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Conn's Narrows Q3 Losses

12/02/2010 09:27:54 AM Eastern
Beaumont, Texas - Multiregional CE and appliance chain Conn's reported a fiscal third-quarter loss of $7.8 million, compared with a year-ago loss of $19.3 million.

The improvement largely reflects the absence of one-time charges taken during the same period last year.

Net sales declined 15.2 percent to $136.8 million, and finance charges and other income decreased 8.6 percent to $33 million for the three months, ended Oct. 31. Same-store sales fell 16.3 percent, on top of a 9.3 percent decrease during the year-ago quarter.

Conn's said sales were impacted by weak local economies, tighter customer credit requirements, competitive pricing and capital limitations.

The latter was corrected with yesterday's completion of a refinancing plan that provides $500 million in capital and extends the company's loans out to 2013 and 2014.

Broken out by segment, retail losses before income taxes were $2.2 million for the quarter, compared with a year-ago loss of $19.2 million that included a goodwill impairment charge of $9.6 million and a $4.1 million litigation reserve adjustment.

The credit segment's loss before income taxes was $5.6 million for the quarter, compared with a year-ago loss of $0.1 million, attributed to reduced interest earnings, higher collection expenses and borrowing costs, and a $2.9 million write-off of costs of un-completed financing transactions.

 Conn's operates 76 retail locations in Texas, Louisiana and Oklahoma, including 23 stores in the Houston area, 20 in the Dallas/Fort Worth market, nine in San Antonio, five in Austin, five in southeast Texas, one in Corpus Christi, four in south Texas, six in Louisiana, and three in Oklahoma.
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