Q3 2024 Conn's Inc Earnings Call

Speaker Change: [music].

Good morning, and thank you for holding. Welcome to CONS Inc. conference call to discuss earnings for the fiscal quarter ended October 31, 2023. The transaction went back to home furniture and more. My name is Sherry, and I will be your operator today. During the presentation, all participants will be in a listen-only mode. After the speaker's remarks, you will be invited to participate in the question and answer session.

Good morning, and thank you for holding welcome to <unk>, Inc Conference call to discuss earnings for the fiscal quarter ended October 31st 2023.

Sherry: Transaction went back home furniture M or my name is Sherry and I will be your operator today during the presentation, all participants will be in a listen only mode.

Sherry: After the Speakers' remarks, you will be invited to participate in the question and answer session.

As a reminder, this conference call is being recorded. The company's earnings release dated December 18, 2023, was distributed yesterday evening, as well as a press release on the transaction with Badcock Home Furniture and more. Both releases can be accessed via company investor relations website at ir.cons.com.

Sherry: As a reminder, this conference call is being recorded the company's earnings release dated December 18th 'twenty to 'twenty three with distributed yesterday evening as well as the press release on the transaction with Babcock home furniture and more both really says can be accessed via company Investor Relations website.

Sherry: I, our dotcom dotcom.

During today's call, management will discuss, among other financial performance measures, adjusted retail segment operating loss. 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.

Sherry: During today's call management will discuss among other financial performance measures adjusted retail segment operating loss. 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 I must remind you that some of the.

I must remind you that some of the statements made in this call are forward-looking statements.

Sherry: That's made in this call are forward looking statements within the meaning of federal security laws. These forward looking statements represent the company's present expectations or beliefs concerning future events. The company questions that such statements are necessarily based on certain assumptions, which are subject to.

within the meaning of federal security laws. These forward-looking statements represent the company's present expectations or beliefs concerning future.

the company questions 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 today. Your speakers today are Norm Miller, the company manager.

Risks and uncertainties, which cause cause actual results to differ materially from those indicated today. Your speakers today are norm Miller, the company's CEO and Tim Santo the company's interim CFO I would now like to turn the call over to Mr. Miller. Please go ahead.

CEO and Tim Santo, the company's interim CFO . I would now like to turn the call over to Mr. Miller. Please go ahead.

Good morning and thank you for joining today's call to review cons transaction with bad cock home furniture and more and our third quarter fiscal year 2024 financial results.

Norm Miller: Good morning, and thank you for joining today's call to review Collins transaction with bad Cock home furniture and more in our third quarter fiscal year 2024 financial results.

I am thrilled to speak with everyone today regarding Khan's transformative transaction with Badcock. By uniting 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 and generating approximately $1.85 billion in annual revenue.

I am thrilled to speak with everyone today regarding cons transformative transaction with bad cocked by uniting 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.

Norm Miller: States in the southern United States, and generating approximately $1.85 billion in annual revenue.

The transaction is a transformative opportunity for cards as we believe it 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.

The transaction is a transformative opportunity for CONS as we believe it 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 across the combined business.

And improving operating leverage across the combined business.

As a result, we believe we can create significant value for our customers, team members, communities, and shareholders.

Norm Miller: As a result, we believe we can create significant value for our customers team members communities and shareholders.

For those of you not familiar with Badcock, the company was founded in 1904 and currently operates nearly 380 Badcock home furniture and more stores across eight southeastern states.

Norm Miller: For those of you not familiar with bad Cock. The company was founded in 19 O. Four and currently operates nearly 380 bed cock home furniture in more stores across eight south Eastern states.

Like cons, many of Badcock's customers are multi-generational and rely on Badcock's payment solutions to help turn their house into a home.

Norm Miller: Like cause many of bad Cox customers are multi generational and rely on bad Cox payment solutions to help turn their house into a home.

For the past two years Mitchell styles has helped lead bad Cogs approximately 1000 associates is the company's president and Chief operating officer.

For the past two years, Mitchell Stiles has helped lead Badcox approximately 1,000 associates as the company's president and chief operating officer.

Mitchell has held a variety of positions of increased responsibility over his 20 year tenure with the company and I look forward to working with him as a member of the CON's leadership team.

Norm Miller: Mitchell has held a variety of positions of increased responsibility over its 20 year tenure with the company and I look forward to working with him as a member of the cons leadership team.

Throughout its history, Badcock has been known as a strong regional furniture and mattress retailer with approximately 70% of Badcock's annual sales coming from these categories.

Norm Miller: Throughout its history bad talk has been known as a strong regional furniture and mattress retailer with approximately 70% of bad Cox annual sales coming from these categories.

The remaining 30% of Badcock sales are primarily appliances, electronics, and home office equipment.

Norm Miller: The remaining 30% of bad car sales are primarily appliances electronics and home office equipment.

A critical part of Badcock's customer value proposition is the flexible financing solutions the company has provided throughout its history.

A critical part of bad Koch customer value proposition is the flexible financing solutions. The company has provided throughout its history.

Norm Miller: Approximately 60% of bad Cox retail sales are supported by an in house payment program called Bad Cock easy purchase.

Approximately 60% of Badcock's retail sales are supported by an in-house payment program called Badcock Easy Purchase.

In addition, 10% of retail sales are supported by third-party financing and lease-to-own solutions, while the remaining 30% of retail sales are cash purchases.

In addition, 10% of retail sales are supported by third party financing and lease to own solutions, while the remaining 30% of retail sales are cash purchases.

Norm Miller: Yeah.

Over 75% of Badcock stores are individually owned through an independent dealer network business model, enabling entry into attractive locations with minimal capital investment.

Norm Miller: Over 75% of bad talk stores are individually owned to an independent dealer network business model, enabling entry into attractive locations with minimal capital investments.

This unique model supports multiple opportunities for BADCOX 120 plus independent dealers to thrive in their local communities.

Norm Miller: This unique model supports multiple opportunities for bad Cox 120, plus independent dealers to thrive in their local communities.

We are excited to partner with these important stakeholders and help provide additional growth opportunities for Bad Cocks Dealer Network.

Norm Miller: We are excited to partner with these important stakeholders and help provide additional growth opportunities for bad Koch dealer network.

CONS and BADCOP share complementary businesses with similar histories, product categories, customer profiles, and payment solutions.

Norm Miller: Cons and bad cop share complementary businesses with similar histories product categories customer profiles and payment solutions.

Combined, we believe we can leverage the core capabilities of both CONS and BADCOC to accelerate growth, expand profitability, and provide our customers and team members with greater opportunities as part of a larger and more dynamic company.

Norm Miller: Combined we believe we can leverage the core capabilities of both cards and bad Cox to accelerate growth expand profitability and provide our customers and team members with greater opportunities as part of a larger and more dynamic company.

So, with this background, I want to review the four strategic rationales of the bad cock announcement, starting with how this combination is expected to accelerate sales growth.

Norm Miller: So with this background I want to review the four strategic rationales of the bad Cock announcements starting with how this combination is expected to accelerate sales growth.

The transaction provides a number of compelling revenue synergies that we believe will drive a multiyear growth strategy.

Norm Miller: The transaction provides a number of compelling revenue synergies that we believe will drive a multi year growth strategy.

First, we believe we can capitalize on what has made each company successful over the past 120 plus years.

Norm Miller: First we believe we can capitalize on what has made each company successful over the past 120 plus years.

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.

Norm Miller: <unk> 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 <unk>.

Norm Miller: <unk> annual sales prior to the transaction.

Conversely, cons was founded as an appliance retailer expanding our product categories over the years to include consumer electronics furniture, mattress and home office.

Conversely, Cons was founded as an appliance retailer expanding our product categories over the years to include consumer electronics, furniture, mattress, and home office.

In fact, it was a little over 10 years ago when we started to strategically increase the size of our stores to add a more complete line of furniture and mattress product.

Norm Miller: In fact, it was a little over 10 years ago. When we started to strategically increase the size of our stores to add a more complete line of furniture and mattress products.

In fiscal 2012, furniture and mattress sales accounted for 14.9% of total product sales compared to 33.8% in fiscal 2023.

Norm Miller: In fiscal 2012 furniture, and mattress sales accounted for 14.9% of total product sales compared to 33, 8% in fiscal 2023.

Going forward, we expect the furniture and mattress categories to represent approximately 47% of our combined annual revenue, and we believe the transaction with Badcock will drive further growth of these high-margin categories.

Going forward, we expect the furniture and mattress categories to represent approximately 47% of our combined annual revenue and we believe the transaction with Babcock will drive further growth of these high margin categories.

As a result, we believe this complementary sales mix creates opportunities to drive appliance, consumer electronics, and home office sales at BADCOC while supporting greater furniture and mattress sales at CON.

Norm Miller: As a result, we believe this complementary sales mix creates opportunities to drive appliances consumer electronics and home office sales at bad Cock, while supporting greater furniture and mattress sales at cons.

It also improves the customer experience by expanding the in-store and online product assortment of the combined entity.

Norm Miller: It also improves the customer experience by expanding the in store and online product assortment of the combined entity.

As part of our complementary product categories, we also believe we can leverage both CONS and Badcock's private label platforms to accelerate the growth of the combined business.

Norm Miller: As part of our complementary product categories. We also believe we can leverage both cards and bad Cox private label platforms to accelerate the growth of the combined business.

As a reminder, DreamSpot is our private mattress brand that has quickly become the number one selling brand within our mattress category. While our in-house furniture brand, Villa Hill, has become our fastest growing furniture brand.

Norm Miller: As a reminder, dream spot is our private mattress brand that has quickly become the number one selling brand within our mattress category, while our in house furniture brand Villa Hill has become our fastest growing furniture brand.

The bad Caulk has been following a similar private label strategy for the past five years as a result by combining the expertise and resources of both cards and bad Caulk. We believe we can increase our overall capabilities to develop and implement private label products across multiple <unk>.

BADCOC has been following a similar private label strategy for the past five years. As a result, by combining the expertise and resources of both CONS and BADCOC, we believe we can increase our overall capabilities to develop and implement private label products across multiple categories and drive additional revenue and margin opportunities.

Norm Miller: Categories and drive additional revenue and margin opportunities.

Second, Badcock provides a network of over 310 dealer-owned stores, operated by more than 120 independent and local entrepreneurs. This is a compelling structure that allows dealers to thrive in their local communities while offering lower store start-up costs and faster store openings than corporate-owned stores.

Second Bad card provides a network of over 310 dealer owned stores operated by more than 120 independent and local entrepreneur is this is a compelling structure that allows dealers to thrive in their local communities offering lower store startup cost.

Norm Miller: And faster store openings than corporate owned stores.

Norm Miller: The bad Cock maintains ownership of the inventory and consigned it to the dealers.

The BADCOC maintains ownership of the inventory and consigns it to the dealers. Dealers are paid a variable commission based on sales and all credit origination and collection activities are centralized through the company's corporate office.

Norm Miller: Dealers are paid a variable commission based on sales and all credit origination and collection activities are centralized to the company's corporate office.

Importantly, dealer-owned stores are typically smaller at around 17,000 square feet and are in more rural markets compared to cons-average store size and footprint.

Norm Miller: Importantly dealer owned stores are typically smaller at around 17000 square feet and are in more rural markets compared to cause the average store size and footprint.

Norm Miller: We believe this provides meaningful opportunities going forward as we can greatly expand the product assortment customer service and retail and credit capabilities of bad Cox dealer own network.

In addition, we believe the transaction expands our long-term addressable market by allowing us to profitably enter rural and less populated areas, especially in legacy cons markets such as the state of Texas.

Norm Miller: In addition, we believe the transaction expands our long term addressable market by allowing us to profitably enter rural and less populated areas, especially in legacy <unk> markets such as the state of Texas. We are thrilled to welcome bad Cox dealers, the cons and I look forward to.

We are thrilled to welcome Badcox dealers to cons and I look forward to working with these committed business owners to help them grow.

Norm Miller: We're working with these committed business owners to help them grow.

Leveraging Khan's e-commerce infrastructure is the third opportunity we are pursuing to accelerate the growth of the combined company.

Norm Miller: Leveraging cons ecommerce infrastructure is the third opportunity we are pursuing to accelerate the growth of the combined company.

CONS has experienced strong e-commerce growth and robust customer adoption since accelerating investments in our online product, value proposition, digital experience, and distribution capabilities.

<unk> has experienced strong e-commerce growth and robust customer adoption since accelerating investments in our online product value proposition digital experience and distribution distribution capabilities.

As a result, e-commerce sales have increased eightfold from $12.6 million for the year ended January 31, 2020, to more than $100 million on a trailing 12-month basis at the end of the most recent quarter.

Norm Miller: As a result e-commerce sales have increased eightfold from $12 $6 million for the year ended January 31, 'twenty 'twenty to more than $100 million on a trailing 12 month basis at the end of the most recent quarter.

Over the past 12 months, Badcock had e-commerce sales of approximately $24 million, which we believe we can meaningfully expand by leveraging Kahn's digital capabilities and best-in-class logistics network.

Over the past 12 months bad Coquette ecommerce sales of approximately $24 million, which we believe we can meaningfully expand by leveraging <unk> digital capabilities and best in class Logistics network.

As you can see, we believe there are multiple opportunities to drive retail sales within our combined footprint while leveraging our complementary businesses, similar product categories, and customer profiles.

Norm Miller: As you can see we believe there are multiple opportunities to drive retail sales within our combined footprint, while leveraging our complementary businesses similar product categories and customer profiles.

There are also incredible opportunities to unlock revenue, cost synergies, and portfolio management efficiencies by combining CONS, in-house credit platform, and expertise with BADCOC's existing financing capabilities, which is the next important strategic rationale I'd like to review today.

There are also incredible opportunities to unlock revenue cost synergies and portfolio management efficiencies by combining cons in house credit platform and expertise with bad Cox existing financing capabilities, which is the next important strategic rationale I'd like to read.

Norm Miller: View today.

I am confident that Khan's credit infrastructure combined with our full spectrum of payment options are best-in-class solutions supporting a compelling and differentiated customer value proposition.

Norm Miller: I am confident the cons credit infrastructure combined with our full spectrum of payment options are best in class solutions, supporting a compelling and differentiated customer value proposition.

As we look at Badcock's payment offerings, we believe there is a powerful opportunity to leverage Khan's in-house credit platform.

Norm Miller: As we look at bad Cox payment offerings. We believe there is a powerful opportunity to leverage <unk> in house credit platform near.

Near-term initiatives include leveraging our pre-qualified direct mail and credit-based marketing expertise to drive sales of bad cock.

Near term initiatives include leveraging our prequalified direct mail and credit based marketing expertise to drive sales of bad Cock.

Over the coming quarters, we will also transition Badcock's existing revolving in-house credit program to Khan's in-house term loan product, which we expect to enhance Badcock's credit yield and add incremental sales as well.

Norm Miller: Over the coming quarters, we will also transition bad Cox existing revolving in house credit program. The cons in house term loan product, which we expect to enhance bad Koch credit yield and add incremental sales as well.

In addition, we believe we can provide meaningful value to BADCOX customers by implementing Kahn's recently launched digital application process.

In addition.

Norm Miller: <unk>, we believe we can provide meaningful value to bad tox customers by implementing cons recently launched digital application process.

This innovative program will make it easier for BADCOX customers to apply for the multiple payment options we provide while limiting the impact a credit application has on a customer's credit score.

Norm Miller: This innovative program will make it easier for bad Cox customers to apply for the multiple payment options, we provide while limiting the impact of credit application has on our customers credit score.

Since rolling out these enhancements earlier this year, CON's fiscal 2024 nine-month application volume has increased 26%, and we believe we can replicate this performance at BADCOG.

Norm Miller: Since rolling out these enhancements earlier this year cause fiscal 'twenty 'twenty four nine months application volume has increased 26% and we believe we can replicate this performance of bad Cox.

We also expect Badcock to benefit from Khan's 10 plus years of experience offering lease-to-own payment plans to our customers.

Norm Miller: We also expect bad talk to benefit from cons 10, plus years of experience offering lease to own payment plans to our customers.

While Badcock offers third-party lease-to-own plans, it currently represents only 3% of their sales compared to over 8% of cons sales at the end of the third quarter.

While bad Cock offers third party lease to own plans. It currently represents only 3% of their sales compared to over 8% of con sales at the end of the third quarter.

Given Badcock's similar product categories, customer profiles, and store locations, we believe there are material opportunities to drive lease-owned sales at Badcock.

Norm Miller: Given bad Cox similar product categories customer profiles and store locations. We believe there are material opportunities to drive lease to own sales at bad Cock.

I want to stress the importance of CONS credit expertise, infrastructure, and credit team. Not only do these resources support credit-driven revenue and cost synergies, but they also power sophisticated loan servicing, collections, and recovery capabilities.

Norm Miller: I want to stress the importance of cons credit expertise infrastructure and credit team not only do these resources support credit driven revenue and cost synergies, but they also powers sophisticated loan servicing and collections and recovery capabilities.

We will leverage this established platform to prudently manage the performance of the combined portfolio in a stable manner, while simultaneously pursuing significant credit driven revenue growth opportunities.

We will leverage this established platform to prudently manage the performance of the combined portfolio in a stable manner, while simultaneously pursuing significant credit-driven revenue growth opportunities.

Norm Miller: The next strategic rationale I'd like to review today is the powerful scale and platform. This combination generates combined we have created a leading home goods retailer with approximately $1.85 billion in revenue across more than 550 stores.

The next strategic rationale I'd like to review today is the powerful scale and platform this combination generates. Combined, we have created a leading home goods retailer with approximately $1.85 billion in revenue across more than 550 stores. Cons also becomes a top 20 furniture and mattress retailer in the United States based on Furniture Today's latest top 100 list.

Norm Miller: <unk> also becomes a top 20 furniture and mattress retailer in the United States based on furniture today's latest top 100 list.

As a larger furniture and mattress retailer, we believe we will benefit from purchasing and logistics synergies helping support higher retail gross margin in the future.

Norm Miller: As a larger furniture and mattress retailer, we believe we will benefit from purchasing and logistics synergies, helping support higher retail gross margin in the future.

In addition, the combination expands our reach throughout the southeastern United States and into states like Florida and Georgia. These markets, like Texas, offer compelling demographics in our leading states for population growth and economic activity.

Norm Miller: In addition, the combination expands our reach throughout the southeastern United States and in the states like Florida and Georgia.

Norm Miller: These markets like Texas offer compelling demographics in our leading states for population growth and economic activity.

Badcox Florida and Georgia store base alone adds over 200 locations compared to 25 cons locations in Florida and Georgia prior to the transaction.

Norm Miller: Bad Cox, Florida, and Georgia store base alone adds over 200 locations compared to twenty-five cons locations in Florida, and Georgia prior to the transaction.

Badcock enjoys strong unaided brand awareness within Florida and Georgia that is similar to Kahn's awareness in Texas and combined these three states will account for 55% of our store base and approximately 60% of our combined sales.

Norm Miller: Backpack enjoy strong unaided brand awareness within Florida, and Georgia that is similar to kinds of awareness in Texas and combined these three states will account for 55% of our store base and approximately 60% of our combined sales.

Norm Miller: We intend to operate both brands to take advantage of the leading awareness contests in Texas and bad talk has in Florida and Georgia.

We intend to operate both brands to take advantage of the leading awareness Conn's has in Texas and Badcock has in Florida and Georgia.

Norm Miller: In addition, we believe we can leverage bad Cox dealer model to enter smaller more rural markets throughout our footprint in Texas alone. There are over 75 municipalities with populations between 10070 5000 that we believe could support a dealer one store.

In addition, we believe we can leverage Badcock's dealer model to enter smaller, more rural markets throughout our footprint. In Texas alone, there are over 75 municipalities with populations between 10,000 and 75,000 that we believe could support a dealer-owned store, a significant increase in our addressable market.

<unk> increase in our addressable market.

Yeah.

The company will also have a meaningful e-commerce business with approximately $125 million of combined e-commerce sales. Supporting our digital platform is a best in class logistic network that is positioned to provide last mile delivery to approximately 92% of the population that resides in the 15 states in which we operate.

Norm Miller: The company will also have a meaningful ecommerce business with approximately $125 million of combined ecommerce sales supporting our digital platform is a best in class logistic network that is positioned to provide last mile delivery to approximately 92% of the population.

Norm Miller: It resides in the 15 states in which we operate.

In addition, Khan's in-house service platform provides us with another compelling offering to support online and in-store customers across our combined footprint.

Norm Miller: In addition cards and how service platform provides us with another compelling offering to support online and in store customers across our combined footprint.

As a result, we believe we will have an even greater e-commerce value proposition, especially across Badcock's dealer network and in their more rural markets.

Norm Miller: As a result, we believe we will have an even greater e-commerce value proposition, especially across bad Cox dealer network and then they are more rural markets.

Our credit segment will also see the benefits of scale. As a reminder, when I first joined CONS as CEO in September 2015, we started investing heavily to create a powerful credit and collections infrastructure.

Norm Miller: Our credit segment will also see the benefits of scale as a reminder, when I first joined cons as CEO in September 2015, we started investing heavily to create a powerful credit and collections infrastructure.

I am pleased with the progress we have made as we continue to enhance our credit segment and drive stable performance.

Norm Miller: I am pleased with the progress we have made as we continue to enhance our credit segment and drive stable performance with the addition of bad Cox receivables our portfolio has grown to $1 $1 billion and I am confident we can properly manage this increase within our existing infrastructure.

With the addition of BADCOX receivables, our portfolio has grown to $1.1 billion, and I am confident we can properly manage this increase within our existing infrastructure.

As we integrate BADCOX receivables into CONS portfolio, we will remove costs associated with duplicative credit, underwriting and collection systems, and associated expenses.

Norm Miller: As we integrate bad Cox receivables into Karnes portfolio, we will remove cost associated with duplicative credit underwriting and collection systems and associated expenses.

We also believe we can optimize Badcock's credit programs through our innovative application process, lease-to-own capabilities, and an in-house financing option.

We also believe we can optimize bad tax credit programs through our innovative application process lease to own capabilities and our in house financing options.

Norm Miller: The fourth and final strategic rationale of the combination with bad car or the opportunities to significantly strengthen our financial position over.

The fourth and final strategic rationale of the combination with Badcock are the opportunities to significantly strengthen our financial position.

Over the near term, there are two main drivers. First, we have identified over $50 million of cost savings that we expect to realize on a run rate basis in the next 18 months.

Norm Miller: Over the near term there are two main drivers first we have identified over $50 million of cost savings that we expect to realize on a run rate basis in the next 18 months.

Expected cost synergies include the benefits from improved procurement and logistics expenses as a larger company.

Norm Miller: Expected cost synergies include the benefits from improved procurement and logistics expenses as a larger company.

In addition, we are focused on driving efficiencies across the combined organization and we believe there are opportunities to reduce general and administrative as well as corporate and credit segment expenses.

Second, the Badcock transaction strengthens our balance sheet by adding approximately $125 million of incremental liquidity to CON.

Second the bad Cop transaction strengthens our balance sheet by adding approximately $125 million of incremental liquidity to cards. This consists of additional collateral in the form of inventory and accounts receivable that will be added to our borrowing base in conjunction with the transaction.

This consists of additional collateral in the form of inventory and accounts receivable that will be added to our borrowing base.

In conjunction with the transaction, we announced an amendment of our $555 million ABL facility with $400 million of such amount extended from March 2025 to December 2026.

Norm Miller: We announced an amendment of our $555 million ABL facility with 400 million of such amount extended from March 2025 to December 2026.

We will also continue to pursue periodic ABS transactions as we leverage our established and highly successful ABS program. This includes our most recent August 2023 ABS transaction, which was 10 times oversubscribed and reflects the extremely strong demand for our bonds, as well as our ability to access the capital markets, even during challenging market conditions.

Norm Miller: We will also continue to pursue periodic ABS transactions as we leverage our established and highly successful ABS program.

Norm Miller: This includes our most recent August 2023, ABS transaction, which was 10 times oversubscribed and reflects the extremely strong demand for our bonds as well as our ability to access the capital markets, even during challenging market conditions. As a result, we believe we can.

As a result, we believe we can be a more frequent ABS issuer, especially as our scale increases and the diversity of our receivables grow.

Norm Miller: A more frequent ABS issuer, especially as our scale increases and the diversity of our receivables grow.

Norm Miller: With these actions we have significantly improved our balance sheet, providing us with greater resources and flexibility to navigate the current economic environment and support the future growth and capital needs of our business.

Norm Miller: As you can see bad talk is a transformative transaction that we expect will immediately improve our financial performance, while creating a platform for significant long term value creation.

Norm Miller: Over the near term both cards and bad Cox leadership teams share a common vision to ensure a successful integration while positioning the company for long term profitable growth.

Norm Miller: We have an integration strategy in place and our team is committed on executing against this plan. We believe the bad cop transaction complements the strategic priorities, we have recently been pursuing including our efforts to better serve our core credit constrained customers expand our reach.

We have an integration strategy in place and our team is committed on executing against this plan. We believe the Badcock transaction complements the strategic priorities we have recently been pursuing, including our efforts to better serve our core credit-constrained customers, expand our lease-to-own offerings, and accelerate our e-commerce business.

Norm Miller: One offerings and accelerate our e-commerce business.

I am pleased with the progress CONS made during the third quarter, as credit applications increased 41% and e-commerce sales increased nearly 51% to a third quarter record.

Norm Miller: I am pleased with the progress <unk> made during the third quarter as credit applications increased 41% and E. Commerce sales increased nearly 51% to a third quarter record.

Norm Miller: I want to reiterate the importance of the bad cock announcements as the transaction strategically benefits four critical areas of our business first it accelerates cons growth opportunities.

I want to reiterate the importance of the Badcock announcement as the transaction strategically benefits four critical areas of our business.

First, it accelerates Khan's growth opportunities.

Next, it combines Khan's in-house credit platform and expertise with Badcock's existing financing capability.

Norm Miller: Next it combines cons in house credit platform and expertise with bad bad Cox existing financing capabilities.

Third, it increases con scale and expands our presence across the southern United States. And finally, it strengthens our financial profile.

Norm Miller: Third it increases con scale and expands our presence across the southern United States and finally, it strengthens our financial profile.

The combination creates a powerful financial model and customer value proposition 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 benefit purchasing and logistics expenses while also driving opportunities to leverage fixed costs.

Norm Miller: Combination creates a powerful financial model and customer value proposition supported by our premium shopping experience best in class payment offerings, leading ecommerce capabilities and unique dealer network. In addition, we expect our larger scale will benefit purchasing and logistics.

Expenses, while also driving opportunities to leverage fixed cost.

Norm Miller: As a result, we believe the transaction will significantly improve our profitability in the coming quarters by fiscal 2026, which is just two years away. We believe we can achieve annual adjusted EBITDA of between 180 million to $220 million.

As a result, we believe the transaction will significantly improve our profitability in the coming quarters.

By fiscal 2026, which is just two years away, we believe we can achieve annual adjusted EBITDA of between $180 million to $220 million on total annual sales between $2 billion to $2.2 billion.

Norm Miller: Total annual sales between 2 billion to $2 $2 billion.

Finally, as you may have seen in yesterday's press release, I am pleased to share that I have officially reassumed the titles of president and CEO . This decision reflects my confidence as well as the board's confidence in the direction CONS was headed prior to the transaction and the incredible opportunity that transaction represents for our communities, customers, employees, and shareholders.

Norm Miller: Finally, as you may have seen in yesterday's press release I am pleased to share that I have officially reassume. The titles are president and CEO. This decision reflects my confidence as well as the board's confidence in the direction cons was headed prior to the transaction and the incredible opportunity the transat.

Norm Miller: <unk> represents who our communities customers employees and shareholders.

As you may remember, under my prior tenure as president and CEO , the company produced multiple record-setting years of profitable growth that I am focused on replicating as we integrate the transaction and execute against our strategic plan.

As you May remember under my prior tenure as President and CEO. The company produced multiple record setting years of profitable growth that I am focused on replicating as we integrate the transaction and execute against our strategic plan.

I am also excited to introduce Tim Santo, CONS Interim CFO . Tim joined CONS in April 2023 as the company's chief accounting officer. He brings a wealth of accounting and financial expertise and prior to joining CONS held executive level positions at PRA Group and GE Capital.

I'm also excited to introduce Tim Santo <unk> interim CFO, Tim joined Cons. In April 2023 is the company's Chief Accounting officer. He brings a wealth of accounting and financial expertise and prior to joining cards held executive level positions at PRA group and.

Tim Santo: <unk> capital.

Tim and Mitchell join a highly experienced and motivated leadership team that is committed to creating real value for our shareholders.

Tim Santo: Tim and Mitchell joined our highly experienced and motivated leadership team that is committed to creating real value for our shareholders. I believe strongly that cons and bad cock have the right strategy resources and platform deliver on the goals we have laid out here today.

I believe strongly that CONS and BADCOC have the right strategy, resources, and platform to deliver on the goals we have laid out here 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. So with this overview, I'll now turn the call over to Tim.

Tim Santo: 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. So with this overview I'll now turn the call over to Tim.

Tim Santo: Thanks Norm I'm.

I'm excited to join everyone on this morning's call and even more excited by the opportunities the Badcock transaction creates for the combined company.

Tim Santo: I'm excited to join everyone on this morning's call and even more excited by the opportunities the bad cop transaction creates for the combined company.

I believe there is a clear path for CONS to deliver strong financial returns over the coming years, and I look forward to updating investors on the progress we are making on future calls.

Tim Santo: I believe there's a clear path for <unk> to deliver strong financial returns over the coming years and I look forward to updating investors on the progress we are making on future calls.

Tim Santo: Turning to our third quarter financial results.

The fiscal 2024 third quarter was challenging, reflecting persistent industry headwinds primarily associated with pulled forward demand because of consumer trends and government stimulus during the COVID-19 pandemic.

The fiscal 2020 for third quarter was challenging reflecting persistent industry headwinds primarily associated with pulled forward demand because of consumer trends and government stimulus during the COVID-19 pandemic.

On a consolidated basis, total revenues were $280.1 million for the third quarter, representing a 12.8% year-over-year decline.

Tim Santo: On a consolidated basis total revenues were $281 million for the third quarter, representing a 12, 8% year over year decline.

For the third quarter, the company reported a gap net loss of $2.11 per diluted share compared to a loss of $1.04 per diluted share for the same period in fiscal year 2023.

Tim Santo: For the third quarter, the company reported a GAAP net loss of $2.11 per diluted share compared to a loss of $1.04 per diluted share for the same period in fiscal year 2023.

As a reminder, reconciliations of GAAP to non-GAAP financial measures are available in our third quarter earnings press release that was issued yesterday.

Tim Santo: As a reminder, reconciliations of GAAP to non-GAAP financial measures are available in our third quarter earnings press release that was issued yesterday.

looking at the performance of our retail segment in more detail.

Tim Santo: Looking at the performance of our retail segment in more detail.

Total retail revenues were $221.4 million in the third quarter.

Total retail revenues were 221 4 million in the third quarter.

The 13.1% year-over-year decline in retail revenue was primarily driven by a 15% decline in same-store sales and partially offset by new-store growth.

The 13, 1% year over year decline in retail revenue was primarily driven by a 15% decline in same store sales and partially offset by new store growth.

Same store sales during the third quarter were impacted by lower discretionary spending for home-related products following an extended period of excess consumer liquidity, which resulted in accelerated sales.

Same store sales during the third quarter were impacted by lower discretionary spending for home related products. Following an extended period of excess consumer liquidity, which resulted in accelerated sales.

Tim Santo: Yeah.

For the third quarter, retail segment operating loss was $24.8 million compared to a retail segment operating loss of $17.7 million for the same period in fiscal year 2023.

Tim Santo: For the third quarter retail segment operating loss was $24 $8 million compared to our retail segment operating loss of $17 $7 million for the same period in fiscal year 2023.

The greater year-over-year retail segment operating loss was primarily due to a decrease in revenue as described above and higher SG&A costs partially offset by an improvement in retail gross margin. Turning to our third

Tim Santo: The greater year over year retail segment operating loss was primarily due to a decrease in revenue as described above and higher SG&A costs, partially offset by an improvement in retail gross margin.

Tim Santo: Turning to our third quarter credit segment performance.

Finance charges and other revenues declined 7.6% year over year to $61.5 million, primarily due to a decline in the average balance of the customer receivable portfolio.

Tim Santo: <unk> charges and other revenues declined seven 6% year over year to $61.5 million, primarily due to a decline in the average balance of the customer receivable portfolio.

Tim Santo: Overall credit trends remain stable, reflecting prudent underwriting strategies aimed at controlling risk during a more uncertain economic landscape.

Overall, credit trends remain stable, reflecting prudent underwriting strategies aimed at controlling risk during a more uncertain economic landscape.

Tim Santo: As a percentage of the portfolio. The 60 day delinquency balance was 11% at October 31, 2023, compared to 12, 2% at October 31 2022.

As a percent of the portfolio, the 60-day delinquency balance was 11% at October 31, 2023, compared to 12.2% at October 31, 2022.

The balance of re-aged accounts as a percent of the portfolio was 18.1% compared to 16.5% for the same period in fiscal year 2023.

Tim Santo: The balance of re aged accounts as a percent of the portfolio was 18, 1% compared to 16, 5% for the same period in fiscal year 2023.

For the third quarter of fiscal year 2024, net charge offs as a percent of the average portfolio balance were 13, 6% compared to 13, 7% for the same period last fiscal year.

For the third quarter of fiscal year 2024, net charge-offs as a percent of the average portfolio balance were 13.6% compared to 13.7% for the same period last fiscal year.

The company reported a credit segment loss before taxes of $36 million in the third quarter compared to a credit segment loss of $11.8 million for the same period last fiscal year.

Tim Santo: The company reported a credit segment loss before taxes of $36 million in the third quarter compared to a credit segment loss of $11 $8 million for the same period last fiscal year.

The greater credit segment loss before taxes was primarily due to higher interest expense, as well as a reduction in our credit spread, which declined to 8.7% compared to 9.8% in the same period last fiscal year.

Tim Santo: The greater credit segment loss before taxes was primarily due to higher interest expense as well as a reduction in our credit spread which declined to eight 7% compared to nine 8% in the same period last fiscal year.

Tim Santo: Yeah.

With this overview, and before we turn, we open the call to questions.

Tim Santo: With this overview and before we turn we open the call to questions I want to turn the call back over to norm to review some financial considerations related to the bad cocked transaction and our high level expectations for the fourth quarter.

Norm Miller: Thanks, Tim as we integrate bad cock and pursue our long term strategic growth priorities I want to review our expectations for the fourth quarter.

First, it is important to consider that approximately seven weeks of BADCOX financial results will be included in our fourth quarter. Quarter to date, CONS total sales have been trending down approximately 13%, and we expect this trend to continue through the fourth quarter.

First it is important to consider that approximately seven weeks of bad Cox financial results will be included in our fourth quarter quarter to date cons total sales had been trending down approximately 13% and we expect this trend to continue through the fourth quarter.

On a year-over-year basis, we expect fourth quarter consolidated revenue will benefit from approximately $58 million to $61 million of BADCOC retail sales and approximately $10 million to $12 million of credit segment revenue.

Norm Miller: On a year over year basis, we expect fourth quarter consolidated revenue will benefit from approximately 58 million to $61 million, a bad car retail sales and approximately 10 million to $12 million of credit segment revenue.

We remain focused on reducing SG&A, but expect elevated SG&A in the fourth quarter associated with new con stores, approximately seven weeks of bad Cox SG&A expenses, and one-time expenses associated with the transaction.

Norm Miller: We remain focused on reducing SG&A, but expect elevated SG&A in the fourth quarter associated with new Con stores, approximately seven weeks of bad Cox SG&A expenses, and one time expenses associated with the transaction.

We are excited to integrate Badcock into cons as the transaction immediately enhances our scale, strengthens our financial profile and creates a powerful foundation for the future.

We are excited to integrate bad cock into cons as the transaction immediately enhances our scale strengthens our financial profile and creates a powerful foundation for the future.

Over the next several quarters, we are focused on accelerating sales growth by pursuing product, dealer e-commerce, and credit-driven growth strategies while simultaneously increasing gross margin and reducing our operating expenses.

Over the next several quarters, we are focused on accelerating sales growth by pursuing product dealer e-commerce and credit driven growth strategies, while simultaneously, increasing gross margin and reducing our operating expenses.

As a result, in two years, we expect to achieve between $2 billion and $2.2 billion in annual revenue and $180 million to $220 million in adjusted EBITDA by fiscal year 2026.

Norm Miller: As a result in two years, we expect to achieve between 2 billion and $2 2 billion in annual revenue and 180 million to $220 million and adjusted EBITDA by fiscal year 2026, we are working hard to position the company for long term success and IRA.

We are working hard to position the company for long-term success, and I look forward to sharing the progress we are making in our future calls.

Norm Miller: Forward to sharing the progress we are making in our future calls Phi.

Finally, I want to share my thanks and appreciation to all our team members for their continued hard work, service, and dedication. I also want to welcome Badcock's employees, their dealers, vendors, and customers to the company. I look forward to working with all of you as we create significant value for our combined enterprise.

Norm Miller: Finally, I want to share my thanks, and appreciation to all our team members for their continued hard work service and dedication I also want to welcome bad Cox employees their dealers vendors and customers to the company I look forward to working with all of you as we create significant value for our.

Norm Miller: Combined enterprise.

So, with this overview, Tim and I are happy to take your questions. Operator, please.

So with this overview, Tim and I are happy to take your questions.

Speaker Change: Operator, please open the call up to questions.

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Once again, it is star 1 on your telephone keypad to ask a question.

Speaker Change: Once again it is star one on your telephone keypad to ask a question.

Speaker Change: Our first question.

Speaker Change: It's from Vincent Fantastic with Stephens. Please proceed.

is from Vincent Santic with Stevens. Please proceed.

Hey, good morning. Thanks for taking my questions and congratulations on the.

Vincent Fantastic: Hey, good morning, Thanks for taking my questions and congratulations on the acquisition looks a very transformative very helpful.

a very transformative, very helpful. I guess first off, I was wondering if there's any help you can give us in terms of just the BADCOC financials since we're trying to figure out how to think about 2024 modeling.

Vincent Fantastic: I guess first off I was wondering if there's any help you can give us in terms of just the bad financial sense, where I'm trying to figure out how to.

Vincent Fantastic: So how to think about 2020 foot modeling of.

of EBITDA and so forth, or maybe if you could give us what the performance was in 2020.

Vincent Fantastic: EBITDA, so forth or maybe if you could give us what the performance wasn't any help you could give us would be helpful. Thank you.

Speaker Change: Yeah, well, we'll take that offline with you as you know there's there's.

Yeah, we'll take that offline with you. As you know, they've not been publicly traded here for the last eight months or so. And they were reported as a subset as a public company with FRG. So there's a lot of moving parts there with some of the sales of their portfolio that they've done transaction-wise. So we'll talk with you offline with that, Vincent, to help you with the proposal.

Speaker Change: <unk> not been publically traded here for the last eight months or so and they were.

Speaker Change: Reported as subs subset as a public company with FRG. So theres a lot of moving parts there with some of the sales of their portfolio that they've done transaction wise. So.

Speaker Change: Well talk with you offline with that Vince and if that help you with the modeling.

Yep, that sounds good. Yeah, I figured from my last model on bad cop, probably

Yes, that's absolutely I figure for my last model on bedrock with probably some changes so appreciate that.

In terms of some of the moving pieces, the finance receivables and that funding part of the bad cop business.

Speaker Change: In terms of some of the moving pieces, the finance receivables and debt funding part of the business.

So I appreciate that CONS will be able to add your financing capabilities.

Speaker Change: So I appreciate that.

Speaker Change: That cost will be able to add your financing capabilities.

Speaker Change: Bagged coffee business can be plumbing side was sold but if you could talk about are you acquiring bangkok's finance receivables.

funding side was sold. But if you could talk about, are you acquiring Badcox finance receivables and will everything be running on the cons platform going forward in terms of...

Speaker Change: We will ever be everything to be running on the cost platform going forward in terms of the funding side.

Speaker Change: Yeah. So.

Uh, over the past year, Badcock has sold off, uh,

Speaker Change: Over the past year Bangkok has sold off.

significant part of their receivables. However, we are bringing over about $100 million of their receivables. We will continue to service in a servicer agreement the existing securitized, that have been securitized privately, their existing portfolio.

Speaker Change: Significant part of their receivables. However, we are bringing over about $100 million of their receivables. We will continue to service in a servicer agreement the existing securitized that have been securitized privately.

Speaker Change: The existing portfolio.

So it's about 100 million of receivables that are coming over that we will manage going forward. And then obviously we will be funding that. Ultimately, we will be moving them from, once we get them integrated into the cons.

Speaker Change: So it's about $100 million of receivables that are coming over that we will manage going forward and then obviously, we will be funding that ultimately we will be moving them.

Speaker Change: Once we get them integrated into the cons.

underwriting platform and the cons in-house financing which

Speaker Change: Underwriting platform in the cons in house financing, which.

is a different product than what they currently operate on. Badcock currently operates with a revolving credit product, and we will move them to the Kahn's installment loan product.

Speaker Change: Is a different product than what they currently operate on a bad car currently operates with a revolving credit product and we will move them to the cons installment loan products, but.

But that's going to take a number of months from an IT standpoint in order to get that fully integrated.

Speaker Change: But that's going to take a number of months from an <unk> standpoint.

Speaker Change: I wanted to get that fully integrated ultimately when we're able to do that it will create.

Ultimately, when we're able to do that, it will create, it will give us the opportunity to increase their yield, number one.

Speaker Change: It will give us the opportunity to increase their yield number one and then number two it also it will be a third of our installment product as you know Vincent is a 36 month product versus the revolving credit is much shorter in duration, which is why in the investor deck that we published this morning, you can see their app.

And then number two, it will be our installment product. As you know, Vincent, is a 36-month product versus the revolving credit is much shorter in duration, which is why in the investor deck that we published this morning, you can see their average ticket is about 30% less than our average ticket.

Average ticket is about 30% less than our average ticket in large part because of the type of credit product that we think we have real opportunity with the installment product to lower the monthly.

in large part because of the type of credit product that we think we have real opportunity with the installment product to lower the monthly payment options for the Badcock customer that ultimately will drive more sales and more options for the Badcock customer.

Speaker Change: Monthly payment options for the for the bad cop customer that ultimately will drive more sales and more options for the bad cop customer as well.

Speaker Change: Okay perfect. Thank you and then the next question so great to hear all of the funding actions you are taking with.

Okay, perfect, thank you. And then the next question, so great to hear all of the funding actions you're taking with.

with the ABS and ABL and so forth. Maybe if you could sum it up, like what's your ability to originate? How much is that expanding and how?

Speaker Change: And so forth.

Maybe if you could sum it up like what are the what's your ability to originate and how much is that expanding and how much capability can you give too bad cop.

capability can you give to BEDCOG for growth from your funding action?

Speaker Change: For growth from the year over year funding actions.

Speaker Change: <unk> for your content.

Yes, so as you know Vincent, we've been a regular since...

Speaker Change: Yeah. So as you know Vincent we've been a regular since since I joined the company in 2015 is when we started doing ABS transactions and we've done either one or two of them regularly and been successful as I mentioned in my.

Since I joined the company in 2015 is when we started doing ABS transactions and we've done either one or two of them regularly and been successful as I mentioned in my presentation.

at the ABS market. Our intention is that we will, you know, our ABL and FILO loan that we have gives us ample credit to be able to continue to not only fund the growth we expect from our business but Badcock as well. We will begin securitizing the Badcock loans going forward in the future when they become on our platform. And our expectation is instead of doing one to two ABS transactions a year, we'll be more in the range of three to four but confident that that will not be a.

Speaker Change: If the ABS market. Our intention is that we will in our our ABL and five alone that we have gives us ample credit.

Speaker Change: To be able to continue to not only fund the growth, we expect from our business, but bad cocky as well we will begin securitizing, the bad cock loans going forward in the future when they become on our platform and our expectation is instead of doing one to two ABS transactions a year will be more in the range.

Speaker Change: A three to four but confident that that will not be a a filter or something that will prevent us from accelerating our growth with with the structure that we have in place.

a filter or something that will prevent us from accelerating our growth with the structure that we have in place.

Speaker Change: Perfect. Thank you.

And then the last one from me, I mean, just taking a step back and if you can talk about the consumer, the state of the consumer.

And then the last one for me I mean, just taking a step back and if you can talk about the consumer the state of the consumer.

last quarter and what you're seeing so far this quarter in terms of, you know, they're spending their credit during the holidays.

Last quarter, and what you're seeing so far this quarter.

Speaker Change: In terms of their.

They are spending their credit during the holidays.

Speaker Change: And if there are any differences also between like when we think about it caused consumer versus a top concern.

Speaker Change: Sure Vincent So first I'll answer the last question first.

So first, I'll answer the last question first, that the consumers are very, very similar. When you look at demographically, you know, the cash-constrained, customer-worthy customer in Badcock is similar to our customer, which is why this transaction...

Speaker Change: The consumers are very very similar.

Speaker Change: When you look at demographically.

Speaker Change: Now the cash constrained.

Customer worthy customer in Bangkok is similar to our customer which is why this transaction.

from a transformative standpoint and a strategic rationale standpoint, makes so much sense. We carry the same products, it's a similar customer, we're in similar geography, we have a very similar business model that's fueled and driven by the in-house financing. So in almost every single box, when you compare the two companies, the similarities are there.

From a transformative standpoint, and a strategic rationale standpoint makes so much sense.

Speaker Change: We carry the same products, it's a similar customer we're in similar geography.

Speaker Change: We have a very similar business model, that's the that's fueled and driven by the in house financing. So so in almost every single box.

Speaker Change: When you compare the two companies are the similarities are shocking.

So, that's number one. Number two, as far as the health of the consumer, you know, as you well know, if you look at delinquencies on car loans, on credit cards, personal loans, delinquencies are continuing to be pressured. They're at 12-, 13-year highs from a macro standpoint.

Speaker Change: So that's number one number two as far as the health of the consumer you know as you well know if you look at delinquencies on car loans on credit cards personal loans delinquencies are continuing to be pressured there at 12 13 year is from a macro standpoint, we have.

We have seen that as well and cons pressure From a delinquency standpoint, which has caused us to tighten cons financing in the last

Seen that as well and cause pressure.

Speaker Change: From a delinquency standpoint, which has caused us to tighten our cons financing in the last.

three to four months by about 850 basis points.

Three to four months by about 850 basis points I'm being conservative there to ensure that we keep the portfolio in a stable place even if it cost us a little bit in sales in the short run having said that we did see improvement from quarter two record it's very slight.

being conservative there to ensure that we keep the portfolio in a stable place, even if it costs us a little bit in sales in the short run. Having said that, we did see improvement from quarter two to quarter three, slight improvement from same store sales down 15. For the down 15.

Speaker Change: Improvement.

Speaker Change: From a same store sales down 15, four did down 15, I will say in the month of November same store sales were improved even more so we saw the consumer respond more they were down 12, 9% in the month of November which from a same store sales and a total sales standpoint at.

I will say in the month of November , our same store sales were improved even more. So we saw the consumer respond more. They were down 12.9 percent in the month of November , which.

from a same-store sales and a total sales standpoint at about down 10%, which is the best performance we've seen in about 18 months.

Speaker Change: About <unk> down, 10%, which is the best performance we've seen in about 18 months for the month of November so or.

for the month of November . So we're encouraged by that. But I will tell you, with inflation still being persistent, I'm still concerned over the next six months.

Speaker Change: We're encouraged by that but I will tell you with inflation still being persistent I'm still concerned over the next six months to nine months with the consumers. So we're going to we're going to be taking a cautious approach, but we believe with our in house financing.

to nine months with the consumers. So we're going to be taking a cautious approach, but we believe with our in-house financing and the benefits we have from a synergy standpoint with the two businesses, especially with the untapped opportunity in Badcock that...

Speaker Change: And the benefits we have from a synergy standpoint, with the two businesses, especially with the untapped opportunity in bad cockpit.

that we have an opportunity to grow the combined business.

Speaker Change: Do we have an opportunity to grow the combined business.

Speaker Change: Great. Okay, that's great to hear about that steady same store sales improvement over the past couple of quarters and great to hear about the transaction. Thanks very much.

Okay, it's great to hear about that steady same source sale improvement over the past couple of quarters and great to hear about the transaction. Thanks very much.

Speaker Change: Thanks Vincent.

Speaker Change: There are no further questions at this time I would like to hand, the conference back over to management for closing comments.

There are no further questions at this time. I would like to hand the conference back over to management for closing.

Thank you. I would like to again acknowledge all of the both the cons employees for all their hard work and dedication here over this past quarter. I'd also like to welcome once again

Speaker Change: Thank you I would like to again acknowledge all of the both the cons employees for all their hard work and dedication here over this past quarter I'd also like to welcome once again, the bad Cock employees. The dealers were so excited to have you alongside us here.

the badcock employees, the dealers. We're so excited to have you alongside us here in the CONDS organization.

Speaker Change: In the Comms organization.

We look forward to working with you and we look forward to sharing with investors.

Speaker Change: Look forward to working with you and we look forward to sharing with investors.

and the excitement builds here and sharing our exciting integration results in future quarters. Thanks, everybody.

Speaker Change: The excitement builds here.

Speaker Change: Sharing our exciting integration results in future quarters, Thanks, everybody happy holidays.

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.

Speaker Change: Thank you. This will conclude today's conference you may disconnect. Your lines at this time and thank him for your participation.

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