Conn's Inc (CONN) 2024 Q4 法說會逐字稿

Good morning and thank you for holding. Welcome to Conn's Inc's conference call to discuss earnings for the fiscal quarter and year ended January 31, 2024. My name is Doug and I'll be your operator today. (Operator Instructions) As a reminder, this conference call is being recorded at the company's earnings release dated April 11, 2024, was distributed this morning and is accessed via the company's Investor Relations website at ir.conns.com.

早上好，感謝您的耐心等待。歡迎參加康恩公司（Conn's Inc）的電話會議，討論截至 2024 年 1 月 31 日的季度和年度收益。我叫道格，今天由我來為您接聽電話。（操作員說明）提醒各位，本次電話會議正在錄音。本公司於 2024 年 4 月 11 日發布的收益報告已於今天上午發布，可透過公司投資者關係網站 ir.conns.com 存取。

During today's call, management will discuss among other financial performance measures, adjusted net income, adjusted retail segment, operating loss, and adjusted credit segment operating income. Please refer to the company's earnings release that was issued today for a reconciliation of these non-GAAP measures to their most comparable GAAP measures.

在今天的電話會議上，管理階層將討論包括調整後淨收入、調整後零售部門營業虧損和調整後信貸部門營業收入在內的各項財務績效指標。有關這些非GAAP指標與其最接近的GAAP指標的調節表，請參閱公司今天發布的盈利報告。

I must remind you that some of the statements made in the call are forward-looking statements within the meaning of the federal securities laws. These forward-looking statements represent the company's present expectations or beliefs concerning future events. The company cautions that such statements are necessarily based on certain assumptions, which are subject to risks and uncertainties, which could cause actual results to differ materially from those indicated above.

我必須提醒各位，本次電話會議中的一些陳述屬於聯邦證券法意義上的前瞻性陳述。這些前瞻性陳述代表了公司目前對未來事件的預期或信念。該公司提醒，此類聲明必然基於某些假設，而這些假設存在風險和不確定性，可能導致實際結果與上述結果有重大差異。

Your statements, today are Norm Miller, the company's CEO, and Tim Santo, the company's CFO. I would now like to turn the conference call over to Mr. Miller. Please go ahead.

今天發言的是公司執行長諾姆·米勒和公司首席財務長蒂姆·桑托。現在我將把電話會議交給米勒先生。請繼續。

Good morning and thank you for joining today's call to review the progress we are making combining W.S. Badcock & Conn's and our fourth quarter and fiscal year 2024 financial results. I am excited to provide an update on the integration between Babcock and Conn's as well as the progress we are making executing against several near-term strategic priorities, that we believe will position the company for year over year, improvements in retail sales and profitability.

早安，感謝各位參加今天的電話會議，共同回顧我們在合併 W.S. Badcock & Conn 和我們公司第四季度及 2024 財年財務業績方面取得的進展。我很高興向大家報告巴布科克和康恩兩家公司整合的最新進展，以及我們在執行幾個近期策略重點方面的進展。我們相信，這些進展將使公司在零售額和盈利能力方面逐年提高。

As a reminder, on December 18, 2023, we announced and closed a transformative transaction with Babcock by uniting the two companies each with over 120 years of serving customers, we have created a leading home goods retailer with more than 550 retail locations across 15 states in the southern United States.

再次提醒大家，2023 年 12 月 18 日，我們宣布並完成了與 Babcock 的一項變革性交易，將兩家擁有 120 多年服務客戶經驗的公司合併，創建了一家領先的家居用品零售商，在美國南部 15 個州擁有 550 多家零售店。

Once fully integrated, we believe the transaction will accelerate our growth by combining two complementary businesses with similar product categories, payment solutions, and customer profiles while driving material cost savings, enhancing gross margins, and improving operating leverage. Over the past three plus months, the combined leadership team is focused on integrating the two organizations aligning around a common culture and establishing a platform to drive significant revenue and cost synergies in the coming quarters.

我們相信，一旦完全整合，此交易將透過合併兩個互補的業務（擁有相似的產品類別、支付解決方案和客戶群），加速我們的成長，同時大幅降低成本，提高毛利率，並改善營運槓桿。在過去的三個多月裡，合併後的領導團隊專注於整合兩個組織，圍繞著共同的文化進行協調，並建立一個平台，以在未來幾季推動顯著的收入和成本協同效應。

Our cross-functional teams are working with strong momentum to quickly improve our performance and create lasting value for our customers, employees, dealers, communities, and shareholders. As a result, we have identified five near term strategic priorities that includes transitioning Badcock's credit program to Conn's in-house loan product, optimizing our merchandising strategy, fully integrating our combined supply chain, leveraging Conn's e-commerce capabilities, and finally, realizing significant cost synergies.

我們的跨職能團隊正以強勁的勢頭快速提升業績，並為我們的客戶、員工、經銷商、社區和股東創造持久價值。因此，我們確定了五個近期策略重點，包括將 Badcock 的信貸計畫過渡到 Conn 的內部貸款產品，優化我們的商品銷售策略，全面整合我們的合併供應鏈，利用 Conn 的電子商務能力，以及最終實現顯著的成本協同效應。

So with this overview, let's look at the strategic priorities in more detail, starting with efforts to transition Babcock to Conn's credit program. As I mentioned on our last call, Badcock currently provides an in-house revolving credit program to its customers and last year approximately 60% of their sales were financed using this offering. By its nature, revolving credit products provide consumers with higher monthly payments, lower availability, and shorter durations compared to Conn's installment loan product.

綜上所述，讓我們更詳細地了解策略重點，首先是巴布科克學院向康乃狄克州立大學學分計畫過渡的努力。正如我在上次通話中提到的，Badcock 目前向其客戶提供內部循環信貸計劃，去年他們約 60% 的銷售額都是透過這項服務融資的。循環信貸產品本質上與康恩的分期貸款產品相比，會為消費者帶來更高的每月付款額、更低的可用額度和更短的期限。

For example, Badcock's average ticket last year was approximately $1,400, which in the state of Florida equates to a monthly payment of approximately $110. By comparison, the same $1,400 purchase in Florida would have a monthly payment of approximately $56 under Conn's in-house installment loan. As you can see at the same average ticket Badcock's monthly payment is nearly twice as much as Conn's.

例如，巴德科克去年的平均票價約為 1400 美元，這在佛羅裡達州相當於每月約 110 美元的支出。相比之下，在佛羅裡達州購買同樣價值 1400 美元的商品，根據康恩公司的內部分期貸款，每月還款額約為 56 美元。從同樣的平均票價來看，巴德科克的月供幾乎是康恩的兩倍。

We have stated historically that our core customer makes the purchasing decision primarily based on the amount of their monthly payment. As you can see from this example, and with similar product categories and customer profiles, we believe we can significantly increase Badcock's average ticket.

我們一直以來都認為，我們的核心客戶主要根據每月付款金額來做出購買決定。從這個例子可以看出，在類似的商品類別和客戶群中，我們相信我們可以顯著提高 Badcock 的平均客單價。

In fact, Conn's went through a similar multiyear transition and had an average ticket of under $1,600 when I first joined the company in September 2015 compared to an average ticket of over $1,800 today. This successful transition supports a high degree of confidence that we can provide more purchasing opportunities for Badcock's customers.

事實上，康恩公司也經歷了類似的多年轉型，在我 2015 年 9 月剛加入該公司時，平均客單價不到 1,600 美元，而如今平均客單價已超過 1,800 美元。此次成功過渡增強了我們對能夠為 Badcock 的客戶提供更多購買機會的信心。

As a result, we believe credit driven growth strategies will be an important near-term catalyst to unlock revenue and cost synergies in the coming quarters. With much of the work already underway, we have launched Conn's credit in select Badcock stores here in the month of April with the expectation of offering Conn's credit across all Badcock locations by the end of May.

因此，我們認為信貸驅動型成長策略將是未來幾季釋放收入和成本綜效的重要近期催化劑。由於大部分工作已經展開，我們已於 4 月在部分 Badcock 門市推出了 Conn's 信用服務，預計到 5 月底將在所有 Badcock 門市提供 Conn's 信用服務。

We are also pursuing additional credit driven opportunities to capture more customers. First, we will focus on leveraging Conn's prequalified, direct mail and credit-based marketing expertise to drive sales at Badcock. Most recently, Badcock is focused on a product based marketing strategy. While over the years Conn's has utilized credit based marketing channels and messaging to promote our multiple payment options.

我們也積極尋求更多以信貸為導向的機會來吸引更多客戶。首先，我們將專注於利用 Conn 在預篩選、直效郵件和信用行銷方面的專業知識來推動 Badcock 的銷售。最近，巴德科克專注於以產品為基礎的行銷策略。多年來，Conn's 一直利用基於信用的行銷管道和資訊來推廣我們的多種支付方式。

Given our similar geographies, customer profiles, and product categories, we believe we can quickly leverage Conn's credit based marketing experience to better promote the payment options of the combined company.

鑑於我們相似的地理位置、客戶群和產品類別，我們相信我們可以迅速利用康恩的信用行銷經驗，更好地推廣合併後公司的支付方式。

Second, we plan to implement the innovative digital application process, we successfully launched last year. This will make it easier for Badcock's customers to apply for the multiple payment options we provide while limiting the impact a credit application has on a customer's credit score.

其次，我們計劃實施去年成功推出的創新數位化申請流程。這將使 Badcock 的客戶更容易申請我們提供的多種付款方式，同時限制信用申請對客戶信用評分的影響。

The enhancements we made to our application process over the past year had a powerful impact at Conn's as our application volume increased 21.6% year over year.

過去一年，我們對申請流程的改進對康恩公司產生了巨大的影響，我們的申請量比去年同期增加了 21.6%。

Third, we also believe the transition from Badcock's in-house revolving credit product to Conn's in-house installment loan will enhance the yield on Badcock's portfolio.

第三，我們也認為，從 Badcock 的內部循環信貸產品過渡到 Conn 的內部分期貸款將提高 Badcock 投資組合的收益率。

Before we even consider expected increases in Badcock sales we believe the transition to Conn's in-house installment loan will contribute nearly $20 million in incremental finance charges and other revenue once the portfolio is fully seasoned. While the yield will be higher, we expect our customers to benefit from a lower monthly payment and greater purchasing power similar to Conn's successful transition from a retail installment contract to a direct loan structure back in 2016.

在我們甚至考慮 Badcock 銷售額的預期成長之前，我們相信，一旦投資組合完全成熟，過渡到 Conn 的內部分期貸款將帶來近 2000 萬美元的額外融資費用和其他收入。雖然收益率會更高，但我們預計我們的客戶將受益於更低的月付款和更大的購買力，這與康恩公司在 2016 年成功從零售分期付款合約過渡到直接貸款結構的情況類似。

Finally, we expect Badcock to benefit from Conn's 10 plus years of experience offering lease-to-own payment plans to our customers. While Badcock has historically offered third-party lease-to-own plans, it represented only about 3% of sales last year compared to over 9% of Conn's fourth-quarter retail sales, which was the highest quarterly level at Conn's since I rejoined the Company as CEO in October 2022.

最後，我們期望 Badcock 能從 Conn 十多年來為客戶提供租賃購買付款計劃的經驗中受益。雖然 Badcock 歷來提供第三方租賃購買計劃，但去年該計劃僅佔銷售額的 3% 左右，而 Conn's 第四季度零售額的 9% 以上，這是自 2022 年 10 月我重新加入公司擔任首席執行官以來 Conn's 的最高季度水平。

At least our own growth at Conn's reflects the success of our efforts to refocus on our core credit constrained customers. Given Badcock similar product categories, customer profiles and store locations, we believe there are material opportunities to drive lease-to-own sales at Badcock.

至少康恩公司本身的成長反映了我們重新專注於核心信貸受限客戶的努力取得了成功。鑑於 Badcock 與我們的類似產品類別、客戶群和門市位置，我們認為 Badcock 的租賃購買銷售有很大的發展空間。

It's important to note that over the past eight years, Conn's has developed a best-in-class credit infrastructure with a team of highly experienced leaders, supporting sophisticated underwriting, servicing, collections, and recovery capabilities. We expect our credit-driven strategies will quickly contribute to sales growth in the coming quarters and I look forward to updating investors on the success of our rollout on future calls.

值得注意的是，在過去的八年中，康恩公司建立了一流的信貸基礎設施，擁有一支經驗豐富的領導團隊，以支援複雜的承保、服務、收款和追償能力。我們預計，以信貸為導向的策略將在未來幾季迅速促進銷售成長，我期待在未來的電話會議上向投資者匯報我們推廣計劃的成功情況。

Optimizing our merchandising strategy is the next priority, I want to review today. Badcock was founded as a furniture and mattress retailer expanding its product categories over the years to include appliances, consumer electronics, and home office with furniture and mattress sales representing 70% of Badcock's annual sales prior to the transaction.

優化我們的商品銷售策略是下一個重點，也是我今天想重點討論的內容。Badcock 最初是一家家具和床墊零售商，多年來不斷擴展其產品類別，包括家電、消費性電子產品和家庭辦公用品。在交易之前，家具和床墊的銷售額佔 Badcock 年銷售額的 70%。

Conversely, Conn's was founded as an appliance retailer expanding our product categories over the years to include consumer electronics, furniture, mattress, and home office with appliance, electronics, and computers, representing nearly 60% of Conn's product sales prior to the transaction. We believe this complementary sales mix creates opportunities to drive appliance, consumer electronics, and home office sales at Badcock while supporting greater furniture and mattress sales at Conn's.

相反，康恩公司最初是一家家電零售商，多年來不斷擴展產品類別，涵蓋消費性電子產品、家具、床墊和家庭辦公用品，其中家電、電子產品和電腦佔康恩公司交易前產品銷售額的近 60%。我們相信，這種互補的銷售組合將為 Badcock 的家電、消費性電子產品和家庭辦公用品銷售創造機會，同時支持 Conn's 的家具和床墊銷售成長。

As we look at Badcock and Conn's assortment, approximately 95% of our product categories overlap, but we only share 45% of the same vendors. As we align our assortment across our combined product categories, we are focusing on capitalizing on the best selling products at both Conn's and Badcock. We will also take advantage of material margin and cost opportunities as we consolidate vendors, benefit from our larger, scale and leverage the success of both Conn's and Badcock's private-label platforms.

當我們查看 Badcock 和 Conn 的產品系列時，會發現我們大約 95% 的產品類別重疊，但我們只有 45% 的供應商相同。在調整我們合併後的產品類別組合時，我們將重點放在充分利用 Conn's 和 Badcock 最暢銷的產品上。我們也將利用整合供應商帶來的材料利潤和成本機會，受益於我們更大的規模，並利用 Conn's 和 Badcock's 自有品牌平台的成功。

We have already started to realize the initial benefits of transitioning Badcock's expertise in higher-margin furniture and mattress categories to Conn's, combining our assortments and optimizing our merchandising strategy. As we work through our existing inventory over the next 12 to 18 months and further strengthen our assortment, we expect to benefit from additional opportunities to drive sales growth and expand margins over the coming year.

我們已經開始意識到，將 Badcock 在高利潤家具和床墊類別方面的專業知識轉移到 Conn's，結合我們的產品系列並優化我們的商品銷售策略，已經帶來了初步的好處。在接下來的 12 到 18 個月裡，我們將逐步消化現有庫存，並進一步加強產品種類，我們預計將在未來一年裡獲得更多機會來推動銷售成長並擴大利潤率。

We will also benefit from Badcock's higher percentage of furniture and mattress sales. With just six weeks of Badcock's retail sales, our consolidated retail gross margin in the fourth quarter was 38.3% compared to 33.5% in the quarter prior to the transaction, representing a 480 basis point increase. The contribution of Badcock was the primary driver of our gross margin improvement from the third quarter. As our integration efforts continue, we expect our retail gross margin to improve to over 40% in the coming quarters.

我們也將受益於 Badcock 家具和床墊銷售額佔比更高。Badcock 的零售額僅六週就實現了第四季度的綜合零售毛利率，達到 38.3%，而交易前一個季度的毛利率為 33.5%，增長了 480 個基點。Badcock 的貢獻是我們第三季毛利率改善的主要驅動力。隨著整合工作的不斷推進，我們預計未來幾季零售毛利率將提高到 40% 以上。

The next strategic priority I will review today are the enhancements we are making to integrate our supply chains and transition Badcock to Conn's last-mile delivery and service capabilities. In fact, efforts to integrate our supply chain are already underway.

我今天要審查的下一個策略重點是我們正在進行的改進，以整合我們的供應鏈，並將 Badcock 過渡到 Conn 的最後一公里配送和服務能力。事實上，我們已經在著手整合供應鏈。

Recently, we started the process to consolidate regional distribution centers in Florida, Georgia, and North Carolina, where Conn's and Badcock overlap. We have also started to leverage Badcock's International Freight capabilities and expertise, which we believe will improve our cost per container by approximately $1,000 going forward.

最近，我們開始整合位於佛羅裡達州、喬治亞州和北卡羅來納州的區域配送中心，這些地區與康恩和巴德科克的業務重疊。我們也開始利用 Badcock 的國際貨運能力和專業知識，我們相信這將使我們未來的每個貨櫃成本降低約 1000 美元。

To transitioning Badcock's delivery and service capabilities to Conn's best in class platform is another important component of our integration plan. Last year, Conn's provided last-mile delivery services to approximately 74% of our retail sales.

將 Badcock 的交付和服務能力過渡到 Conn 的一流平台是我們整合計畫的另一個重要組成部分。去年，康恩公司為我們約 74% 的零售額提供了最後一公里配送服務。

In addition, 95% of appliance and TV repairs are performed by Conn's employees and our repair time is 50% faster than the industry average. On the other hand, Badcock's delivery and service model is decentralized and differs by location. By transitioning to Conn's centralized platform, we believe we can improve Badcock's customer experience and leverage our existing delivery infrastructure.

此外，95% 的家電和電視維修工作都是由康恩的員工完成的，我們的維修速度比業界平均快 50%。另一方面，Badcock 的配送和服務模式是分散的，並且因地點而異。我們相信，透過過渡到 Conn 的集中式平台，我們可以改善 Badcock 的客戶體驗，並利用我們現有的交付基礎設施。

In addition, since we operate in the same states, we can quickly transition Badcock's last-mile delivery and service capabilities to Conn's while also driving efficiencies. We expect these efforts to provide another opportunity to expand our retail gross margin in the coming quarters.

此外，由於我們在相同的州開展業務，我們可以迅速將 Badcock 的最後一公里配送和服務能力轉移到 Conn's，同時提高效率。我們預計這些舉措將為未來幾季擴大零售毛利率提供另一個機會。

Turning to our e-commerce integration strategies for the year ending January 31, 2024 Conn's had record e-commerce sales of $109.3 million, representing a 38.2% increase from last fiscal year and nearly a nine fold improvement from the $12.6 million in e-commerce sales we achieved just four years ago. Badcock's e-commerce sales were $22.4 million this past year, reflecting a 27% year over year decline. From a balance of sales standpoint, e-commerce represented 11.1% of Conn's total retail sales last year compared to 4.6% at Badcock.

回顧截至 2024 年 1 月 31 日的年度電子商務整合策略，Conn's 的電子商務銷售額創下 1.093 億美元的紀錄，比上個財政年度增長了 38.2%，比四年前實現的 1260 萬美元電子商務銷售額增長了近九倍。Badcock去年的電子商務銷售額為2,240萬美元，年減27%。從銷售平衡的角度來看，去年電子商務佔康恩零售總額的 11.1%，而巴德科克零售總額的比例為 4.6%。

By leveraging Conn's established digital resources and capabilities, we are confident we can improve Badcock's e-commerce sales and begin a multiyear process to align Badcock with Conn's growing balance of e-commerce sales. Initially, we expect to improve Badcock's performance through the actions underway to optimize our product assortment and transition Badcock to Conn's last-mile delivery and service model.

透過利用 Conn 已建立的數位資源和能力，我們有信心提高 Badcock 的電子商務銷售額，並開始一個多年流程，使 Badcock 與 Conn 不斷增長的電子商務銷售結構保持一致。最初，我們希望透過正在實施的措施來改善 Badcock 的業績，這些措施包括優化我們的產品組合，並將 Badcock 過渡到 Conn 的最後一公里配送和服務模式。

During the year, we will begin leveraging Conn's digital marketing capabilities, which includes our recently launched application process and the investments we have made across our digital platform to further support the e-commerce growth strategies of the combined company. As a result, we continue to believe we can grow e-commerce sales to well over $300 million in the next several years.

今年，我們將開始利用 Conn 的數位行銷能力，包括我們最近推出的申請流程以及我們在數位平台上的投資，以進一步支持合併後公司的電子商務成長策略。因此，我們仍然相信，在未來幾年內，我們可以將電子商務銷售額成長到超過 3 億美元。

The final strategic priority I want to review today are the actions we are pursuing to realize significant cost savings and quickly expand profitability. I am pleased to report that we are ahead of plan. And during the fourth quarter alone, we removed approximately $50 million of combined annualized expenses in the form of headcount reductions, optimizing vendor agreements, and eliminating other operating costs, we have identified an additional $50 million of costs that we expect to remove from the combined business over the next 18 months.

今天我想回顧的最後一個策略重點是我們正在採取的行動，以實現顯著的成本節約並迅速提高獲利能力。我很高興地報告，我們的進度超前於計劃。僅在第四季度，我們就透過裁員、優化供應商協議和消除其他營運成本，削減了約 5,000 萬美元的年度合併支出。我們還確定了另外 5000 萬美元的成本，預計將在未來 18 個月內從合併後的業務中削減這些成本。

Looking at our quarter-to-date sales as of today's call. Overall sales are up approximately 40.7% year over year as a result of the contribution of Badcock. Quarter to date, same-store sales for the combined business are down approximately 13.5%. As the year progresses, we expect to see an inflection in same-store sales performance as we benefit from the integration and growth strategies we have outlined today. We also expect market trends for the home related products we sell to improve in the back half of the year.

看看我們截至今天電話會議時的季度迄今為止的銷售情況。由於 Badcock 的貢獻，整體銷售額年增約 40.7%。本季至今，合併後業務的同店銷售額下降了約 13.5%。隨著今年的推進，我們預計同店銷售業績將出現轉機，因為我們將受益於今天概述的整合和成長策略。我們也預計，我們銷售的家居相關產品的市場趨勢將在下半年有所改善。

In addition, we continue to focus on supporting our customers and driving retail sales while prudently managing credit risk as our core customers feel the ongoing effects of higher inflation driven by increased housing cost and car expenses. We believe our sophisticated in-house credit underwriting and collection capabilities, combined with our industry-leading payment options, provide the company with a significant advantage over other retailers.

此外，我們將繼續專注於支持客戶和推動零售銷售，同時謹慎管理信貸風險，因為我們的核心客戶正感受到住房成本和汽車支出增加導致的通貨膨脹持續上升的影響。我們相信，我們先進的內部信貸承銷和收款能力，加上我們行業領先的支付方式，使公司比其他零售商擁有顯著優勢。

Despite a fluid operating environment, we believe fiscal 2025 will be a transformative year for Conn's. The Badcock transaction has exceeded our initial expectations, we have quickly identified powerful operating and financial synergies and created a growth focused integration plan that we are now executing against. While there will be continued onetime costs that will impact our results in the first quarter, we believe our shareholders will begin to see the benefits of our new operating model in the second quarter, and we expect to produce accelerating revenue and earnings growth through this year.

儘管經營環境瞬息萬變，我們相信 2025 財年將是康恩公司具有變革意義的一年。Badcock 的交易超出了我們最初的預期，我們迅速發現了強大的營運和財務協同效應，並製定了以成長為中心的整合計劃，我們現在正在執行該計劃。雖然第一季仍將存在一些一次性成本，這將對我們的業績產生影響，但我們相信股東們將在第二季開始看到我們新營運模式帶來的好處，我們預計今年營收和獲利將加速成長。

I want to reiterate my optimism for our path going forward. Over the coming quarters, I am confident we will start to benefit from the powerful financial model we are creating, which is supported by our premium shopping experience, best-in-class payment offerings, leading e-commerce capabilities, and unique dealer network. In addition, we expect our larger scale will improve purchasing and logistics expenses, while also driving opportunities to leverage fixed costs.

我想重申我對我們未來發展道路的樂觀態度。我相信，在接下來的幾個季度裡，我們將開始從我們正在創建的強大的財務模式中受益，該模式得到了我們優質的購物體驗、一流的支付產品、領先的電子商務能力和獨特的經銷商網路的支持。此外，我們預期規模擴大將改善採購和物流費用，同時也將帶來利用固定成本的機會。

We expect to benefit from more than $100 million of annualized cost synergies as well as over $50 million of revenue synergies over the next 18 months. As positive momentum in our business builds we continue to believe that we can achieve annual adjusted EBITDA of between $180 million to $220 million on total annual sales between $2 billion to $2.2 billion by the end of our next fiscal year.

我們預計在未來 18 個月內，每年可獲得超過 1 億美元的成本綜效以及超過 5,000 萬美元的收入綜效。隨著業務發展勢頭良好，我們仍然相信，到下一個財政年度結束時，我們的年度調整後 EBITDA 可以達到 1.8 億美元至 2.2 億美元，年度總銷售額可以達到 20 億美元至 22 億美元。

I believe strongly we have the right strategies, leadership team, associates, dealers, and platform in place to deliver on the goals we have outlined today. Together, we will have an even greater impact on the communities we serve, and I am excited by the opportunities we have in front of us to produce long-term value for our stakeholders.

我堅信，我們擁有正確的策略、領導團隊、合作夥伴、經銷商和平台，能夠實現我們今天所設定的目標。我們將攜手合作，對我們所服務的社區產生更大的影響，我對我們面前有機會為利益相關者創造長期價值感到興奮。

I would like to take this opportunity as well to acknowledge Tim Santo, who is recently appointed Conn's permanent CFO. Tim, on behalf of everyone at Conn's, congratulations on your promotion. Now I'll turn the call over to Tim to review our financial results in more detail.

我還要藉此機會感謝 Tim Santo，他最近被任命為 Conn 的正式財務長。提姆，我代表康恩公司全體員工，祝賀你升職。現在我將把電話交給提姆，讓他更詳細地回顧一下我們的財務表現。

Thank you, Norm. I'm pleased to join everyone on this morning's call. And excited by the near term strategies we are pursuing to quickly integrate Badcock and produce improving sales and profitability in the coming quarters. I look forward to updating investors on the progress we are making on future calls.

謝謝你，諾姆。很高興今天早上能和大家一起參加電話會議。我們對近期採取的策略感到興奮，這些策略旨在快速整合 Badcock，並在未來幾季提高銷售額和獲利能力。我期待在未來的電話會議上向投資者報告我們的進展。

Our fourth quarter financial performance reflects ongoing industry headwinds as well as one-time costs, primarily associated with the completion of the Badcock transaction on December 18, 2023. In addition, it is important to note that our fourth quarter results include approximately six weeks of Badcock's performance and Badcock's financial results will be consolidated in our quarterly results going forward.

我們第四季度的財務表現反映了持續的行業逆風以及一次性成本，主要與 2023 年 12 月 18 日完成 Badcock 交易有關。此外，值得注意的是，我們第四季的業績包含了 Badcock 大約六週的業績，而 Badcock 的財務業績今後將併入我們的季度業績中。

On a consolidated basis, total revenues were $366.1 million for the fourth quarter, representing a 9.3% year-over-year increase.

從合併基準來看，第四季總營收為 3.661 億美元，年增 9.3%。

For the fourth quarter, the company reported GAAP net income of $43.3 million compared to a GAAP net loss of $42.8 million for the same period in fiscal year 2023. GAAP net income includes a one-time bargain purchase gain of $104.9 million, transaction costs of $16.3 million, and a one-time loss on extinguishment of debt of $14.2 million.

該公司第四季GAAP淨利為4,330萬美元，而2023財年同期GAAP淨虧損為4,280萬美元。GAAP 淨收入包括一次性議價購買收益 1.049 億美元、交易成本 1,630 萬美元以及一次性債務清償損失 1,420 萬美元。

Reconciliations of GAAP to non-GAAP financial measures are available in our fourth quarter earnings press release that was issued this morning. On an adjusted basis, we reported a net loss of $31 million for the fourth quarter compared to a net loss of $36.7 million in that same period last fiscal year.

GAAP 與非 GAAP 財務指標的調整表已在今天早上發布的第四季度收益新聞稿中提供。經調整後，我們第四季淨虧損 3,100 萬美元，而去年同期淨虧損為 3,670 萬美元。

Looking at the performance of our retail segment in more detail. Total retail revenues were $296.9 million in the fourth quarter. The 9.6% year over year increase in retail revenue was primarily driven by Badcock revenue of $60.3 million, offset by a 14.4% decrease in same store sales. Same store sales during the fourth quarter were impacted by lower discretionary spending for home-related products following an extended period of excess consumer liquidity, which resulted in accelerated sales.

讓我們更詳細地了解一下零售業務的表現。第四季零售總收入為 2.969 億美元。零售收入年增 9.6%，主要得益於 Badcock 的營收達到 6,030 萬美元，但被同店銷售額下降 14.4% 所抵銷。第四季同店銷售額受到消費者流動性過剩導致家居相關產品可自由支配支出減少的影響，從而加速了銷售。

For the fourth quarter, retail segment operating loss was $38.1 million compared to a retail segment operating loss of $19.5 million for the same period in fiscal year 2023. On a non-GAAP basis, adjusted retail segment operating loss for the fourth quarter was $21.8 million compared to a loss of $11.7 million for the same period last year. Reflecting a decrease in same-store sales and higher SG&A costs, partially offset by improved retail gross margin.

第四季度，零售部門營業虧損為 3,810 萬美元，而 2023 財年同期零售部門營業虧損為 1,950 萬美元。以非GAAP準則計算，第四季調整後的零售部門營業虧損為2,180萬美元，去年同期虧損為1,170萬美元。反映出同店銷售額下降和銷售、管理及行政費用增加，但零售毛利率提高部分抵銷了這一影響。

Turning to our credit segments, fourth quarter credit revenues increased 10.4% year over year to $70.8 million, primarily due to the addition of Badcock's receivables, partially offset by a decline in the average balance of the Conn's consumer receivable portfolio. Overall, credit trends remain stable, reflecting prudent underwriting strategies aimed at controlling risk during a more uncertain economic period.

再來看我們的信貸業務，第四季信貸收入年增 10.4% 至 7,080 萬美元，主要原因是 Badcock 的應收帳款增加，但部分被 Conn 的消費者應收帳款組合平均餘額下降所抵銷。整體而言，信用趨勢保持穩定，反映出在經濟情勢較為不確定時期，為控制風險所採取的審慎承銷策略。

As a percent of the portfolio, the 60 day delinquency balance was 12.2% at January 31, 2024 compared to 12.7% last fiscal year. The balance of re-aged accounts as a percent of the portfolio was 18.8% compared to 16.5% for the same period in fiscal year 2023. Both 60 day delinquencies and re-aged balances remain well below pre-COVID levels, while we have also experienced a significant increase in the weighted average credit score of -- finance sales.

截至 2024 年 1 月 31 日，60 天逾期餘額佔投資組合的百分比為 12.2%，而上一財年為 12.7%。重新調整帳齡的帳戶餘額佔投資組合的百分比為 18.8%，而 2023 財年同期為 16.5%。60 天逾期率和重新計算帳齡的餘額均遠低於 COVID 疫情前的水平，同時，金融銷售的加權平均信用評分也顯著提高。

In fact, our 60 day delinquency balance has improved by 30 basis points, and the re-aged balance has improved 10.6-percentage-points since January 31, 2020. For the fourth quarter of fiscal year 2024 net charge-offs as a percentage of the average portfolio balance were 15.9% compared to 17.1% for the same period last fiscal year.

事實上，自 2020 年 1 月 31 日以來，我們的 60 天逾期餘額改善了 30 個基點，重新計算後的餘額改善了 10.6 個百分點。2024 財年第四季淨沖銷額佔平均投資組合餘額的百分比為 15.9%，而上一財年同期為 17.1%。

The company reported a credit segment loss before taxes of $53.1 million in the fourth quarter compared to a credit segment loss of $27 million for the same period last fiscal year. On a non-GAAP basis, adjusted credit segment operating income for the fourth quarter was $1.4 million compared to an operating loss of $13.9 million for the same period last year. Reflecting higher credit segment revenue, partially offset by an increase in our provision for bad debt. Our credit spread was 7.5% at January 31, 2024, compared to 9.1% last fiscal year.

該公司報告稱，第四季信貸業務稅前虧損5,310萬美元，而上年同期信貸業務虧損2,700萬美元。以非GAAP準則計算，第四季調整後的信貸部門營業收入為140萬美元，而去年同期營業虧損為1,390萬美元。信貸業務收入增加，但部分被壞帳撥備增加所抵銷。截至 2024 年 1 月 31 日，我們的信用利差為 7.5%，而上個財政年度為 9.1%。

Looking at our balance sheet and capital position in more detail. On January 26, 2024, we completed a $252.6 million ABS transaction with the Class A bond, 13 times oversubscribed and the Class B bond 9 times oversubscribed, which reflects the strong performance of our customer receivables. We anticipate completing two to three additional ABS transactions this year as a result of higher expected sales level.s

更詳細地看一下我們的資產負債表和資本狀況。2024 年 1 月 26 日，我們完成了 2.526 億美元的資產支持證券交易，其中 A 類債券超額認購 13 倍，B 類債券超額認購 9 倍，這反映了我們客戶應收帳款的強勁表現。由於預期銷售額成長，我們預計今年將完成兩到三筆額外的資產支援證券交易。

At January 31, 2024, we had $155.3 million of available borrowing capacity under our $555 million revolving credit facility. In addition, we had $50 million of borrowing capacity available under the delayed draw term loan, resulting in total available borrowing capacity of $205.3 million.

截至 2024 年 1 月 31 日，我們在 5.55 億美元的循環信貸額度下有 1.553 億美元的可用借款額度。此外，我們還有 5,000 萬美元的延期提取定期貸款可用借款額度，使得總可用借款額度達到 2.053 億美元。

As we look forward towards the future, we are excited by the direction Conn's is headed. There will be continued onetime costs that impact our results in the first quarter, but we expect to see the benefits of our new operating model starting in the second quarter.

展望未來，我們對康恩的發展方向感到興奮。第一季仍將存在一些一次性成本，這將對我們的業績產生影響，但我們預計從第二季開始，我們將看到新營運模式的好處。

In addition, we expect to benefit from more than $100 million of annualized cost synergies as well as over $50 million of revenue synergies over the next 18 months. As this positive momentum builds, we expect to generate annual adjusted EBITDA of between $180 million to $220 million on total annual sales of between $2 billion to $2.2 billion by the end of our next fiscal year.

此外，我們預計在未來 18 個月內，每年將獲得超過 1 億美元的成本綜效以及超過 5,000 萬美元的收入綜效。隨著這一積極勢頭的增強，我們預計到下一個財政年度結束時，年度調整後 EBITDA 將達到 1.8 億美元至 2.2 億美元，年度總銷售額將達到 20 億美元至 22 億美元。

Finally, I want to share my thanks to all our team members for their continued hard work, service, and dedication.

最後，我要感謝我們所有團隊成員的持續努力、服務和奉獻。

So with this overview, Norm and I are happy to take your questions. Operator, please open the call to questions.

綜上所述，我和諾姆很樂意回答大家的問題。接線員，請開啟問答環節。

(Operator Instructions) Derek Sommers, Jefferies.

（操作說明）Derek Sommers，傑​​富瑞。

Hi, good morning, everyone. Can you talk about your expectations for store count at both Conn's and Badcock's in the near term?

大家早安。您能否談談您對 Conn's 和 Badcock's 近期門市數量的預期？

Yes, Derek, I appreciate the question. What I would say is, in the near term and don't expect any variance from the 550 stores we currently have longer term. My expectations would be some of the overlap specifically in the Florida market where we are Conn's is relatively new in that market and we've got about 20 stores there and there is some overlap in that market. And North Carolina, there could be some consolidation, but I wouldn't expect that to happen probably until next fiscal year.

是的，德瑞克，感謝你的提問。我想說的是，短期內不會有任何變化，長期來看，我們目前的門市數量仍將維持在 550 家。我的預期是，在佛羅裡達州市場，尤其是康恩百貨所在的市場，會有一些重疊。康恩百貨在該市場相對較新，我們在那裡有大約 20 家門市，因此在該市場存在一些重疊。至於北卡羅來納州，可能會有一些合併，但我預計這種情況可能要到下一個財政年度才會發生。

Okay, got it. And then on the gross margin expansion in this quarter. Can you go into more detail on some of the drivers behind that? How much was attributable the product mix shifted? Were there any other drivers behind the expansion?

好的，明白了。然後是本季的毛利率成長。能否詳細介紹背後的一些驅動因素？產品組合的變化造成了多大程度的影響？此次擴張還有其他驅動因素嗎？

Yeah, very excited about what's happening from a gross margin standpoint with the business. As I mentioned in my prepared comments, the product mix shift is a significant portion of it, that's probably 80% of it, both product mix shift on the Conn's side and bringing the Badcock's -- Badcock higher mix of furniture and mattress into the overall combined business is the primary driver -- driving a higher margin.

是的，我對公司毛利率的發展感到非常興奮。正如我在準備好的評論中提到的，產品組合的變化是其中一個重要因素，可能占到 80%，這既包括 Conn's 的產品組合變化，也包括 Badcock's 的加入——Badcock's 家具和床墊在整體合併業務中的佔比更高，這是主要驅動因素——從而推高了利潤率。

We are seeing improvement from a freight cost standpoint on both sides of the business, which is being helpful as well. So very bullish on the gross margin standpoint. The retail margin, we would expect. As I said in my comments, that to continue to see upside there and that margin to be over 40% on a consistent basis here as we go through the rest of this year and going forward into the future.

從貨運成本的角度來看，業務的供需雙方都有所改善，這也有助於業務發展。因此，我對毛利率前景非常看好。零售利潤率符合預期。正如我在評論中所說，我們將繼續看到上漲空間，並且在今年剩餘的時間裡以及未來很長一段時間內，利潤率將持續超過 40%。

Got it. Thank you. It's very helpful. And then on credit applications for the quarter, kind of year-over-year growth is moderating a bit, but the mix of sales financed continues to grow, which seems a little counter-intuitive. Is there -- can you provide any commentary on what's driving that dynamic or any other color behind it?

知道了。謝謝。這很有幫助。至於本季的信貸申請，年增速有所放緩，但融資銷售佔持續成長，似乎有點違反直覺。您能否就這種動態背後的驅動因素或其他因素提供一些評論？

Sure. Part of the reason that it's you're seeing some moderation in growth is we're starting to lap some of the increases, the dramatic increases we saw in application growth a year ago. But the reason you are still seeing growth, is we're seeing average ticket increase, and we're also seeing better usage. So it's not just a number of applications. It's how many applications are approved and ultimately used. And as we get better and more efficient at targeting the right customers that are going to ultimately be able to use the application. And we're getting more effective in that -- from that front, it actually is enabling us to still drive Conn's financing and LTO financing growth year over year.

當然。之所以會出現成長放緩的情況，部分原因是我們開始逐漸跟不上去年申請量大幅成長的動能。但你們仍然看到成長的原因是，我們看到平均客單價上漲，而且使用率也提高了。所以這不只是申請數量的問題。這是有多少應用程式獲得批准並最終使用。隨著我們越來越擅長、越來越有效率地定位最終能夠使用該應用程式的合適客戶。我們在這方面也越來越有效——從這個角度來看，它實際上使我們能夠繼續推動康恩的融資和長期融資逐年增長。

Got it. And then on the time line for integrating Badcock on to kind of Conn's financing platform. Is there any kind of -- will -- corporate stores from Badcock has more or less access to financing products and franchisee stores. Is there any kind of differentiation there on the store mix?

知道了。然後是巴德科克整合到康恩融資平台的時間表。Badcock 的公司門市和加盟店在融資產品上是否有某種程度的差異？門市組合方面是否有任何差異？

No. There really isn't a differentiation. Currently there is that within the Badcock stores, they're currently offering a third party financing in the corporate stores, but they are still doing Badcock financing and they have in their stores. But as we said there, their in-house financing is not nearly as sophisticated from an underwriting our standpoint as well as the product itself is very different with the installment loan versus the revolving credit.

不。實際上並沒有什麼差別。目前，Badcock 門市正在提供第三方融資服務，但他們仍在自己的門市提供 Badcock 融資服務。但正如我們之前所說，從承銷的角度來看，他們的內部融資遠沒有那麼複雜，而且分期貸款和循環信貸的產品本身也大不相同。

As we roll out, and as I said, in my comments that is already underway. We are already in a number of both corporate stores and dealer stores with the Conn's in-house finance product, and it will be the same across ultimately all approximately 380 stores.

正如我在評論中所說，我們正在逐步推進，這項工作已經在進行中。我們已經在多家公司直營店和經銷商門市推出了 Conn's 的內部金融產品，最終將在所有約 380 家門市推廣該產品。

Remember, even with the dealers, we control, when I say we that the company controls the underwriting, they control the entire credit infrastructure who gets one credit, how much credit, the collection process it will be the same for both dealer stores and corporate stores, all controlled via our credit infrastructure system, which is proven itself to be very, very successful over the last six or seven years.

記住，即使是經銷商，我們也控制著——我說「我們」指的是公司控制著承保，他們控制著整個信貸體系，包括誰能獲得信貸、信貸額度、收款流程等等，經銷商門市和公司門市的流程都一樣，所有這些都透過我們的信貸體系進行控制，而這個體系在過去六七年中已被證明非常非常成功。

I may add to the comment. As Norm mentioned, we are already starting the process of implementing where the corporate stores did not have the legacy Badcock credit platform. We are already seeing a sizable lift in sales in those corporate stores. So we are expecting some very strong results.

我可能會補充一些評論。正如 Norm 所提到的，我們已經開始著手在那些沒有舊版 Badcock 信用平台的公司門市實施新平台。我們已經看到這些公司直營店的銷售額大幅成長。因此，我們預期會取得非常優異的成績。

Got it. That's helpful. And then last one for me. Just any commentary on on tax refund season so far. Any noticeable changes in kind of retail sales activity from that or portfolio collection?ii

知道了。那很有幫助。最後，也是我最後一個問題。大家對目前的退稅季有什麼看法？零售銷售活動或投資組合系列是否有任何明顯變化？

Yeah, I guess having lived through eight or nine of these tax seasons, what I would say is post-COVID this tax season as from a collection standpoint, pretty pleased with where this is shaking out. It's been very solid for us, very similar to last year for us on the Conn's side, very, very solid tax season.

是的，經歷了八到九個這樣的報稅季之後，就新冠疫情後的這個報稅季的徵稅情況而言，我對目前的進展相當滿意。對我們來說，今年的稅務季非常穩健，與去年康恩家族的情況非常相似，稅務季非常非常穩健。

What I will say is on the retail side, since COVID, we did see an uptick, but not nearly to the degree that we had seen previous to the pandemic and COVID, there used to be a larger increase from a from a retail standpoint and when tax season kicked off during the tax season.

我想說的是，就零售業而言，自新冠疫情以來，我們確實看到了成長，但遠不及疫情爆發前和疫情期間的成長幅度。過去，從零售業的角度來看，尤其是在報稅季開始時，成長幅度會更大。

My conclusion to that is that both from a pull forward of demand and with the product categories that we carry and and the state of the consumer right now, there's not quite as robust in the high ticket items within the home has probably the consumer has used those funds for other things to a greater degree than they did probably pre pandemic in our categories.

我的結論是，無論是從提前需求來看，還是從我們所銷售的產品類別以及消費者目前的狀況來看，高價家居用品的需求並不像疫情前那樣強勁，因為消費者可能已經將這些資金更多地用於其他方面，而不是像疫情前那樣用於我們所銷售的產品類別。

All right. Great. That's all for me. Thank you for taking my questions.

好的。偉大的。我的內容就這些了。謝謝您回答我的問題。

Thanks, Derek. Appreciate it.

謝謝你，德里克。謝謝。

There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

隊列中已無其他問題。我想把電話交還給管理階層，請他們做總結發言。

Thank you. Just want to take a moment and express my appreciation to all of our employees across both the Conn's organization and the Badcock organization for their hard work, their contributions, their dedication over the past three or four months as we are working hard to combine the two businesses truly remarkable what they're doing, and it's very much appreciated.

謝謝。我想藉此機會向康恩集團和巴德科克集團的所有員工表達我的感謝，感謝他們在過去三四個月裡為合併兩家公司所付出的辛勤努力、貢獻和奉獻精神。他們所做的一切真的非常了不起，我們對此深表感激。

We also appreciate your interest in the company for those on the call and listening to the call and look forward and excited to share our results and performance in the first quarter as this integration continues. Have a great day.

我們也感謝各位參與電話會議和收聽電話會議的朋友們對公司的關注，並期待與大家分享我們在第一季的業績和表現，因為整合工作仍在繼續。祝你有美好的一天。

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation and you may disconnect your lines at this time. And have a wonderful day.

女士們、先生們，今天的電話會議到此結束。感謝您的參與，您可以暫時斷開線路了。祝您有美好的一天。