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Share Name | Share Symbol | Market | Type |
---|---|---|---|
HHGREGG Inc (CE) | USOTC:HGGGQ | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0012 | 0.00 | 01:00:00 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Indiana
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47-4850538
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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4151 East 96
th
Street
Indianapolis, IN
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46240
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated Filer
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Part I. Financial Information
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Item 1.
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Condensed Consolidated Financial Statements (unaudited):
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Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2016 and 2015
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Condensed Consolidated Balance Sheets as of December 31, 2016 and March 31, 2016
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Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2016 and 2015
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Condensed Consolidated Statement of Stockholders’ Equity for the Nine Months Ended December 31, 2016
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Item 2.
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||
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Item 3.
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Item 4.
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Part II. Other Information
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Item 1.
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Item 1A.
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Item 6.
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||
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Part I.
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Financial Information
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ITEM 1.
|
Condensed Consolidated Financial Statements
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|
Three Months Ended
|
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Nine Months Ended
|
||||||||||||
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December 31,
2016 |
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December 31,
2015 |
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December 31,
2016 |
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December 31,
2015 |
||||||||
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(In thousands, except share and per share data)
|
||||||||||||||
Net sales
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$
|
452,791
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|
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$
|
593,219
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|
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$
|
1,330,863
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$
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1,521,158
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Cost of goods sold
|
353,011
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438,189
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969,187
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1,093,126
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|
||||
Gross profit
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99,780
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155,030
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361,676
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428,032
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|
||||
Selling, general and administrative expenses
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116,077
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116,533
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341,812
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341,116
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||||
Net advertising expense
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26,005
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34,168
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70,637
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83,476
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||||
Depreciation and amortization expense
|
7,013
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8,355
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21,059
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25,115
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||||
Asset impairment charges
|
7,850
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20,910
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9,238
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20,910
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||||
Loss from operations
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(57,165
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)
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(24,936
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)
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(81,070
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)
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(42,585
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)
|
||||
Other expense (income):
|
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||||||||
Interest expense
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1,106
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|
|
727
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|
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2,827
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|
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1,966
|
|
||||
Interest income
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(2
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)
|
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(2
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)
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(24
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)
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(9
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)
|
||||
Total other expense
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1,104
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|
|
725
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|
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2,803
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|
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1,957
|
|
||||
Loss before income taxes
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(58,269
|
)
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(25,661
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)
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(83,873
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)
|
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(44,542
|
)
|
||||
Income taxes
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—
|
|
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1,252
|
|
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—
|
|
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1,252
|
|
||||
Net loss
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$
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(58,269
|
)
|
|
$
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(26,913
|
)
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$
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(83,873
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)
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$
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(45,794
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)
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Net loss per share
|
|
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|
||||||||
Basic and diluted
|
$
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(2.10
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)
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$
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(0.97
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)
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$
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(3.02
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)
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$
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(1.65
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)
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Weighted average shares outstanding-basic and diluted
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27,806,460
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27,707,978
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27,783,216
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27,698,789
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December 31,
2016 |
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March 31,
2016 |
||||
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(In thousands, except share data)
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||||||
Assets
|
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|
||||
Current assets:
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||||
Cash
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$
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1,953
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$
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3,703
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Accounts receivable—trade, less allowances of $11 and $5 as of December 31, 2016 and March 31, 2016, respectively
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20,653
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11,106
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||
Accounts receivable—other
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19,764
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14,937
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Merchandise inventories, net
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210,820
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256,559
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Prepaid expenses and other current assets
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5,545
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6,333
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Income tax receivable
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68
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1,130
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Total current assets
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258,803
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293,768
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Net property and equipment
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74,365
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87,472
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Deferred financing costs, net
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2,192
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1,257
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Other assets
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2,930
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2,855
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Total long-term assets
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79,487
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91,584
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Total assets
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$
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338,290
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$
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385,352
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Liabilities and Stockholders’ Equity
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|
||||
Current liabilities:
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||||
Accounts payable
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$
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99,037
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$
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107,474
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Line of credit
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30,250
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|
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—
|
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Customer deposits
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61,970
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43,235
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Accrued liabilities
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42,765
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43,370
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Total current liabilities
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234,022
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194,079
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Long-term liabilities:
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|
||||
Deferred rent
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50,438
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59,101
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Other long-term liabilities
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15,224
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10,818
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||
Total long-term liabilities
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65,662
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69,919
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|
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Total liabilities
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299,684
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263,998
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Stockholders’ equity:
|
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|
||||
Preferred stock, par value $.0001; 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2016 and March 31, 2016, respectively
|
—
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|
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—
|
|
||
Common stock, par value $.0001; 150,000,000 shares authorized; 41,303,240 and 41,204,660 shares issued; and 27,806,558 and 27,707,978 outstanding as of December 31, 2016 and March 31, 2016, respectively
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4
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|
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4
|
|
||
Additional paid-in capital
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305,450
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|
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304,325
|
|
||
Accumulated deficit
|
(116,620
|
)
|
|
(32,747
|
)
|
||
Common stock held in treasury at cost 13,496,682, shares as of December 31, 2016 and March 31, 2016
|
(150,228
|
)
|
|
(150,228
|
)
|
||
Total stockholders’ equity
|
38,606
|
|
|
121,354
|
|
||
Total liabilities and stockholders’ equity
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$
|
338,290
|
|
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$
|
385,352
|
|
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Nine Months Ended
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(83,873
|
)
|
|
$
|
(45,794
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
21,059
|
|
|
25,115
|
|
||
Amortization of deferred financing costs
|
378
|
|
|
404
|
|
||
Stock-based compensation
|
1,169
|
|
|
2,423
|
|
||
Loss on early extinguishment of debt
|
126
|
|
|
—
|
|
||
Loss on sales of property and equipment
|
147
|
|
|
60
|
|
||
Asset impairment charges
|
9,238
|
|
|
20,910
|
|
||
Tenant allowances received from landlords
|
—
|
|
|
812
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable—trade
|
(9,547
|
)
|
|
(3,036
|
)
|
||
Accounts receivable—other
|
(4,827
|
)
|
|
(1,512
|
)
|
||
Merchandise inventories
|
45,739
|
|
|
(82,854
|
)
|
||
Income tax receivable
|
1,062
|
|
|
4,864
|
|
||
Prepaid expenses and other assets
|
923
|
|
|
(352
|
)
|
||
Accounts payable
|
3,681
|
|
|
62,456
|
|
||
Customer deposits
|
18,735
|
|
|
(557
|
)
|
||
Income tax payable
|
—
|
|
|
1,129
|
|
||
Accrued liabilities
|
(649
|
)
|
|
11,148
|
|
||
Deferred rent
|
(8,663
|
)
|
|
(6,409
|
)
|
||
Other long-term liabilities
|
4,606
|
|
|
(1,010
|
)
|
||
Net cash used in operating activities
|
(696
|
)
|
|
(12,203
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(18,533
|
)
|
|
(10,406
|
)
|
||
Proceeds from sales of property and equipment
|
69
|
|
|
80
|
|
||
Purchases of corporate-owned life insurance
|
(210
|
)
|
|
(160
|
)
|
||
Net cash used in investing activities
|
(18,674
|
)
|
|
(10,486
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net borrowings on line of credit
|
30,250
|
|
|
—
|
|
||
Net repayments on inventory financing facility
|
(11,191
|
)
|
|
(676
|
)
|
||
Payment of financing costs
|
(1,439
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
17,620
|
|
|
(676
|
)
|
||
Net decrease in cash and cash equivalents
|
(1,750
|
)
|
|
(23,365
|
)
|
||
Cash and cash equivalents
|
|
|
|
||||
Beginning of period
|
3,703
|
|
|
30,401
|
|
||
End of period
|
$
|
1,953
|
|
|
$
|
7,036
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
2,496
|
|
|
$
|
1,572
|
|
Income taxes received
|
$
|
(1,067
|
)
|
|
$
|
(4,721
|
)
|
Capital expenditures included in accounts payable
|
$
|
338
|
|
|
$
|
503
|
|
|
Common Shares Outstanding
|
|
Preferred
Stock
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated Deficit
|
|
Common Stock
Held in
Treasury
|
|
Total
Stockholders’
Equity
|
|||||||||||||
Balance at March 31, 2016
|
27,707,978
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
304,325
|
|
|
$
|
(32,747
|
)
|
|
$
|
(150,228
|
)
|
|
$
|
121,354
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83,873
|
)
|
|
—
|
|
|
(83,873
|
)
|
||||||
Vesting of RSUs, net of tax withholdings
|
98,580
|
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
1,169
|
|
|
—
|
|
|
—
|
|
|
1,169
|
|
||||||
Balance at December 31, 2016
|
27,806,558
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
305,450
|
|
|
$
|
(116,620
|
)
|
|
$
|
(150,228
|
)
|
|
$
|
38,606
|
|
(1)
|
Summary of Significant Accounting Policies
|
(2)
|
Fair Value Measurements
|
|
Three Months Ended
|
|
Nine months ended
|
||||||||||||
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||
Carrying value (pre-impairment)
|
$
|
8.9
|
|
|
$
|
21.7
|
|
|
$
|
10.2
|
|
|
$
|
21.7
|
|
Asset impairment charge (included in income from operations)
|
7.9
|
|
|
20.9
|
|
|
9.2
|
|
|
20.9
|
|
||||
Remaining net carrying value
|
$
|
1.0
|
|
|
$
|
0.8
|
|
|
$
|
1.0
|
|
|
$
|
0.8
|
|
(3)
|
Property and Equipment
|
|
December 31,
2016 |
|
March 31,
2016 |
||||
Machinery and equipment
|
$
|
24,071
|
|
|
$
|
23,700
|
|
Store fixtures and furniture
|
144,844
|
|
|
150,390
|
|
||
Vehicles
|
1,737
|
|
|
1,757
|
|
||
Signs
|
10,337
|
|
|
11,959
|
|
||
Leasehold improvements
|
96,858
|
|
|
103,908
|
|
||
Construction in progress
|
826
|
|
|
1,792
|
|
||
|
278,673
|
|
|
293,506
|
|
||
Less accumulated depreciation and amortization
|
(204,308
|
)
|
|
(206,034
|
)
|
||
Net property and equipment
|
$
|
74,365
|
|
|
$
|
87,472
|
|
(4)
|
Net Loss per Share
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||
Net loss (A)
|
$
|
(58,269
|
)
|
|
$
|
(26,913
|
)
|
|
$
|
(83,873
|
)
|
|
$
|
(45,794
|
)
|
Weighted average outstanding shares of common stock (B)
|
27,806,460
|
|
|
27,707,978
|
|
|
27,783,216
|
|
|
27,698,789
|
|
||||
Common stock and potential dilutive common shares (C)
|
27,806,460
|
|
|
27,707,978
|
|
|
27,783,216
|
|
|
27,698,789
|
|
||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic (A/B)
|
$
|
(2.10
|
)
|
|
$
|
(0.97
|
)
|
|
$
|
(3.02
|
)
|
|
$
|
(1.65
|
)
|
Diluted (A/C)
|
$
|
(2.10
|
)
|
|
$
|
(0.97
|
)
|
|
$
|
(3.02
|
)
|
|
$
|
(1.65
|
)
|
(5)
|
Inventories
|
|
December 31,
2016 |
|
March 31,
2016 |
||||
Appliances
|
$
|
120,144
|
|
|
$
|
126,025
|
|
Consumer electronics
|
71,020
|
|
|
109,418
|
|
||
Home products
|
19,656
|
|
|
21,116
|
|
||
Net merchandise inventory
|
$
|
210,820
|
|
|
$
|
256,559
|
|
(6)
|
Debt
|
|
December 31,
2016 |
|
March 31,
2016 |
||||
Line of credit
|
$
|
30,250
|
|
|
$
|
—
|
|
(7)
|
Stock-based Compensation
|
|
Number of Options
Outstanding
|
|
Weighted Average
Exercise Price
per Share
|
|||
Outstanding at March 31, 2016
|
2,827,168
|
|
|
$
|
11.86
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
—
|
|
|
—
|
|
|
Forfeited
|
(137,001
|
)
|
|
6.83
|
|
|
Expired
|
(1,291,229
|
)
|
|
13.06
|
|
|
Outstanding at December 31, 2016
|
1,398,938
|
|
|
$
|
11.25
|
|
(8)
|
Contingencies
|
(9)
|
Related Party Transaction
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Overview
|
•
|
Critical Accounting Policies
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Contractual Obligations
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
(unaudited)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net sales
|
$
|
452,791
|
|
|
$
|
593,219
|
|
|
$
|
1,330,863
|
|
|
$
|
1,521,158
|
|
Net sales % decrease
|
(23.7
|
)%
|
|
(10.9
|
)%
|
|
(12.5
|
)%
|
|
(7.5
|
)%
|
||||
Comparable store sales % decrease
(1)
|
(22.2
|
)%
|
|
(10.8
|
)%
|
|
(11.8
|
)%
|
|
(7.3
|
)%
|
||||
Gross profit as a % of net sales
|
22.0
|
%
|
|
26.1
|
%
|
|
27.2
|
%
|
|
28.1
|
%
|
||||
SG&A as a % of net sales
|
25.6
|
%
|
|
19.6
|
%
|
|
25.7
|
%
|
|
22.4
|
%
|
||||
Net advertising expense as a % of net sales
|
5.7
|
%
|
|
5.8
|
%
|
|
5.3
|
%
|
|
5.5
|
%
|
||||
Depreciation and amortization expense as a % of net sales
|
1.5
|
%
|
|
1.4
|
%
|
|
1.6
|
%
|
|
1.7
|
%
|
||||
Asset impairment charges as a % of net sales
|
1.7
|
%
|
|
3.5
|
%
|
|
0.7
|
%
|
|
1.4
|
%
|
||||
Loss from operations as a % of net sales
|
(12.6
|
)%
|
|
(4.2
|
)%
|
|
(6.1
|
)%
|
|
(2.8
|
)%
|
||||
Net interest expense as a % of net sales
|
0.2
|
%
|
|
0.1
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
||||
Income tax expense as a % of net sales
|
—
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
0.1
|
%
|
||||
Net loss
|
$
|
(58,269
|
)
|
|
$
|
(26,913
|
)
|
|
$
|
(83,873
|
)
|
|
$
|
(45,794
|
)
|
Net loss per diluted share
|
$
|
(2.10
|
)
|
|
$
|
(0.97
|
)
|
|
$
|
(3.02
|
)
|
|
$
|
(1.65
|
)
|
Weighted average shares outstanding—diluted
|
27,806,460
|
|
|
27,707,978
|
|
|
27,783,216
|
|
|
27,698,789
|
|
||||
Number of stores open at the end of period
|
220
|
|
|
227
|
|
|
|
|
|
(1)
|
Comprised of net sales at stores in operation for at least 14 full months, including remodeled and relocated stores, as well as net sales for our e-commerce site.
|
|
Net Sales Mix Summary
|
|
Comparable Store Sales Summary
|
||||||||||||||||||||
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Appliances
|
53
|
%
|
|
43
|
%
|
|
60
|
%
|
|
52
|
%
|
|
(4.2
|
)%
|
|
(10.4
|
)%
|
|
1.8
|
%
|
|
(4.1
|
)%
|
Consumer electronics
(1)
|
41
|
%
|
|
52
|
%
|
|
34
|
%
|
|
42
|
%
|
|
(38.6
|
)%
|
|
(12.2
|
)%
|
|
(29.6
|
)%
|
|
(12.3
|
)%
|
Home products
(2)
|
6
|
%
|
|
5
|
%
|
|
6
|
%
|
|
6
|
%
|
|
(9.0
|
)%
|
|
3.3
|
%
|
|
(3.3
|
)%
|
|
6.2
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
(22.2
|
)%
|
|
(10.8
|
)%
|
|
(11.8
|
)%
|
|
(7.3
|
)%
|
(1)
|
Primarily consists of televisions, audio, personal electronics, computers and tablets, and accessories.
|
(2)
|
Primarily consists of furniture and mattresses.
|
|
Nine Months Ended
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
Net cash used in operating activities
|
$
|
(696
|
)
|
|
$
|
(12,203
|
)
|
Net cash used in investing activities
|
(18,674
|
)
|
|
(10,486
|
)
|
||
Net cash provided by (used in) financing activities
|
17,620
|
|
|
(676
|
)
|
ITEM 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
ITEM 4.
|
Controls and Procedures
|
Part II.
|
Other Information
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
ITEM 6.
|
Exhibits
|
31.1
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1*
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2*
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
The following materials from hhgregg, Inc.’s Form 10-Q for the quarterly period ended
December 31, 2016
, formatted in an XBRL Interactive Data File: (i) Condensed Consolidated Statements of Operations-unaudited; (ii) Condensed Consolidated Balance Sheets-unaudited; (iii) Condensed Consolidated Statements of Cash Flows-unaudited; (iv) Condensed Consolidated Statement of Stockholders’ Equity-unaudited; and (v) Notes to Condensed Consolidated Financial Statements-unaudited.
|
*
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
|
|
|
|
|
HHGREGG, INC.
|
|
|
|
|
By:
|
/s/ Kevin J. Kovacs
|
|
|
Kevin J. Kovacs
SVP, Chief Financial Officer
(Principal Accounting and Financial Officer)
|
|
1 Year HHGREGG (CE) Chart |
1 Month HHGREGG (CE) Chart |
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