CONN'S : , Inc. Announces Closing of Amended and Restated Credit Facility, Execution of Amendment to Senior Notes, and Authorization of a New $100 Million Share Repurchase Program
November 02, 2015 at 10:31 am EST
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November 2, 2015
THE WOODLANDS, Texas--(BUSINESS WIRE)--
Conn's, Inc. (NASDAQ:CONN) (the 'Company'), a specialty retailer of
furniture and mattresses, home appliances, consumer electronics and home
office products, and provider of consumer credit announced today that it
has amended and restated its asset-based revolving credit facility (the
'Amended Credit Facility') that, among other things:
Provides total commitments of $810 million;
Extends the maturity date from November 25, 2017 to October 30, 2018;
Increases the total leverage ratio covenant from 2.0x to 4.0x;
Eliminates the fixed charge coverage ratio covenant and replaces it
with an interest coverage covenant; and
Adds a new minimum liquidity requirement for repurchases of the
Company's common stock, notes and other debt pre-payment, which,
combined with the new total leverage ratio covenant, is expected to
provide the Company greater flexibility for repurchases.
Concurrently with execution of the Amended Credit Facility, the Company
executed a Second Supplemental Indenture (the 'Supplemental Indenture')
to the Indenture (as supplemented or amended, the 'Indenture') that
governs the Company's 7.250% Senior Notes due 2022 (the 'Notes'). The
Supplemental Indenture changes the restricted payments provisions under
the Indenture by:
Amending, from May 1, 2014 to November 1, 2015, the beginning of the
accounting period from which consolidated net income is calculated for
purposes of determining the size of the 'restricted payment basket'
exception to the restricted payments limitation; and
Increasing, from $75.0 million to $375.0 million, the dollar threshold
exception to the restricted payments limitation (together with the
first point, the 'Indenture Amendments').
The Indenture Amendments were approved by the holders of a majority in
principal amount of the Notes through the Company's consent solicitation
that was completed on October 29, 2015.
Norm Miller, Conn's President and Chief Executive Officer commented, 'We
are pleased with the successful completion of these amendments and
believe they reflect the confidence of our lenders and bond holders in
our company. The credit facility, combined with expected future
securitizations and use of high-yield notes provides us with ample
liquidity to pursue our growth initiatives supported by a diversified
capital structure.'
'With the completion of the amendments to our bank facility and senior
notes indenture, we are also pleased to announce an additional $100
million share repurchase program which supports our goal of returning
value to our shareholders while investing in our business and improving
our capital structure. We intend to complete the repurchases under this
authorization during our fiscal quarter ending January 31, 2016, as long
as market conditions and other factors continue to support such use of
our capital. The amendments to our bank facility and senior note
indenture give us the ability to consider additional repurchase programs
over time, dependent on market conditions, capital availability and
other factors.'
The Company utilized substantially all of its authorization available
under the previously approved $75 million repurchase program. During the
quarter ended October 31, 2015, the Company purchased 1.9 million
shares, using $51.6 million of its $75 million stock and bond repurchase
authorization. Additionally, the Company utilized $22.9 million of the
repurchase authorization to acquire $23.0 million of face of value of
its senior notes. As a result of the bond repurchases, the Company
incurred a loss during the quarter of approximately $0.5 million,
related primarily to the write-off of deferred costs related to the
bonds acquired. Additionally, the Company will write off approximately
$0.9 million of deferred costs related to the amendment of its bank
facility.
About Conn's, Inc.
The Company is a specialty retailer currently operating approximately
100 retail locations in Arizona, Colorado, Georgia, Louisiana,
Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South
Carolina, Tennessee and Texas. The Company's primary product categories
include:
Furniture and mattress, including furniture and related accessories
for the living room, dining room and bedroom, as well as both
traditional and specialty mattresses;
Home appliance, including refrigerators, freezers, washers, dryers,
dishwashers and ranges;
Consumer electronics, including LCD, LED, 3-D and Ultra HD
televisions, Blu-ray players, home theater and portable audio
equipment; and
Home office, including computers, printers and accessories.
Additionally, the Company offers a variety of products on a seasonal
basis. Unlike many of its competitors, the Company provides flexible
in-house credit options for its customers in addition to third-party
financing programs and third-party rent-to-own payment plans.
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that
involve risks and uncertainties.
Such forward-looking statements
include information concerning the Company's future financial
performance, business strategy, plans, goals and objectives.
Statements
containing the words 'anticipate,' 'believe,' 'could,' 'estimate,'
'expect,' 'intend,' 'may,' 'plan,' 'project,' 'should,' or the negative
of such terms or other similar expressions are generally forward-looking
in nature and not historical facts.
Although we believe that the
expectations, opinions, projections, and comments reflected in these
forward-looking statements are reasonable, we can give no assurance that
such statements will prove to be correct, and actual results may differ
materially.
A wide variety of potential risks, uncertainties, and
other factors could materially affect the Company's ability to achieve
the results either expressed or implied by the Company's forward-looking
statements including, but not limited to: general economic conditions
impacting the Company's customers or potential customers; the Company's
ability to execute periodic securitizations of future originated loans
including the sale of any remaining residual equity on favorable terms;
the Company's ability to continue existing customer financing programs
or to offer new customer financing programs; changes in the delinquency
status of the Company's credit portfolio; unfavorable developments in
ongoing litigation; increased regulatory oversight; higher than
anticipated net charge-offs in the credit portfolio; the success of the
Company's planned opening of new stores; technological and market
developments and sales trends for the Company's major product offerings;
the Company's ability to protect against cyber-attacks or data security
breaches and to protect the integrity and security of individually
identifiable data of the Company's customers and employees; the
Company's ability to fund its operations, capital expenditures, debt
repayment and expansion from cash flows from operations, borrowings from
the Company's revolving credit facility, and proceeds from accessing
debt or equity markets; the ability to continue the Company's stock
repurchase program; and the other risks detailed in the Company's most
recent SEC reports, including but not limited to, the Company's Annual
Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.
If one or more of these or other
risks or uncertainties materialize (or the consequences of such a
development changes), or should our underlying assumptions prove
incorrect, actual outcomes may vary materially from those reflected in
our forward-looking statements.
You are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
of the date of this press release.
We disclaim any intention or
obligation to update publicly or revise such statements, whether as a
result of new information, future events or otherwise.
All
forward-looking statements attributable to us, or to persons acting on
our behalf, are expressly qualified in their entirety by these
cautionary statements.
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Conn's, Inc. is a specialty retailer of home goods, including furniture and mattresses, appliances and consumer electronics. The Company offers branded durable consumer goods and related services in addition to proprietary credit solutions for its core credit-constrained consumers. The Company operates in two segments: retail and credit. The retail segment operates primarily through its stores and Website. The retail segment product offerings include furniture and mattresses, home appliances, consumer electronics and home office products from global brands across a wide range of price points. The credit segment offers financing solutions to a large, under-served population of credit-constrained consumers who typically have limited credit alternatives. Its appliances include refrigerators, washers and dryers, dishwashers, cooktops, ranges, wall ovens, microwaves, vacuum cleaners, range hoods, parts and accessories, and air conditioners.
CONN'S : , Inc. Announces Closing of Amended and Restated Credit Facility, Execution of Amendment to Senior Notes, and Authorization of a New $100 Million Share Repurchase Program