) $ 979,022 $ — $ 50,522 Cash flows from investing activities: Purchase of customer accounts receivables — — (1,112,903 ) 1,112,903 — Sale of customer accounts receivables — 1,112,903 — (1,112,903 ) — Purchase of property and equipment — (16,918 ) — — (16,918 ) Net cash provided by (used in) investing activities — 1,095,985 (1,112,903 ) — (16,918 ) Cash flows from financing activities: Proceeds from issuance of asset-backed notes — — 1,042,034 — 1,042,034 Payments on asset-backed notes — (77,104 ) (922,923 ) — (1,000,027 ) Borrowings from Revolving Credit Facility — 1,717,012 — — 1,717,012 Payments on Revolving Credit Facility — (1,817,512 ) — — (1,817,512 ) Payments of debt issuance costs and amendment fees — (3,268 ) (10,606 ) — (13,874 ) Proceeds from stock issued under employee benefit plans 3,318 — — — 3,318 Tax payments associated with equity-based compensation transactions — (1,182 ) — — (1,182 ) Payments from extinguishment of debt — (836 ) — — (836 ) Other — (643 ) — — (643 ) Net cash provided by (used in) financing activities 3,318 (183,533 ) 108,505 — (71,710 ) Net change in cash, cash equivalents and restricted cash — (12,730 ) (25,376 ) — (38,106 ) Cash, cash equivalents and restricted cash, beginning of period — 23,566 110,698 — 134,264 Cash, cash equivalents and restricted cash, end of period $ — $ 10,836 $ 85,322 $ — $ 96,158 |
Quarterly Information (Unaudi_2
Quarterly Information (Unaudited) (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | The following tables set forth certain quarterly financial data for the years ended January 31, 2019 and 2018 that have been prepared on a consistent basis as the accompanying audited consolidated financial statements and include all adjustments necessary for a fair presentation, in all material respects, of the information shown: (dollars in thousands, except per share amounts) Fiscal Year 2019 Quarter Ended April 30 July 31 October 31 January 31 Revenues: Retail Segment $ 275,770 $ 296,411 $ 284,053 $ 338,887 Credit Segment 82,617 88,209 89,771 94,095 Total revenues $ 358,387 $ 384,620 $ 373,824 $ 432,982 Percent of annual revenues 23.1 % 24.8 % 24.1 % 28.0 % Costs and expenses: Cost of goods sold $ 166,589 $ 173,627 $ 166,886 $ 195,033 Operating income (loss): Retail Segment $ 31,169 $ 39,238 $ 35,250 $ 54,712 Credit Segment 1,595 14 223 (946 ) Total operating income $ 32,764 $ 39,252 $ 35,473 $ 53,766 Net income $ 12,732 $ 17,011 $ 14,630 $ 29,476 Income per share: Basic (1) $ 0.40 $ 0.54 $ 0.46 $ 0.93 Diluted (1) $ 0.39 $ 0.53 $ 0.45 $ 0.91 Fiscal Year 2018 (dollars in thousands, except per share amounts) Quarter Ended April 30 July 31 October 31 January 31 Revenues: Retail Segment $ 279,365 $ 286,505 $ 291,903 $ 334,535 Credit Segment 76,461 80,142 81,269 85,851 Total revenues $ 355,826 $ 366,647 $ 373,172 $ 420,386 Percent of annual revenues 23.5 % 24.2 % 24.6 % 27.7 % Costs and expenses: Cost of goods sold $ 171,950 $ 172,306 $ 175,591 $ 200,497 Operating income (loss): Retail Segment $ 32,011 $ 31,299 $ 29,586 $ 48,583 Credit Segment (11,829 ) (2,107 ) (8,733 ) (3,742 ) Total operating income $ 20,182 $ 29,192 $ 20,853 $ 44,841 Net income (loss) $ (2,580 ) $ 4,273 $ 1,569 $ 3,201 Income (loss) per share Basic (1) $ (0.08 ) $ 0.14 $ 0.05 $ 0.10 Diluted (1) $ (0.08 ) $ 0.14 $ 0.05 $ 0.10 (1) The sum of the quarterly earnings per share amounts may not equal the fiscal year amount due to rounding and use of weighted-average shares outstanding. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Jan. 31, 2019USD ($)segmentshares | Jan. 31, 2018USD ($)shares | Jan. 31, 2017USD ($)shares | |
Business | |||
Operating segments | segment | 2 | ||
Cash and cash equivalents | |||
Credit card deposits in-transit | $ 2,500,000 | $ 2,000,000 | |
Customer Accounts Receivable | |||
Delinquent accounts charged-off (more than) | 209 days | ||
Interest Income on Customer Accounts Receivable | |||
Receivables in non-accrual status | $ 13,900,000 | 16,800,000 | |
Receivables past due | 106,500,000 | 103,600,000 | |
Amount in bankruptcy and less than 60 days past due | 12,000,000 | 14,400,000 | |
Vendor Allowances | |||
Vendor rebates | 143,300,000 | 153,000,000 | $ 162,500,000 |
Internal-Use Software Costs | |||
Write-off of capitalized software costs | 0 | 5,861,000 | 0 |
Impairment of Long-Lived Assets | |||
Impairment charges recorded | 0 | 0 | 0 |
Debt Issuance Costs | |||
Deferred debt issuance costs | (5,637,000) | (8,886,000) | |
Advertising Costs | |||
Advertising expense included in Selling, general and administrative expense | $ 80,500,000 | $ 86,800,000 | $ 92,900,000 |
Earnings per Share | |||
Weighted average common shares outstanding - Basic (in shares) | shares | 31,668,370 | 31,192,439 | 30,776,479 |
Dilutive effect of stock options and restricted stock units (in shares) | shares | 706,005 | 585,384 | 0 |
Weighted average common shares outstanding - Diluted (in shares) | shares | 32,374,375 | 31,777,823 | 30,776,479 |
Weighted average number of options not included in the calculation of the dilutive effect of stock options and restricted stock units (in shares) | shares | 578,951 | 278,740 | 735,456 |
Fair Value of Financial Instruments | |||
Fair value of debt | $ 221,900,000 | ||
Secured debt | |||
Fair Value of Financial Instruments | |||
Carrying amount of debt | $ 227,000,000 | ||
Minimum | |||
Leases | |||
Term of lease | 5 years | ||
Number of days possession occurs prior to store opening | 90 days | ||
Minimum | Equipment | |||
Leases | |||
Term of lease | 3 years | ||
Maximum | |||
Leases | |||
Term of lease | 15 years | ||
Number of days possession occurs prior to store opening | 120 days | ||
Maximum | Equipment | |||
Leases | |||
Term of lease | 5 years | ||
Lease agreements with escalating rent payments | |||
Leases | |||
Deferred rent credit | $ 27,700,000 | $ 26,900,000 | |
Tenant allowances | |||
Leases | |||
Deferred rent credit | 77,800,000 | 69,700,000 | |
Revolving Credit Facility | |||
Debt Issuance Costs | |||
Deferred debt issuance costs | (6,100,000) | (5,200,000) | |
Customer Accounts Receivable | |||
Interest Income on Customer Accounts Receivable | |||
Deferred interest | 11,200,000 | 12,500,000 | |
VIE | |||
Interest Income on Customer Accounts Receivable | |||
Deferred interest | 5,513,000 | 10,639,000 | |
Debt Issuance Costs | |||
Deferred debt issuance costs | (2,731,000) | (5,497,000) | |
Fair Value of Financial Instruments | |||
Carrying amount of debt | 461,628,000 | 787,979,000 | |
Securitized receivables | |||
Cash and cash equivalents | |||
Restricted cash and cash equivalents | 45,300,000 | 58,100,000 | |
Securitized receivables | VIE | |||
Cash and cash equivalents | |||
Restricted cash and cash equivalents | $ 12,200,000 | $ 27,200,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Recent Accounting Pronouncements Adopted (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | Feb. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net after-tax cumulative effect adjustment to retained earnings | $ 956 | |||
Decrease in cash used in financing activities | $ (150,208) | $ (71,710) | $ (125,987) | |
Payment for debt extinguishment | 1,178 | 836 | 0 | |
Customer deposits | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred revenue, revenue recognized | 1,800 | |||
RSA administrative fees | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred revenue, revenue recognized | $ 5,400 | |||
RSA administrative fees | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Percent of revenue deferred | 5.00% | |||
ASU 2016-18 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Decrease in cash used in financing activities | $ 23,800 | $ 32,100 | ||
Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net after-tax cumulative effect adjustment to retained earnings | 956 | |||
Retained Earnings | ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net after-tax cumulative effect adjustment to retained earnings | $ 1,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Cumulative Effect of the Changes for Adoption of Topic 606 (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Feb. 01, 2018 | Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Other accounts receivable | $ 67,078 | $ 71,186 | |||
Stockholder’s Equity | $ 619,975 | 535,068 | $ 517,790 | $ 538,281 | |
ASU 2014-09 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Other accounts receivable | $ 72,396 | ||||
Deferred Income Taxes | 21,311 | ||||
Stockholder’s Equity | 536,024 | ||||
ASU 2014-09 | Balance at January 31, 2018 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Other accounts receivable | 71,186 | ||||
Deferred Income Taxes | 21,565 | ||||
Stockholder’s Equity | $ 535,068 | ||||
ASU 2014-09 | Adjustments due to ASC 606 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Other accounts receivable | 1,210 | ||||
Deferred Income Taxes | (254) | ||||
Stockholder’s Equity | $ 956 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Recent Accounting Pronouncements Yet To Be Adopted (Details) - Subsequent event - Anticipated - ASU 2016-02 $ in Millions | Apr. 30, 2019USD ($) |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating Lease, Liability | $ 200 |
Right-of-use assets | 200 |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating Lease, Liability | 260 |
Right-of-use assets | $ 260 |
Customer Accounts Receivable -
Customer Accounts Receivable - Schedule of Customer Accounts Receivable (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Receivables [Abstract] | ||
Customer accounts receivable portfolio balance | $ 1,589,828 | $ 1,527,862 |
Deferred fees and origination costs, net | (16,579) | (15,897) |
Allowance for no-interest option credit programs | (19,257) | (20,960) |
Allowance for uncollectible interest | (15,555) | (10,966) |
Carrying value of customer accounts receivable | 1,538,437 | 1,480,039 |
Allowance for bad debts | (199,324) | (192,606) |
Carrying value of customer accounts receivable, net of allowance for bad debts | 1,339,113 | 1,287,433 |
Short-term portion of customer accounts receivable, net | (652,769) | (636,825) |
Long-term customer accounts receivable, net | 686,344 | 650,608 |
Customer accounts receivable 60 plus days past due | 146,188 | 143,713 |
Re-aged customer accounts receivable | 395,576 | 364,768 |
Restructured customer accounts receivable | 183,641 | 152,784 |
Total amount of customer receivables past due one day or greater | 420,900 | 390,000 |
Amounts included within past due and reaged accounts | 92,400 | 76,900 |
Re-aged receivable balance | 26,500 | 59,800 |
Amounts included within past due and restructured accounts | $ 43,900 | $ 37,100 |
Customer Accounts Receivable _2
Customer Accounts Receivable - Allowance for Doubtful Accounts and Uncollectible Interest for Customer Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Allowance at beginning of period | $ 203,572 | $ 210,175 | $ 190,990 |
Provision | 249,066 | 260,833 | 281,872 |
Principal charge-offs | (212,813) | (237,685) | (229,945) |
Interest charge-offs | (43,742) | (40,638) | (38,518) |
Recoveries | 18,796 | 10,887 | 5,776 |
Allowance at end of period | 214,879 | 203,572 | 210,175 |
Average total customer portfolio balance | 1,526,728 | 1,500,700 | 1,552,475 |
Customer Accounts Receivable | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Allowance at beginning of period | 148,856 | 158,992 | 149,227 |
Provision | 174,552 | 189,786 | 219,084 |
Principal charge-offs | (157,789) | (177,682) | (183,235) |
Interest charge-offs | (32,432) | (30,379) | (30,686) |
Recoveries | 13,936 | 8,139 | 4,602 |
Allowance at end of period | 147,123 | 148,856 | 158,992 |
Average total customer portfolio balance | 1,355,011 | 1,357,455 | 1,423,445 |
Restructured Accounts | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Allowance at beginning of period | 54,716 | 51,183 | 41,763 |
Provision | 74,514 | 71,047 | 62,788 |
Principal charge-offs | (55,024) | (60,003) | (46,710) |
Interest charge-offs | (11,310) | (10,259) | (7,832) |
Recoveries | 4,860 | 2,748 | 1,174 |
Allowance at end of period | 67,756 | 54,716 | 51,183 |
Average total customer portfolio balance | $ 171,717 | $ 143,245 | $ 129,030 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 350,186 | $ 313,009 |
Less accumulated depreciation | (201,203) | (169,857) |
Total property and equipment, net | 148,983 | 143,152 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 4,130 | 4,146 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 1,748 | 1,748 |
Estimated life | 30 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 246,404 | 222,781 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated life | 5 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated life | 15 years | |
Equipment and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 78,562 | 67,710 |
Equipment and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated life | 3 years | |
Equipment and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated life | 5 years | |
Capital leases | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 9,646 | 8,527 |
Capital leases | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated life | 3 years | |
Capital leases | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated life | 20 years | |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 9,696 | $ 8,097 |
Property and Equipment - Additi
Property and Equipment - Additional Disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 31,584 | $ 30,806 | $ 28,846 |
Charges and Credits (Details)
Charges and Credits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Charges and Credits [Abstract] | |||
Store and facility closure and relocation costs | $ 0 | $ 2,381 | $ 1,089 |
Legal and professional fees and related reserves associated with the exploration of strategic alternatives, securities-related litigation, a legal judgment and other legal matters | 5,100 | 1,177 | 101 |
Indirect tax audit reserve | 1,943 | 2,595 | 1,434 |
Impairment from disposal | 0 | 0 | 1,986 |
Employee severance and executive management transition costs | 737 | 1,317 | 1,868 |
Write-off of capitalized software costs | 0 | 5,861 | 0 |
Charges and credits | $ 7,780 | $ 13,331 | $ 6,478 |
Finance Charges and Other Rev_3
Finance Charges and Other Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Summary of the classification of the amounts as Finance charges and other [Abstract] | |||
Interest income and fees | $ 325,136 | $ 289,005 | $ 238,386 |
Insurance income | 29,556 | 34,718 | 42,422 |
Other revenues | 447 | 341 | 1,569 |
Total finance charges and other revenues | 355,139 | 324,064 | 282,377 |
Provisions for uncollectible interest | 52,000 | 44,800 | 40,600 |
TDR accounts | |||
Summary of the classification of the amounts as Finance charges and other [Abstract] | |||
Interest income and fees | $ 27,200 | $ 19,300 | $ 17,300 |
Debt and Capital Lease Obliga_3
Debt and Capital Lease Obligations - Schedule of Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Debt Instrument [Line Items] | ||
Current Principal Amount | $ 957,859 | |
Capital lease obligations | 5,075 | $ 4,949 |
Total debt and capital lease obligations | 962,934 | 1,102,425 |
Discount on debt | (1,966) | (2,527) |
Deferred debt issuance costs | (5,637) | (8,886) |
Current maturities of long-term debt and capital lease obligations | (54,109) | (907) |
Long-term debt and capital lease obligations | 901,222 | 1,090,105 |
VIE | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 410,724 | 793,476 |
Deferred debt issuance costs | (2,731) | (5,497) |
Current maturities of long-term debt and capital lease obligations | (53,635) | 0 |
VIE | Warehouse Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 53,635 | 0 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Deferred debt issuance costs | (6,100) | (5,200) |
Revolving Credit Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 266,500 | 77,000 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 227,000 | 227,000 |
Secured debt | VIE | 2016-B Class B Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 0 | 73,589 |
Secured debt | VIE | 2017-A Class A Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 0 | 59,794 |
Secured debt | VIE | 2017-A Class B Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 0 | 106,270 |
Secured debt | VIE | 2017-A Class C Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 0 | 50,340 |
Secured debt | VIE | 2017-B Class A Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 0 | 292,663 |
Secured debt | VIE | 2017-B Class B Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 98,297 | 132,180 |
Secured debt | VIE | 2017-B Class C Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 78,640 | 78,640 |
Secured debt | VIE | 2018-A Class A Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 105,971 | 0 |
Secured debt | VIE | 2018-A Class B Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | 63,908 | 0 |
Secured debt | VIE | 2018-A Class C Notes | ||
Debt Instrument [Line Items] | ||
Current Principal Amount | $ 63,908 | $ 0 |
Debt and Capital Lease Obliga_4
Debt and Capital Lease Obligations - Maturities of Long-term Debt (Details) $ in Thousands | Jan. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 53,635 |
2021 | 0 |
2022 | 98,297 |
2023 | 805,927 |
2024 | 0 |
Total | $ 957,859 |
Debt and Capital Lease Obliga_5
Debt and Capital Lease Obligations - Senior Notes (Details) | 12 Months Ended | |
Jan. 31, 2019USD ($) | Jul. 01, 2014USD ($) | |
Debt Instrument [Line Items] | ||
Minimum percentage of consolidated net | 50.00% | |
Limit on percentage of net cash proceeds | 100.00% | |
Senior Notes | Senior unsecured notes due July 2022 | ||
Debt Instrument [Line Items] | ||
Original Principal Amount | $ 250,000,000 | |
Contractual Interest Rate | 7.25% | |
Effective interest rate percentage | 7.80% | |
Leverage ratio (less than or equal to) | 2.50 | |
Restricted payments (up to) | $ 375,000,000 | |
Restrictions on payment of dividends, amount free from restriction | $ 228,400,000 | |
Debt default trigger amount | $ 25,000,000 |
Debt and Capital Lease Obliga_6
Debt and Capital Lease Obligations - Asset-backed Notes (Details) - USD ($) | Aug. 15, 2018 | Jul. 16, 2018 | Feb. 15, 2018 | Jan. 31, 2019 |
Warehouse Notes | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 52,200,000 | |||
2018-A Class A Notes | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 219,200,000 | |||
Contractual Interest Rate | 3.25% | |||
2018-A Class B Notes | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 69,600,000 | |||
Contractual Interest Rate | 4.65% | |||
2018-A Class C Notes | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 69,600,000 | |||
Contractual Interest Rate | 6.02% | |||
Additional financing | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 121,100,000 | |||
Asset-backed notes | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 358,300,000 | |||
Proceeds from issuance of debt | $ 355,700,000 | |||
Asset-backed receivables | ||||
Debt Instrument [Line Items] | ||||
Monthly fee received (annualized) (as percent) | 4.75% | |||
Secured debt | 2017-B Class B Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual Interest Rate | 4.52% | |||
Secured debt | 2017-B Class C Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual Interest Rate | 5.95% | |||
Secured debt | 2018-A Class A Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual Interest Rate | 3.25% | |||
Secured debt | 2018-A Class B Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual Interest Rate | 4.65% | |||
Secured debt | 2018-A Class C Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual Interest Rate | 6.02% | |||
Secured debt | 2016-B Redeemed Notes | ||||
Debt Instrument [Line Items] | ||||
Redemption amount | 73,600,000 | |||
Payments to redeem debt | 50,300,000 | |||
Adjustments | 23,300,000 | |||
Write off debt issuance costs | $ 400,000 | |||
Secured debt | 2017-A Redeemed Notes | ||||
Debt Instrument [Line Items] | ||||
Redemption amount | 127,200,000 | |||
Payments to redeem debt | 119,000,000 | |||
Adjustments | 8,200,000 | |||
Write off debt issuance costs | $ 1,200,000 |
Debt and Capital Lease Obliga_7
Debt and Capital Lease Obligations - Schedule of Asset-Backed Notes (Details) - USD ($) | Aug. 15, 2018 | Jul. 16, 2018 | Dec. 20, 2017 | Aug. 15, 2018 | Jan. 31, 2019 | Feb. 15, 2018 | Jan. 31, 2018 |
Debt Instrument [Line Items] | |||||||
Current Principal Amount | $ 957,859,000 | ||||||
2018-A Class A Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | $ 219,200,000 | ||||||
Contractual Interest Rate | 3.25% | ||||||
2018-A Class B Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | $ 69,600,000 | ||||||
Contractual Interest Rate | 4.65% | ||||||
2018-A Class C Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | $ 69,600,000 | ||||||
Contractual Interest Rate | 6.02% | ||||||
Warehouse Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | $ 52,200,000 | ||||||
Effective Interest Rate | 6.41% | ||||||
Warehouse Notes | Index | |||||||
Debt Instrument [Line Items] | |||||||
Contractual Interest Rate | 2.50% | ||||||
VIE | |||||||
Debt Instrument [Line Items] | |||||||
Current Principal Amount | $ 410,724,000 | $ 793,476,000 | |||||
VIE | Warehouse Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | $ 121,060,000 | ||||||
Original Net Proceeds | $ 118,972,000 | ||||||
Current Principal Amount | 53,635,000 | 0 | |||||
VIE | Asset-backed notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | $ 690,180,000 | $ 690,180,000 | |||||
Original Net Proceeds | 683,798,000 | ||||||
Current Principal Amount | $ 464,359,000 | ||||||
Secured debt | 2017-B Class B Notes | |||||||
Debt Instrument [Line Items] | |||||||
Contractual Interest Rate | 4.52% | ||||||
Effective Interest Rate | 5.24% | ||||||
Secured debt | 2017-B Class C Notes | |||||||
Debt Instrument [Line Items] | |||||||
Contractual Interest Rate | 5.95% | ||||||
Effective Interest Rate | 6.34% | ||||||
Secured debt | 2018-A Class A Notes | |||||||
Debt Instrument [Line Items] | |||||||
Contractual Interest Rate | 3.25% | ||||||
Effective Interest Rate | 4.57% | ||||||
Secured debt | 2018-A Class B Notes | |||||||
Debt Instrument [Line Items] | |||||||
Contractual Interest Rate | 4.65% | ||||||
Effective Interest Rate | 5.43% | ||||||
Secured debt | 2018-A Class C Notes | |||||||
Debt Instrument [Line Items] | |||||||
Contractual Interest Rate | 6.02% | ||||||
Effective Interest Rate | 6.80% | ||||||
Secured debt | VIE | 2017-B Class B Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | $ 132,180,000 | ||||||
Original Net Proceeds | 131,281,000 | ||||||
Current Principal Amount | $ 98,297,000 | 132,180,000 | |||||
Secured debt | VIE | 2017-B Class C Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | 78,640,000 | ||||||
Original Net Proceeds | $ 77,843,000 | ||||||
Current Principal Amount | 78,640,000 | 78,640,000 | |||||
Secured debt | VIE | 2018-A Class A Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | 219,200,000 | 219,200,000 | |||||
Original Net Proceeds | 217,832,000 | ||||||
Current Principal Amount | 105,971,000 | 0 | |||||
Secured debt | VIE | 2018-A Class B Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | 69,550,000 | 69,550,000 | |||||
Original Net Proceeds | 69,020,000 | ||||||
Current Principal Amount | 63,908,000 | 0 | |||||
Secured debt | VIE | 2018-A Class C Notes | |||||||
Debt Instrument [Line Items] | |||||||
Original Principal Amount | 69,550,000 | $ 69,550,000 | |||||
Original Net Proceeds | $ 68,850,000 | ||||||
Current Principal Amount | $ 63,908,000 | $ 0 |
Debt and Capital Lease Obliga_8
Debt and Capital Lease Obligations - Revolving Credit Facility (Details) | May 23, 2018USD ($) | Jan. 31, 2019USD ($) | Jan. 31, 2019USD ($) | May 22, 2018USD ($) | Oct. 30, 2015USD ($) |
Debt Instrument [Line Items] | |||||
Interest Coverage Ratio for the trailing two quarters must equal or exceed (minimum) | 4.59 | ||||
Interest Coverage Ratio for the quarter must equal or exceed minimum | 1 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Remaining borrowing capacity | $ 381,000,000 | $ 381,000,000 | |||
Outstanding letters of credit | $ 2,500,000 | $ 2,500,000 | |||
Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 650,000,000 | $ 750,000,000 | $ 650,000,000 | ||
Borrowing base availability block | $ 10,000,000 | ||||
Maximum accounts receivable advance rate | 80.00% | 75.00% | |||
Decrease in commitment fee | (0.25%) | ||||
Unused capacity fee percentage | 0.75% | 0.50% | |||
Maximum inventory component | $ 175,000,000 | ||||
Maximum inventory component percent | 33.33% | ||||
Interest Coverage Ratio for the trailing two quarters must equal or exceed (minimum) | 1.5 | ||||
Interest Coverage Ratio for the quarter must equal or exceed minimum | 1 | ||||
Maximum capital expenditures | $ 100,000,000 | $ 75,000,000 | |||
Weighted average interest rate | 6.90% | 6.90% | |||
Restrictions on payment of dividends, amount free from restriction | $ 223,000,000 | $ 223,000,000 | |||
Sub-facility letters of credit | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Original Principal Amount | $ 40,000,000 | $ 40,000,000 | |||
LIBOR | Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Contractual Interest Rate | 1.00% | ||||
Federal funds rate | Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Contractual Interest Rate | 0.50% | ||||
Minimum | Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Unused capacity fee percentage | 0.25% | ||||
Minimum | LIBOR | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Contractual Interest Rate | 2.50% | ||||
Minimum | Base rate | Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Contractual Interest Rate | 1.50% | ||||
Maximum | Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Unused capacity fee percentage | 0.50% | ||||
Maximum | LIBOR | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Contractual Interest Rate | 3.25% | ||||
Maximum | Base rate | Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Contractual Interest Rate | 2.25% |
Debt and Capital Lease Obliga_9
Debt and Capital Lease Obligations - Debt Covenants (Details) $ in Millions | 12 Months Ended |
Jan. 31, 2019USD ($)quarter | |
Actual | |
Interest Coverage Ratio for the quarter must equal or exceed minimum | 5.08 |
Interest Coverage Ratio for the trailing two quarters must equal or exceed minimum | 4.59 |
Leverage Ratio must not exceed maximum | 1.94 |
ABS Excluded Leverage Ratio must not exceed maximum | 1.28 |
Capital Expenditures, net, must not exceed maximum | $ 16 |
Required Minimum/ Maximum | |
Interest Coverage Ratio for the quarter must equal or exceed minimum | 1 |
Interest Coverage Ratio for the trailing two quarters must equal or exceed minimum | 1.50 |
Leverage Ratio must not exceed maximum | 4 |
ABS Excluded Leverage Ratio must not exceed maximum | 2 |
Capital Expenditures, net, must not exceed maximum | $ 100 |
Cash recovery percent covenant determination period | quarter | 4 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 22,637 | $ 19,325 |
Deferred rent | 6,200 | 5,839 |
Deferred gains on sale-leaseback transactions | 1,447 | 1,598 |
Deferred revenue | 908 | 1,240 |
Indirect tax reserve | 3,025 | 0 |
Inventories | 1,711 | 2,126 |
Stock-based compensation | 1,825 | 1,439 |
State net operating loss carryforwards | 1,127 | 1,207 |
Other | 3,093 | 3,534 |
Total deferred tax assets | 41,973 | 36,308 |
Deferred tax liabilities: | ||
Vendor prepayments | (1,066) | (4,723) |
Sales tax receivable | (4,155) | (3,649) |
Property and equipment | (8,694) | (6,275) |
Other | (523) | (96) |
Total deferred tax liabilities | 14,438 | 14,743 |
Net deferred tax asset | $ 27,535 | $ 21,565 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Current: | |||
Federal | $ 29,919 | $ (25,891) | $ (11,251) |
Federal | 2,308 | 1,184 | 3,519 |
Total current | 32,227 | (24,707) | (7,732) |
Deferred: | |||
Federal | (9,419) | 49,536 | (1,435) |
State | 121 | 342 | 212 |
Total deferred | (9,298) | ||
Total deferred | (6,224) | 49,878 | (1,223) |
Provision (benefit) for income taxes | $ 22,929 | $ 25,171 | $ (8,955) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Tax Provision at Statutory Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax provision (benefit) at U.S. federal statutory rate | $ 20,323 | $ 10,696 | $ (12,081) |
State income taxes, net of federal benefit | 2,068 | 1,910 | 2,363 |
Tax Act and other deferred tax adjustments | 0 | 13,387 | 771 |
Provision to return adjustments | 0 | (1,142) | 0 |
Employee benefits | 1,096 | 0 | 0 |
Other | (558) | 320 | (8) |
Provision (benefit) for income taxes | $ 22,929 | $ 25,171 | $ (8,955) |
Income Taxes - Additional Discl
Income Taxes - Additional Disclosures (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current tax benefit related to the change in tax rate | $ 0.3 | ||
Blended rate | 33.81% | ||
Total impact of the Tax Act | $ 13.4 | ||
Unrecognized tax benefits that if recognized would affect the annual effective tax rate | $ 3.5 | ||
Interest and penalties | $ 0.1 |
Income Taxes - Changes in Balan
Income Taxes - Changes in Balance of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at February 1 | $ 0 | $ 0 | $ 0 |
Increases related to prior year tax positions | (12,084) | 0 | 0 |
Decreases related to prior year tax positions | 459 | 0 | 0 |
Balance at January 31 | $ (11,625) | $ 0 | $ 0 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Leases, Operating [Abstract] | |||
Total rent expense | $ 52,700 | $ 51,400 | $ 50,900 |
Operating Leases | |||
2020 | 68,678 | ||
2021 | 71,462 | ||
2022 | 69,802 | ||
2023 | 67,935 | ||
2024 | 62,721 | ||
Thereafter | 172,827 | ||
Total | 513,425 | ||
Capital Leases | |||
2020 | 1,040 | ||
2021 | 724 | ||
2022 | 723 | ||
2023 | 470 | ||
2024 | 639 | ||
Thereafter | 3,703 | ||
Total | 7,299 | ||
Less - interest on capital lease obligations | (2,224) | ||
Total principal payable on capital lease obligations | 5,075 | $ 4,949 | |
Less - current maturities | (744) | ||
Long-term capital lease obligations | $ 4,331 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Narrative (Details) - shares | May 31, 2017 | Jan. 31, 2019 | May 25, 2016 |
Stock options and restricted stock | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options and restricted stock units vesting period | 1 year | ||
Stock options and restricted stock | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options and restricted stock units vesting period | 5 years | ||
Omnibus Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized for future issuance (in shares) | 670,125 | 1,200,000 | |
Additional shares authorized (in shares) | 1,400,000 | ||
Number of years until a grant expires | 10 years | ||
Non-Employee Director Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized for future issuance (in shares) | 120,000 | ||
Non-Employee Director Restricted Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized for future issuance (in shares) | 82,388 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation cost for share-based compensation | $ 12,217 | $ 8,680 | $ 5,001 |
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation cost for share-based compensation | 263 | 220 | 329 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation cost for share-based compensation | 3,414 | 236 | 173 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation cost for share-based compensation | 8,540 | 7,622 | 4,282 |
RSUs | Accelerated RSU expense charged to severance | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation cost for share-based compensation | $ 0 | $ 602 | $ 217 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Expense Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Recognized tax benefits related to compensation cost | $ 1,700 | $ 1,700 | $ 1,600 |
Stock-based compensation expense | $ 12,217 | 8,680 | 5,001 |
Recognition period for unrecognized compensation cost related to all non-vested stock compensation awards | 2 years 4 months 24 days | ||
Fair value of stock options vested | $ 12,600 | $ 6,000 | $ 1,900 |
Nonvested | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 23,900 |
Stock-Based Compensation - St_3
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of stock options exercised | $ 0.4 | $ 2.3 | $ 1 |
Aggregate intrinsic value of stock options vested and expected to vest and exercisable | 1 | ||
Fair value of stock options vested | 12.6 | 6 | 1.9 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of stock options vested | $ 0.5 | $ 0.9 | $ 0.3 |
Incentive Stock Option Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 620,166 | 0 | 100,000 |
Granted (in dollars per share) | $ 32.35 | ||
Options and restricted stock units vesting period | 4 years | ||
Number of years until a grant expires | 10 years | 10 years | |
Expected volatility (as percent) | 68.00% | 75.10% | |
Expected term | 10 years | ||
Risk-free interest rate (as percent) | 2.69% | 2.46% | |
Dividend yield (as percent) | 0.00% | ||
Incentive Stock Option Plan | Stock options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in dollars per share) | $ 12.65 | ||
Options and restricted stock units vesting period | 3 years | ||
Fair value at grant date (in dollars per share) | $ 20 | 8.97 | |
Expected term | 6 years | ||
Incentive Stock Option Plan | Stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in dollars per share) | 25.30 | ||
Options and restricted stock units vesting period | 4 years | ||
Fair value at grant date (in dollars per share) | $ 21.67 | $ 10.03 | |
Expected term | 7 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Incentive Stock Option Plan activity (Details) - $ / shares | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Shares Under Option | |||
Vested and expected to vest, end of period (in shares) | 772,731 | ||
Weighted- Average Exercise Price | |||
Vested and expected to vest, end of period (in dollar per shares) | $ 28.94 | ||
Weighted- Average Remaining Contractual Life | |||
Vested and expected to vest, end of period | 8 years 5 months | ||
Incentive Stock Option Plan | Stock options | |||
Shares Under Option | |||
Outstanding, beginning of period (in shares) | 189,485 | ||
Granted (in shares) | 620,166 | 0 | 100,000 |
Exercised (in shares) | (32,620) | ||
Forfeited (in shares) | (4,300) | ||
Outstanding, end of period (in shares) | 772,731 | 189,485 | |
Exercisable, end of period (in shares) | 102,564 | ||
Weighted- Average Exercise Price | |||
Outstanding, beginning of period (in dollars per share) | $ 14.39 | ||
Granted (in dollars per share) | 32.35 | ||
Exercised (in dollars per share) | 12.23 | ||
Forfeited (in dollars per share) | 5.46 | ||
Outstanding, end of period (in dollars per share) | 28.94 | $ 14.39 | |
Exercisable, end of period (in dollars per share) | $ 13.21 | ||
Weighted- Average Remaining Contractual Life | |||
Outstanding, end of period | 8 years 5 months | ||
Exercisable, end of period | 4 years 5 months |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of shares vested | $ 12.1 | $ 5.1 | $ 1.6 | |
Fair value of shares granted | $ 7.6 | $ 17.2 | $ 8.2 | |
Performance-Based RSUs | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Return on invested capital period (generally) | 3 years | |||
Percentage of shares to be vested (as percent) | 150.00% | |||
Performance-Based RSUs | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options and restricted stock units vesting period | 3 years | |||
Omnibus Incentive Plan | Time-Based RSUs | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options and restricted stock units vesting period | 5 years | |||
Omnibus Incentive Plan | Time-Based RSUs | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options and restricted stock units vesting period | 3 years |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Activity of RSUs (Details) | 12 Months Ended |
Jan. 31, 2019$ / sharesshares | |
RSUs | |
Number of Units | |
Outstanding, beginning of period (in shares) | 1,837,183 |
Restricted stock units granted (in shares) | 272,973 |
Vested and converted to common stock (in shares) | 390,478 |
Restricted stock units forfeited (in shares) | (368,403) |
Outstanding, end of year (in shares) | 1,351,275 |
Omnibus Incentive Plan | Time-Based RSUs | |
Number of Units | |
Outstanding, beginning of period (in shares) | 1,222,009 |
Restricted stock units granted (in shares) | 272,973 |
Vested and converted to common stock (in shares) | 390,478 |
Restricted stock units forfeited (in shares) | (220,229) |
Outstanding, end of year (in shares) | 884,275 |
Weighted-Average Grant Date Fair Value | |
Nonvested, beginning of year (in dollars per share) | $ / shares | $ 15.52 |
Options granted (in dollars per share) | $ / shares | 27.90 |
Options vested (in dollars per share) | $ / shares | 15.62 |
Forfeited (in dollars per share) | $ / shares | 17.83 |
Nonvested, end of year (in dollars per share) | $ / shares | $ 18.73 |
Omnibus Incentive Plan | Performance-Based RSUs | |
Number of Units | |
Outstanding, beginning of period (in shares) | 615,174 |
Restricted stock units granted (in shares) | 0 |
Vested and converted to common stock (in shares) | 0 |
Restricted stock units forfeited (in shares) | (148,174) |
Outstanding, end of year (in shares) | 467,000 |
Weighted-Average Grant Date Fair Value | |
Nonvested, beginning of year (in dollars per share) | $ / shares | $ 11.78 |
Options granted (in dollars per share) | $ / shares | 0 |
Options vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 12.26 |
Nonvested, end of year (in dollars per share) | $ / shares | $ 11.66 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - shares | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued (in shares) | 34,922 | 57,937 | 100,758 |
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of fair market value that shares are acquired at (as percent) | 85.00% | ||
Number of shares reserved for future issuance (in shares) | 771,722 |
Significant Vendors (Details)
Significant Vendors (Details) - vendor | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Significant Vendors [Abstract] | |||
Number of vendors the company purchased merchandise from | 6 | ||
Concentration Risk [Line Items] | |||
Vendor concentration (in hundredths) | 65.30% | 62.10% | 63.00% |
Vendors | Vendor A | |||
Concentration Risk [Line Items] | |||
Vendor concentration (in hundredths) | 25.30% | 27.60% | 26.50% |
Vendors | Vendor B | |||
Concentration Risk [Line Items] | |||
Vendor concentration (in hundredths) | 16.10% | 14.80% | 17.60% |
Vendors | Vendor C | |||
Concentration Risk [Line Items] | |||
Vendor concentration (in hundredths) | 7.00% | 6.50% | 5.80% |
Vendors | Vendor D | |||
Concentration Risk [Line Items] | |||
Vendor concentration (in hundredths) | 6.70% | 5.30% | 5.40% |
Vendors | Vendor E | |||
Concentration Risk [Line Items] | |||
Vendor concentration (in hundredths) | 5.20% | 4.10% | 4.00% |
Vendors | Vendor F | |||
Concentration Risk [Line Items] | |||
Vendor concentration (in hundredths) | 5.00% | 3.80% | 3.70% |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | Dec. 31, 2018 | Jan. 01, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2019 |
Retirement Benefits [Abstract] | ||||||
Maximum employee contribution percentage (as percent) | 20.00% | 50.00% | ||||
Employer matching percent | 100.00% | 100.00% | ||||
Percentage contribution which company matches on first 3% of contributions (as percent) | 3.00% | 3.00% | ||||
Employer matching percent on next 2% | 50.00% | |||||
Percentage contribution which company matches on next 2% of contributions (as percent) | 2.00% | |||||
Supplemental contributions by employer | $ 0 | $ 0 | $ 0 | |||
Total matching contribution made by company | $ 1,400,000 | $ 1,100,000 | $ 1,100,000 |
Contingencies (Details)
Contingencies (Details) $ in Millions | Sep. 10, 2018USD ($) | Jun. 28, 2018USD ($) | Jan. 31, 2019defendant |
Loss Contingencies [Line Items] | |||
Legal judgment | $ 4.8 | ||
Consolidated Securities Action | |||
Loss Contingencies [Line Items] | |||
Litigation settlement | $ 22.5 | ||
Former executive officers | Consolidated Securities Action | |||
Loss Contingencies [Line Items] | |||
Number of defendants | defendant | 2 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2016 |
Assets: | ||||
Restricted cash | $ 59,025 | $ 86,872 | ||
Customer accounts receivable: | ||||
Restructured accounts | 183,641 | 152,784 | ||
Allowance for uncollectible accounts | (214,879) | (203,572) | $ (210,175) | $ (190,990) |
Deferred fees and origination costs | (16,579) | (15,897) | ||
Carrying value of customer accounts receivable, net of allowance for bad debts | 1,339,113 | 1,287,433 | ||
Total assets | 1,884,907 | 1,900,799 | $ 1,941,134 | |
Liabilities: | ||||
Accrued expenses | 54,381 | 44,807 | ||
Long-term Debt, Gross | 957,859 | |||
Less deferred debt issuance costs | (5,637) | (8,886) | ||
Total liabilities | 1,264,932 | 1,365,731 | ||
VIE | ||||
Assets: | ||||
Restricted cash | 57,475 | 85,322 | ||
Due from Conn’s, Inc., net | 5,504 | 15,212 | ||
Customer accounts receivable: | ||||
Customer accounts receivable | 538,826 | 987,418 | ||
Restructured accounts | 135,834 | 97,967 | ||
Allowance for uncollectible accounts | (106,327) | (143,115) | ||
Allowance for no-interest option credit programs | (8,047) | (18,228) | ||
Deferred fees and origination costs | (5,321) | (9,332) | ||
Carrying value of customer accounts receivable, net of allowance for bad debts | 554,965 | 914,710 | ||
Total assets | 617,944 | 1,015,244 | ||
Liabilities: | ||||
Accrued expenses | 3,939 | 6,723 | ||
Other liabilities | 5,513 | 10,639 | ||
Long-term Debt, Gross | 410,724 | 793,476 | ||
Less deferred debt issuance costs | (2,731) | (5,497) | ||
Total debt | 461,628 | 787,979 | ||
Total liabilities | 471,080 | 805,341 | ||
VIE | Warehouse Notes | ||||
Liabilities: | ||||
Warehouse Notes | 53,635 | 0 | ||
Long-term Debt, Gross | 53,635 | 0 | ||
Secured debt | VIE | 2016-B Class B Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | 0 | 73,589 | ||
Secured debt | VIE | 2017-A Class A Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | 0 | 59,794 | ||
Secured debt | VIE | 2017-A Class B Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | 0 | 106,270 | ||
Secured debt | VIE | 2017-A Class C Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | 0 | 50,340 | ||
Secured debt | VIE | 2017-B Class A Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | 0 | 292,663 | ||
Secured debt | VIE | 2017-B Class B Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | 98,297 | 132,180 | ||
Secured debt | VIE | 2017-B Class C Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | 78,640 | 78,640 | ||
Secured debt | VIE | 2018-A Class A Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | 105,971 | 0 | ||
Secured debt | VIE | 2018-A Class B Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | 63,908 | 0 | ||
Secured debt | VIE | 2018-A Class C Notes | ||||
Liabilities: | ||||
Long-term Debt, Gross | $ 63,908 | $ 0 |
Segment Information - Additiona
Segment Information - Additional Disclosures (Details) | 12 Months Ended |
Jan. 31, 2019segmentstorestate | |
Segment Reporting Information [Line Items] | |
Operating segments | segment | 2 |
Estimated annual rate of reimbursement (as percent) | 2.50% |
Number of states in which entity operates | state | 14 |
Outside of the United States | |
Segment Reporting Information [Line Items] | |
Number of retail stores | store | 0 |
Segment Information - Financial
Segment Information - Financial Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Revenues: | |||||||||||
Product sales | $ 1,078,635 | $ 1,077,874 | $ 1,186,197 | ||||||||
Repair service agreement commissions | 101,928 | 100,383 | 113,615 | ||||||||
Service revenues | 14,111 | 13,710 | 14,659 | ||||||||
Total net sales | 1,194,674 | 1,191,967 | 1,314,471 | ||||||||
Finance charges and other revenues | 355,139 | 324,064 | 282,377 | ||||||||
Total revenues | $ 432,982 | $ 373,824 | $ 384,620 | $ 358,387 | $ 420,386 | $ 373,172 | $ 366,647 | $ 355,826 | 1,549,813 | 1,516,031 | 1,596,848 |
Costs and expenses: | |||||||||||
Cost of goods sold | 195,033 | 166,886 | 173,627 | 166,589 | 200,497 | 175,591 | 172,306 | 171,950 | 702,135 | 720,344 | 823,082 |
Selling, general and administrative expense | 480,561 | 450,413 | 460,896 | ||||||||
Provision for bad debts | 198,082 | 216,875 | 242,294 | ||||||||
Charges and credits | 7,780 | 13,331 | 6,478 | ||||||||
Total costs and expenses | 1,388,558 | 1,400,963 | 1,532,750 | ||||||||
Operating income | 53,766 | 35,473 | 39,252 | 32,764 | 44,841 | 20,853 | 29,192 | 20,182 | 161,255 | 115,068 | 64,098 |
Interest expense | 62,704 | 80,160 | 98,615 | ||||||||
Loss on extinguishment of debt | 1,773 | 3,274 | 0 | ||||||||
Income (loss) before income taxes | 96,778 | 31,634 | (34,517) | ||||||||
Property and equipment additions | 37,494 | 21,327 | 43,642 | ||||||||
Depreciation expense | 31,584 | 30,806 | 28,846 | ||||||||
Total assets | 1,884,907 | 1,900,799 | 1,884,907 | 1,900,799 | 1,941,134 | ||||||
Allocation of overhead by operating segments | 36,400 | 27,600 | 24,500 | ||||||||
Amount of reimbursement made by operating segments | 432,982 | 373,824 | 384,620 | 358,387 | 420,386 | 373,172 | 366,647 | 355,826 | 1,549,813 | 1,516,031 | 1,596,848 |
Reimbursement | |||||||||||
Revenues: | |||||||||||
Total revenues | 38,100 | 37,400 | 38,800 | ||||||||
Costs and expenses: | |||||||||||
Amount of reimbursement made by operating segments | 38,100 | 37,400 | 38,800 | ||||||||
Retail | |||||||||||
Revenues: | |||||||||||
Product sales | 1,078,635 | 1,077,874 | 1,186,197 | ||||||||
Repair service agreement commissions | 101,928 | 100,383 | 113,615 | ||||||||
Service revenues | 14,111 | 13,710 | 14,659 | ||||||||
Total net sales | 1,194,674 | 1,191,967 | 1,314,471 | ||||||||
Finance charges and other revenues | 447 | 341 | 1,569 | ||||||||
Total revenues | 338,887 | 284,053 | 296,411 | 275,770 | 334,535 | 291,903 | 286,505 | 279,365 | 1,195,121 | 1,192,308 | 1,316,040 |
Costs and expenses: | |||||||||||
Cost of goods sold | 702,135 | 720,344 | 823,082 | ||||||||
Selling, general and administrative expense | 328,628 | 316,325 | 326,078 | ||||||||
Provision for bad debts | 1,009 | 829 | 990 | ||||||||
Charges and credits | 2,980 | 13,331 | 6,478 | ||||||||
Total costs and expenses | 1,034,752 | 1,050,829 | 1,156,628 | ||||||||
Operating income | 54,712 | 35,250 | 39,238 | 31,169 | 48,583 | 29,586 | 31,299 | 32,011 | 160,369 | 141,479 | 159,412 |
Interest expense | 0 | 0 | 0 | ||||||||
Loss on extinguishment of debt | 0 | 0 | |||||||||
Income (loss) before income taxes | 160,369 | 141,479 | 159,412 | ||||||||
Property and equipment additions | 36,110 | 21,285 | 43,460 | ||||||||
Depreciation expense | 30,739 | 30,065 | 28,063 | ||||||||
Total assets | 405,542 | 344,327 | 405,542 | 344,327 | 332,611 | ||||||
Amount of reimbursement made by operating segments | 338,887 | 284,053 | 296,411 | 275,770 | 334,535 | 291,903 | 286,505 | 279,365 | 1,195,121 | 1,192,308 | 1,316,040 |
Credit | |||||||||||
Revenues: | |||||||||||
Product sales | 0 | 0 | 0 | ||||||||
Repair service agreement commissions | 0 | 0 | 0 | ||||||||
Service revenues | 0 | 0 | 0 | ||||||||
Total net sales | 0 | 0 | 0 | ||||||||
Finance charges and other revenues | 354,692 | 323,723 | 280,808 | ||||||||
Total revenues | 94,095 | 89,771 | 88,209 | 82,617 | 85,851 | 81,269 | 80,142 | 76,461 | 354,692 | 323,723 | 280,808 |
Costs and expenses: | |||||||||||
Cost of goods sold | 0 | 0 | 0 | ||||||||
Selling, general and administrative expense | 151,933 | 134,088 | 134,818 | ||||||||
Provision for bad debts | 197,073 | 216,046 | 241,304 | ||||||||
Charges and credits | 4,800 | 0 | 0 | ||||||||
Total costs and expenses | 353,806 | 350,134 | 376,122 | ||||||||
Operating income | (946) | 223 | 14 | 1,595 | (3,742) | (8,733) | (2,107) | (11,829) | 886 | (26,411) | (95,314) |
Interest expense | 62,704 | 80,160 | 98,615 | ||||||||
Loss on extinguishment of debt | 1,773 | 3,274 | |||||||||
Income (loss) before income taxes | (63,591) | (109,845) | (193,929) | ||||||||
Property and equipment additions | 1,384 | 42 | 182 | ||||||||
Depreciation expense | 845 | 741 | 783 | ||||||||
Total assets | 1,479,365 | 1,556,472 | 1,479,365 | 1,556,472 | 1,608,523 | ||||||
Amount of reimbursement made by operating segments | $ 94,095 | $ 89,771 | $ 88,209 | $ 82,617 | $ 85,851 | $ 81,269 | $ 80,142 | $ 76,461 | 354,692 | 323,723 | 280,808 |
Furniture and mattress | |||||||||||
Revenues: | |||||||||||
Product sales | 382,975 | 393,853 | 421,055 | ||||||||
Furniture and mattress | Retail | |||||||||||
Revenues: | |||||||||||
Product sales | 382,975 | 393,853 | 421,055 | ||||||||
Furniture and mattress | Credit | |||||||||||
Revenues: | |||||||||||
Product sales | 0 | 0 | 0 | ||||||||
Home appliance | |||||||||||
Revenues: | |||||||||||
Product sales | 332,609 | 337,538 | 358,771 | ||||||||
Home appliance | Retail | |||||||||||
Revenues: | |||||||||||
Product sales | 332,609 | 337,538 | 358,771 | ||||||||
Home appliance | Credit | |||||||||||
Revenues: | |||||||||||
Product sales | 0 | 0 | 0 | ||||||||
Consumer electronics | |||||||||||
Revenues: | |||||||||||
Product sales | 262,088 | 248,727 | 293,685 | ||||||||
Consumer electronics | Retail | |||||||||||
Revenues: | |||||||||||
Product sales | 262,088 | 248,727 | 293,685 | ||||||||
Consumer electronics | Credit | |||||||||||
Revenues: | |||||||||||
Product sales | 0 | 0 | 0 | ||||||||
Home office | |||||||||||
Revenues: | |||||||||||
Product sales | 86,260 | 80,330 | 92,404 | ||||||||
Home office | Retail | |||||||||||
Revenues: | |||||||||||
Product sales | 86,260 | 80,330 | 92,404 | ||||||||
Home office | Credit | |||||||||||
Revenues: | |||||||||||
Product sales | 0 | 0 | 0 | ||||||||
Other | |||||||||||
Revenues: | |||||||||||
Product sales | 14,703 | 17,426 | 20,282 | ||||||||
Other | Retail | |||||||||||
Revenues: | |||||||||||
Product sales | 14,703 | 17,426 | 20,282 | ||||||||
Other | Credit | |||||||||||
Revenues: | |||||||||||
Product sales | $ 0 | $ 0 | $ 0 |
Guarantor Financial Informati_3
Guarantor Financial Information - Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2016 |
Condensed Financial Statements, Captions [Line Items] | ||||
Cash and cash equivalents | $ 5,912 | $ 9,286 | ||
Restricted cash | 59,025 | 86,872 | ||
Customer accounts receivable, net of allowances | 652,769 | 636,825 | ||
Other accounts receivable | 67,078 | 71,186 | ||
Inventories | 220,034 | 211,894 | ||
Other current assets | 9,576 | 63,954 | ||
Total current assets | 1,014,394 | 1,080,017 | ||
Investment in and advances to subsidiaries | 0 | 0 | ||
Long-term portion of customer accounts receivable, net of allowance | 686,344 | 650,608 | ||
Property and equipment, net | 148,983 | 143,152 | ||
Deferred income taxes | 27,535 | 21,565 | ||
Other assets | 7,651 | 5,457 | ||
Total assets | 1,884,907 | 1,900,799 | $ 1,941,134 | |
Current maturities of debt and capital lease obligations | 54,109 | 907 | ||
Accounts payable | 71,118 | 71,617 | ||
Accrued expenses | 90,335 | 69,112 | ||
Other current liabilities | 22,006 | 22,475 | ||
Total current liabilities | 237,568 | 164,111 | ||
Deferred rent | 93,127 | 87,003 | ||
Long-term debt and capital lease obligations | 901,222 | 1,090,105 | ||
Other long-term liabilities | 33,015 | 24,512 | ||
Total liabilities | 1,264,932 | 1,365,731 | ||
Total stockholders’ equity | 619,975 | 535,068 | $ 517,790 | $ 538,281 |
Total liabilities and stockholders’ equity | 1,884,907 | 1,900,799 | ||
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Customer accounts receivable, net of allowances | 0 | 0 | ||
Other accounts receivable | 0 | 0 | ||
Inventories | 0 | 0 | ||
Other current assets | (8,272) | (19,879) | ||
Total current assets | (8,272) | (19,879) | ||
Investment in and advances to subsidiaries | (962,388) | (945,175) | ||
Long-term portion of customer accounts receivable, net of allowance | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | (970,660) | (965,054) | ||
Current maturities of debt and capital lease obligations | 0 | 0 | ||
Accounts payable | 0 | 0 | ||
Accrued expenses | (2,768) | (4,667) | ||
Other current liabilities | (5,504) | (15,212) | ||
Total current liabilities | (8,272) | (19,879) | ||
Deferred rent | 0 | 0 | ||
Long-term debt and capital lease obligations | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | (8,272) | (19,879) | ||
Total stockholders’ equity | (962,388) | (945,175) | ||
Total liabilities and stockholders’ equity | (970,660) | (965,054) | ||
Conn’s, Inc. | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Customer accounts receivable, net of allowances | 0 | 0 | ||
Other accounts receivable | 0 | 0 | ||
Inventories | 0 | 0 | ||
Other current assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Investment in and advances to subsidiaries | 815,524 | 735,272 | ||
Long-term portion of customer accounts receivable, net of allowance | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Deferred income taxes | 27,535 | 21,565 | ||
Other assets | 0 | 0 | ||
Total assets | 843,059 | 756,837 | ||
Current maturities of debt and capital lease obligations | 0 | 0 | ||
Accounts payable | 0 | 0 | ||
Accrued expenses | 686 | 686 | ||
Other current liabilities | 0 | 0 | ||
Total current liabilities | 686 | 686 | ||
Deferred rent | 0 | 0 | ||
Long-term debt and capital lease obligations | 222,398 | 221,083 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 223,084 | 221,769 | ||
Total stockholders’ equity | 619,975 | 535,068 | ||
Total liabilities and stockholders’ equity | 843,059 | 756,837 | ||
Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 5,912 | 9,286 | ||
Restricted cash | 1,550 | 1,550 | ||
Customer accounts receivable, net of allowances | 328,705 | 177,117 | ||
Other accounts receivable | 67,078 | 71,186 | ||
Inventories | 220,034 | 211,894 | ||
Other current assets | 12,344 | 68,621 | ||
Total current assets | 635,623 | 539,654 | ||
Investment in and advances to subsidiaries | 146,864 | 209,903 | ||
Long-term portion of customer accounts receivable, net of allowance | 455,443 | 195,606 | ||
Property and equipment, net | 148,983 | 143,152 | ||
Deferred income taxes | 0 | 0 | ||
Other assets | 7,651 | 5,457 | ||
Total assets | 1,394,564 | 1,093,772 | ||
Current maturities of debt and capital lease obligations | 474 | 907 | ||
Accounts payable | 71,118 | 71,617 | ||
Accrued expenses | 88,478 | 66,370 | ||
Other current liabilities | 24,918 | 32,685 | ||
Total current liabilities | 184,988 | 171,579 | ||
Deferred rent | 93,127 | 87,003 | ||
Long-term debt and capital lease obligations | 270,831 | 81,043 | ||
Other long-term liabilities | 30,094 | 18,875 | ||
Total liabilities | 579,040 | 358,500 | ||
Total stockholders’ equity | 815,524 | 735,272 | ||
Total liabilities and stockholders’ equity | 1,394,564 | 1,093,772 | ||
Non-Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 57,475 | 85,322 | ||
Customer accounts receivable, net of allowances | 324,064 | 459,708 | ||
Other accounts receivable | 0 | 0 | ||
Inventories | 0 | 0 | ||
Other current assets | 5,504 | 15,212 | ||
Total current assets | 387,043 | 560,242 | ||
Investment in and advances to subsidiaries | 0 | 0 | ||
Long-term portion of customer accounts receivable, net of allowance | 230,901 | 455,002 | ||
Property and equipment, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | 617,944 | 1,015,244 | ||
Current maturities of debt and capital lease obligations | 53,635 | 0 | ||
Accounts payable | 0 | 0 | ||
Accrued expenses | 3,939 | 6,723 | ||
Other current liabilities | 2,592 | 5,002 | ||
Total current liabilities | 60,166 | 11,725 | ||
Deferred rent | 0 | 0 | ||
Long-term debt and capital lease obligations | 407,993 | 787,979 | ||
Other long-term liabilities | 2,921 | 5,637 | ||
Total liabilities | 471,080 | 805,341 | ||
Total stockholders’ equity | 146,864 | 209,903 | ||
Total liabilities and stockholders’ equity | $ 617,944 | $ 1,015,244 |
Guarantor Financial Informati_4
Guarantor Financial Information - Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total net sales | $ 1,194,674 | $ 1,191,967 | $ 1,314,471 | ||||||||
Finance charges and other revenues | 355,139 | 324,064 | 282,377 | ||||||||
Servicing fee revenue | 0 | 0 | 0 | ||||||||
Total revenues | $ 432,982 | $ 373,824 | $ 384,620 | $ 358,387 | $ 420,386 | $ 373,172 | $ 366,647 | $ 355,826 | 1,549,813 | 1,516,031 | 1,596,848 |
Cost of goods sold | 195,033 | 166,886 | 173,627 | 166,589 | 200,497 | 175,591 | 172,306 | 171,950 | 702,135 | 720,344 | 823,082 |
Selling, general and administrative expense | 480,561 | 450,413 | 460,896 | ||||||||
Provision for bad debts | 198,082 | 216,875 | 242,294 | ||||||||
Charges and credits | 7,780 | 13,331 | 6,478 | ||||||||
Total costs and expenses | 1,388,558 | 1,400,963 | 1,532,750 | ||||||||
Operating income (loss) | 53,766 | 35,473 | 39,252 | 32,764 | 44,841 | 20,853 | 29,192 | 20,182 | 161,255 | 115,068 | 64,098 |
Interest expense | 62,704 | 80,160 | 98,615 | ||||||||
Loss on extinguishment of debt | 1,773 | 3,274 | 0 | ||||||||
Income (loss) before income taxes | 96,778 | 31,634 | (34,517) | ||||||||
Provision (benefit) for income taxes | 22,929 | 25,171 | (8,955) | ||||||||
Net income (loss) | 73,849 | 6,463 | (25,562) | ||||||||
Income (loss) from consolidated subsidiaries | 0 | 0 | 0 | ||||||||
Net income (loss) | $ 29,476 | $ 14,630 | $ 17,011 | $ 12,732 | $ 3,201 | $ 1,569 | $ 4,273 | $ (2,580) | 73,849 | 6,463 | (25,562) |
Eliminations | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total net sales | 0 | 0 | 0 | ||||||||
Finance charges and other revenues | 0 | 0 | 0 | ||||||||
Servicing fee revenue | (40,947) | (63,372) | (60,149) | ||||||||
Total revenues | (40,947) | (63,372) | (60,149) | ||||||||
Cost of goods sold | 0 | 0 | 0 | ||||||||
Selling, general and administrative expense | (40,947) | (63,372) | (60,149) | ||||||||
Provision for bad debts | 0 | 0 | 0 | ||||||||
Charges and credits | 0 | 0 | 0 | ||||||||
Total costs and expenses | (40,947) | (63,372) | (60,149) | ||||||||
Operating income (loss) | 0 | 0 | 0 | ||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Loss on extinguishment of debt | 0 | 0 | 0 | ||||||||
Income (loss) before income taxes | 0 | 0 | 0 | ||||||||
Provision (benefit) for income taxes | 0 | 0 | 0 | ||||||||
Net income (loss) | 0 | 0 | 0 | ||||||||
Income (loss) from consolidated subsidiaries | (53,815) | 15,666 | 159,422 | ||||||||
Net income (loss) | (53,815) | 15,666 | 159,422 | ||||||||
Conn’s, Inc. | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total net sales | 0 | 0 | 0 | ||||||||
Finance charges and other revenues | 0 | 0 | 0 | ||||||||
Servicing fee revenue | 0 | 0 | 0 | ||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Cost of goods sold | 0 | 0 | 0 | ||||||||
Selling, general and administrative expense | 0 | 0 | 0 | ||||||||
Provision for bad debts | 0 | 0 | 0 | ||||||||
Charges and credits | 0 | 0 | 0 | ||||||||
Total costs and expenses | 0 | 0 | 0 | ||||||||
Operating income (loss) | 0 | 0 | 0 | ||||||||
Interest expense | 17,782 | 17,772 | 17,708 | ||||||||
Loss on extinguishment of debt | 0 | 0 | 0 | ||||||||
Income (loss) before income taxes | (17,782) | (17,772) | (17,708) | ||||||||
Provision (benefit) for income taxes | (4,213) | (14,141) | (4,594) | ||||||||
Net income (loss) | (13,569) | (3,631) | (13,114) | ||||||||
Income (loss) from consolidated subsidiaries | 87,418 | 10,094 | (12,448) | ||||||||
Net income (loss) | 73,849 | 6,463 | (25,562) | ||||||||
Guarantors | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total net sales | 1,194,674 | 1,191,967 | 1,314,471 | ||||||||
Finance charges and other revenues | 193,583 | 173,539 | 117,028 | ||||||||
Servicing fee revenue | 40,947 | 63,372 | 60,149 | ||||||||
Total revenues | 1,429,204 | 1,428,878 | 1,491,648 | ||||||||
Cost of goods sold | 702,135 | 720,344 | 823,082 | ||||||||
Selling, general and administrative expense | 479,995 | 460,698 | 460,076 | ||||||||
Provision for bad debts | 68,056 | 42,677 | 6,974 | ||||||||
Charges and credits | 7,780 | 13,331 | 6,478 | ||||||||
Total costs and expenses | 1,257,966 | 1,237,050 | 1,296,610 | ||||||||
Operating income (loss) | 171,238 | 191,828 | 195,038 | ||||||||
Interest expense | 12,498 | 15,978 | 13,379 | ||||||||
Loss on extinguishment of debt | 142 | 349 | 0 | ||||||||
Income (loss) before income taxes | 158,598 | 175,501 | 181,659 | ||||||||
Provision (benefit) for income taxes | 37,577 | 139,647 | 47,129 | ||||||||
Net income (loss) | 121,021 | 35,854 | 134,530 | ||||||||
Income (loss) from consolidated subsidiaries | (33,603) | (25,760) | (146,978) | ||||||||
Net income (loss) | 87,418 | 10,094 | (12,448) | ||||||||
Non-Guarantor Subsidiaries | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total net sales | 0 | 0 | 0 | ||||||||
Finance charges and other revenues | 161,556 | 150,525 | 165,349 | ||||||||
Servicing fee revenue | 0 | 0 | 0 | ||||||||
Total revenues | 161,556 | 150,525 | 165,349 | ||||||||
Cost of goods sold | 0 | 0 | 0 | ||||||||
Selling, general and administrative expense | 41,513 | 53,087 | 60,969 | ||||||||
Provision for bad debts | 130,026 | 174,198 | 235,320 | ||||||||
Charges and credits | 0 | 0 | 0 | ||||||||
Total costs and expenses | 171,539 | 227,285 | 296,289 | ||||||||
Operating income (loss) | (9,983) | (76,760) | (130,940) | ||||||||
Interest expense | 32,424 | 46,410 | 67,528 | ||||||||
Loss on extinguishment of debt | 1,631 | 2,925 | 0 | ||||||||
Income (loss) before income taxes | (44,038) | (126,095) | (198,468) | ||||||||
Provision (benefit) for income taxes | (10,435) | (100,335) | (51,490) | ||||||||
Net income (loss) | (33,603) | (25,760) | (146,978) | ||||||||
Income (loss) from consolidated subsidiaries | 0 | 0 | 0 | ||||||||
Net income (loss) | $ (33,603) | $ (25,760) | $ (146,978) |
Guarantor Financial Informati_5
Guarantor Financial Information - Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by (used in) operating activities | $ 151,801 | $ 50,522 | $ 205,171 |
Cash flows from investing activities: | |||
Purchase of customer accounts receivables | 0 | 0 | 0 |
Sale of customer accounts receivables | 0 | 0 | 0 |
Purchase of property and equipment | (32,814) | (16,918) | (46,556) |
Proceeds from sales of property | 0 | 0 | 10,806 |
Net cash used in investing activities | (32,814) | (16,918) | (35,750) |
Cash flows from financing activities: | |||
Proceeds from issuance of asset-backed notes | 358,300 | 1,042,034 | 1,067,850 |
Payments on asset-backed notes | (739,875) | (1,000,027) | (1,032,842) |
Borrowings under revolving credit facility | 1,836,822 | 1,717,012 | 724,697 |
Payments on Revolving Credit Facility | (1,647,322) | (1,817,512) | (876,404) |
Borrowings from warehouse facility | 173,286 | 79,940 | 0 |
Payment of debt issuance costs and amendment fees | (7,418) | (13,874) | (9,716) |
Payments on warehouse facility | (119,650) | (79,940) | 0 |
Proceeds from stock issued under employee benefit plans | 1,237 | 3,318 | 1,268 |
Tax payments associated with equity-based compensation transactions | (3,342) | (1,182) | (40) |
Payment from extinguishment of debt | (1,178) | (836) | 0 |
Other | (1,068) | (643) | (800) |
Net cash used in financing activities | (150,208) | (71,710) | (125,987) |
Net change in cash, cash equivalents and restricted cash | (31,221) | (38,106) | 43,434 |
Cash, cash equivalents and restricted cash, beginning of period | 96,158 | 134,264 | 90,830 |
Cash, cash equivalents and restricted cash, end of period | 64,937 | 96,158 | 134,264 |
Eliminations | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by (used in) operating activities | 0 | 0 | 0 |
Cash flows from investing activities: | |||
Purchase of customer accounts receivables | 525,846 | 1,112,903 | 923,842 |
Sale of customer accounts receivables | (525,846) | (1,112,903) | (923,842) |
Purchase of property and equipment | 0 | 0 | 0 |
Proceeds from sales of property | 0 | ||
Net cash used in investing activities | 0 | 0 | 0 |
Cash flows from financing activities: | |||
Proceeds from issuance of asset-backed notes | 0 | 0 | 0 |
Payments on asset-backed notes | 0 | 0 | 0 |
Borrowings under revolving credit facility | 0 | 0 | 0 |
Payments on Revolving Credit Facility | 0 | 0 | 0 |
Borrowings from warehouse facility | 0 | ||
Payment of debt issuance costs and amendment fees | 0 | 0 | 0 |
Payments on warehouse facility | 0 | ||
Proceeds from stock issued under employee benefit plans | 0 | 0 | 0 |
Tax payments associated with equity-based compensation transactions | 0 | 0 | 0 |
Payment from extinguishment of debt | 0 | 0 | |
Other | 0 | 0 | 0 |
Net cash used in financing activities | 0 | 0 | 0 |
Net change in cash, cash equivalents and restricted cash | 0 | 0 | 0 |
Cash, cash equivalents and restricted cash, beginning of period | 0 | 0 | 0 |
Cash, cash equivalents and restricted cash, end of period | 0 | 0 | 0 |
Conn’s, Inc. | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by (used in) operating activities | (1,237) | (3,318) | (1,268) |
Cash flows from investing activities: | |||
Purchase of customer accounts receivables | 0 | 0 | 0 |
Sale of customer accounts receivables | 0 | 0 | 0 |
Purchase of property and equipment | 0 | 0 | 0 |
Proceeds from sales of property | 0 | ||
Net cash used in investing activities | 0 | 0 | 0 |
Cash flows from financing activities: | |||
Proceeds from issuance of asset-backed notes | 0 | 0 | 0 |
Payments on asset-backed notes | 0 | 0 | 0 |
Borrowings under revolving credit facility | 0 | 0 | 0 |
Payments on Revolving Credit Facility | 0 | 0 | 0 |
Borrowings from warehouse facility | 0 | ||
Payment of debt issuance costs and amendment fees | 0 | 0 | 0 |
Payments on warehouse facility | 0 | ||
Proceeds from stock issued under employee benefit plans | 1,237 | 3,318 | 1,268 |
Tax payments associated with equity-based compensation transactions | 0 | 0 | 0 |
Payment from extinguishment of debt | 0 | 0 | |
Other | 0 | 0 | 0 |
Net cash used in financing activities | 1,237 | 3,318 | 1,268 |
Net change in cash, cash equivalents and restricted cash | 0 | 0 | 0 |
Cash, cash equivalents and restricted cash, beginning of period | 0 | 0 | 0 |
Cash, cash equivalents and restricted cash, end of period | 0 | 0 | 0 |
Guarantors | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by (used in) operating activities | 18,201 | (925,182) | (723,018) |
Cash flows from investing activities: | |||
Purchase of customer accounts receivables | 0 | 0 | 0 |
Sale of customer accounts receivables | 0 | 1,112,903 | 923,842 |
Purchase of property and equipment | (32,814) | (16,918) | (46,556) |
Proceeds from sales of property | 10,806 | ||
Net cash used in investing activities | (32,814) | 1,095,985 | 888,092 |
Cash flows from financing activities: | |||
Proceeds from issuance of asset-backed notes | 0 | 0 | 0 |
Payments on asset-backed notes | (169,443) | (77,104) | 0 |
Borrowings under revolving credit facility | 1,836,822 | 1,717,012 | 724,697 |
Payments on Revolving Credit Facility | (1,647,322) | (1,817,512) | (876,404) |
Borrowings from warehouse facility | 0 | ||
Payment of debt issuance costs and amendment fees | (3,230) | (3,268) | (1,215) |
Payments on warehouse facility | 0 | ||
Proceeds from stock issued under employee benefit plans | 0 | 0 | 0 |
Tax payments associated with equity-based compensation transactions | (3,342) | (1,182) | (40) |
Payment from extinguishment of debt | (1,178) | (836) | |
Other | (1,068) | (643) | (800) |
Net cash used in financing activities | 11,239 | (183,533) | (153,762) |
Net change in cash, cash equivalents and restricted cash | (3,374) | (12,730) | 11,312 |
Cash, cash equivalents and restricted cash, beginning of period | 10,836 | 23,566 | 12,254 |
Cash, cash equivalents and restricted cash, end of period | 7,462 | 10,836 | 23,566 |
Non-Guarantor Subsidiaries | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by (used in) operating activities | 134,837 | 979,022 | 929,457 |
Cash flows from investing activities: | |||
Purchase of customer accounts receivables | (525,846) | (1,112,903) | (923,842) |
Sale of customer accounts receivables | 525,846 | 0 | 0 |
Purchase of property and equipment | 0 | 0 | 0 |
Proceeds from sales of property | 0 | ||
Net cash used in investing activities | 0 | (1,112,903) | (923,842) |
Cash flows from financing activities: | |||
Proceeds from issuance of asset-backed notes | 358,300 | 1,042,034 | 1,067,850 |
Payments on asset-backed notes | (570,432) | (922,923) | (1,032,842) |
Borrowings under revolving credit facility | 0 | 0 | 0 |
Payments on Revolving Credit Facility | 0 | 0 | 0 |
Borrowings from warehouse facility | 173,286 | ||
Payment of debt issuance costs and amendment fees | (4,188) | (10,606) | (8,501) |
Payments on warehouse facility | (119,650) | ||
Proceeds from stock issued under employee benefit plans | 0 | 0 | 0 |
Tax payments associated with equity-based compensation transactions | 0 | 0 | 0 |
Payment from extinguishment of debt | 0 | 0 | |
Other | 0 | 0 | 0 |
Net cash used in financing activities | (162,684) | 108,505 | 26,507 |
Net change in cash, cash equivalents and restricted cash | (27,847) | (25,376) | 32,122 |
Cash, cash equivalents and restricted cash, beginning of period | 85,322 | 110,698 | 78,576 |
Cash, cash equivalents and restricted cash, end of period | $ 57,475 | $ 85,322 | $ 110,698 |
Quarterly Information (Unaudi_3
Quarterly Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Revenues [Abstract] | |||||||||||
Total revenues | $ 432,982 | $ 373,824 | $ 384,620 | $ 358,387 | $ 420,386 | $ 373,172 | $ 366,647 | $ 355,826 | $ 1,549,813 | $ 1,516,031 | $ 1,596,848 |
Percent of annual revenues (as percent) | 28.00% | 24.10% | 24.80% | 23.10% | 27.70% | 24.60% | 24.20% | 23.50% | |||
Cost of goods sold | $ 195,033 | $ 166,886 | $ 173,627 | $ 166,589 | $ 200,497 | $ 175,591 | $ 172,306 | $ 171,950 | 702,135 | 720,344 | 823,082 |
Operating income [Abstract] | |||||||||||
Operating income | 53,766 | 35,473 | 39,252 | 32,764 | 44,841 | 20,853 | 29,192 | 20,182 | 161,255 | 115,068 | 64,098 |
Net income (loss) | $ 29,476 | $ 14,630 | $ 17,011 | $ 12,732 | $ 3,201 | $ 1,569 | $ 4,273 | $ (2,580) | $ 73,849 | $ 6,463 | $ (25,562) |
Income (loss) per share | |||||||||||
Basic (in dollars per share) | $ 0.93 | $ 0.46 | $ 0.54 | $ 0.40 | $ 0.10 | $ 0.05 | $ 0.14 | $ (0.08) | $ 2.33 | $ 0.21 | $ (0.83) |
Diluted (in dollars per share) | $ 0.91 | $ 0.45 | $ 0.53 | $ 0.39 | $ 0.10 | $ 0.05 | $ 0.14 | $ (0.08) | $ 2.28 | $ 0.20 | $ (0.83) |
Retail Segment | |||||||||||
Revenues [Abstract] | |||||||||||
Total revenues | $ 338,887 | $ 284,053 | $ 296,411 | $ 275,770 | $ 334,535 | $ 291,903 | $ 286,505 | $ 279,365 | $ 1,195,121 | $ 1,192,308 | $ 1,316,040 |
Cost of goods sold | 702,135 | 720,344 | 823,082 | ||||||||
Operating income [Abstract] | |||||||||||
Operating income | 54,712 | 35,250 | 39,238 | 31,169 | 48,583 | 29,586 | 31,299 | 32,011 | 160,369 | 141,479 | 159,412 |
Credit Segment | |||||||||||
Revenues [Abstract] | |||||||||||
Total revenues | 94,095 | 89,771 | 88,209 | 82,617 | 85,851 | 81,269 | 80,142 | 76,461 | 354,692 | 323,723 | 280,808 |
Cost of goods sold | 0 | 0 | 0 | ||||||||
Operating income [Abstract] | |||||||||||
Operating income | $ (946) | $ 223 | $ 14 | $ 1,595 | $ (3,742) | $ (8,733) | $ (2,107) | $ (11,829) | $ 886 | $ (26,411) | $ (95,314) |