Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2017 | Nov. 30, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CONNS INC | |
Entity Central Index Key | 1,223,389 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 31,370,581 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Oct. 31, 2017 | Jan. 31, 2017 |
Current assets: | ||
Restricted cash (all held by VIEs) | $ 12,742 | $ 23,566 |
Restricted cash (all held by VIEs) | 71,099 | 110,698 |
Customer accounts receivable, net of allowances (includes VIE balance of $360,086 and $529,108, respectively) | 635,700 | 702,162 |
Other accounts receivable | 63,203 | 69,286 |
Inventories | 235,479 | 164,856 |
Income taxes recoverable | 1,194 | 2,150 |
Prepaid expenses and other current assets | 14,721 | 14,955 |
Total current assets | 1,034,138 | 1,087,673 |
Long-term portion of customer accounts receivable, net of allowances (includes VIE balance of $231,036 and $320,382, respectively) | 616,665 | 615,904 |
Property and equipment, net | 144,747 | 159,202 |
Deferred income taxes | 72,554 | 71,442 |
Other assets | 6,285 | 6,913 |
Total assets | 1,874,389 | 1,941,134 |
Current liabilities: | ||
Current maturities of long-term debt and capital lease obligations (includes VIE balance of $64,952 and $0 respectively) | 65,651 | 849 |
Accounts payable | 109,738 | 101,612 |
Accrued compensation and related expenses | 16,912 | 13,325 |
Accrued expenses | 45,491 | 26,456 |
Income taxes payable | 2,513 | 3,318 |
Deferred revenues and other credits | 22,018 | 21,821 |
Total current liabilities | 262,323 | 167,381 |
Deferred rent | 87,152 | 87,957 |
Long-term debt and capital lease obligations (includes VIE balance of $396,010 and $745,581, respectively) | 973,278 | 1,144,393 |
Other long-term liabilities | 22,245 | 23,613 |
Total liabilities | 1,344,998 | 1,423,344 |
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; 31,365,028 and 30,961,898 shares issued, respectively) | 314 | 310 |
Additional paid-in capital | 98,611 | 90,276 |
Retained earnings | 430,466 | 427,204 |
Total stockholders' equity | 529,391 | 517,790 |
Total liabilities and stockholders' equity | $ 1,874,389 | $ 1,941,134 |
CONSOLIDATED BALANCE SHEETS (u3
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Apr. 30, 2017 | Jan. 31, 2017 |
Assets, Noncurrent [Abstract] | ||
Customer accounts receivable, net of allowances (includes VIE balance of $360,086 and $529,108, respectively) | $ 702,162 | |
Long-term customer accounts receivable, net | $ 615,904 | |
Liabilities and Stockholders' Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 31,004,000 | 30,962,000 |
Variable Interest Entity | ||
Assets, Noncurrent [Abstract] | ||
Customer accounts receivable, net of allowances (includes VIE balance of $360,086 and $529,108, respectively) | $ 581,679 | $ 529,108 |
Long-term customer accounts receivable, net | 474,474 | 320,382 |
Long-term Debt | $ 981,836 | $ 745,581 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Revenues: | ||||
Product sales | $ 263,786 | $ 278,056 | $ 774,741 | $ 864,269 |
Repair service agreement commissions | 24,488 | 26,354 | 72,703 | 82,849 |
Service revenues | 3,534 | 3,623 | 10,062 | 11,456 |
Total net sales | 291,808 | 308,033 | 857,506 | 958,574 |
Finance charges and other revenues | 81,364 | 68,740 | 238,139 | 205,469 |
Total revenues | 373,172 | 376,773 | 1,095,645 | 1,164,043 |
Costs and expenses: | ||||
Cost of goods sold | 175,591 | 192,374 | 519,847 | 605,709 |
Selling, general and administrative expenses | 114,355 | 114,457 | 332,524 | 347,550 |
Provision for bad debts | 56,512 | 51,564 | 161,891 | 169,978 |
Charges and credits | 5,861 | 1,987 | 11,156 | 5,408 |
Total costs and expenses | 352,319 | 360,382 | 1,025,418 | 1,128,645 |
Operating income | 20,853 | 16,391 | 70,227 | 35,398 |
Interest expense | 18,095 | 23,470 | 62,142 | 73,504 |
Loss on extinguishment of debt | 461 | 0 | 2,907 | 0 |
Income (loss) before income taxes | 2,297 | (7,079) | 5,178 | (38,106) |
Provision (benefit) for income taxes | 728 | (3,264) | 1,916 | (12,618) |
Net income (loss) | $ 1,569 | $ (3,815) | $ 3,262 | $ (25,488) |
Income (loss) per share: | ||||
Basic (in dollars per share) | $ 0.05 | $ (0.12) | $ 0.10 | $ (0.83) |
Diluted (in dollars per share) | $ 0.05 | $ (0.12) | $ 0.10 | $ (0.83) |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 31,292,913 | 30,816,319 | 31,121,177 | 30,736,636 |
Diluted (in shares) | 31,764,594 | 30,816,319 | 31,457,420 | 30,736,636 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 3,262 | $ (25,488) |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
Depreciation | 23,138 | 21,209 |
Loss from retirement of leasehold improvement | 0 | 1,980 |
Amortization of debt issuance costs | 11,088 | 19,164 |
Provision for bad debts and uncollectible interest | 192,354 | 200,349 |
Loss on extinguishment of debt | 2,907 | 0 |
Stock-based compensation expense | 5,899 | 3,928 |
Charges, net of credits, for store and facility closures | 428 | 954 |
Deferred income taxes | (1,112) | 3,309 |
Loss (gain) on sale/write-off of fixed assets | 5,636 | (259) |
Tenant improvement allowances received from landlords | 5,072 | 23,674 |
Change in operating assets and liabilities: | ||
Customer accounts receivable | (126,654) | (131,943) |
Other accounts receivable | 5,641 | 13,281 |
Inventories | (70,623) | (2,568) |
Other assets | (964) | (1,483) |
Accounts payable | 8,186 | 32,342 |
Accrued expenses | 21,371 | 11,542 |
Income taxes | 151 | (355) |
Deferred rent, revenues and other credits | (4,971) | 10,409 |
Net cash provided by operating activities | 82,737 | 183,011 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (11,995) | (41,804) |
Proceeds from sale of property | 0 | 686 |
Net cash used in investing activities | (11,995) | (41,118) |
Cash flows from financing activities: | ||
Proceeds from issuance of asset-backed notes | 469,814 | 1,067,850 |
Payments on asset-backed notes | (816,243) | (736,266) |
Changes in restricted cash balances | 39,599 | (87,900) |
Borrowings from revolving credit facility | 1,257,052 | 529,352 |
Payments on revolving credit facility | (1,082,552) | (858,559) |
Payment of debt issuance costs and amendment fees | (8,172) | (9,775) |
Borrowings on warehouse facility | 79,940 | 0 |
Payments on warehouse facility | (23,066) | 0 |
Proceeds from stock issued under employee benefit plans | 3,011 | 824 |
Other | (949) | (608) |
Net cash used in financing activities | (81,566) | (95,082) |
Net change in cash and cash equivalents | (10,824) | 46,811 |
Cash and cash equivalents, beginning of period | 23,566 | 12,254 |
Cash and cash equivalents, end of period | 12,742 | 59,065 |
Capital lease asset additions and related obligations | 3,196 | 0 |
Property and equipment purchases not yet paid | 1,021 | 1,805 |
Cash interest paid | 44,561 | 53,074 |
Cash income taxes paid (refunded), net | $ 2,878 | $ (15,624) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2017 | |
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" or "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. Our management evaluates performance and allocates resources based on the operating results of the retail and credit segments. Basis of Presentation. The accompanying unaudited, condensed consolidated financial statements of Conn's, Inc. and its wholly-owned subsidiaries, including the VIEs (as defined below), have been prepared by management in accordance with accounting principles generally accepted in the United States ("GAAP") and prevailing industry practice for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature. The condensed consolidated financial position, results of operations and cash flows for these interim periods are not necessarily indicative of the results that may be expected in future periods. The balance sheet at January 31, 2017 has been derived from the audited financial statements at that date. The financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2017, filed with the United States Securities and Exchange Commission (the “SEC”) on April 4, 2017. 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 8, 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, allowances for no-interest option credit programs and deferred interest, which are particularly sensitive given the size of our customer portfolio balance. Cash and Cash Equivalents . Cash and cash equivalents include cash, credit card deposits in-transit, and highly liquid debt instruments purchased with a maturity of three months or less. Cash and cash equivalents include credit card deposits in-transit of $2.1 million and $2.4 million , as of October 31, 2017 and January 31, 2017 , respectively. Restricted Cash. The restricted cash balance as of October 31, 2017 and January 31, 2017 includes $52.8 million and $75.2 million , respectively, of cash we collected as servicer on the securitized receivables that was subsequently remitted to the VIEs and $18.3 million and $35.5 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 repossess collateral or 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 re-age their obligation by refinancing the account, which 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. Our calculation of interest income for customers with similar financing arrangements for which the timing and amount of prepayments can be reasonably estimated includes an estimate of the benefit from future prepayments based on our historical experience. At October 31, 2017 and January 31, 2017 , there was $13.0 million and $13.7 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 12 -and 18 -month no -interest option programs. If the customer is delinquent in making a scheduled monthly payment or does not repay the principal in full by the end of the no-interest 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. No -interest option finance programs with terms greater than 12 months are discounted to their present value at origination, resulting in a reduction in sales and customer receivables, and the discount amount is amortized into finance charges and other revenues over the term of the contract. 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 typically only place accounts in non-accrual status when legally required. Payments received on non-accrual loans will be applied to principal and reduce the amount of the loan. At October 31, 2017 and January 31, 2017 , customer receivables carried in non-accrual status were $21.4 million and $22.9 million , respectively. At October 31, 2017 and January 31, 2017 , customer receivables that were past due 90 days or more and still accruing interest totaled $105.2 million and $124.0 million , respectively. At October 31, 2017 and January 31, 2017, customer receivables in a bankruptcy status that are less than 60 days past due of $11.7 million and $19.5 million , respectively, are included within the customer receivables carried in non-accrual status balance. 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 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 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 the quality of the loan review system, changes in the value of underlying collateral, 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. 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. 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 were $5.9 million and $5.7 million as of October 31, 2017 and January 31, 2017 , respectively, and were included in other assets on our consolidated balance sheet. Income Taxes. For the nine months ended October 31, 2017 and 2016 we utilized the estimated annual effective tax rate based on our estimated fiscal year 2018 and 2017 pre-tax income, respectively, in determining income tax expense. 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. Three Months Ended Nine Months Ended 2017 2016 2017 2016 Restricted stock awards ("RSUs") (1) 2,740 14,502 646,033 343,369 Performance stock awards ("PSUs") (2) — — 501,012 131,759 Total stock awards granted 2,740 14,502 1,147,045 475,128 Aggregate grant date fair value (in thousands) $ 50 $ 96 $ 14,596 $ 5,046 (1) The majority of the RSUs issued during the nine months ended October 31, 2017 will vest, if at all, over periods of three to five years from the date of grant. (2)The majority of the PSUs issued during the nine months ended October 31, 2017 will vest, if at all, upon the certification, after fiscal year 2020, by the compensation committee of the satisfaction of the annual and cumulative Earnings Before Interest, Taxes, Depreciation and Amortization performance conditions over the three fiscal years commencing with fiscal year 2018. For the three months ended October 31, 2017 and 2016 , stock-based compensation expense was $ 1.7 million and $1.0 million , respectively. For the nine months ended October 31, 2017 and 2016 , stock-based compensation expense was $5.9 million and $3.9 million , respectively, inclusive of severance related stock-based compensation expense of $0.6 million and $0.2 million , respectively. Earnings per Share . Basic earnings 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 and restricted stock units granted, which is calculated using the treasury-stock method. The following table sets forth the shares outstanding for the earnings per share calculations: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Weighted-average common shares outstanding - Basic 31,292,913 30,816,319 31,121,177 30,736,636 Dilutive effect of stock options and restricted stock units 471,681 — 336,243 — Weighted-average common shares outstanding - Diluted 31,764,594 30,816,319 31,457,420 30,736,636 For the three months ended October 31, 2017 and 2016 the weighted-average number of stock options and restricted stock units not included in the calculation due to their anti-dilutive effect was 0.2 million and 1.2 million , respectively. For the nine months ended October 31, 2017 and 2016 , the weighted-average number of stock options and restricted stock units not included in the calculation due to their anti-dilutive effect was 0.4 million and 1.2 million , respectively. Fair Value of Financial Instruments . Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels related to subjectivity associated with the inputs to fair value measurements as follows: • Level 1 – 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 held by the consolidated VIEs and accounts payable approximate their carrying amounts because of the short maturity of these instruments. The fair value of customer accounts receivables, determined using a Level 3 discounted cash flow analysis, approximates their carrying amount, which includes 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 October 31, 2017 , the fair value of the Senior Notes outstanding, which was determined using Level 1 inputs, was $225.3 million as compared to the carrying value of $227.0 million , excluding the impact of the related discount. At October 31, 2017 , 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 March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which modifies the accounting for excess tax benefits and tax deficiencies associated with share-based payments, the accounting for forfeitures, and the classification of certain items on the statement of cash flows. ASU 2016-09 eliminates the requirement to recognize excess tax benefits in additional paid-in capital ("APIC"), and the requirement to evaluate tax deficiencies for APIC or income tax expense classification, and provides for these benefits or deficiencies to be recorded as an income tax expense or benefit in the income statement. With these changes, tax-related cash flows resulting from share-based payments are classified as operating activities as opposed to financing. The standard became effective for us in the first quarter of fiscal year 2018. The amendment requiring the recognition of excess tax benefits and deficiencies as income tax benefit or expense in the income statement as opposed to being recognized as additional paid-in-capital was applied prospectively and the impact was not material. The Company retrospectively adopted the amendments requiring the classification of excess tax benefits and deficiencies with other income tax cash flows as operating activities and cash paid when directly withholding shares as financing activities in the accompanying consolidated statements of cash flows; the impact was not material. The Company has elected to continue its current practice of estimating the number of awards expected to vest in determining the amount of compensation cost to be recognized related to share based payment transactions. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 requires that inventory that has historically been measured using first-in, first-out or average cost method be measured at the lower of cost and net realizable value. The update requires prospective application and became effective for us in the first quarter of fiscal year 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements Yet To Be 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. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date , which defers the effective date of ASU 2014-09 by one year and allows early adoption on a limited basis. The FASB has 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. These ASUs will be effective for us beginning in the first quarter of fiscal year 2019 and will result in retrospective application, either in the form of recasting all prior periods presented or a cumulative adjustment to equity in the period of adoption. Based on our preliminary assessment, we do not expect the adoption of these ASUs to have a material impact on our consolidated financial statements other than the expected additional disclosure requirements. 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. On transition, we will recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The final standard will become effective for us beginning in the first quarter of fiscal year 2020. Based on our preliminary assessment, we believe the adoption of this ASU will have a material impact on our financial statements as we will be required to report additional leases on our consolidated balance sheet. 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 6, Leases, of our audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2017 . 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 should 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 earlier adoption is permitted beginning in the first quarter of fiscal year 2020. We are currently assessing the impact this ASU will have on our financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) . 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 flow. The standard will become effective for us in the first quarter of fiscal year 2019 and early adoption is permitted. The adoption of this ASU is not expected to have a significant impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory , which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The standard will become effective for us in the first quarter of fiscal year 2019 and early adoption is permitted. The application of the amendments will require the use of a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. We are evaluating the standard and the impact it will have on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) . 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. The adoption of this standard will result in us no longer showing the changes in restricted cash balances as a component of cash flows from financing activities but instead include 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 ASU will become effective for us in the first quarter of fiscal year 2019, and early adoption is permitted. |
Customer Accounts Receivable
Customer Accounts Receivable | 9 Months Ended |
Oct. 31, 2017 | |
Receivables [Abstract] | |
Customer Accounts Receivable | Customer Accounts Receivable Customer accounts receivable consisted of the following: Total Outstanding Balance Customer Accounts Receivable 60 Days Past Due (1) Re-aged (1) (in thousands) October 31, January 31, October 31, 2017 (2) January 31, October 31, 2017 (3) January 31, Customer accounts receivable $ 1,341,939 $ 1,417,581 $ 110,382 $ 127,747 $ 208,047 $ 111,585 Restructured accounts 146,967 138,858 37,484 38,010 146,967 138,858 Total customer portfolio balance 1,488,906 1,556,439 $ 147,866 $ 165,757 $ 355,014 $ 250,443 Allowance for uncollectible accounts (202,906 ) (210,175 ) Allowances for no-interest option credit programs (19,616 ) (21,207 ) Deferred fees and origination costs, net (14,019 ) (6,991 ) Total customer accounts receivable, net 1,252,365 1,318,066 Short-term portion of customer accounts receivable, net (635,700 ) (702,162 ) Long-term portion of customer accounts receivable, net $ 616,665 $ 615,904 Securitized receivables held by the VIEs $ 712,727 $ 1,015,837 $ 99,763 $ 156,344 $ 246,333 $ 238,375 Receivables not held by the VIEs 776,179 540,602 48,103 9,413 108,681 12,068 Total customer portfolio balance $ 1,488,906 $ 1,556,439 $ 147,866 $ 165,757 $ 355,014 $ 250,443 (1) Due to the fact that an account can become past due after having been re-aged, accounts could be represented as both past due and re-aged. As of October 31, 2017 and January 31, 2017 , the amounts included within both 60 days past due and re-aged were $64.8 million and $66.7 million , respectively. As of October 31, 2017 and January 31, 2017 , the total customer portfolio balance past due one day or greater was $394.5 million and $406.1 million , respectively. These amounts include the 60 days past due balances shown. (2) The balance of accounts 60 days past due as of October 31, 2017 reflects the impact of first time re-ages related to customers within FEMA-designated Hurricane Harvey disaster areas. (3) The re-aged receivable balance as of October 31, 2017 includes $71.8 million in first time re-ages related to customers within FEMA-designated Hurricane Harvey disaster areas. The following presents the activity in the allowance for doubtful accounts and uncollectible interest for customer receivables: Nine Months Ended October 31, 2017 Nine Months Ended October 31, 2016 (in thousands) Customer Accounts Receivable Restructured Accounts Total Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 158,992 $ 51,183 $ 210,175 $ 149,226 $ 41,764 $ 190,990 Provision (1) 139,406 52,948 192,354 156,063 44,286 200,349 Principal charge-offs (2) (133,033 ) (44,657 ) (177,690 ) (132,028 ) (31,802 ) (163,830 ) Interest charge-offs (21,884 ) (7,346 ) (29,230 ) (22,400 ) (5,405 ) (27,805 ) Recoveries (2) 5,463 1,834 7,297 3,727 899 4,626 Allowance at end of period $ 148,944 $ 53,962 $ 202,906 $ 154,588 $ 49,742 $ 204,330 Average total customer portfolio balance $ 1,352,137 $ 141,155 $ 1,493,292 $ 1,422,473 $ 126,493 $ 1,548,966 (1) Includes provision for uncollectible interest, which is included in finance charges and other revenues. (2) Charge-offs include the principal amount of losses (excluding accrued and unpaid interest). Recoveries include principal collections of previously charged-off balances. Net charge-offs are calculated as the net of principal charge-offs and recoveries. |
Accrual for Store Closures
Accrual for Store Closures | 9 Months Ended |
Oct. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Accrual for Store Closures | Accrual for Store and Facility Closures We have closed or relocated retail and facility locations that did not perform at a level expected for mature store locations or that did not align with our long-term retail objectives. Certain of the closed or relocated stores and facilities had non-cancelable lease agreements, resulting in the accrual of the present value of the remaining lease payments and estimated related occupancy obligations, net of estimated sublease income. Adjustments to these projections for changes in estimated marketing times and sublease rates, as well as other revisions, are made to the obligation as further information related to the actual terms and costs become available. The following table presents detail of the activity in the accrual for store and facility closures: Nine Months Ended (in thousands) 2017 2016 Balance at beginning of period $ 1,874 $ 1,866 Accrual for additional closures 1,314 954 Adjustments 16 (74 ) Cash payments, net of sublease income (2,010 ) (767 ) Balance at end of period 1,194 1,979 Current portion, included in accrued expenses (170 ) (923 ) Long-term portion, included in other long-term liabilities $ 1,024 $ 1,056 |
Charges and Credits
Charges and Credits | 9 Months Ended |
Oct. 31, 2017 | |
Charges and Credits [Abstract] | |
Charges and Credits | Charges and Credits Charges and credits consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Store and facility closure costs $ — $ 954 $ 1,349 $ 954 Impairments from disposals — 595 — 1,980 Legal and professional fees related to the exploration of strategic alternatives and securities-related litigation — 158 34 747 Employee severance — 280 1,317 1,493 Indirect tax audit reserve — — 2,595 — Write-off of capitalized software costs 5,861 — 5,861 — Executive management transition costs — — — 234 $ 5,861 $ 1,987 $ 11,156 $ 5,408 During the three months ended October 31, 2017 , we incurred a loss from the write-off of previously capitalized costs for a software project that was abandoned during the third quarter of fiscal year 2018 related to the implementation of a new point of sale system that began in fiscal year 2013. During the nine months ended October 31, 2017 , we incurred exit costs associated with reducing the square footage of a distribution center, severance costs related to a change in the executive management team, a charge related to an increase in our indirect tax audit reserve, and a loss from the write-off of previously capitalized costs for a software project that was abandoned during the third quarter of fiscal year 2018 related to the implementation of a new point of sale system that began in fiscal year 2013. During the three and nine months ended October 31, 2016 , we incurred costs associated with store and facility closures, impairments from disposals, legal and professional fees related to our securities-related litigation and severance and transition costs due to changes in the executive management team. The impairments from disposals included the write-off of leasehold improvements for one store we relocated prior to the end of the useful life of the leasehold improvements and incurred costs for a terminated store project prior to starting construction. |
Finance Charges and Other Reven
Finance Charges and Other Revenue | 9 Months Ended |
Oct. 31, 2017 | |
Supplemental Disclosure of Finance Charges and Other Revenue [Abstract] | |
Finance Charges And Other Revenue Disclosure [Text Block] | Finance Charges and Other Revenues Finance charges and other revenues consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Interest income and fees $ 74,144 $ 58,404 $ 210,765 $ 173,527 Insurance income 7,125 9,999 27,107 30,674 Other revenues 95 337 267 1,268 $ 81,364 $ 68,740 $ 238,139 $ 205,469 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 at the time we sell the coverage, and we may receive retrospective commissions, which are additional commissions paid by the insurance carrier if insurance claims are less than earned premiums. During the three months ended October 31, 2017 and 2016, interest income and fees reflected provisions for uncollectible interest of $10.5 million and $11.0 million and interest income related to TDR accounts of $4.8 million and $4.4 million , respectively. During the nine months ended October 31, 2017 and 2016, interest income and fees reflected provisions for uncollectible interest of $31.0 million and $31.2 million and interest income related to TDR accounts of $14.0 million and $12.7 million , respectively. |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 9 Months Ended |
Oct. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt and Capital Lease Obligations | Debt and Capital Lease Obligations Debt and capital lease obligations consisted of the following: (in thousands) October 31, January 31, Revolving credit facility $ 352,000 $ 177,500 Senior Notes 227,000 227,000 2015 VIE Asset-backed Class A notes — 12,166 2015 VIE Asset-backed Class B notes — 165,900 2016-A VIE Asset-backed Class A notes — 64,732 2016-A VIE Asset-backed Class B notes — 70,510 2016-A VIE Asset-backed Class C notes — 70,510 2016-B VIE Asset-backed Class A notes 8,563 256,513 2016-B VIE Asset-backed Class B notes 111,960 111,960 2017-A VIE Asset-backed Class A notes 129,583 — 2017-A VIE Asset-backed Class B notes 106,270 — 2017-A VIE Asset-backed Class C notes 50,340 — 2017 Warehouse Class A Notes 56,874 — Capital lease obligations 5,213 2,393 Total debt and capital lease obligations 1,047,803 1,159,184 Less: Discount on debt (2,668 ) (3,089 ) Deferred debt issuance costs (6,206 ) (10,853 ) Current maturities of long-term debt and capital lease obligations (65,651 ) (849 ) Long-term debt and capital lease obligations $ 973,278 $ 1,144,393 Senior Notes. On July 1, 2014, we issued $250.0 million of the unsecured Senior Notes due July 2022 bearing interest at 7.25% (the "Senior Notes"), pursuant to an indenture dated July 1, 2014 (the "Indenture"), among Conn's, Inc., its subsidiary guarantors (the "Guarantors") and U.S. Bank National Association, as trustee. The effective interest rate of the Senior Notes after giving effect to 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 were to exceed an amount tied to consolidated net income. These limitations, however, are subject to two exceptions: (1) an exception that permits the payment of up to $375.0 million in restricted payments, and (2) an exception that permits restricted payments regardless of dollar amount so long as, after giving pro forma effect to the dividends and other restricted payments, we would have had a leverage ratio, as defined under the Indenture, of less than or equal to 2.50 to 1.0 . As a result of these exceptions, as of October 31, 2017 , $179.2 million would have been free from the distribution restriction. However, as a result of the revolving credit facility distribution restrictions, which are further described below, we were restricted from making a distribution as of October 31, 2017 . 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. During fiscal years 2018, 2017 and 2016, we securitized customer accounts receivables by transferring the receivables to various bankruptcy-remote VIEs. In turn, the VIEs issued 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 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 of 1933, as amended. 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 at origination consisted of the following: Asset-Backed Notes Original Principal Amount Net Proceeds (1) Issuance Date Maturity Date Contractual Interest Rate Effective Interest Rate (2) 2016-B Class A Notes 391,840 380,033 10/6/2016 10/15/2018 3.73% 5.47% 2016-B Class B Notes 111,960 108,586 10/6/2016 3/15/2019 7.34% 8.03% 2017-A Class A Notes 313,220 304,451 4/19/2017 7/15/2019 2.73% 4.96% 2017-A Class B Notes 106,270 103,300 4/19/2017 2/15/2020 5.11% 5.83% 2017-A Class C Notes 50,340 48,919 4/19/2017 10/15/2021 7.40% 7.91% 2017 Warehouse Class A Notes 79,940 78,777 8/15/2017 8/15/2018 1M CP + 4% (3) 7.02% Total $ 1,053,570 $ 1,024,066 (1) After giving effect to debt issuance costs and restricted cash held by the VIEs. (2) For the nine months ended October 31, 2017 , and inclusive of changes in timing of actual and expected cash flows. (3) The rate on the 2017 Warehouse Class A Notes is defined as the one-month commercial paper rate, representing the purchaser's commercial paper cost, plus a 4% fixed margin. On May 15, 2017, the Company completed the redemption of its Series 2015-A Class B Notes (collectively, the "2015-A Redeemed Notes") at an aggregate redemption price of $114.1 million (which was equal to the entire outstanding principal of, plus accrued interest on, the 2015-A Redeemed Notes). The net funds used to call the notes was $78.8 million , which is equal to the redemption price less adjustments of $35.3 million for funds held in reserve and collection accounts in accordance with the terms of the applicable indenture governing the 2015-A Redeemed Notes. The net funds used to call the 2015-A Redeemed Notes of $78.8 million was transferred from the Guarantors to the Non-Guarantor Subsidiary in exchange for the underlying securities held as collateral on the 2015-A Redeemed Notes with carrying value of $126.3 million as of April 30, 2017. In connection with the early redemption of the 2015-A Redeemed Notes, we wrote-off $2.1 million of debt issuance costs. On August 15, 2017, affiliates of the Company closed on a $79.9 million financing under a receivables warehouse financing transaction entered into on August 8, 2017 (the "Warehouse Financing"). The net proceeds of the Warehouse Financing were used to prepay in full the Series 2016-A Class B Notes and Class C Notes (collectively, the "2016-A Redeemed Notes"), which had been issued by Conn’s Receivables Funding 2016-A, LLC under a securitization transaction entered into on March 17, 2016, that were still outstanding as of August 15, 2017. On August 15, 2017, the Company completed the redemption of the 2016-A Redeemed Notes at an aggregate redemption price of $102.9 million (which was equal to the entire outstanding principal of, plus accrued interest and the call premiums on, the 2016-A Redeemed Notes). The net funds used to call the notes was $78.6 million , which is equal to the redemption price less adjustments of $24.3 million for funds held in reserve and collection accounts in accordance with the terms of the applicable indenture governing the 2016-A Redeemed Notes. The difference between the net proceeds of the Warehouse Financing and the carrying value of the 2016-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 2016-A Redeemed Notes, we wrote-off $0.5 million of debt issuance costs. Revolving Credit Facility. On March 31, 2017, Conn's, Inc. and certain of its subsidiaries (the "Borrowers") entered into a Third Amendment (the "Third Amendment") to the Third Amended and Restated Loan and Security Agreement, dated as of October 30, 2015, with certain lenders, which provides for a $750.0 million asset-based revolving credit facility (the "revolving credit facility") under which credit availability is subject to a borrowing base. The revolving credit facility matures on October 30, 2019. The Third Amendment, among other things, (a) extends the maturity date of the credit facility one year to October 30, 2019; (b) provides for a reduction in the aggregate commitments from $810 million to $750 million ; (c) amends the minimum interest coverage ratio covenant to reduce the minimum interest coverage ratio to 1.10 x as of the last day of the fiscal quarter ending October 31, 2017 and to 1.25 x as of the last day of each fiscal quarter thereafter, beginning with the fiscal quarter ending January 31, 2018; (d) sets the applicable margin at 3.50% for LIBOR loans and 2.50% for Base Rate loans until the Company demonstrates an interest coverage ratio of equal to or greater than 1.10 x for the fiscal quarter ending October 31, 2017, at which point the applicable margin will revert to being determined according to the existing pricing grid based on facility availability; (e) reduces the minimum cash recovery percentage on the contracts it owns and manages from 4.50% to 4.45% for the first nine months of each fiscal year, and from 4.25% to 4.20% for the last three months of each fiscal year; (f) amends the definition of “EBITDA” to, among other things, exclude the impact of non-cash asset write-offs relating to construction in process; (g) amends the definition of “Interest Expense” to exclude certain non-interest expenses; (h) amends various definitions and other related provisions to clarify the Company’s ability to undertake permitted securitization transactions; (i) increases the number of equity cures that may be exercised during the term of the agreement from one time to two times, and increases the maximum amount of each such cure from $10 million to $20 million ; and (j) modifies the calculations of “Tangible Net Worth” and “Interest Coverage Ratio” to deduct certain amounts attributable to the difference between a calculated loss reserve and the Company’s recorded loss reserve on its customer receivables. Loans under the revolving credit facility bear interest, at our option, at a rate equal to LIBOR plus the applicable margin at 3.50% for LIBOR loans and 2.50% for base rate loans until the Company demonstrates an interest coverage ratio of equal to or greater than 1.10 x for the fiscal quarter ending October 31, 2017, at which point the applicable margin will revert to being determined according to the existing pricing grid based on facility availability which specifies a margin ranging from 2.75% to 3.25% per annum (depending on quarterly average net availability under the borrowing base) or the alternate base rate plus a margin ranging from 1.75% to 2.25% per annum (depending on quarterly average net availability under the borrowing base). 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 0.75% 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 6.6% for the nine months ended October 31, 2017 . 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 October 31, 2017 , we had immediately available borrowing capacity of $110.5 million under our revolving credit facility, net of standby letters of credit issued of $2.8 million . We also had $284.8 million that may become available under our revolving credit facility if we grow the balance of eligible customer receivables and our eligible inventory balances. 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 make dividends and distributions to the Company and other obligors under the revolving credit facility without restriction. As of October 31, 2017 , we were unable to repay the Senior Notes or make other distributions as a result of the revolving credit facility 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. In connection with entering into the Third Amendment, we wrote-off $0.3 million of debt issuance costs for lenders that did not continue to participate. We also paid $2.8 million of debt issuance costs, recorded as other assets, which will be amortized ratably over the remaining term of the revolving credit facility along with the unamortized debt issuance costs remaining on the revolving credit facility. Debt Covenants. We were in compliance with our debt covenants, as amended, at October 31, 2017 . A summary of the significant financial covenants that govern our revolving credit facility, as amended, compared to our actual compliance status at October 31, 2017 is presented below: Actual Required Minimum/ Maximum Interest Coverage Ratio must equal or exceed minimum 1.75:1.00 1.10:1.00 Leverage Ratio must not exceed maximum 2.49:1.00 4.00:1.00 ABS Excluded Leverage Ratio must not exceed maximum 1.71:1.00 2.00:1.00 Cash Recovery Percent must exceed stated amount 4.80% 4.45% Capital Expenditures, net, must not exceed maximum $1.0 million $75.0 million All capitalized terms in the above table are defined by the revolving credit facility, as amended, and may or may not agree directly to the financial statement captions in this document. The covenants are calculated quarterly, except for the Cash Recovery Percent, which is calculated monthly on a trailing three-month basis, and Capital Expenditures, which is calculated for a period of four consecutive fiscal quarters, as of the end of each fiscal quarter. |
Contingencies
Contingencies | 9 Months Ended |
Oct. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Securities Class Action Litigation. We and two of our former executive officers are 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 Consolidated Securities Action started as three separate purported securities class action lawsuits filed between March 5, 2014 and May 5, 2014 in the Court that were consolidated into the Consolidated Securities Action on June 3, 2014. The plaintiffs in the Consolidated Securities Action allege that the defendants made false and misleading statements or failed to disclose material adverse facts about our business, operations, and prospects. They allege violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and seek to certify a class of all persons and entities that purchased or otherwise acquired Conn's common stock or call options, or sold or wrote Conn's put options between April 3, 2013 and December 9, 2014. The complaint does not specify the amount of damages sought. On June 30, 2015, the Court held a hearing on the defendants' motion to dismiss plaintiffs' complaint. At the hearing, the Court dismissed Brian Taylor, a former executive officer, and certain other aspects of the complaint. The Court ordered the plaintiffs to further amend their complaint in accordance with its ruling, and the plaintiffs filed their Fourth Consolidated Amended Complaint on July 21, 2015. The remaining defendants filed a motion to dismiss on August 28, 2015. The defendant's motion to dismiss was fully briefed and the Court held a hearing on defendants' motion on March 25, 2016 and on May 5, 2016, the Court issued a ruling that dismissed 78 of 91 alleged misstatements. The parties have submitted their respective briefs in support of, and in opposition to, class certification, and also engaged in discovery pursuant to the Court’s scheduling order. In late June 2017, the Court granted the plaintiffs’ motion for class certification, and shortly thereafter, Defendants filed a petition for permission to appeal to the U.S. 5 th Circuit Court of Appeals. The Fifth Circuit granted leave to appeal on August 21, 2017. We anticipate that the appellate court may issue its ruling in the first half of calendar year 2018. Trial is scheduled for October 2018. We intend to vigorously defend against all of the claims in the Consolidated Securities Action against us. 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. 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 motion to dismiss in the Consolidated Securities Action. The Consolidated Securities Action is scheduled for trial in October 2018. The parties have agreed to continue the stay. Another derivative action was filed on January 27, 2015, captioned as Richard A. Dohn v. Wright, et al., Cause No. 2015-04405, filed in the 281st Judicial District Court, Harris County, Texas. This action makes substantially similar allegations to the Original Derivative Action against the same defendants. On September 14, 2017, the court entered an order extending the stay until March 16, 2018. On May 19, 2016, an alleged shareholder, 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 Robert J. Casey II, 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. Pursuant to the parties’ agreement, this action is currently stayed. None of the plaintiffs in any of the derivative actions made a demand on our Board of Directors prior to filing their respective lawsuits. The defendants in the derivative actions intend to vigorously defend against these claims. 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 SEC's 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. At this time, it is not possible to predict the timing or outcome of this investigation, or whether there will be a material loss, if any, resulting from this investigation. 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. |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Oct. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity | Variable Interest Entities In fiscal years 2018, 2017 and 2016, we securitized 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 repair service agreements on charge-offs of the securitized receivables, which will continue to be reflected as a reduction of net charge-offs on a consolidated basis for as long as we consolidate the 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) October 31, January 31, Assets: Restricted cash $ 71,099 $ 110,698 Due from Conn's, Inc., net 2,387 7,368 Customer accounts receivable: Customer accounts receivable 603,584 884,367 Restructured accounts 109,143 131,470 Allowance for uncollectible accounts (109,759 ) (150,435 ) Allowances for no-interest option credit programs (8,661 ) (15,912 ) Deferred fees and origination costs (3,185 ) — Total customer accounts receivable, net 591,122 849,490 Total assets $ 664,608 $ 967,556 Liabilities: Accrued expenses $ 3,602 $ 6,525 Other liabilities 6,362 6,691 Current maturities of long-term debt: 2016-B Class A Notes 8,563 2017-A Warehouse Class A Notes 56,874 Deferred debt issuance costs (485 ) 64,952 — Long-term debt: 2015 Class A Notes — 12,166 2015 Class B Notes — 165,900 2016-A Class A Notes — 64,732 2016-A Class B Notes — 70,510 2016-A Class C Notes — 70,510 2016-B Class A Notes — 256,513 2016-B Class B Notes 111,960 111,960 2017-A Class A Notes 129,583 — 2017-A Class B Notes 106,270 — 2017-A Class C Notes 50,340 — 398,153 752,291 Less: deferred debt issuance costs (2,143 ) (6,710 ) Total long-term debt 396,010 745,581 Total liabilities $ 470,926 $ 758,797 The assets of the VIEs serve as collateral for the obligations of the VIEs. The holders of the asset-backed notes have no recourse to assets outside of the respective VIEs. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Oct. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting 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 in the retail furniture and mattresses, home appliances, consumer electronics and home office products business. 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. We believe our large, attractively merchandised retail stores and credit solutions offer a distinctive value proposition compared to other retailers that target our core customer demographic. 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. Selling, general and administrative expenses include the direct expenses of the retail and credit operations, allocated corporate 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 estimated using an annual rate of 2.5% times the average portfolio balance for each applicable period. As of October 31, 2017 , 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: Three Months Ended October 31, 2017 Three Months Ended October 31, 2016 (in thousands) Retail Credit Total Retail Credit Total Revenues: Furniture and mattress $ 97,146 $ — $ 97,146 $ 98,898 $ — $ 98,898 Home appliance 83,837 — 83,837 85,785 — 85,785 Consumer electronic 58,062 — 58,062 65,670 — 65,670 Home office 20,295 — 20,295 22,747 — 22,747 Other 4,446 — 4,446 4,956 — 4,956 Product sales 263,786 — 263,786 278,056 — 278,056 Repair service agreement commissions 24,488 — 24,488 26,354 — 26,354 Service revenues 3,534 — 3,534 3,623 — 3,623 Total net sales 291,808 — 291,808 308,033 — 308,033 Finance charges and other revenues 95 81,269 81,364 337 68,403 68,740 Total revenues 291,903 81,269 373,172 308,370 68,403 376,773 Costs and expenses: Cost of goods sold 175,591 — 175,591 192,374 — 192,374 Selling, general and administrative expenses (1) 80,676 33,679 114,355 79,777 34,680 114,457 Provision for bad debts 189 56,323 56,512 286 51,278 51,564 Charges and credits 5,861 — 5,861 1,987 — 1,987 Total costs and expense 262,317 90,002 352,319 274,424 85,958 360,382 Operating income (loss) 29,586 (8,733 ) 20,853 33,946 (17,555 ) 16,391 Interest expense — 18,095 18,095 — 23,470 23,470 Loss on extinguishment of debt — 461 461 — — — Income (loss) before income taxes $ 29,586 $ (27,289 ) $ 2,297 $ 33,946 $ (41,025 ) $ (7,079 ) Nine Months Ended October 31, 2017 Nine Months Ended October 31, 2016 (in thousands) Retail Credit Total Retail Credit Total Revenues: Furniture and mattress $ 286,886 $ — $ 286,886 $ 309,766 $ — $ 309,766 Home appliance 253,044 — 253,044 275,048 — 275,048 Consumer electronic 166,761 — 166,761 197,270 — 197,270 Home office 54,945 — 54,945 66,921 — 66,921 Other 13,105 — 13,105 15,264 — 15,264 Product sales 774,741 — 774,741 864,269 — 864,269 Repair service agreement commissions 72,703 — 72,703 82,849 — 82,849 Service revenues 10,062 — 10,062 11,456 — 11,456 Total net sales 857,506 — 857,506 958,574 — 958,574 Finance charges and other revenues 267 237,872 238,139 1,268 204,201 205,469 Total revenues 857,773 237,872 1,095,645 959,842 204,201 1,164,043 Costs and expenses: Cost of goods sold 519,847 — 519,847 605,709 — 605,709 Selling, general and administrative expenses (1) 233,290 99,234 332,524 244,598 102,952 347,550 Provision for bad debts 584 161,307 161,891 811 169,167 169,978 Charges and credits 11,156 — 11,156 5,408 — 5,408 Total costs and expense 764,877 260,541 1,025,418 856,526 272,119 1,128,645 Operating income (loss) 92,896 (22,669 ) 70,227 103,316 (67,918 ) 35,398 Interest expense — 62,142 62,142 — 73,504 73,504 Loss on extinguishment of debt — 2,907 2,907 — — — Income (loss) before income taxes $ 92,896 $ (87,718 ) $ 5,178 $ 103,316 $ (141,422 ) $ (38,106 ) (1) For the three months ended October 31, 2017 and 2016 , the amount of corporate overhead allocated to each segment reflected in selling, general and administrative expense was $7.3 million and $6.7 million , respectively. For the three months ended October 31, 2017 and 2016 , the amount of reimbursement made to the retail segment by the credit segment was $9.3 million and $9.6 million , respectively. For the nine months ended October 31, 2017 and 2016 , the amount of corporate overhead allocated to each segment reflected in selling, general and administrative expense was $21.5 million and $18.9 million , respectively. For the nine months ended October 31, 2017 and 2016 , the amount of reimbursement made to the retail segment by the credit segment was $27.9 million and $29.0 million , respectively. |
Guarantor Financial Information
Guarantor Financial Information (Notes) | 9 Months Ended |
Oct. 31, 2017 | |
Guarantor Financial Information [Abstract] | |
Condensed Balance Sheet [Table Text Block] | 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 certain guarantor subsidiaries (the "Guarantors"). As of October 31, 2017 and January 31, 2017, 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 condensed 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 October 31, 2017 and January 31, 2017 (after the elimination of intercompany balances and transactions). Condensed consolidated net income (loss) is the same as condensed consolidated comprehensive income (loss) for the periods presented. Condensed Consolidated Balance Sheet as of October 31, 2017 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 12,742 $ — $ — $ 12,742 Restricted cash — — 71,099 — 71,099 Customer accounts receivable, net of allowance — 275,614 360,086 — 635,700 Other accounts receivable — 63,203 — — 63,203 Inventories — 235,479 — — 235,479 Other current assets — 18,865 2,387 (5,337 ) 15,915 Total current assets — 605,903 433,572 (5,337 ) 1,034,138 Investment in and advances to subsidiaries 682,391 193,682 — (876,073 ) — Long-term portion of customer accounts receivable, net of allowance — 385,629 231,036 — 616,665 Property and equipment, net — 144,747 — — 144,747 Deferred income taxes 72,554 — — — 72,554 Other assets — 6,285 — — 6,285 Total assets $ 754,945 $ 1,336,246 $ 664,608 $ (881,410 ) $ 1,874,389 Liabilities and Stockholders' Equity Current liabilities: Current maturities of capital lease obligations $ — $ 699 $ 64,952 $ — $ 65,651 Accounts payable — 109,738 — — 109,738 Accrued expenses 4,800 59,463 3,602 (2,949 ) 64,916 Other current liabilities — 21,342 3,063 (2,387 ) 22,018 Total current liabilities 4,800 191,242 71,617 (5,336 ) 262,323 Deferred rent — 87,152 — — 87,152 Long-term debt and capital lease obligations 220,754 356,514 396,010 — 973,278 Other long-term liabilities — 18,946 3,299 — 22,245 Total liabilities 225,554 653,854 470,926 (5,336 ) 1,344,998 Total stockholders' equity 529,391 682,391 193,682 (876,073 ) 529,391 Total liabilities and stockholders' equity $ 754,945 $ 1,336,245 $ 664,608 $ (881,409 ) $ 1,874,389 Deferred income taxes related to tax attributes of the Guarantors and Non-Guarantor Subsidiaries are reflected under Conn's, Inc. Condensed Consolidated Balance Sheet as of January 31, 2017 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 23,566 $ — $ — $ 23,566 Restricted cash — — 110,698 — 110,698 Customer accounts receivable, net of allowance — 173,054 529,108 — 702,162 Other accounts receivable — 69,286 — — 69,286 Inventories — 164,856 — — 164,856 Other current assets — 21,505 7,368 (11,768 ) 17,105 Total current assets — 452,267 647,174 (11,768 ) 1,087,673 Investment in and advances to subsidiaries 678,149 220,107 — (898,256 ) — Long-term portion of customer accounts receivable, net of allowance — 295,522 320,382 — 615,904 Property and equipment, net — 159,202 — — 159,202 Deferred income taxes 71,442 — — — 71,442 Other assets — 6,913 — — 6,913 Total assets $ 749,591 $ 1,134,011 $ 967,556 $ (910,024 ) $ 1,941,134 Liabilities and Stockholders' Equity Current liabilities: Current maturities of capital lease obligations $ — $ 849 $ — $ — $ 849 Accounts payable — 101,612 — — 101,612 Accrued expenses 686 40,287 6,525 (4,399 ) 43,099 Other current liabilities — 25,230 3,961 (7,370 ) 21,821 Total current liabilities 686 167,978 10,486 (11,769 ) 167,381 Deferred rent — 87,957 — — 87,957 Long-term debt and capital lease obligations 219,768 179,044 745,581 — 1,144,393 Other long-term liabilities — 20,883 2,730 — 23,613 Total liabilities 220,454 455,862 758,797 (11,769 ) 1,423,344 Total stockholders' equity 529,137 678,149 208,759 (898,255 ) 517,790 Total liabilities and stockholders' equity $ 749,591 $ 1,134,011 $ 967,556 $ (910,024 ) $ 1,941,134 Deferred income taxes related to tax attributes of the Guarantors and Non-Guarantor Subsidiaries are reflected under Conn's, Inc. Condensed Consolidated Statement of Operations for the three months ended October 31, 2017 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 291,808 $ — $ — $ 291,808 Finance charges and other revenues — 45,228 36,136 — 81,364 Servicing fee revenue — 18,178 — (18,178 ) — Total revenues — 355,214 36,136 (18,178 ) 373,172 Costs and expenses: Cost of goods sold — 175,591 — — 175,591 Selling, general and administrative expenses — 125,355 7,178 (18,178 ) 114,355 Provision for bad debts — 44,454 12,058 — 56,512 Charges and credits — 5,861 — — 5,861 Total costs and expenses — 351,261 19,236 (18,178 ) 352,319 Operating income — 3,953 16,900 — 20,853 Interest expense 4,443 4,979 8,673 — 18,095 Loss on extinguishment of debt — — 461 — 461 Income (loss) before income taxes (4,443 ) (1,026 ) 7,766 — 2,297 Provision (benefit) for income taxes (1,408 ) (324 ) 2,460 — 728 Net income (loss) before consolidation $ (3,035 ) $ (702 ) $ 5,306 $ — $ 1,569 Income (loss) from consolidated subsidiaries (after tax) $ 4,742 $ 1,988 $ — $ (6,730 ) $ — Consolidated net income (loss) $ 1,707 $ 1,286 $ 5,306 $ (6,730 ) $ 1,569 Condensed Consolidated Statement of Operations for the three months ended October 31, 2016 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 308,033 $ — $ — $ 308,033 Finance charges and other revenues — 22,326 46,414 — 68,740 Servicing fee revenue — 15,073 — (15,073 ) — Total revenues — 345,432 46,414 (15,073 ) 376,773 Costs and expenses: Cost of goods sold — 192,374 — — 192,374 Selling, general and administrative expenses — 114,457 15,073 (15,073 ) 114,457 Provision for bad debts — 31,672 19,892 — 51,564 Charges and credits — 1,987 — — 1,987 Total costs and expenses — 340,490 34,965 (15,073 ) 360,382 Operating income — 4,942 11,449 — 16,391 Interest expense 4,447 3,876 15,147 — 23,470 Loss on extinguishment of debt — — — — — Income (loss) before income taxes (4,447 ) 1,066 (3,698 ) — (7,079 ) Provision (benefit) for income taxes (2,051 ) 492 (1,705 ) — (3,264 ) Net income (loss) before consolidation $ (2,396 ) $ 574 $ (1,993 ) $ — $ (3,815 ) Income (loss) from consolidated subsidiaries (after tax) $ (1,419 ) $ (1,993 ) $ — $ 3,412 $ — Consolidated net income (loss) $ (3,815 ) $ (1,419 ) $ (1,993 ) $ 3,412 $ (3,815 ) Condensed Consolidated Statement of Operations for the nine months ended October 31, 2017 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 857,506 $ — $ — $ 857,506 Finance charges and other revenues — 122,305 115,834 — 238,139 Servicing fee revenue — 46,010 — (46,010 ) — Total revenues — 1,025,821 115,834 (46,010 ) 1,095,645 Costs and expenses: Cost of goods sold — 519,847 — — 519,847 Selling, general and administrative expenses — 343,043 35,491 (46,010 ) 332,524 Provision for bad debts — 64,438 97,453 — 161,891 Charges and credits — 11,156 — — 11,156 Total costs and expenses — 938,484 132,944 (46,010 ) 1,025,418 Operating income — 87,337 (17,110 ) — 70,227 Interest expense 13,329 7,501 41,312 — 62,142 Loss on extinguishment of debt — 349 2,558 — 2,907 Income (loss) before income taxes (13,329 ) 79,487 (60,980 ) — 5,178 Provision (benefit) for income taxes (4,934 ) 29,420 (22,570 ) — 1,916 Net income (loss) before consolidation $ (8,395 ) $ 50,067 $ (38,410 ) $ — $ 3,262 Income (loss) from consolidated subsidiaries (after tax) $ 11,657 $ (38,410 ) $ — $ 26,753 $ — Consolidated net income (loss) $ 3,262 $ 11,657 $ (38,410 ) $ 26,753 $ 3,262 Condensed Consolidated Statement of Operations for the nine months ended October 31, 2016 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 958,574 $ — $ — $ 958,574 Finance charges and other revenues — 85,560 119,909 — 205,469 Servicing fee revenue — 45,384 — (45,384 ) — Total revenues — 1,089,518 119,909 (45,384 ) 1,164,043 Costs and expenses: Cost of goods sold — 605,709 — — 605,709 Selling, general and administrative expenses — 347,550 45,384 (45,384 ) 347,550 Provision for bad debts — 88,084 81,894 — 169,978 Charges and credits — 5,408 — — 5,408 Total costs and expenses — 1,046,751 127,278 (45,384 ) 1,128,645 Operating income — 42,767 (7,369 ) — 35,398 Interest expense 13,290 10,496 49,718 — 73,504 Income (loss) before income taxes (13,290 ) 32,271 (57,087 ) — (38,106 ) Provision (benefit) for income taxes (4,400 ) 10,685 (18,903 ) — (12,618 ) Net income (loss) before consolidation $ (8,890 ) $ 21,586 $ (38,184 ) $ — $ (25,488 ) Income (loss) from consolidated subsidiaries (after tax) $ (16,598 ) $ (38,184 ) $ — $ 54,780 $ — Consolidated net income (loss) $ (25,488 ) $ (16,598 ) $ (38,184 ) $ 54,780 $ (25,488 ) Condensed Consolidated Statement of Cash Flows for the nine months ended October 31, 2017 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ (3,011 ) $ (635,568 ) $ 721,316 $ — $ 82,737 Cash flows from investing activities: Purchase of customer accounts receivables — — (544,833 ) 544,833 — Sale of customer accounts receivables — 544,833 — (544,833 ) — Purchase of property and equipment — (11,995 ) — — (11,995 ) Proceeds from sales of property — — — — — Net cash provided by (used in) investing activities — 532,838 (544,833 ) — (11,995 ) Cash flows from financing activities: Proceeds from issuance of asset-backed notes — — 469,814 — 469,814 Payments on asset-backed notes — (78,780 ) (737,463 ) — (816,243 ) Changes in restricted cash balances — — 39,599 — 39,599 Borrowings from revolving credit facility — 1,257,052 — — 1,257,052 Payments on revolving credit facility — (1,082,552 ) — — (1,082,552 ) Borrowings from warehouse facility — — 79,940 — 79,940 Payment of debt issuance costs and amendment fees — (2,865 ) (5,307 ) — (8,172 ) Payments on warehouse facility — — (23,066 ) — (23,066 ) Proceeds from stock issued under employee benefit plans 3,011 — — — 3,011 Other — (949 ) — — (949 ) Net cash provided by (used in) financing activities 3,011 91,906 (176,483 ) — (81,566 ) Net change in cash and cash equivalents — (10,824 ) — — (10,824 ) Cash and cash equivalents, beginning of period — 23,566 — — 23,566 Cash and cash equivalents, end of period $ — $ 12,742 $ — $ — $ 12,742 Condensed Consolidated Statement of Cash Flows for the nine months ended October 31, 2016 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ (13,544 ) $ (606,570 ) $ 803,125 $ — $ 183,011 Cash flows from investing activities: Purchase of customer accounts receivables — — (1,038,226 ) 1,038,226 — Sale of customer accounts receivables — 1,038,226 — (1,038,226 ) — Purchase of property and equipment — (41,804 ) — — (41,804 ) Proceeds from sales of property — 686 — — 686 Net change in intercompany 12,719 (12,719 ) — Net cash provided by (used in) investing activities 12,719 997,108 (1,038,226 ) (12,719 ) (41,118 ) Cash flows from financing activities: Proceeds from issuance of asset-backed notes — — 1,067,850 — 1,067,850 Payments on asset-backed notes — — (736,266 ) — (736,266 ) Changes in restricted cash balances — — (87,900 ) — (87,900 ) Borrowings from revolving credit facility — 529,352 — — 529,352 Payments on revolving credit facility — (858,559 ) — — (858,559 ) Payment of debt issuance costs and amendment fees — (1,192 ) (8,583 ) — (9,775 ) Proceeds from stock issued under employee benefit plans 824 — — — 824 Net change in intercompany — (12,719 ) — 12,719 — Other 1 (609 ) — — (608 ) Net cash provided by (used in) financing activities 825 (343,727 ) 235,101 12,719 (95,082 ) Net change in cash and cash equivalents — 46,811 — — 46,811 Cash and cash equivalents, beginning of period — 12,254 — — 12,254 Cash and cash equivalents, end of period $ — $ 59,065 $ — $ — $ 59,065 |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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" or "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. Our management evaluates performance and allocates resources based on the operating results of the retail and credit segments. Basis of Presentation. The accompanying unaudited, condensed consolidated financial statements of Conn's, Inc. and its wholly-owned subsidiaries, including the VIEs (as defined below), have been prepared by management in accordance with accounting principles generally accepted in the United States ("GAAP") and prevailing industry practice for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature. The condensed consolidated financial position, results of operations and cash flows for these interim periods are not necessarily indicative of the results that may be expected in future periods. The balance sheet at January 31, 2017 has been derived from the audited financial statements at that date. The financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2017, filed with the United States Securities and Exchange Commission (the “SEC”) on April 4, 2017. |
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 Entity | 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 8, Variable Interest Entities , for additional information. |
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, allowances for no-interest option credit programs and deferred interest, which are particularly sensitive given the size of our customer portfolio balance. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents . Cash and cash equivalents include cash, credit card deposits in-transit, and highly liquid debt instruments purchased with a maturity of three months or less. Cash and cash equivalents include credit card deposits in-transit of $2.1 million and $2.4 million , as of October 31, 2017 and January 31, 2017 , respectively. Restricted Cash. The restricted cash balance as of October 31, 2017 and January 31, 2017 includes $52.8 million and $75.2 million , respectively, of cash we collected as servicer on the securitized receivables that was subsequently remitted to the VIEs and $18.3 million and $35.5 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 repossess collateral or 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 re-age their obligation by refinancing the account, which 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. Our calculation of interest income for customers with similar financing arrangements for which the timing and amount of prepayments can be reasonably estimated includes an estimate of the benefit from future prepayments based on our historical experience. At October 31, 2017 and January 31, 2017 , there was $13.0 million and $13.7 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 12 -and 18 -month no -interest option programs. If the customer is delinquent in making a scheduled monthly payment or does not repay the principal in full by the end of the no-interest 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. No -interest option finance programs with terms greater than 12 months are discounted to their present value at origination, resulting in a reduction in sales and customer receivables, and the discount amount is amortized into finance charges and other revenues over the term of the contract. 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 typically only place accounts in non-accrual status when legally required. Payments received on non-accrual loans will be applied to principal and reduce the amount of the loan. At October 31, 2017 and January 31, 2017 , customer receivables carried in non-accrual status were $21.4 million and $22.9 million , respectively. At October 31, 2017 and January 31, 2017 , customer receivables that were past due 90 days or more and still accruing interest totaled $105.2 million and $124.0 million , respectively. At October 31, 2017 and January 31, 2017, customer receivables in a bankruptcy status that are less than 60 days past due of $11.7 million and $19.5 million , respectively, are included within the customer receivables carried in non-accrual status balance. |
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 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 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 the quality of the loan review system, changes in the value of underlying collateral, 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. 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. |
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. Unamortized costs related to the revolving credit facility were $5.9 million and $5.7 million as of October 31, 2017 and January 31, 2017 , respectively, and were included in other assets on our consolidated balance sheet. |
Income Taxes | Income Taxes. For the nine months ended October 31, 2017 and 2016 we utilized the estimated annual effective tax rate based on our estimated fiscal year 2018 and 2017 pre-tax income, respectively, in determining income tax expense. |
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. Three Months Ended Nine Months Ended 2017 2016 2017 2016 Restricted stock awards ("RSUs") (1) 2,740 14,502 646,033 343,369 Performance stock awards ("PSUs") (2) — — 501,012 131,759 Total stock awards granted 2,740 14,502 1,147,045 475,128 Aggregate grant date fair value (in thousands) $ 50 $ 96 $ 14,596 $ 5,046 (1) The majority of the RSUs issued during the nine months ended October 31, 2017 will vest, if at all, over periods of three to five years from the date of grant. (2)The majority of the PSUs issued during the nine months ended October 31, 2017 will vest, if at all, upon the certification, after fiscal year 2020, by the compensation committee of the satisfaction of the annual and cumulative Earnings Before Interest, Taxes, Depreciation and Amortization performance conditions over the three fiscal years commencing with fiscal year 2018. For the three months ended October 31, 2017 and 2016 , stock-based compensation expense was $ 1.7 million and $1.0 million , respectively. For the nine months ended October 31, 2017 and 2016 , stock-based compensation expense was $5.9 million and $3.9 million , respectively, inclusive of severance related stock-based compensation expense of $0.6 million and $0.2 million , respectively. |
Earnings per Share | Earnings per Share . Basic earnings 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 and restricted stock units granted, which is calculated using the treasury-stock method. The following table sets forth the shares outstanding for the earnings per share calculations: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Weighted-average common shares outstanding - Basic 31,292,913 30,816,319 31,121,177 30,736,636 Dilutive effect of stock options and restricted stock units 471,681 — 336,243 — Weighted-average common shares outstanding - Diluted 31,764,594 30,816,319 31,457,420 30,736,636 For the three months ended October 31, 2017 and 2016 the weighted-average number of stock options and restricted stock units not included in the calculation due to their anti-dilutive effect was 0.2 million and 1.2 million , respectively. For the nine months ended October 31, 2017 and 2016 , the weighted-average number of stock options and restricted stock units not included in the calculation due to their anti-dilutive effect was 0.4 million and 1.2 million , respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments . Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels related to subjectivity associated with the inputs to fair value measurements as follows: • Level 1 – 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 held by the consolidated VIEs and accounts payable approximate their carrying amounts because of the short maturity of these instruments. The fair value of customer accounts receivables, determined using a Level 3 discounted cash flow analysis, approximates their carrying amount, which includes 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 October 31, 2017 , the fair value of the Senior Notes outstanding, which was determined using Level 1 inputs, was $225.3 million as compared to the carrying value of $227.0 million , excluding the impact of the related discount. At October 31, 2017 , 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 | Recent Accounting Pronouncements Adopted. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which modifies the accounting for excess tax benefits and tax deficiencies associated with share-based payments, the accounting for forfeitures, and the classification of certain items on the statement of cash flows. ASU 2016-09 eliminates the requirement to recognize excess tax benefits in additional paid-in capital ("APIC"), and the requirement to evaluate tax deficiencies for APIC or income tax expense classification, and provides for these benefits or deficiencies to be recorded as an income tax expense or benefit in the income statement. With these changes, tax-related cash flows resulting from share-based payments are classified as operating activities as opposed to financing. The standard became effective for us in the first quarter of fiscal year 2018. The amendment requiring the recognition of excess tax benefits and deficiencies as income tax benefit or expense in the income statement as opposed to being recognized as additional paid-in-capital was applied prospectively and the impact was not material. The Company retrospectively adopted the amendments requiring the classification of excess tax benefits and deficiencies with other income tax cash flows as operating activities and cash paid when directly withholding shares as financing activities in the accompanying consolidated statements of cash flows; the impact was not material. The Company has elected to continue its current practice of estimating the number of awards expected to vest in determining the amount of compensation cost to be recognized related to share based payment transactions. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 requires that inventory that has historically been measured using first-in, first-out or average cost method be measured at the lower of cost and net realizable value. The update requires prospective application and became effective for us in the first quarter of fiscal year 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements Yet To Be 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. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date , which defers the effective date of ASU 2014-09 by one year and allows early adoption on a limited basis. The FASB has 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. These ASUs will be effective for us beginning in the first quarter of fiscal year 2019 and will result in retrospective application, either in the form of recasting all prior periods presented or a cumulative adjustment to equity in the period of adoption. Based on our preliminary assessment, we do not expect the adoption of these ASUs to have a material impact on our consolidated financial statements other than the expected additional disclosure requirements. 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. On transition, we will recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The final standard will become effective for us beginning in the first quarter of fiscal year 2020. Based on our preliminary assessment, we believe the adoption of this ASU will have a material impact on our financial statements as we will be required to report additional leases on our consolidated balance sheet. 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 6, Leases, of our audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2017 . 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 should 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 earlier adoption is permitted beginning in the first quarter of fiscal year 2020. We are currently assessing the impact this ASU will have on our financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) . 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 flow. The standard will become effective for us in the first quarter of fiscal year 2019 and early adoption is permitted. The adoption of this ASU is not expected to have a significant impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory , which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The standard will become effective for us in the first quarter of fiscal year 2019 and early adoption is permitted. The application of the amendments will require the use of a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. We are evaluating the standard and the impact it will have on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) . 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. The adoption of this standard will result in us no longer showing the changes in restricted cash balances as a component of cash flows from financing activities but instead include 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 ASU will become effective for us in the first quarter of fiscal year 2019, and early adoption is permitted. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Shares outstanding for the earnings per share calculations | The following table sets forth the shares outstanding for the earnings per share calculations: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Weighted-average common shares outstanding - Basic 31,292,913 30,816,319 31,121,177 30,736,636 Dilutive effect of stock options and restricted stock units 471,681 — 336,243 — Weighted-average common shares outstanding - Diluted 31,764,594 30,816,319 31,457,420 30,736,636 |
Customer Accounts Receivable (T
Customer Accounts Receivable (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent [Table Text Block] | The following presents the activity in the allowance for doubtful accounts and uncollectible interest for customer receivables: Nine Months Ended October 31, 2017 Nine Months Ended October 31, 2016 (in thousands) Customer Accounts Receivable Restructured Accounts Total Customer Accounts Receivable Restructured Accounts Total Allowance at beginning of period $ 158,992 $ 51,183 $ 210,175 $ 149,226 $ 41,764 $ 190,990 Provision (1) 139,406 52,948 192,354 156,063 44,286 200,349 Principal charge-offs (2) (133,033 ) (44,657 ) (177,690 ) (132,028 ) (31,802 ) (163,830 ) Interest charge-offs (21,884 ) (7,346 ) (29,230 ) (22,400 ) (5,405 ) (27,805 ) Recoveries (2) 5,463 1,834 7,297 3,727 899 4,626 Allowance at end of period $ 148,944 $ 53,962 $ 202,906 $ 154,588 $ 49,742 $ 204,330 Average total customer portfolio balance $ 1,352,137 $ 141,155 $ 1,493,292 $ 1,422,473 $ 126,493 $ 1,548,966 (1) Includes provision for uncollectible interest, which is included in finance charges and other revenues. (2) Charge-offs include the principal amount of losses (excluding accrued and unpaid interest). Recoveries include principal collections of previously charged-off balances. Net charge-offs are calculated as the net of principal charge-offs and recoveries. |
Allowance for doubtful accounts and uncollectible interest for customer receivables | Customer accounts receivable consisted of the following: Total Outstanding Balance Customer Accounts Receivable 60 Days Past Due (1) Re-aged (1) (in thousands) October 31, January 31, October 31, 2017 (2) January 31, October 31, 2017 (3) January 31, Customer accounts receivable $ 1,341,939 $ 1,417,581 $ 110,382 $ 127,747 $ 208,047 $ 111,585 Restructured accounts 146,967 138,858 37,484 38,010 146,967 138,858 Total customer portfolio balance 1,488,906 1,556,439 $ 147,866 $ 165,757 $ 355,014 $ 250,443 Allowance for uncollectible accounts (202,906 ) (210,175 ) Allowances for no-interest option credit programs (19,616 ) (21,207 ) Deferred fees and origination costs, net (14,019 ) (6,991 ) Total customer accounts receivable, net 1,252,365 1,318,066 Short-term portion of customer accounts receivable, net (635,700 ) (702,162 ) Long-term portion of customer accounts receivable, net $ 616,665 $ 615,904 Securitized receivables held by the VIEs $ 712,727 $ 1,015,837 $ 99,763 $ 156,344 $ 246,333 $ 238,375 Receivables not held by the VIEs 776,179 540,602 48,103 9,413 108,681 12,068 Total customer portfolio balance $ 1,488,906 $ 1,556,439 $ 147,866 $ 165,757 $ 355,014 $ 250,443 (1) Due to the fact that an account can become past due after having been re-aged, accounts could be represented as both past due and re-aged. As of October 31, 2017 and January 31, 2017 , the amounts included within both 60 days past due and re-aged were $64.8 million and $66.7 million , respectively. As of October 31, 2017 and January 31, 2017 , the total customer portfolio balance past due one day or greater was $394.5 million and $406.1 million , respectively. These amounts include the 60 days past due balances shown. (2) The balance of accounts 60 days past due as of October 31, 2017 reflects the impact of first time re-ages related to customers within FEMA-designated Hurricane Harvey disaster areas. (3) The re-aged receivable balance as of October 31, 2017 includes $71.8 million in first time re-ages related to customers within FEMA-designated Hurricane Harvey disaster areas. |
Accrual for Store Closures (Tab
Accrual for Store Closures (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Activity in accrual for store closures | The following table presents detail of the activity in the accrual for store and facility closures: Nine Months Ended (in thousands) 2017 2016 Balance at beginning of period $ 1,874 $ 1,866 Accrual for additional closures 1,314 954 Adjustments 16 (74 ) Cash payments, net of sublease income (2,010 ) (767 ) Balance at end of period 1,194 1,979 Current portion, included in accrued expenses (170 ) (923 ) Long-term portion, included in other long-term liabilities $ 1,024 $ 1,056 Charges and credits consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Store and facility closure costs $ — $ 954 $ 1,349 $ 954 Impairments from disposals — 595 — 1,980 Legal and professional fees related to the exploration of strategic alternatives and securities-related litigation — 158 34 747 Employee severance — 280 1,317 1,493 Indirect tax audit reserve — — 2,595 — Write-off of capitalized software costs 5,861 — 5,861 — Executive management transition costs — — — 234 $ 5,861 $ 1,987 $ 11,156 $ 5,408 |
Charges and Credits (Tables)
Charges and Credits (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Charges and Credits [Abstract] | |
Schedule of Charges and Credits [Table Text Block] | The following table presents detail of the activity in the accrual for store and facility closures: Nine Months Ended (in thousands) 2017 2016 Balance at beginning of period $ 1,874 $ 1,866 Accrual for additional closures 1,314 954 Adjustments 16 (74 ) Cash payments, net of sublease income (2,010 ) (767 ) Balance at end of period 1,194 1,979 Current portion, included in accrued expenses (170 ) (923 ) Long-term portion, included in other long-term liabilities $ 1,024 $ 1,056 Charges and credits consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Store and facility closure costs $ — $ 954 $ 1,349 $ 954 Impairments from disposals — 595 — 1,980 Legal and professional fees related to the exploration of strategic alternatives and securities-related litigation — 158 34 747 Employee severance — 280 1,317 1,493 Indirect tax audit reserve — — 2,595 — Write-off of capitalized software costs 5,861 — 5,861 — Executive management transition costs — — — 234 $ 5,861 $ 1,987 $ 11,156 $ 5,408 |
Finance Charges and Other Rev21
Finance Charges and Other Revenue (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Supplemental Disclosure of Finance Charges and Other Revenue [Abstract] | |
Supplemental Disclosure of Finance Charges and Other Revenue [Text Block] | Finance charges and other revenues consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Interest income and fees $ 74,144 $ 58,404 $ 210,765 $ 173,527 Insurance income 7,125 9,999 27,107 30,674 Other revenues 95 337 267 1,268 $ 81,364 $ 68,740 $ 238,139 $ 205,469 |
Debt and Capital Lease Obliga22
Debt and Capital Lease Obligations (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Debt and capital lease obligations consisted of the following: (in thousands) October 31, January 31, Revolving credit facility $ 352,000 $ 177,500 Senior Notes 227,000 227,000 2015 VIE Asset-backed Class A notes — 12,166 2015 VIE Asset-backed Class B notes — 165,900 2016-A VIE Asset-backed Class A notes — 64,732 2016-A VIE Asset-backed Class B notes — 70,510 2016-A VIE Asset-backed Class C notes — 70,510 2016-B VIE Asset-backed Class A notes 8,563 256,513 2016-B VIE Asset-backed Class B notes 111,960 111,960 2017-A VIE Asset-backed Class A notes 129,583 — 2017-A VIE Asset-backed Class B notes 106,270 — 2017-A VIE Asset-backed Class C notes 50,340 — 2017 Warehouse Class A Notes 56,874 — Capital lease obligations 5,213 2,393 Total debt and capital lease obligations 1,047,803 1,159,184 Less: Discount on debt (2,668 ) (3,089 ) Deferred debt issuance costs (6,206 ) (10,853 ) Current maturities of long-term debt and capital lease obligations (65,651 ) (849 ) Long-term debt and capital lease obligations $ 973,278 $ 1,144,393 |
Schedule of Asset-backed Notes | The asset-backed notes at origination consisted of the following: Asset-Backed Notes Original Principal Amount Net Proceeds (1) Issuance Date Maturity Date Contractual Interest Rate Effective Interest Rate (2) 2016-B Class A Notes 391,840 380,033 10/6/2016 10/15/2018 3.73% 5.47% 2016-B Class B Notes 111,960 108,586 10/6/2016 3/15/2019 7.34% 8.03% 2017-A Class A Notes 313,220 304,451 4/19/2017 7/15/2019 2.73% 4.96% 2017-A Class B Notes 106,270 103,300 4/19/2017 2/15/2020 5.11% 5.83% 2017-A Class C Notes 50,340 48,919 4/19/2017 10/15/2021 7.40% 7.91% 2017 Warehouse Class A Notes 79,940 78,777 8/15/2017 8/15/2018 1M CP + 4% (3) 7.02% Total $ 1,053,570 $ 1,024,066 (1) After giving effect to debt issuance costs and restricted cash held by the VIEs. (2) For the nine months ended October 31, 2017 , and inclusive of changes in timing of actual and expected cash flows. |
Covenant Compliance | A summary of the significant financial covenants that govern our revolving credit facility, as amended, compared to our actual compliance status at October 31, 2017 is presented below: Actual Required Minimum/ Maximum Interest Coverage Ratio must equal or exceed minimum 1.75:1.00 1.10:1.00 Leverage Ratio must not exceed maximum 2.49:1.00 4.00:1.00 ABS Excluded Leverage Ratio must not exceed maximum 1.71:1.00 2.00:1.00 Cash Recovery Percent must exceed stated amount 4.80% 4.45% Capital Expenditures, net, must not exceed maximum $1.0 million $75.0 million |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of assets and liabilities held by the VIE | (in thousands) October 31, January 31, Assets: Restricted cash $ 71,099 $ 110,698 Due from Conn's, Inc., net 2,387 7,368 Customer accounts receivable: Customer accounts receivable 603,584 884,367 Restructured accounts 109,143 131,470 Allowance for uncollectible accounts (109,759 ) (150,435 ) Allowances for no-interest option credit programs (8,661 ) (15,912 ) Deferred fees and origination costs (3,185 ) — Total customer accounts receivable, net 591,122 849,490 Total assets $ 664,608 $ 967,556 Liabilities: Accrued expenses $ 3,602 $ 6,525 Other liabilities 6,362 6,691 Current maturities of long-term debt: 2016-B Class A Notes 8,563 2017-A Warehouse Class A Notes 56,874 Deferred debt issuance costs (485 ) 64,952 — Long-term debt: 2015 Class A Notes — 12,166 2015 Class B Notes — 165,900 2016-A Class A Notes — 64,732 2016-A Class B Notes — 70,510 2016-A Class C Notes — 70,510 2016-B Class A Notes — 256,513 2016-B Class B Notes 111,960 111,960 2017-A Class A Notes 129,583 — 2017-A Class B Notes 106,270 — 2017-A Class C Notes 50,340 — 398,153 752,291 Less: deferred debt issuance costs (2,143 ) (6,710 ) Total long-term debt 396,010 745,581 Total liabilities $ 470,926 $ 758,797 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Segment Reporting [Abstract] | |
Financial information by segment | Nine Months Ended October 31, 2017 Nine Months Ended October 31, 2016 (in thousands) Retail Credit Total Retail Credit Total Revenues: Furniture and mattress $ 286,886 $ — $ 286,886 $ 309,766 $ — $ 309,766 Home appliance 253,044 — 253,044 275,048 — 275,048 Consumer electronic 166,761 — 166,761 197,270 — 197,270 Home office 54,945 — 54,945 66,921 — 66,921 Other 13,105 — 13,105 15,264 — 15,264 Product sales 774,741 — 774,741 864,269 — 864,269 Repair service agreement commissions 72,703 — 72,703 82,849 — 82,849 Service revenues 10,062 — 10,062 11,456 — 11,456 Total net sales 857,506 — 857,506 958,574 — 958,574 Finance charges and other revenues 267 237,872 238,139 1,268 204,201 205,469 Total revenues 857,773 237,872 1,095,645 959,842 204,201 1,164,043 Costs and expenses: Cost of goods sold 519,847 — 519,847 605,709 — 605,709 Selling, general and administrative expenses (1) 233,290 99,234 332,524 244,598 102,952 347,550 Provision for bad debts 584 161,307 161,891 811 169,167 169,978 Charges and credits 11,156 — 11,156 5,408 — 5,408 Total costs and expense 764,877 260,541 1,025,418 856,526 272,119 1,128,645 Operating income (loss) 92,896 (22,669 ) 70,227 103,316 (67,918 ) 35,398 Interest expense — 62,142 62,142 — 73,504 73,504 Loss on extinguishment of debt — 2,907 2,907 — — — Income (loss) before income taxes $ 92,896 $ (87,718 ) $ 5,178 $ 103,316 $ (141,422 ) $ (38,106 ) (1) For the three months ended October 31, 2017 and 2016 , the amount of corporate overhead allocated to each segment reflected in selling, general and administrative expense was $7.3 million and $6.7 million , respectively. For the three months ended October 31, 2017 and 2016 , the amount of reimbursement made to the retail segment by the credit segment was $9.3 million and $9.6 million , respectively. For the nine months ended October 31, 2017 and 2016 , the amount of corporate overhead allocated to each segment reflected in selling, general and administrative expense was $21.5 million and $18.9 million , respectively. For the nine months ended October 31, 2017 and 2016 , the amount of reimbursement made to the retail segment by the credit segment was $27.9 million and $29.0 million , respectively. |
Guarantor Financial Informati25
Guarantor Financial Information (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Guarantor Financial Information [Abstract] | |
Condensed Balance Sheet [Table Text Block] | Condensed Consolidated Balance Sheet as of January 31, 2017 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 23,566 $ — $ — $ 23,566 Restricted cash — — 110,698 — 110,698 Customer accounts receivable, net of allowance — 173,054 529,108 — 702,162 Other accounts receivable — 69,286 — — 69,286 Inventories — 164,856 — — 164,856 Other current assets — 21,505 7,368 (11,768 ) 17,105 Total current assets — 452,267 647,174 (11,768 ) 1,087,673 Investment in and advances to subsidiaries 678,149 220,107 — (898,256 ) — Long-term portion of customer accounts receivable, net of allowance — 295,522 320,382 — 615,904 Property and equipment, net — 159,202 — — 159,202 Deferred income taxes 71,442 — — — 71,442 Other assets — 6,913 — — 6,913 Total assets $ 749,591 $ 1,134,011 $ 967,556 $ (910,024 ) $ 1,941,134 Liabilities and Stockholders' Equity Current liabilities: Current maturities of capital lease obligations $ — $ 849 $ — $ — $ 849 Accounts payable — 101,612 — — 101,612 Accrued expenses 686 40,287 6,525 (4,399 ) 43,099 Other current liabilities — 25,230 3,961 (7,370 ) 21,821 Total current liabilities 686 167,978 10,486 (11,769 ) 167,381 Deferred rent — 87,957 — — 87,957 Long-term debt and capital lease obligations 219,768 179,044 745,581 — 1,144,393 Other long-term liabilities — 20,883 2,730 — 23,613 Total liabilities 220,454 455,862 758,797 (11,769 ) 1,423,344 Total stockholders' equity 529,137 678,149 208,759 (898,255 ) 517,790 Total liabilities and stockholders' equity $ 749,591 $ 1,134,011 $ 967,556 $ (910,024 ) $ 1,941,134 Condensed Consolidated Balance Sheet as of October 31, 2017 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 12,742 $ — $ — $ 12,742 Restricted cash — — 71,099 — 71,099 Customer accounts receivable, net of allowance — 275,614 360,086 — 635,700 Other accounts receivable — 63,203 — — 63,203 Inventories — 235,479 — — 235,479 Other current assets — 18,865 2,387 (5,337 ) 15,915 Total current assets — 605,903 433,572 (5,337 ) 1,034,138 Investment in and advances to subsidiaries 682,391 193,682 — (876,073 ) — Long-term portion of customer accounts receivable, net of allowance — 385,629 231,036 — 616,665 Property and equipment, net — 144,747 — — 144,747 Deferred income taxes 72,554 — — — 72,554 Other assets — 6,285 — — 6,285 Total assets $ 754,945 $ 1,336,246 $ 664,608 $ (881,410 ) $ 1,874,389 Liabilities and Stockholders' Equity Current liabilities: Current maturities of capital lease obligations $ — $ 699 $ 64,952 $ — $ 65,651 Accounts payable — 109,738 — — 109,738 Accrued expenses 4,800 59,463 3,602 (2,949 ) 64,916 Other current liabilities — 21,342 3,063 (2,387 ) 22,018 Total current liabilities 4,800 191,242 71,617 (5,336 ) 262,323 Deferred rent — 87,152 — — 87,152 Long-term debt and capital lease obligations 220,754 356,514 396,010 — 973,278 Other long-term liabilities — 18,946 3,299 — 22,245 Total liabilities 225,554 653,854 470,926 (5,336 ) 1,344,998 Total stockholders' equity 529,391 682,391 193,682 (876,073 ) 529,391 Total liabilities and stockholders' equity $ 754,945 $ 1,336,245 $ 664,608 $ (881,409 ) $ 1,874,389 |
Condensed Income Statement [Table Text Block] | Condensed Consolidated Statement of Operations for the three months ended October 31, 2017 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 291,808 $ — $ — $ 291,808 Finance charges and other revenues — 45,228 36,136 — 81,364 Servicing fee revenue — 18,178 — (18,178 ) — Total revenues — 355,214 36,136 (18,178 ) 373,172 Costs and expenses: Cost of goods sold — 175,591 — — 175,591 Selling, general and administrative expenses — 125,355 7,178 (18,178 ) 114,355 Provision for bad debts — 44,454 12,058 — 56,512 Charges and credits — 5,861 — — 5,861 Total costs and expenses — 351,261 19,236 (18,178 ) 352,319 Operating income — 3,953 16,900 — 20,853 Interest expense 4,443 4,979 8,673 — 18,095 Loss on extinguishment of debt — — 461 — 461 Income (loss) before income taxes (4,443 ) (1,026 ) 7,766 — 2,297 Provision (benefit) for income taxes (1,408 ) (324 ) 2,460 — 728 Net income (loss) before consolidation $ (3,035 ) $ (702 ) $ 5,306 $ — $ 1,569 Income (loss) from consolidated subsidiaries (after tax) $ 4,742 $ 1,988 $ — $ (6,730 ) $ — Consolidated net income (loss) $ 1,707 $ 1,286 $ 5,306 $ (6,730 ) $ 1,569 Condensed Consolidated Statement of Operations for the three months ended October 31, 2016 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Total net sales $ — $ 308,033 $ — $ — $ 308,033 Finance charges and other revenues — 22,326 46,414 — 68,740 Servicing fee revenue — 15,073 — (15,073 ) — Total revenues — 345,432 46,414 (15,073 ) 376,773 Costs and expenses: Cost of goods sold — 192,374 — — 192,374 Selling, general and administrative expenses — 114,457 15,073 (15,073 ) 114,457 Provision for bad debts — 31,672 19,892 — 51,564 Charges and credits — 1,987 — — 1,987 Total costs and expenses — 340,490 34,965 (15,073 ) 360,382 Operating income — 4,942 11,449 — 16,391 Interest expense 4,447 3,876 15,147 — 23,470 Loss on extinguishment of debt — — — — — Income (loss) before income taxes (4,447 ) 1,066 (3,698 ) — (7,079 ) Provision (benefit) for income taxes (2,051 ) 492 (1,705 ) — (3,264 ) Net income (loss) before consolidation $ (2,396 ) $ 574 $ (1,993 ) $ — $ (3,815 ) Income (loss) from consolidated subsidiaries (after tax) $ (1,419 ) $ (1,993 ) $ — $ 3,412 $ — Consolidated net income (loss) $ (3,815 ) $ (1,419 ) $ (1,993 ) $ 3,412 $ (3,815 ) |
Condensed Cash Flow Statement [Table Text Block] | Condensed Consolidated Statement of Cash Flows for the nine months ended October 31, 2017 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ (3,011 ) $ (635,568 ) $ 721,316 $ — $ 82,737 Cash flows from investing activities: Purchase of customer accounts receivables — — (544,833 ) 544,833 — Sale of customer accounts receivables — 544,833 — (544,833 ) — Purchase of property and equipment — (11,995 ) — — (11,995 ) Proceeds from sales of property — — — — — Net cash provided by (used in) investing activities — 532,838 (544,833 ) — (11,995 ) Cash flows from financing activities: Proceeds from issuance of asset-backed notes — — 469,814 — 469,814 Payments on asset-backed notes — (78,780 ) (737,463 ) — (816,243 ) Changes in restricted cash balances — — 39,599 — 39,599 Borrowings from revolving credit facility — 1,257,052 — — 1,257,052 Payments on revolving credit facility — (1,082,552 ) — — (1,082,552 ) Borrowings from warehouse facility — — 79,940 — 79,940 Payment of debt issuance costs and amendment fees — (2,865 ) (5,307 ) — (8,172 ) Payments on warehouse facility — — (23,066 ) — (23,066 ) Proceeds from stock issued under employee benefit plans 3,011 — — — 3,011 Other — (949 ) — — (949 ) Net cash provided by (used in) financing activities 3,011 91,906 (176,483 ) — (81,566 ) Net change in cash and cash equivalents — (10,824 ) — — (10,824 ) Cash and cash equivalents, beginning of period — 23,566 — — 23,566 Cash and cash equivalents, end of period $ — $ 12,742 $ — $ — $ 12,742 Condensed Consolidated Statement of Cash Flows for the nine months ended October 31, 2016 : (in thousands) Conn's, Inc. Guarantors Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ (13,544 ) $ (606,570 ) $ 803,125 $ — $ 183,011 Cash flows from investing activities: Purchase of customer accounts receivables — — (1,038,226 ) 1,038,226 — Sale of customer accounts receivables — 1,038,226 — (1,038,226 ) — Purchase of property and equipment — (41,804 ) — — (41,804 ) Proceeds from sales of property — 686 — — 686 Net change in intercompany 12,719 (12,719 ) — Net cash provided by (used in) investing activities 12,719 997,108 (1,038,226 ) (12,719 ) (41,118 ) Cash flows from financing activities: Proceeds from issuance of asset-backed notes — — 1,067,850 — 1,067,850 Payments on asset-backed notes — — (736,266 ) — (736,266 ) Changes in restricted cash balances — — (87,900 ) — (87,900 ) Borrowings from revolving credit facility — 529,352 — — 529,352 Payments on revolving credit facility — (858,559 ) — — (858,559 ) Payment of debt issuance costs and amendment fees — (1,192 ) (8,583 ) — (9,775 ) Proceeds from stock issued under employee benefit plans 824 — — — 824 Net change in intercompany — (12,719 ) — 12,719 — Other 1 (609 ) — — (608 ) Net cash provided by (used in) financing activities 825 (343,727 ) 235,101 12,719 (95,082 ) Net change in cash and cash equivalents — 46,811 — — 46,811 Cash and cash equivalents, beginning of period — 12,254 — — 12,254 Cash and cash equivalents, end of period $ — $ 59,065 $ — $ — $ 59,065 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2017USD ($)shares | Oct. 31, 2016USD ($)shares | Oct. 31, 2017USD ($)segmentshares | Oct. 31, 2016USD ($)shares | Jan. 31, 2017USD ($) | |
Schedule of Earnings Per Share [Line Items] | |||||
Other liabilities | $ 13,000 | $ 13,000 | $ 13,700 | ||
Number of Operating Segments | segment | 2 | ||||
Credit and Debit Card Receivables, at Carrying Value | 2,100 | $ 2,100 | 2,400 | ||
Restricted cash | 71,099 | 71,099 | 110,698 | ||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Financing Receivable, Recorded Investment, Nonaccrual Status | 21,400 | 21,400 | 22,900 | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 105,200 | 105,200 | 124,000 | ||
Financing Receivable, Recorded Investment, Current | 11,700 | 11,700 | 19,500 | ||
Deferred debt issuance costs | $ 6,206 | $ 6,206 | 10,853 | ||
Grants in period (in shares) | shares | 2,740 | 14,502 | 1,147,045 | 475,128 | |
Grant date fair value | $ 50 | $ 96 | $ 14,596 | $ 5,046 | |
Stock-based compensation expense | $ 1,700 | $ 1,000 | $ 5,900 | $ 3,900 | |
Weighted average number of stock options and restricted stock units not included in the calculation of the dilutive effect of stock options and restricted stock units (in shares) | shares | 200,000 | 1,200,000 | 400,000 | 1,200,000 | |
Shares outstanding for earnings (loss) per share calculations [Abstract] | |||||
Weighted average common shares outstanding - Basic (in shares) | shares | 31,292,913,000 | 30,816,319,000 | 31,121,177,000 | 30,736,636,000 | |
Common shares attributable to stock options and restricted stock units (in shares) | shares | 471,681,000 | 0 | |||
Weighted average common shares outstanding - Diluted (in shares) | shares | 31,764,594,000 | 30,816,319,000 | 31,457,420,000 | 30,736,636,000 | |
Secured Debt [Member] | |||||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Long-term Debt | $ 227,000 | $ 227,000 | |||
Senior Notes [Member] | |||||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Debt Instrument, Fair Value Disclosure | $ 225,300 | 225,300 | |||
Employee Severance [Member] | |||||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Stock-based compensation expense | $ 600 | $ 200 | |||
Performance Shares [Member] | |||||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Grants in period (in shares) | shares | 0 | 0 | 501,012 | 131,759 | |
Restricted Stock Units (RSUs) [Member] | |||||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Grants in period (in shares) | shares | 2,740 | 14,502 | 646,033 | 343,369 | |
Stock options and restricted stock [Member] | Minimum [Member] | |||||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Vesting period | 3 years | ||||
Stock options and restricted stock [Member] | Maximum [Member] | |||||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Vesting period | 5 years | ||||
Employee Stock Option [Member] | |||||
Shares outstanding for earnings (loss) per share calculations [Abstract] | |||||
Common shares attributable to stock options and restricted stock units (in shares) | shares | 336,243,000 | 0 | |||
Officer [Member] | Performance Shares [Member] | Proposed Amendment to 2016 Omnibus Incentive Equity Plan [Member] | |||||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Vesting period | 3 years | ||||
Revolving Credit Facility [Member] | |||||
Interest Income on Customer Accounts Receivable [Abstract] | |||||
Deferred debt issuance costs | $ 5,900 | $ 5,900 | 5,700 | ||
Securitized Receivables Servicer [Member] | |||||
Schedule of Earnings Per Share [Line Items] | |||||
Restricted cash | 18,300 | 18,300 | 35,500 | ||
Collateral Held by VIE [Member] | |||||
Schedule of Earnings Per Share [Line Items] | |||||
Restricted cash | $ 52,800 | $ 52,800 | $ 75,200 |
Customer Accounts Receivable (D
Customer Accounts Receivable (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | |
Total Outstanding Balance | ||||||
Customer Accounts Receivable | $ 1,488,906 | $ 1,556,439 | ||||
Financing Receivable Outstanding Balance 60 Days Past Due | 147,866 | 165,757 | ||||
Reaged | 355,014 | 250,443 | ||||
Allowance for uncollectible accounts related to the credit portfolio | $ (210,175) | $ (190,990) | (202,906) | (210,175) | $ (204,330) | |
Allowances for no-interest option credit programs | (19,616) | (21,207) | ||||
Deferred fees and origination costs | (14,019) | (6,991) | ||||
Total customer accounts receivable, net | 1,252,365 | 1,318,066 | ||||
Short-term portion of customer accounts receivable, net | (635,700) | (702,162) | ||||
Long-term customer accounts receivable, net | 616,665 | 615,904 | ||||
Amounts included within past due and reaged accounts | 64,800 | 66,700 | ||||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | ||||||
Allowance at beginning of period | (210,175) | (190,990) | ||||
Provision | 192,354 | 200,349 | ||||
Principal charge-offs | (177,690) | (163,830) | ||||
Interest charge-offs | (29,230) | (27,805) | ||||
Recoveries | 7,297 | 4,626 | ||||
Allowance at end of period | (202,906) | (204,330) | ||||
Average Total Customer Portfolio Balance | 1,493,292 | 1,548,966 | ||||
Financing Receivable, Recorded Investment, Past Due | 394,500 | 406,100 | ||||
Re-Ages Related to Hurricane Harvey Disaster Areas [Member] | ||||||
Total Outstanding Balance | ||||||
Reaged | 71,800 | |||||
Customer Accounts Receivable [Member] | ||||||
Total Outstanding Balance | ||||||
Customer Accounts Receivable | 1,341,939 | 1,417,581 | ||||
Financing Receivable Outstanding Balance 60 Days Past Due | 110,382 | 127,747 | ||||
Reaged | 208,047 | 111,585 | ||||
Allowance for uncollectible accounts related to the credit portfolio | (158,992) | (149,226) | (148,944) | (158,992) | (154,588) | |
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | ||||||
Allowance at beginning of period | (158,992) | (149,226) | ||||
Provision | 139,406 | 156,063 | ||||
Principal charge-offs | (133,033) | (132,028) | ||||
Interest charge-offs | (21,884) | (22,400) | ||||
Recoveries | 5,463 | 3,727 | ||||
Allowance at end of period | (148,944) | (154,588) | ||||
Average Total Customer Portfolio Balance | 1,352,137 | 1,422,473 | ||||
Restructured Accounts [Member] | ||||||
Total Outstanding Balance | ||||||
Customer Accounts Receivable | 146,967 | 138,858 | ||||
Financing Receivable Outstanding Balance 60 Days Past Due | 37,484 | 38,010 | ||||
Reaged | 146,967 | 138,858 | ||||
Allowance for uncollectible accounts related to the credit portfolio | (51,183) | (41,764) | (53,962) | (51,183) | (49,742) | |
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | ||||||
Allowance at beginning of period | (51,183) | (41,764) | ||||
Provision | 52,948 | 44,286 | ||||
Principal charge-offs | (44,657) | (31,802) | ||||
Interest charge-offs | (7,346) | (5,405) | ||||
Recoveries | 1,834 | 899 | ||||
Allowance at end of period | (53,962) | $ (49,742) | ||||
Average Total Customer Portfolio Balance | 141,155 | $ 126,493 | ||||
Variable Interest Entity | ||||||
Total Outstanding Balance | ||||||
Customer Accounts Receivable | 712,727 | 1,015,837 | ||||
Financing Receivable Outstanding Balance 60 Days Past Due | 99,763 | 156,344 | ||||
Reaged | 246,333 | 238,375 | ||||
Allowance for uncollectible accounts related to the credit portfolio | (150,435) | (109,759) | (150,435) | |||
Allowances for no-interest option credit programs | (8,661) | (15,912) | ||||
Deferred fees and origination costs | (3,185) | 0 | ||||
Total customer accounts receivable, net | 591,122 | 849,490 | ||||
Short-term portion of customer accounts receivable, net | $ (581,679) | (529,108) | ||||
Long-term customer accounts receivable, net | $ 474,474 | 320,382 | ||||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | ||||||
Allowance at beginning of period | (150,435) | |||||
Allowance at end of period | $ (109,759) | |||||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||||
Total Outstanding Balance | ||||||
Customer Accounts Receivable | 776,179 | 540,602 | ||||
Financing Receivable Outstanding Balance 60 Days Past Due | 48,103 | 9,413 | ||||
Reaged | $ 108,681 | $ 12,068 |
Accrual for Store Closures (Det
Accrual for Store Closures (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Detail of activity in the accrual for store closures [Abstract] | ||
Balance at beginning of period | $ 1,874 | $ 1,866 |
Accrual for closures | 1,314 | 954 |
Change in estimate | 16 | (74) |
Cash payments | (2,010) | (767) |
Balance at end of period | 1,194 | 1,979 |
Balance sheet presentation [Abstract] | ||
Accrued expenses | (170) | (923) |
Other long-term liabilities | $ 1,024 | $ 1,056 |
Charges and Credits (Details)
Charges and Credits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Charges and Credits [Abstract] | ||||
Store and facility closure costs | $ 0 | $ 954 | $ 1,349 | $ 954 |
Impairments from disposals | 0 | 595 | 0 | 1,980 |
Legal and professional fees related to the exploration of strategic alternatives and securities-related litigation | 0 | 158 | 34 | 747 |
Employee severance | 0 | 280 | 1,317 | 1,493 |
Indirect tax audit reserve | 0 | 0 | 2,595 | 0 |
Write-off of capitalized software costs | 5,861 | 0 | 5,861 | 0 |
Executive management transition costs | 0 | 0 | 0 | 234 |
Other Nonrecurring (Income) Expense | $ 5,861 | $ 1,987 | $ 11,156 | $ 5,408 |
Finance Charges and Other Rev30
Finance Charges and Other Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Summary of the classification of the amounts as Finance charges and other [Abstract] | ||||
Interest and Fee Income, Loans, Consumer | $ 74,144 | $ 58,404 | $ 210,765 | $ 173,527 |
Insurance Commissions and Fees | 7,125 | 9,999 | 27,107 | 30,674 |
Other Revenue, Net | 95 | 337 | 267 | 1,268 |
Finance charges and other | 81,364 | 68,740 | 238,139 | 205,469 |
Provisions for uncollectible interest | 10,500 | 11,000 | 31,000 | 31,200 |
Financing Receivable [Member] | ||||
Summary of the classification of the amounts as Finance charges and other [Abstract] | ||||
Interest and Fee Income, Loans, Consumer | $ 4,800 | $ 4,400 | $ 14,000 | $ 12,700 |
Debt and Capital Lease Obliga31
Debt and Capital Lease Obligations - Schedule of Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Mar. 31, 2017 | Jan. 31, 2017 |
Long-term debt [Abstract] | |||
Capital lease obligations | $ 5,213 | $ 2,393 | |
Total debt and capital lease obligations | 1,047,803 | 1,159,184 | |
Less: | |||
Discount on debt | (2,668) | (3,089) | |
Deferred debt issuance costs | (6,206) | (10,853) | |
Current maturities of long-term debt and capital lease obligations | (65,651) | (849) | |
Long-term debt and capital lease obligations | 973,278 | 1,144,393 | |
Senior Notes [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 227,000 | 227,000 | |
2015-A Class A Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 0 | 12,166 | |
2015-A Class B Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 0 | 165,900 | |
Class A Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 0 | 64,732 | |
Class B Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 0 | 70,510 | |
2016-A Class C Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 0 | 70,510 | |
2016-B Class A Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 0 | 256,513 | |
Less: | |||
Current maturities of long-term debt and capital lease obligations | (8,563) | ||
2016-B Class B Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 111,960 | 111,960 | |
2017-A Class A Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 129,583 | 0 | |
2017-A Class B Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 106,270 | 0 | |
2017-A Class C Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 50,340 | 0 | |
2017-A Warehouse Class A Notes [Member] | Secured Debt [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | 56,874 | 0 | |
Revolving Credit Facility [Member] | |||
Less: | |||
Deferred debt issuance costs | (5,900) | (5,700) | |
Revolving Credit Facility [Member] | Line of Credit [Member] | |||
Long-term debt [Abstract] | |||
Long-term Debt | $ 352,000 | $ 177,500 | |
Less: | |||
Deferred debt issuance costs | $ (2,800) |
Debt and Capital Lease Obliga32
Debt and Capital Lease Obligations - Senior Notes (Details) | Oct. 31, 2017USD ($)exception | Jul. 01, 2014USD ($) |
Debt Instrument [Line Items] | ||
Amount of notes issued | $ 1,053,570,000 | |
Senior Notes [Member] | Senior Unsecured Notes Due July 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Amount of notes issued | $ 250,000,000 | |
Interest rate on notes (in hundredths) | 7.25% | |
Effective interest rate | 7.80% | |
Number of exceptions for limitations | exception | 2 | |
Restricted payment basket amount | $ 375,000,000 | |
Restrictions on payment of dividends, amount free from restriction | $ 179,200,000 | |
Trigger amount under indenture | $ 25,000,000 | |
Senior Notes [Member] | Senior Unsecured Notes Due July 2022 [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Leverage Ratio | 2.50 | |
Senior Notes [Member] | Senior Unsecured Notes Due July 2022 [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Leverage Ratio | 1 |
Debt and Capital Lease Obliga33
Debt and Capital Lease Obligations - Asset Backed Notes (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2017 | Jan. 31, 2017 | Jan. 31, 2016 | Aug. 15, 2017 | May 15, 2017 | Apr. 30, 2017 | |
Debt Instrument [Line Items] | ||||||
Monthly fee percentage on outstanding balance | 4.75% | |||||
Amount of notes issued | $ 1,053,570,000 | |||||
Proceeds from Securitizations of Consumer Loans | 1,024,066,000 | |||||
Debt issuance costs | 6,206,000 | $ 10,853,000 | ||||
2016-B Class A Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount of notes issued | 391,840,000 | |||||
Proceeds from Securitizations of Consumer Loans | $ 380,033,000 | |||||
Fixed annual rate | 3.73% | |||||
Effective interest rate | 5.47% | |||||
2016-B Class B Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount of notes issued | $ 111,960,000 | |||||
Proceeds from Securitizations of Consumer Loans | $ 108,586,000 | |||||
Fixed annual rate | 7.34% | |||||
Effective interest rate | 8.03% | |||||
2017-A Class A Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount of notes issued | $ 313,220,000 | |||||
Proceeds from Securitizations of Consumer Loans | $ 304,451,000 | |||||
Fixed annual rate | 2.73% | |||||
Effective interest rate | 4.96% | |||||
2017-A Class B Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount of notes issued | $ 106,270,000 | |||||
Proceeds from Securitizations of Consumer Loans | $ 103,300,000 | |||||
Fixed annual rate | 5.11% | |||||
Effective interest rate | 5.83% | |||||
2017-A Class C Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount of notes issued | $ 50,340,000 | |||||
Proceeds from Securitizations of Consumer Loans | $ 48,919,000 | |||||
Fixed annual rate | 7.40% | |||||
Effective interest rate | 7.91% | |||||
2015-A Redeemed Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount of notes issued | $ 78,800,000 | |||||
Redemption price | 114,100,000 | |||||
Adjustments | 35,300,000 | |||||
Carrying value | $ 126,300,000 | |||||
Debt issuance costs | $ 2,100,000 | |||||
2017-A Warehouse Class A Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount of notes issued | $ 79,940,000 | $ 79,900,000 | ||||
Proceeds from Securitizations of Consumer Loans | $ 78,777,000 | |||||
Fixed annual rate | 4.00% | |||||
Effective interest rate | 7.02% | |||||
2016-A Redeemed Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount of notes issued | 78,600,000 | |||||
Redemption price | 102,900,000 | |||||
Adjustments | 24,300,000 | |||||
Debt issuance costs | $ 500,000 | |||||
Asset-backed Securities [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Monthly fee percentage on outstanding balance | 4.75% | 4.75% | 4.75% |
Debt and Capital Lease Obliga34
Debt and Capital Lease Obligations - Revolving Credit Facility (Details) | Mar. 31, 2017USD ($)equity_cure | Mar. 30, 2017USD ($)equity_cure | Oct. 31, 2017USD ($) | Jan. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | ||||
Minimum Interest Coverage Ratio | 1.10 | |||
Minimum cash recovery percentage | 4.45% | |||
Amount of notes issued | $ 1,053,570,000 | |||
Deferred debt issuance costs | 6,206,000 | $ 10,853,000 | ||
Second quarter of fiscal 2017 through the first quarter of fiscal 2018 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Minimum cash recovery percentage | 4.45% | 4.50% | ||
Second quarter of fiscal 2018 through the third quarter of fiscal 2019 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Minimum cash recovery percentage | 4.20% | 4.25% | ||
Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Deferred debt issuance costs | 5,900,000 | $ 5,700,000 | ||
Line of Credit [Member] | Letter of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Amount of notes issued | $ 40,000,000 | |||
Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum capacity extended under credit facility | $ 750,000,000 | $ 810,000,000 | ||
Debt Instrument, Number of Equity Cures Exercisable | equity_cure | 2 | 1 | ||
Maximum amount of each equity cure | $ 20,000,000 | $ 10,000,000 | ||
Weighted-average interest rate | 6.60% | |||
Write off debt issuance costs | 300,000 | |||
Deferred debt issuance costs | $ 2,800,000 | |||
Line of Credit [Member] | Revolving Credit Facility [Member] | Second quarter of fiscal 2018 through the third quarter of fiscal 2019 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Minimum Interest Coverage Ratio | 1.10 | |||
Line of Credit [Member] | Revolving Credit Facility [Member] | May 31, 2016 through June 30, 2017 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Minimum Interest Coverage Ratio | 1.25 | |||
Minimum [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Unused capacity fee percentage | 0.25% | |||
Maximum [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Unused capacity fee percentage | 0.75% | |||
LIBOR [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 1.00% | |||
Alternate Base Rate [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 2.50% | |||
Alternate Base Rate [Member] | Minimum [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 1.75% | |||
Alternate Base Rate [Member] | Maximum [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 2.25% | |||
Federal Funds Rate [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 0.50% | |||
Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line Of Credit Facility Additional Remaining Borrowing Capacity | $ 284,800,000 | |||
Sub-facility for letters of credit | 2,800,000 | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 110,500,000 | |||
Revolving Credit Facility [Member] | LIBOR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 3.50% | |||
Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 2.75% | |||
Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 3.25% |
Debt and Capital Lease Obliga35
Debt and Capital Lease Obligations - Debt Covenants (Details) $ in Millions | 9 Months Ended |
Oct. 31, 2017USD ($) | |
Debt Disclosure [Abstract] | |
Debt Instrument, Actual Interest Coverage Ratio | 1.75 |
Minimum Interest Coverage Ratio | 1.10 |
Debt Instrument, Actual Leverage Ratio | 2.49 |
Debt Instrument, Maximum Leverage Ratio | 4 |
Debt Instrument, Actual ABS Excluded Leverage Ratio | 1.71 |
Debt Instrument, Maximum ABS Excluded Leverage Ratio | 2 |
Debt Instrument, Actual Cash Recovery Percentage | 4.80% |
ABS Excluded Leverage Ratio must not exceed maximum | 4.45% |
Capital Expenditures, net, must not exceed maximum | $ 1 |
Maximum Capital Expenditures, Net | $ 75 |
Contingencies (Details)
Contingencies (Details) - False and Misleading Statements and Failure to Disclosure Adverse Information [Member] | Jun. 30, 2015allegation | Jul. 31, 2017defendant | May 05, 2014claim |
Loss Contingencies [Line Items] | |||
Number of pending actions | claim | 3 | ||
Number of allegations dismissed in claim | 78 | ||
Number of allegations in claim | 91 | ||
Executive Officer [Member] | |||
Loss Contingencies [Line Items] | |||
Number of defendants | defendant | 2 |
Variable Interest Entity - Add
Variable Interest Entity - Additional Information (Details) | 9 Months Ended |
Oct. 31, 2017 | |
Variable Interest Entity [Line Items] | |
Monthly fee percentage on outstanding balance | 4.75% |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jan. 31, 2016 |
Assets: | |||||
Restricted cash | $ 71,099 | $ 110,698 | |||
Customer accounts receivable: | |||||
Allowance for uncollectible accounts | (202,906) | (210,175) | $ (204,330) | $ (190,990) | |
Allowances for no-interest option credit programs | (19,616) | (21,207) | |||
Deferred fees and origination costs | (14,019) | (6,991) | |||
Total customer accounts receivable, net | 1,252,365 | 1,318,066 | |||
Total assets | 1,874,389 | 1,941,134 | |||
Liabilities: | |||||
Other liabilities | 13,000 | 13,700 | |||
Current maturities of long-term debt: | 65,651 | 849 | |||
Less: deferred debt issuance costs | (6,206) | (10,853) | |||
Long-term debt and capital lease obligations | 973,278 | 1,144,393 | |||
Total liabilities | 1,344,998 | 1,423,344 | |||
Variable Interest Entity | |||||
Assets: | |||||
Restricted cash | 71,099 | 110,698 | |||
Due from Conn's, Inc., net | 2,387 | 7,368 | |||
Customer accounts receivable: | |||||
Customer accounts receivable | 603,584 | 884,367 | |||
Restructured accounts | 109,143 | 131,470 | |||
Allowance for uncollectible accounts | (109,759) | (150,435) | |||
Allowances for no-interest option credit programs | (8,661) | (15,912) | |||
Deferred fees and origination costs | (3,185) | 0 | |||
Total customer accounts receivable, net | 591,122 | 849,490 | |||
Total assets | 664,608 | 967,556 | |||
Liabilities: | |||||
Accrued expenses | 3,602 | 6,525 | |||
Other liabilities | 6,362 | 6,691 | |||
Current maturities of long-term debt: | 64,952 | 0 | |||
Deferred debt issuance costs | (485) | ||||
Less: deferred debt issuance costs | (2,143) | (6,710) | |||
Long-term debt and capital lease obligations | 398,153 | 752,291 | |||
Total long-term debt | 396,010 | $ 981,836 | 745,581 | ||
Total liabilities | 470,926 | 758,797 | |||
2016-B Class A Notes [Member] | Variable Interest Entity | |||||
Liabilities: | |||||
Current maturities of long-term debt: | 8,563 | ||||
2017-A Warehouse Class A Notes [Member] | Variable Interest Entity | |||||
Liabilities: | |||||
Current maturities of long-term debt: | 56,874 | ||||
Secured Debt [Member] | 2017-A Warehouse Class A Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | 56,874 | 0 | |||
Secured Debt [Member] | 2015-A Class A Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | 0 | 12,166 | |||
Secured Debt [Member] | 2015-A Class B Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | 0 | 165,900 | |||
Secured Debt [Member] | 2016-A Class A Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | 0 | 64,732 | |||
Secured Debt [Member] | 2016-A Class B Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | 0 | 70,510 | |||
Secured Debt [Member] | 2016-A Class C Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | 0 | 70,510 | |||
Secured Debt [Member] | 2016-B Class A Notes [Member] | |||||
Liabilities: | |||||
Current maturities of long-term debt: | 8,563 | ||||
Total long-term debt | 0 | 256,513 | |||
Secured Debt [Member] | 2016-B Class B Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | 111,960 | 111,960 | |||
Secured Debt [Member] | 2017-A Class A Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | 129,583 | 0 | |||
Secured Debt [Member] | 2017-A Class B Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | 106,270 | 0 | |||
Secured Debt [Member] | 2017-A Class C Notes [Member] | |||||
Liabilities: | |||||
Total long-term debt | $ 50,340 | $ 0 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017USD ($)state | Oct. 31, 2016USD ($) | Oct. 31, 2017USD ($)segmentstate | Oct. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of Operating Segments | segment | 2 | |||
Revenues [Abstract] | ||||
Product sales | $ 263,786 | $ 278,056 | $ 774,741 | $ 864,269 |
Repair service agreement commissions | 24,488 | 26,354 | 72,703 | 82,849 |
Service revenues | 3,534 | 3,623 | 10,062 | 11,456 |
Revenue, Net | 291,808 | 308,033 | 857,506 | 958,574 |
Finance charges and other revenues | 81,364 | 68,740 | 238,139 | 205,469 |
Total revenues | 373,172 | 376,773 | 1,095,645 | 1,164,043 |
Costs and expenses: | ||||
Cost of goods sold | 175,591 | 192,374 | 519,847 | 605,709 |
Selling, general and administrative expenses | 114,355 | 114,457 | 332,524 | 347,550 |
Provision for bad debts | 56,512 | 51,564 | 161,891 | 169,978 |
Quarterly Financial Information, Quarterly Charges and Credits, Amount Affecting Comparability | 5,861 | 1,987 | 11,156 | 5,408 |
Total costs and expenses | 352,319 | 360,382 | 1,025,418 | 1,128,645 |
Operating income | 20,853 | 16,391 | 70,227 | 35,398 |
Interest expense | 18,095 | 23,470 | 62,142 | 73,504 |
Loss on extinguishment of debt | 461 | 0 | 2,907 | 0 |
Income (loss) before income taxes | $ 2,297 | (7,079) | $ 5,178 | (38,106) |
Estimated annual rate of reimbursement (in hundredths) | 2.50% | |||
Number of States in which Entity Operates | state | 14 | 14 | ||
Allocation of overhead by operating segments | $ 7,300 | 6,700 | $ 21,500 | 18,900 |
Retail [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 263,786 | 278,056 | 774,741 | 864,269 |
Repair service agreement commissions | 24,488 | 26,354 | 72,703 | 82,849 |
Service revenues | 3,534 | 3,623 | 10,062 | 11,456 |
Revenue, Net | 291,808 | 308,033 | 857,506 | 958,574 |
Finance charges and other revenues | 95 | 337 | 267 | 1,268 |
Total revenues | 291,903 | 308,370 | 857,773 | 959,842 |
Costs and expenses: | ||||
Cost of goods sold | 175,591 | 192,374 | 519,847 | 605,709 |
Selling, general and administrative expenses | 80,676 | 79,777 | 233,290 | 244,598 |
Provision for bad debts | 189 | 286 | 584 | 811 |
Quarterly Financial Information, Quarterly Charges and Credits, Amount Affecting Comparability | 5,861 | 1,987 | 11,156 | 5,408 |
Total costs and expenses | 262,317 | 274,424 | 764,877 | 856,526 |
Operating income | 29,586 | 33,946 | 92,896 | 103,316 |
Interest expense | 0 | 0 | 0 | 0 |
Loss on extinguishment of debt | 0 | 0 | 0 | 0 |
Income (loss) before income taxes | 29,586 | 33,946 | 92,896 | 103,316 |
Credit [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 0 | 0 | 0 | 0 |
Repair service agreement commissions | 0 | 0 | 0 | 0 |
Service revenues | 0 | 0 | 0 | 0 |
Revenue, Net | 0 | 0 | 0 | 0 |
Finance charges and other revenues | 81,269 | 68,403 | 237,872 | 204,201 |
Total revenues | 81,269 | 68,403 | 237,872 | 204,201 |
Costs and expenses: | ||||
Cost of goods sold | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 33,679 | 34,680 | 99,234 | 102,952 |
Provision for bad debts | 56,323 | 51,278 | 161,307 | 169,167 |
Quarterly Financial Information, Quarterly Charges and Credits, Amount Affecting Comparability | 0 | 0 | 0 | 0 |
Total costs and expenses | 90,002 | 85,958 | 260,541 | 272,119 |
Operating income | (8,733) | (17,555) | (22,669) | (67,918) |
Interest expense | 18,095 | 23,470 | 62,142 | 73,504 |
Loss on extinguishment of debt | 461 | 0 | 2,907 | 0 |
Income (loss) before income taxes | (27,289) | (41,025) | (87,718) | (141,422) |
Furniture and Mattress [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 97,146 | 98,898 | 286,886 | 309,766 |
Furniture and Mattress [Member] | Retail [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 97,146 | 98,898 | 286,886 | 309,766 |
Furniture and Mattress [Member] | Credit [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 0 | 0 | 0 | 0 |
Home Appliance [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 83,837 | 85,785 | 253,044 | 275,048 |
Home Appliance [Member] | Retail [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 83,837 | 85,785 | 253,044 | 275,048 |
Home Appliance [Member] | Credit [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 0 | 0 | 0 | 0 |
Consumer Electronics [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 58,062 | 65,670 | 166,761 | 197,270 |
Consumer Electronics [Member] | Retail [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 58,062 | 65,670 | 166,761 | 197,270 |
Consumer Electronics [Member] | Credit [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 0 | 0 | 0 | 0 |
Home Office [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 20,295 | 22,747 | 54,945 | 66,921 |
Home Office [Member] | Retail [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 20,295 | 22,747 | 54,945 | 66,921 |
Home Office [Member] | Credit [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 0 | 0 | 0 | 0 |
Other Products [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 4,446 | 4,956 | 13,105 | 15,264 |
Other Products [Member] | Retail [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 4,446 | 4,956 | 13,105 | 15,264 |
Other Products [Member] | Credit [Member] | ||||
Revenues [Abstract] | ||||
Product sales | 0 | 0 | 0 | 0 |
Intersegment Eliminations [Member] | ||||
Revenues [Abstract] | ||||
Total revenues | $ 9,300 | $ 9,600 | $ 27,900 | $ 29,000 |
Guarantor Financial Informati40
Guarantor Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Jan. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||||||
Borrowings on warehouse facility | $ 79,940 | $ 0 | ||||
Cash and Cash Equivalents, at Carrying Value | $ 12,742 | $ 59,065 | 23,566 | 12,254 | $ 12,742 | $ 23,566 |
Restricted cash | 71,099 | 110,698 | ||||
Accounts Receivable, Net, Current | 635,700 | 702,162 | ||||
Other Receivables, Net, Current | 63,203 | 69,286 | ||||
Inventory, Net | 235,479 | 164,856 | ||||
Other Assets, Current | 15,915 | 17,105 | ||||
Total current assets | 1,034,138 | 1,087,673 | ||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | 0 | 0 | ||||
Accounts Receivable, Net, Noncurrent | 616,665 | 615,904 | ||||
Property, Plant and Equipment, Net | 144,747 | 159,202 | ||||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 72,554 | 71,442 | ||||
Other Assets, Noncurrent | 6,285 | 6,913 | ||||
Total assets | 1,874,389 | 1,941,134 | ||||
Current maturities of long-term debt: | 65,651 | 849 | ||||
Accounts Payable, Current | 109,738 | 101,612 | ||||
Accrued Liabilities and Other Liabilities | 64,916 | 43,099 | ||||
Other Liabilities, Current | 22,018 | 21,821 | ||||
Total current liabilities | 262,323 | 167,381 | ||||
Deferred rent | 87,152 | 87,957 | ||||
Long-term debt and capital lease obligations | 973,278 | 1,144,393 | ||||
Other Liabilities, Noncurrent | 22,245 | 23,613 | ||||
Total liabilities | 1,344,998 | 1,423,344 | ||||
Total stockholders' equity | 529,391 | 517,790 | ||||
Total liabilities and stockholders' equity | 1,874,389 | 1,941,134 | ||||
Revenue, Net | 291,808 | 308,033 | 857,506 | 958,574 | ||
Financial Services Revenue | 81,364 | 68,740 | 238,139 | 205,469 | ||
Contractually Specified Servicing Fees, Amount | 0 | 0 | 0 | 0 | ||
Total revenues | 373,172 | 376,773 | 1,095,645 | 1,164,043 | ||
Cost of Goods Sold | 175,591 | 192,374 | 519,847 | 605,709 | ||
Selling, General and Administrative Expense | 114,355 | 114,457 | 332,524 | 347,550 | ||
Provision for bad debts | 56,512 | 51,564 | 161,891 | 169,978 | ||
Charges and credits | 5,861 | 1,987 | 11,156 | 5,408 | ||
Total costs and expenses | 352,319 | 360,382 | 1,025,418 | 1,128,645 | ||
Operating income | 20,853 | 16,391 | 70,227 | 35,398 | ||
Interest expense | 18,095 | 23,470 | 62,142 | 73,504 | ||
Loss on extinguishment of debt | 461 | 0 | 2,907 | 0 | ||
Income (loss) before income taxes | 2,297 | (7,079) | 5,178 | (38,106) | ||
Provision (benefit) for income taxes | 728 | (3,264) | 1,916 | (12,618) | ||
Net income (loss) before consolidation | 1,569 | (3,815) | 3,262 | (25,488) | ||
Income (loss) from consolidated subsidiaries (after tax) | 0 | 0 | 0 | 0 | ||
Net income (loss) | 1,569 | (3,815) | 3,262 | (25,488) | ||
Net Cash Provided by (Used in) Operating Activities | 82,737 | 183,011 | ||||
Payments to Acquire Receivables | 0 | 0 | ||||
Proceeds from Sale and Collection of Receivables | 0 | 0 | ||||
Payments to Acquire Property, Plant, and Equipment | (11,995) | (41,804) | ||||
Proceeds from Sale of Property, Plant, and Equipment | 0 | 686 | ||||
Net Cash Provided by (Used in) Investing Activities, Intercompany Net Change | 0 | |||||
Net cash used in investing activities | (11,995) | (41,118) | ||||
Proceeds from issuance of asset backed notes, net of original issue discount | 469,814 | 1,067,850 | ||||
Payments on asset backed notes | (816,243) | (736,266) | ||||
Changes in restricted cash balances | 39,599 | (87,900) | ||||
Borrowings from revolving credit facility | 1,257,052 | 529,352 | ||||
Payments on revolving credit facility | (1,082,552) | (858,559) | ||||
Payment of debt issuance costs and amendment fees | (8,172) | (9,775) | ||||
Payments on warehouse facility | (23,066) | 0 | ||||
Proceeds from stock issued under employee benefit plans | 3,011 | 824 | ||||
Net Cash Provided by (Used in) Financing Activities, Intercompany Net Change | 0 | |||||
Proceeds from (Payments for) Other Financing Activities, Including Excess Tax Benefit from Share-based Compensation | (949) | (608) | ||||
Net cash used in financing activities | (81,566) | (95,082) | ||||
Net change in cash and cash equivalents | (10,824) | 46,811 | ||||
Cash and cash equivalents, beginning of period | 23,566 | 12,254 | ||||
Cash and cash equivalents, end of period | 12,742 | 59,065 | 12,742 | 59,065 | ||
Consolidation, Eliminations [Member] | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Borrowings on warehouse facility | 0 | |||||
Cash and Cash Equivalents, at Carrying Value | 0 | 0 | 0 | 0 | 0 | 0 |
Restricted cash | 0 | 0 | ||||
Accounts Receivable, Net, Current | 0 | 0 | ||||
Other Receivables, Net, Current | 0 | 0 | ||||
Inventory, Net | 0 | 0 | ||||
Other Assets, Current | (5,337) | (11,768) | ||||
Total current assets | (5,337) | (11,768) | ||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | (876,073) | (898,256) | ||||
Accounts Receivable, Net, Noncurrent | 0 | 0 | ||||
Property, Plant and Equipment, Net | 0 | 0 | ||||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 0 | 0 | ||||
Other Assets, Noncurrent | 0 | 0 | ||||
Total assets | (881,410) | (910,024) | ||||
Current maturities of long-term debt: | 0 | 0 | ||||
Accounts Payable, Current | 0 | 0 | ||||
Accrued Liabilities and Other Liabilities | (2,949) | (4,399) | ||||
Other Liabilities, Current | (2,387) | (7,370) | ||||
Total current liabilities | (5,336) | (11,769) | ||||
Deferred rent | 0 | 0 | ||||
Long-term debt and capital lease obligations | 0 | 0 | ||||
Other Liabilities, Noncurrent | 0 | 0 | ||||
Total liabilities | (5,336) | (11,769) | ||||
Total stockholders' equity | (876,073) | (898,255) | ||||
Total liabilities and stockholders' equity | (881,409) | (910,024) | ||||
Revenue, Net | 0 | 0 | 0 | 0 | ||
Financial Services Revenue | 0 | 0 | 0 | 0 | ||
Contractually Specified Servicing Fees, Amount | (18,178) | (15,073) | (46,010) | (45,384) | ||
Total revenues | (18,178) | (15,073) | (46,010) | (45,384) | ||
Cost of Goods Sold | 0 | 0 | 0 | 0 | ||
Selling, General and Administrative Expense | (18,178) | (15,073) | (46,010) | (45,384) | ||
Provision for bad debts | 0 | 0 | 0 | 0 | ||
Charges and credits | 0 | 0 | 0 | 0 | ||
Total costs and expenses | (18,178) | (15,073) | (46,010) | (45,384) | ||
Operating income | 0 | 0 | 0 | 0 | ||
Interest expense | 0 | 0 | 0 | 0 | ||
Loss on extinguishment of debt | 0 | 0 | 0 | |||
Income (loss) before income taxes | 0 | 0 | 0 | 0 | ||
Provision (benefit) for income taxes | 0 | 0 | 0 | 0 | ||
Net income (loss) before consolidation | 0 | 0 | 0 | 0 | ||
Income (loss) from consolidated subsidiaries (after tax) | (6,730) | 3,412 | 26,753 | 54,780 | ||
Net income (loss) | (6,730) | 3,412 | 26,753 | 54,780 | ||
Net Cash Provided by (Used in) Operating Activities | 0 | 0 | ||||
Payments to Acquire Receivables | 544,833 | 1,038,226 | ||||
Proceeds from Sale and Collection of Receivables | (544,833) | (1,038,226) | ||||
Payments to Acquire Property, Plant, and Equipment | 0 | 0 | ||||
Proceeds from Sale of Property, Plant, and Equipment | 0 | 0 | ||||
Net Cash Provided by (Used in) Investing Activities, Intercompany Net Change | (12,719) | |||||
Net cash used in investing activities | 0 | (12,719) | ||||
Proceeds from issuance of asset backed notes, net of original issue discount | 0 | 0 | ||||
Payments on asset backed notes | 0 | 0 | ||||
Changes in restricted cash balances | 0 | 0 | ||||
Borrowings from revolving credit facility | 0 | 0 | ||||
Payments on revolving credit facility | 0 | 0 | ||||
Payment of debt issuance costs and amendment fees | 0 | 0 | ||||
Payments on warehouse facility | 0 | |||||
Proceeds from stock issued under employee benefit plans | 0 | |||||
Net Cash Provided by (Used in) Financing Activities, Intercompany Net Change | 12,719 | |||||
Proceeds from (Payments for) Other Financing Activities, Including Excess Tax Benefit from Share-based Compensation | 0 | 0 | ||||
Net cash used in financing activities | 0 | 12,719 | ||||
Net change in cash and cash equivalents | 0 | 0 | ||||
Cash and cash equivalents, beginning of period | 0 | 0 | ||||
Cash and cash equivalents, end of period | 0 | 0 | 0 | 0 | ||
Parent Company [Member] | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Borrowings on warehouse facility | 0 | |||||
Cash and Cash Equivalents, at Carrying Value | 0 | 0 | 0 | 0 | 0 | 0 |
Restricted cash | 0 | 0 | ||||
Accounts Receivable, Net, Current | 0 | 0 | ||||
Other Receivables, Net, Current | 0 | 0 | ||||
Inventory, Net | 0 | 0 | ||||
Other Assets, Current | 0 | 0 | ||||
Total current assets | 0 | 0 | ||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | 682,391 | 678,149 | ||||
Accounts Receivable, Net, Noncurrent | 0 | 0 | ||||
Property, Plant and Equipment, Net | 0 | 0 | ||||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 72,554 | 71,442 | ||||
Other Assets, Noncurrent | 0 | 0 | ||||
Total assets | 754,945 | 749,591 | ||||
Current maturities of long-term debt: | 0 | 0 | ||||
Accounts Payable, Current | 0 | 0 | ||||
Accrued Liabilities and Other Liabilities | 4,800 | 686 | ||||
Other Liabilities, Current | 0 | 0 | ||||
Total current liabilities | 4,800 | 686 | ||||
Deferred rent | 0 | 0 | ||||
Long-term debt and capital lease obligations | 220,754 | 219,768 | ||||
Other Liabilities, Noncurrent | 0 | 0 | ||||
Total liabilities | 225,554 | 220,454 | ||||
Total stockholders' equity | 529,391 | 529,137 | ||||
Total liabilities and stockholders' equity | 754,945 | 749,591 | ||||
Revenue, Net | 0 | 0 | 0 | 0 | ||
Financial Services Revenue | 0 | 0 | 0 | 0 | ||
Contractually Specified Servicing Fees, Amount | 0 | 0 | 0 | 0 | ||
Total revenues | 0 | 0 | 0 | 0 | ||
Cost of Goods Sold | 0 | 0 | 0 | 0 | ||
Selling, General and Administrative Expense | 0 | 0 | 0 | 0 | ||
Provision for bad debts | 0 | 0 | 0 | 0 | ||
Charges and credits | 0 | 0 | 0 | 0 | ||
Total costs and expenses | 0 | 0 | 0 | 0 | ||
Operating income | 0 | 0 | 0 | 0 | ||
Interest expense | 4,443 | 4,447 | 13,329 | 13,290 | ||
Loss on extinguishment of debt | 0 | 0 | ||||
Income (loss) before income taxes | (4,443) | (4,447) | (13,329) | (13,290) | ||
Provision (benefit) for income taxes | (1,408) | (2,051) | (4,934) | (4,400) | ||
Net income (loss) before consolidation | (3,035) | (2,396) | (8,395) | (8,890) | ||
Income (loss) from consolidated subsidiaries (after tax) | 4,742 | (1,419) | 11,657 | (16,598) | ||
Net income (loss) | 1,707 | (3,815) | 3,262 | (25,488) | ||
Net Cash Provided by (Used in) Operating Activities | (3,011) | (13,544) | ||||
Payments to Acquire Receivables | 0 | 0 | ||||
Proceeds from Sale and Collection of Receivables | 0 | 0 | ||||
Payments to Acquire Property, Plant, and Equipment | 0 | 0 | ||||
Proceeds from Sale of Property, Plant, and Equipment | 0 | 0 | ||||
Net Cash Provided by (Used in) Investing Activities, Intercompany Net Change | 12,719 | |||||
Net cash used in investing activities | 0 | 12,719 | ||||
Proceeds from issuance of asset backed notes, net of original issue discount | 0 | 0 | ||||
Payments on asset backed notes | 0 | 0 | ||||
Changes in restricted cash balances | 0 | 0 | ||||
Borrowings from revolving credit facility | 0 | 0 | ||||
Payments on revolving credit facility | 0 | 0 | ||||
Payment of debt issuance costs and amendment fees | 0 | 0 | ||||
Payments on warehouse facility | 0 | |||||
Proceeds from stock issued under employee benefit plans | 824 | |||||
Net Cash Provided by (Used in) Financing Activities, Intercompany Net Change | 0 | |||||
Proceeds from (Payments for) Other Financing Activities, Including Excess Tax Benefit from Share-based Compensation | 0 | 1 | ||||
Net cash used in financing activities | 3,011 | 825 | ||||
Net change in cash and cash equivalents | 0 | 0 | ||||
Cash and cash equivalents, beginning of period | 0 | 0 | ||||
Cash and cash equivalents, end of period | 0 | 0 | 0 | 0 | ||
Guarantor Subsidiaries [Member] | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Borrowings on warehouse facility | 0 | |||||
Cash and Cash Equivalents, at Carrying Value | 12,742 | 59,065 | 23,566 | 12,254 | 12,742 | 23,566 |
Restricted cash | 0 | 0 | ||||
Accounts Receivable, Net, Current | 275,614 | 173,054 | ||||
Other Receivables, Net, Current | 63,203 | 69,286 | ||||
Inventory, Net | 235,479 | 164,856 | ||||
Other Assets, Current | 18,865 | 21,505 | ||||
Total current assets | 605,903 | 452,267 | ||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | 193,682 | 220,107 | ||||
Accounts Receivable, Net, Noncurrent | 385,629 | 295,522 | ||||
Property, Plant and Equipment, Net | 144,747 | 159,202 | ||||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 0 | 0 | ||||
Other Assets, Noncurrent | 6,285 | 6,913 | ||||
Total assets | 1,336,246 | 1,134,011 | ||||
Current maturities of long-term debt: | 699 | 849 | ||||
Accounts Payable, Current | 109,738 | 101,612 | ||||
Accrued Liabilities and Other Liabilities | 59,463 | 40,287 | ||||
Other Liabilities, Current | 21,342 | 25,230 | ||||
Total current liabilities | 191,242 | 167,978 | ||||
Deferred rent | 87,152 | 87,957 | ||||
Long-term debt and capital lease obligations | 356,514 | 179,044 | ||||
Other Liabilities, Noncurrent | 18,946 | 20,883 | ||||
Total liabilities | 653,854 | 455,862 | ||||
Total stockholders' equity | 682,391 | 678,149 | ||||
Total liabilities and stockholders' equity | 1,336,245 | 1,134,011 | ||||
Revenue, Net | 291,808 | 308,033 | 857,506 | 958,574 | ||
Financial Services Revenue | 45,228 | 22,326 | 122,305 | 85,560 | ||
Contractually Specified Servicing Fees, Amount | 18,178 | 15,073 | 46,010 | 45,384 | ||
Total revenues | 355,214 | 345,432 | 1,025,821 | 1,089,518 | ||
Cost of Goods Sold | 175,591 | 192,374 | 519,847 | 605,709 | ||
Selling, General and Administrative Expense | 125,355 | 114,457 | 343,043 | 347,550 | ||
Provision for bad debts | 44,454 | 31,672 | 64,438 | 88,084 | ||
Charges and credits | 5,861 | 1,987 | 11,156 | 5,408 | ||
Total costs and expenses | 351,261 | 340,490 | 938,484 | 1,046,751 | ||
Operating income | 3,953 | 4,942 | 87,337 | 42,767 | ||
Interest expense | 4,979 | 3,876 | 7,501 | 10,496 | ||
Loss on extinguishment of debt | 0 | 349 | ||||
Income (loss) before income taxes | (1,026) | 1,066 | 79,487 | 32,271 | ||
Provision (benefit) for income taxes | (324) | 492 | 29,420 | 10,685 | ||
Net income (loss) before consolidation | (702) | 574 | 50,067 | 21,586 | ||
Income (loss) from consolidated subsidiaries (after tax) | 1,988 | (1,993) | (38,410) | (38,184) | ||
Net income (loss) | 1,286 | (1,419) | 11,657 | (16,598) | ||
Net Cash Provided by (Used in) Operating Activities | (635,568) | (606,570) | ||||
Payments to Acquire Receivables | 0 | 0 | ||||
Proceeds from Sale and Collection of Receivables | 544,833 | 1,038,226 | ||||
Payments to Acquire Property, Plant, and Equipment | (11,995) | (41,804) | ||||
Proceeds from Sale of Property, Plant, and Equipment | 0 | 686 | ||||
Net cash used in investing activities | 532,838 | 997,108 | ||||
Proceeds from issuance of asset backed notes, net of original issue discount | 0 | 0 | ||||
Payments on asset backed notes | (78,780) | 0 | ||||
Changes in restricted cash balances | 0 | 0 | ||||
Borrowings from revolving credit facility | 1,257,052 | 529,352 | ||||
Payments on revolving credit facility | (1,082,552) | (858,559) | ||||
Payment of debt issuance costs and amendment fees | (2,865) | (1,192) | ||||
Payments on warehouse facility | 0 | |||||
Proceeds from stock issued under employee benefit plans | 0 | |||||
Net Cash Provided by (Used in) Financing Activities, Intercompany Net Change | (12,719) | |||||
Proceeds from (Payments for) Other Financing Activities, Including Excess Tax Benefit from Share-based Compensation | (949) | (609) | ||||
Net cash used in financing activities | 91,906 | (343,727) | ||||
Net change in cash and cash equivalents | (10,824) | 46,811 | ||||
Cash and cash equivalents, beginning of period | 23,566 | 12,254 | ||||
Cash and cash equivalents, end of period | 12,742 | 59,065 | 12,742 | 59,065 | ||
Non-Guarantor Subsidiaries [Member] | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Borrowings on warehouse facility | 79,940 | |||||
Cash and Cash Equivalents, at Carrying Value | 0 | 0 | 0 | 0 | 0 | 0 |
Restricted cash | 71,099 | 110,698 | ||||
Accounts Receivable, Net, Current | 360,086 | 529,108 | ||||
Other Receivables, Net, Current | 0 | 0 | ||||
Inventory, Net | 0 | 0 | ||||
Other Assets, Current | 2,387 | 7,368 | ||||
Total current assets | 433,572 | 647,174 | ||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | 0 | 0 | ||||
Accounts Receivable, Net, Noncurrent | 231,036 | 320,382 | ||||
Property, Plant and Equipment, Net | 0 | 0 | ||||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 0 | 0 | ||||
Other Assets, Noncurrent | 0 | 0 | ||||
Total assets | 664,608 | 967,556 | ||||
Current maturities of long-term debt: | 64,952 | 0 | ||||
Accounts Payable, Current | 0 | 0 | ||||
Accrued Liabilities and Other Liabilities | 3,602 | 6,525 | ||||
Other Liabilities, Current | 3,063 | 3,961 | ||||
Total current liabilities | 71,617 | 10,486 | ||||
Deferred rent | 0 | 0 | ||||
Long-term debt and capital lease obligations | 396,010 | 745,581 | ||||
Other Liabilities, Noncurrent | 3,299 | 2,730 | ||||
Total liabilities | 470,926 | 758,797 | ||||
Total stockholders' equity | 193,682 | 208,759 | ||||
Total liabilities and stockholders' equity | $ 664,608 | $ 967,556 | ||||
Revenue, Net | 0 | 0 | 0 | 0 | ||
Financial Services Revenue | 36,136 | 46,414 | 115,834 | 119,909 | ||
Contractually Specified Servicing Fees, Amount | 0 | 0 | 0 | 0 | ||
Total revenues | 36,136 | 46,414 | 115,834 | 119,909 | ||
Cost of Goods Sold | 0 | 0 | 0 | 0 | ||
Selling, General and Administrative Expense | 7,178 | 15,073 | 35,491 | 45,384 | ||
Provision for bad debts | 12,058 | 19,892 | 97,453 | 81,894 | ||
Charges and credits | 0 | 0 | 0 | 0 | ||
Total costs and expenses | 19,236 | 34,965 | 132,944 | 127,278 | ||
Operating income | 16,900 | 11,449 | (17,110) | (7,369) | ||
Interest expense | 8,673 | 15,147 | 41,312 | 49,718 | ||
Loss on extinguishment of debt | 461 | 2,558 | ||||
Income (loss) before income taxes | 7,766 | (3,698) | (60,980) | (57,087) | ||
Provision (benefit) for income taxes | 2,460 | (1,705) | (22,570) | (18,903) | ||
Net income (loss) before consolidation | 5,306 | (1,993) | (38,410) | (38,184) | ||
Income (loss) from consolidated subsidiaries (after tax) | 0 | 0 | 0 | 0 | ||
Net income (loss) | 5,306 | (1,993) | (38,410) | (38,184) | ||
Net Cash Provided by (Used in) Operating Activities | 721,316 | 803,125 | ||||
Payments to Acquire Receivables | (544,833) | (1,038,226) | ||||
Proceeds from Sale and Collection of Receivables | 0 | 0 | ||||
Payments to Acquire Property, Plant, and Equipment | 0 | 0 | ||||
Proceeds from Sale of Property, Plant, and Equipment | 0 | 0 | ||||
Net cash used in investing activities | (544,833) | (1,038,226) | ||||
Proceeds from issuance of asset backed notes, net of original issue discount | 469,814 | 1,067,850 | ||||
Payments on asset backed notes | (737,463) | (736,266) | ||||
Changes in restricted cash balances | 39,599 | (87,900) | ||||
Borrowings from revolving credit facility | 0 | 0 | ||||
Payments on revolving credit facility | 0 | 0 | ||||
Payment of debt issuance costs and amendment fees | (5,307) | (8,583) | ||||
Payments on warehouse facility | (23,066) | |||||
Proceeds from stock issued under employee benefit plans | 0 | |||||
Proceeds from (Payments for) Other Financing Activities, Including Excess Tax Benefit from Share-based Compensation | 0 | 0 | ||||
Net cash used in financing activities | (176,483) | 235,101 | ||||
Net change in cash and cash equivalents | 0 | 0 | ||||
Cash and cash equivalents, beginning of period | 0 | 0 | ||||
Cash and cash equivalents, end of period | $ 0 | $ 0 | $ 0 | $ 0 |