Theo Wright – Chairman and Chief Executive Officer Mike Poppe – Executive Vice President and Chief Operating Officer Tom Moran – Executive Vice President and Chief Financial Officer

Brian Nagel – Oppenheimer Rick Nelson – Stephens Peter Keith – Piper Jaffray Brad Thomas – KeyBanc Capital Markets David Magee – SunTrust

Good morning and thank you for holding. Welcome to Conn's, Inc.'s conference call to discuss earnings for the Quarter Ended July 31, 2015. My name is Jonathan 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'll 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 September 9, 2015, distributed by the market opened this morning and slides that will be referenced during today's conference call can be accessed via the Company's Investor Relations website at ir.conns.com. I will remind you that some of the statements made in this call are forward-looking statements within the meaning of the Securities and Exchange Act of 1934. These forward-looking statements represent the Company's present expectations or beliefs concerning future events. The Company cautions that such statements are necessarily based on certain assumptions, which are subject to risks and uncertainties, which could cause actual results to differ materially from those indicated today. Your speakers today are Theo Wright, the Company’s Chairman; Mike Poppe, the Company's COO; David Trahan, the Company’s President of Retail; and Tom Moran, the Company's CFO. I would now like to turn the conference call over to Mr. Wright. Please go ahead, sir.

Good morning and welcome to Conn’s second quarter of fiscal 2016 earnings conference call. I’ll begin the call with an overview and then Mike Poppe will discuss our credit segment, as well as provide additional details on our securitization transaction. Tom Moran will complete our prepared remarks with additional comments on results and on our balance sheet. In separate press releases issued today, Conn’s announced a number of initiatives. The Board of Directors, implementing a long-planned leadership succession has appointed Norman Miller to serve as Chief Executive Officer. Norman is a seasoned executive with considerable experience in retail and consumer finance, having previously served as President of both Sears Automotive and DFC Global. The Company also entered into an agreement to securitize $1.4 billion of retail installment contract receivables. The Board authorized the Company to repurchase up to $75 million of outstanding shares of its common stock or its senior notes and approved the termination of the Company's stockholder rights plan effective at the close of the securitization transaction. These actions collectively represent a major transformation in the business and position the Company to execute its growth strategies while reducing risk and enhancing shareholder value. The Company believes the initiation of the repurchase program underscores its confidence in its long-term growth prospects and commitment to generate continued profitable growth and enhanced long-term shareholder value. Additionally, the Company reported today adjusted diluted earnings per share of $0.47 for the second quarter. Turning to current retail trends, August same-store sales were down 0.2%, as many retailers have already reported the shift in Labor Day by nearly a week reduced August sales compared to the same month in the prior year. September sales month to date showed the offsetting benefit of the holiday shift. Combined same-store sales for the two month period are expected to be in line with recent monthly trends for Conn’s and support our annual guidance. Retail execution in August and throughout Q2 was solid. Labor Day weekend, sales were in line with expectations with particularly strong performances in furniture and mattresses. Our ability to be in stock and deliver next day was better than ever for a holiday. Delivery volumes set an all-time record on this past Sunday and then broke that record again Monday. Yesterday’s delivery volume was higher than any day prior to this weekend. As we said on our last conference call, comparisons are less challenging in Q3 and for the remainder of the year. Appliance same-store sales increased approximately 2% in August, industry trends are positive with a number of retailers reporting strong comparisons in the second quarter. Conn’s isn’t as likely as some of our competitors to benefit from a strong homebuilding or home remodeling cycle. Core customers are less likely than more affluent groups to purchase new homes or complete major re-models. Televison sales trends have turned positive after passing the difficult comparisons for the World Cup, a year ago. Television comparisons were positive for both July and August. For August, 75% of our television sales were UHD or 4K televisions. This is now the primary television technology at higher price points. We’re optimistic about the impact of better assortment and price point distribution, as we head into the holiday period for television. In this year’s first quarter, as a result of ongoing evaluation of credit standards, it was decided to stop selling gaming hardware, cameras and certain tablets. Exiting of these categories was completed in the second quarter. The impact of exiting these categories was 3.9% of same stores sales in August and 3.6% for the second quarter. Improving execution and consumer demand for furniture, mattresses and appliances has more than offset the drag to total same-store performance of exiting certain electronics categories. On Slide 3, you can see a three year trend in furniture and mattress sales. Our goal is for furniture and mattress sales to be 45% of total products sales. In the second quarter, furniture and mattress sales were 34% of product sales, and 46% of total product gross margin dollars. The share of total product gross profit dollars is now similar to square footage allocation. There remains an opportunity to increase the sales productivity per square foot and to complete the planned square footage growth for the categories. As you can see on Slide 4, square footage per store has increased 35% since 2011. Furniture and mattresses has been the primary beneficiary of this growth. Average store square footage is closing in on our prototype square footage, which would be 43,000 square feet without a cross-stock facility and 47,000 feet of cross-stock is required, most facilities would not Those facilities would not have an onsite cross-stock. Expansion or relocation opportunities are being pursued for nine locations with three currently under construction. Only eight stores are still in the old format. Furniture product assortment has grown rapidly over the last several years as square footage has grown, although enough sales history exists now to allow optimization of this expanded SKU assortment. A significant percentage of the assortment is being replaced to remove less productive SKUs and replace these styles – these with styles more likely to suit consumers. More so than in other categories, SKU optimization will take time to execute. The furniture industry supply chain is uniquely inefficient in replacing an unproductive SKU can take six months or more. One notable theme in our furniture assortment is a trend to smaller scale living room suites with more contemporary styles. The West Coast port issues brought to light inventory availability problems that have been ongoing. Many of these issues have been resolved and recent relative outperformance in furniture sales reflects these corrective actions. Conn’s sales process isn’t designed to order product, so inventory shortages have an immediate impact on sales. Availability improved in Q2 and in August; in-stock status is now approaching our goals. Beginning in the second quarter, a plan to expand furniture sales more aggressively was tested. This plan included increased advertising exposure in both television and print, which is principally shared mail, advertising messages featuring only furniture and mattress products, and target investments in price. On Slide 5 are two diverse examples of markets that are participated in this test. Both markets are newer markets for Conn’s and include recently opened stores. These markets are delivering well above average gross margins and solid store productivity. The performance represented is indicative of the opportunity for Conn’s to increase store productivity and profitability by becoming a more competitive furniture retailer. Additional advertising standing for test markets was productive and didn't impact leverage of advertising spending in the quarter. Conn’s furniture offering includes competitive pricing, that’s promotion and true next day delivery. This offering can be competitive, even without Conn’s unique credit tools for consumers. The furniture expansion plan is being expanded to additional markets in Q3 and will be fully implemented by the end of Q4. The plan is to open 15 to 18 stores in fiscal year 2016 and we are on track to complete the plan. Year-to-date 15 stores are open or currently under construction with scheduled opening before year-end. Opening 18 stores will be depended on timely completion of construction for additional locations. Revision to the store opening plan to concentrate efforts on markets with existing distribution in marketing is showing in results and Tom will comment further on this topic. Store opening plans in fiscal 2017 are unchanged and are to open 22 to 25 stores. This store opening pace is designed to deliver 15% growth in revenue from new stores. There are no current plans to change our stores opening pace, but reevaluation of the store opening pace is one of the items under consideration as a result of our securitization transaction and the opportunity to access new capital markets to fund the receivables growth. In closing, I’ve enjoyed the last 4.5 years of my six month temporary assignment at Conn's and look forward to continued involvement in the Company’s growth but in a new role. Appointment of Norm Miller to lead the Company is part of a long- term succession plan to transition to a larger, more professionally managed business. This transition is a natural progression to enable the business to grow to a national chain with hundreds of locations. Not just through succession at CEO but deeper in the organization. We've added experienced, motivated talent to lead components of the business like human resources, credit and collections, information technology, real estate, finance and marketing. CEO succession is only the most visible aspect of putting into place the human resources for Conn's to realize its growth potential. Opportunity for individuals to advance their careers results from the power of business growth. Opportunity that isn't limited to executive levels, but shared within our organization. As shown in several examples on Slide 6, Conn’s has significantly increased compensation throughout the organization without compromising profitability. Productivity growth has directly benefited the associates. Income has grown from a mostly non-college educated workforce at a time when median income has been declining. Today no one join’s Conn’s at a wage rate of less than $10 an hour. Most entry level positions are at higher wages than this. The majority of associates also have the opportunity to earn additional incentive compensation, sharing in the benefits of achieving goals for themselves or their teams. We expect our associates to work hard and deliver results, but we are rewarding their efforts and success creating opportunities for careers, not just employment. Conn’s business model provides a sensible alternative for subprime finance for consumers and a compelling overall value. The announced management changes and securitization will allow further growth and optimization of a proven business model. Every business is dependent on its people. Conn's has the people from the top of the organization to the sales associate greeting customers in the store or the lift operator pulling product for a customer in a warehouse to fulfill its promise. Now I'll turn the call over to Mike. Mike

Thank you, Theo. Starting with an update on the securitization transaction, this week we are closing the transaction for virtually the entire portfolio balance as of July 31st that will deliver proceeds to the Company of approximately $1.1 billion. As you may recall, the original plan authorized by the Board was to pursue the sale of all or a portion of the portfolio or other refinancing of the portfolio. This transaction represents the successful completion of that work. We received multiple bids for the purchase of the receivables with some that approached book value. However, none of the bidders was able to propose a long-term solution for ongoing originations. This securitization transaction is an important first step towards creating a simplified asset-light business model. The benefits of completing this transaction include diversification of our access to the financial markets, significant reduction of risk for Conn’s with the transfer of the receivables and debt to a legally isolated entity. The securitization bondholders will not receive any payments from Conn’s or have the ability to make any claims against the assets or cash flows of Conn’s highly profitable retail business, since the debt is non-recourse. And Conn’s only balance sheet and earnings risk related to these assets is its interest in the residual cash flows from the receivables. Turning to Slide 7, the advance rate on the securitization bonds equal to 77.5% of the balance of the receivables. This is approximately 89.5% of the net book value of the receivables as of July 31. Our net investment in the net book value of the residual interest of approximately $130 million, which is the net book balance of the securitized receivables less the outstanding securitization debt balance. This is our maximum loss exposure on these receivables. Each month, the cash flows received from the receivables, the principle and interest payments will be used to pay bondholders, the required interest and principle payments along with paying servicing fees. We will be the servicer of the receivables and we’ll receive a servicing fee equal to an annual rate of 4.75% on the outstanding receivables balance securitized. Based on recent expense trends, this will deliver a small profit to Conn’s. The remaining cash flows each month are then paid to the owner of the residual interest in the receivables. At this time, that will be Conn’s until the residual interest is sold to a third party, if it is ultimately sold. Additionally, we will retain all of the profitability we currently receive under the credit insurance program. We are in the process of marketing the residual interest. If we receive proposals to purchase the residual at acceptable prices, we will sell it, eliminating the remaining balance sheet risk to the company and likely allowing us to remove the receivables and debt from our balance sheet. If we do not receive acceptable proposals, we will retain the residual interest and consider marketing it for sale at a later day. This structure has the ability to deliver the same and potentially better economic and benefits to the Company and its stockholders as could be achieved under a sale or forward flow arrangement. In the short-term, the complexity is higher than we would like. Over time, as investors gain a better understanding of our portfolio performance, we expect to be able to complete the securitization bond issuance and residual interest sales simultaneously. This would allow us to regularly transfer all of the portfolio risk and debt obligations from Conn’s. If this is ultimately completed, we expect to be able to remove these items from our balance sheet, creating the asset-light business model we set out to build. Since we have not accessed the securitization market in several years, we are in the position of reeducating the investor base about Conn’s portfolio to support this and future transactions. This transaction was not rated, but was structured such that both series of bonds support loss coverage multiples consistent with investment grade profile securities. The weighted average coupon rate of the bonds is 6% with an all-in-cost of 9.1% after underwriting fees and other expenses. We anticipate lower coupon rates and all-in-cost on future transactions as investors gain experience with our securitized receivable performance through monthly reporting on impacts. Expenses moderate with repeat transactions and longer tenor, future receivables sold will be recently originated compared to the season tool included in the current transaction and we intend to obtain ratings for future transactions. Reducing borrowing cost over time is typical for repeat issuers in most debt markets and is evidenced specifically by Springleaf and One Main's experience in the securitization market. For example, Springleaf completed a 2013 transaction with an 83% advance rate and 4.1% weighted average coupon to investors and then in 2015 completed a larger transaction with higher ratings and an increased advance rate of 92% at a 3.6% weighted average coupon to investors. Post July 31 originations will be held on our balance sheet until we go to market with our next transaction, expected to be early next year. Given our origination volume, we believe we will be able to offer bonds in the securitization market three to four times a year. Between transactions, the Company will hold receivables for a short period of time and will earn the interest and fee yield on the receivables net of borrowing costs during the holding period, but we will incur almost no losses assuming the holding period is less than seven to eight months. We began this process assuming that bidders would have access to financing on more favorable terms and are available to us. We found that our ABL facility delivers a cost-effective solution and that maintaining on balance sheet financing capability would likely help us deliver the best result through periodic securitization transactions. Proving performance in the securitization market over time will be important to developing a long-term flow arrangement in the future. There are other options that may become available to us in the securitization market in the future. As you may recall, we funded the portfolios solely through the securitization market prior to 2008, and it was a key component of our funding strategy through 2010. During that time period, we had a master trust structure consisting of a securitized warehouse facility and revolving medium-term bond issuances. It is an example of an efficient structure that could provide the funding needed for a flow arrangement. Again, we will need to prove performance through periodic issuances to best position ourselves to use a master trust or other structure in the future. We have continued to have discussions with a small group of potential investors about structuring a flow arrangement. With completion of the securitization transaction, we have answered many of the questions around structure and ability to finance the receivables. However, the flow is a complex transaction that will take more time to put together than we originally allotted for this process. This complexity stems from how to manage and price originations given the variation over time back on seasonal and other factors, how to align Conn’s and investor interest, and achieve our off balance sheet accounting goals given the financing, origination and alignment of interest issues. In the meantime, our plan is to execute periodic securitizations and simultaneous sales of the residual interest in the receivables. There's a large market for residual interest in securitizations for investors looking to receive additional deal. Future residual interest sales along with securitization transaction should be easier to complete because the transaction size is expected to be smaller. The receivables will be recently originated. Investors will have the benefit of watching monthly performance from the current transaction and expected future transactions. We will continue to manage underwriting and servicing of the portfolio because retail and credit are inextricably linked in our business model. We believe it is important that we maintain control of underwriting and servicing to allow us to effectively manage the retail operations and ensure our customers are provided with the best possible experience. Additionally, we are continuing to review structures that would allow us to export interest rates and will continue to pursue this opportunity. Turning to underwriting on Slide 8 is the average FICO score in the portfolio for the last five years. The portfolio has been in a narrow range of credit scores and remained there last quarter with a small increase year-over-year. We started making underwriting changes in late fiscal 2014 and throughout fiscal 2015 to reduce risk. These changes are summarized on Slide 9. Slide 10 shows the impact of these underwriting changes, which has resulted in an increase in the score originated over the past few years. The FICO score of all originations in Q2 of fiscal 2015 was 617 compared to 607 in Q2 of the prior year in 617 in Q1 this year. Turing to Slide 11, beginning in late October of fiscal 2015, we began originating 18 and 24 month no interest contracts to customers with prime credit scores, as we had several years ago. As of August 31, 2015, 18 and 24 months no interest consumer accounts represented 7.3% of the total portfolio and we expect this percentage to increase over the next couple of quarters. The average FICO score of these contracts at origination was 696 during the quarter. See Slide 12 for our delinquency data by product category. Consistent with historical performance, appliances delivered the best delinquency performance while home office products deliver the worst. As our product mix shifts towards more furniture and mattress and appliance balances, it is expected to benefit our delinquency rates over time. The elimination of catalyst, gaming, hardware and cameras is helping speed the shift in product mix. On the next slide, Slide 13, you can see the trend in the proportion of new and existing customers, which after several quarters of increases in new customers reversed beginning in the third quarter last fiscal year with the percentage of originations to existing customers beginning to increase. I would note that we typically see a higher percentage of repeat customers during the fourth quarter related to holiday purchases. At this time, internal and external evaluations of underwriting have not identified other underwriting changes necessary to achieve our objectives. We have engaged FICO to update our risk scoring model and provide a more advanced tool for early payment default detection, which we insist they pay implementing during the third quarter. This engagement may yield changes to our origination model too, which are likely to be implemented early next year. The consultants engaged by the Board to review the portfolio and underwriting have completed their assessment. Their findings were largely confirmatory of management’s conclusions and did not result in any recommendations for changes to be made in underwriting or collections. Lastly, in addition to Norm Miller joining the team, we completed the searches for the other management team positions previously announced. In April, we hired our Chief Credit Officer and are glad to have Tom Moran on board now. He joined as our CFO in July. Turning to static loss trends, due to our decision last year to stop selling charged-off accounts, current static loss rate trends are being negatively impacted by reduced recoveries. We expect to collect these amounts over time through our own recovery collection efforts, which should benefit the static loss rates in future periods. Additionally, as can be seen on Slide 14, the speed of portfolio run-off has accelerated in recent quarters and is especially evident for fiscal 2013 and fiscal 2014. With only 1.4% of the original balance remaining, fiscal 2013 is a quarter or more ahead of the previous vintages. Fiscal 2014, which had 480 basis points more of its origination balance remaining at the end of the year of origination, compared to fiscal 2013 is now only 70 basis points higher and has gained ground each quarter since the year of origination. This acceleration in the amortization of the vintages is partly driven by a return to our historical account combination practices and is expected to reduce future losses. It is important to understand that when applying for a new purchase, the customer must satisfy all underwriting requirements including being current on all existing accounts at Conn's. Lastly, we have returned to some of our historical reaging practices. The benefit of the additional cash collections is expected to help reduce the frequency and severity of future losses. Our current reaging practices are still more restrictive than those in place prior to fiscal 2012, capping the number of times an account can be reaged and requiring a meaningful payment to be reaged. Reaged accounts as a percentage of the portfolio increased 10 basis points from the end of the first quarter, compared to an increase of 50 basis points for the same period a year ago. The originations for the last half of fiscal 2015 and early fiscal 2016 have exhibited better delinquency trends than fiscal 2014 and early fiscal 2015 vintages. On a static pool basis for 60-plus-day delinquency the last two quarters of fiscal 2015 and first quarter of fiscal 2016 are performing better than the comparable prior-year quarters. It is too early to have a meaningful comparison for the recently completed second quarter. While the proportion of new versus existing customers in the portfolio increased during fiscal 2015 compared to fiscal 2014, the pace of increase has slowed in fiscal 2016. The increase in new customers in the portfolio will offset some of the benefit of improved collections performance and tighter underwriting. Slide 15 shows recent trends and near-term expectations for several origination and portfolio metrics. The weighted average score and mix of high versus low scored customers at origination has trended towards higher quality and we expect to maintain the recent levels. Average income at origination has trended higher with the addition of the high FICO customers and we expect to maintain these recent levels. As noted earlier, the proportion of originations to new customers has been decreasing year-over-year recently and we expect that trend to continue. We expect the proportion of originations supporting sales of home office and consumer electronics products to decline. First payment default balances over 30 days past due as a percentage of the portfolio have been declining, which we expect to continue given higher average credit score underwritten, higher average income and decreasing proportion of new customers underwritten. And the average account age has increased slightly year-over-year and we expect that trend to continue, given the slower growth of the portfolio. It will take time for these changes to be fully reflected in the portfolio performance, especially in late-stage delinquency. In fact, as of July 31, the 60-plus-day delinquency rate of balances originated in the last 12 months was 6.1%, compared to 6.6% for the comparable period in the prior year. The more recent origination vintages are contributing a smaller percentage of 60-plus delinquencies this year than the comparable vintages a year ago, 50% versus 58%, and are a slightly smaller percentage of the balance of outstanding, 75% versus 77%. Looking further at portfolio trends, in the second quarter total originations grew 26.1% over the prior-year quarter compared to a growth rate of 25.4% a year ago. The origination growth increase is being driven by the combination of existing accounts in the new originations, which is why the portfolio only grew 6.3% from January 31 to July 31 compared to 10.4% growth in the prior-year period. Slower portfolio growth is benefiting the underlying performance of the portfolio, but has negative effects on reported delinquency rates. Third quarter of fiscal 2016 delinquency is expected to increase seasonally. August greater than 60 day delinquency is up seasonally to 9.7%. If the portfolio had grown at the same pace in the second quarter as it did in the prior year, including the impact of the Labor Day sales that benefited August in the prior year, the 60 day delinquency rate would have been approximately 20 basis points lower than reported this year. Looking at net charge-off performance, we have seen the net charge-off rate decline from 13.1% in the fourth quarter of fiscal 2015 to 12.2% in the first quarter of this year to 11.7% this past quarter and expect the rate to improve slightly in the third to between 11.25% and 11.75%. As portfolio quality has increased, the charge-off rate has moderated benefiting from a reduced gross charge-off rate and increasing recoveries. The increasing recoveries is consistent with what we communicated late last year when we decided to stop selling charged-off accounts. We said it would take time to rebuild the recovery cash flows. This recovery trend should continue to improve. Our objective is to improve execution over the course of the year. Sustained improvement will be needed before the provision rate and related reserves will decline. We will continue to monitor reserve levels and portfolio performance and will make adjustments when it is deemed appropriate. We have remained focused on achieving and maintaining appropriate staffing levels and improving underlying credit quality at origination and will continue to identify opportunities to improve execution and credit quality. Now I'll turn the call over to Tom Moran. Tom?

Thank you, Mike, and good morning, everyone. Before we review our financial results, it's important to take a few minutes to talk a bit more about the financial impact of securitization. When the securitization transaction closes on or about September 10, the significant proceeds made available will enable us to pay down our asset-based credit line and have approximately $380 million in cash on our balance sheet. Given that the immediate cash proceeds of the securitization will be about $1.08 billion and we are paying down an ABL line of about $590 million, you might expect a higher cash balance to result versus the $380 million. Affecting this pro forma balance is the fact that the securitization proceeds reflect a transaction cutoff of July 31 and that cash difference is driven by new receivables originated since July 31. For clarity, these pro forma numbers do not reflect the sale of any portion of the residual equity which, if completed, would result in additional proceeds to Conn's. A related key callout is that the overall impact of this transaction is leverage neutral if you net cash against liabilities in making that calculation. From a financial reporting perspective, the securitized assets would remain on our balance sheet until we sell the residual equity. If we are able to sell the residual equity in the current portfolio, these receivables will be derecognized from our balance sheet subject to meeting accounting requirements. While we can achieve the economic benefits without moving the assets off of our balance sheet, doing so would provide a model that is more readily understood and analyzed by investors in retail and our financials would be more readily comparable to those of others in the industry. A portion of the cash on hand, along with future draws on our asset-based line as needed, will be used to fund receivables until each future securitization transaction takes place. Some of this liquidity is also expected to be used to embark on a program of repurchasing up to $75 million in securities, consisting of common stock outstanding or the Senior Notes which are due in 2022. That $75 million is currently the maximum amount permitted under the terms of our credit facility and bond indenture and we are seeking further amendments to permit additional repurchases. The timing and amounts of future activity will be dependent in part on whether or not we sell the residual and on future limitations under our credit agreements. We believe these repurchase actions underscore the confidence we have in our long-term growth prospects and the program is consistent with our commitment to generate continued profitable growth and enhance long-term shareholder value. We intend to maintain a meaningful on balance sheet capital availability to enable us to manage through any disruption in the capital markets. Even if we sell the residual equity in the portfolio, we will retain at least a portion of our high yield bonds, as well as the ability to use our asset-based credit facility to continue to fund retail installment contract receivables which are vital to our business. This would take place not only in between periodic securitizations but also for longer periods should any change in the capital markets require us to pursue other financing alternatives. This is also why we intend to maintain a presence in the high-yield bond market. Finally, as noted earlier today, Conn's will terminate the stockholders' rights plan at the time the securitization transaction closes, which is expected to happen in the next day or two. That plan was put into place in October of last year and was intended to give the company the opportunity to explore strategic alternatives while reducing the likelihood any party would gain control of the company without appropriately compensating all of the company's shareholders. That strategic analysis has been completed and now that the recommended actions have been taken, the Board of Directors felt this stockholders' rights plan had served its purpose and was no longer required. We will make a formal announcement when the termination becomes effective. Moving on now to the financial review. Net income for the quarter was $16.5 million or $0.45 per diluted share. This included net charges of $1 million, or $0.02 per diluted share, on an after-tax basis from legal and professional fees related to the exploration of strategic alternatives and securities-related litigation. Earnings adjusted to exclude these costs were $0.47 per diluted share. For the retail segment of the business, total revenues for the second quarter of fiscal 2016 were $325.6 million, which was an increase of $37 million or 12.8% versus the same quarter a year ago. This growth reflects the impact of a net addition of nine stores over a year ago, together with a same-store sales increase of 3.1%. Slide 16 in the earnings presentation breaks this down. Growth was driven by furniture and mattress up 6.9% and home appliance up 9.2% and these are also our two highest margin product categories. In addition, same-store sales of repair service agreements were up 9.7%, due to mix-driven higher average selling price of these agreements. On the other hand, same-store sales declines came from categories which included products for which we have made the decision to exit, including tablets which are part of home office, and video game products and digital cameras which are part of consumer electronics. Excluding the impact from these products, total same-store sales for the quarter increased 6.7%. There is an ongoing question regarding whether, given Conn's geographic concentration in oil-producing states, we are seeing any sales impact from oil prices. Despite sustained lower oil prices for most of the past year, it is still difficult to determine if these prices are affecting sales and collections performance significantly. Houston market sales are still outperforming other mature markets, as they have for the last several quarters. Stores in oil- and gas-producing areas such as Laredo, Odessa, and Lubbock are showing more signs of slowing sales, but sales levels are still good in comparison to other similar size markets. The lower Rio Grande Valley has been one of our weaker markets, but this market is also being affected by currency shifts and declining cross-border activity. Lower gas prices are reducing the cost of living in all markets year-over-year and evidence is accumulating these lower oil prices are benefiting sales of durable household goods and this is consistent with our sales trends in furniture, mattresses and appliances. Slide 17 in the presentation recaps product gross margins which were up 20 basis points as a percentage of product revenue. This overall increase was driven by the favorable product sales mix shift toward our higher margin categories, as we discussed on the prior slide. We saw margin rate declines in home appliance on a shift in the timing of vendor funds and in home office which was affected by the transition to exit tablets. On the other hand, consumer electronics margin rates improved benefiting from the sales mix shift to higher-end TVs which carry greater percentage margins. Retail gross margins, which include not only product margins but also the impact of repair service agreements and warehousing and occupancy costs, improved by 100 basis points to 41.8%. The majority of this improvement was driven by the impact of repair service agreements, which benefited from higher retro or back-end payments, as well as higher average selling price on the front end due to mix. A secondary driver was the 20 basis point increase in product gross margins as shown on Slide 17 and discussed a moment ago. A further driver of this improvement was increased utilization and leverage of warehouse costs as sales increase and we add new stores. No warehouses will be added for the remainder of the year and all stores opening for the balance of this year will continue to leverage existing facilities. We've previously discussed that our long-term retail gross margin goal is 42%. We came within striking distance of that in Q2 at 41.8% and ultimately we believe our goal is achievable when you consider the following. The decreasing share of revenues coming from lower margin small electronics and home office, increasing sales of furniture and mattress which have a higher margin, increasing sales of appliances and continuing improving warehouse utilization. Taking a look at Slide 18 of the earnings presentation, retail costs and expenses leveraged in all categories. Starting with the top row, we show that cost of goods and parts, including warehousing and occupancy costs, leveraged by 120 basis points as a percent of total retail revenue, declining to 57.9%. This improvement resulted from the same drivers as we just discussed for retail gross margins. Delivery, handling and – delivery, transportation and handling costs leveraged by 40 basis points to 4.2% as efficiencies and delivery operations with the added distribution centers were partly offset by higher costs stemming from the shift in product sales mix. Retail SG&A, excluding delivery costs, was 23.6% for the quarter, compared to 24% for the same period a year ago. The 40 basis point improvement was driven by 70 basis points of advertising leverage. Beginning in the previous quarter of this year, we've successfully executed on a number of efforts to increase advertising efficiency. These included refined targeted geography for both mail and print and advanced buys for television. In addition, we mentioned in the past our expectation was that in the second quarter, the pace of store openings would accelerate with many of the new stores coming in markets having existing advertising spending. Examples include El Paso, Memphis, Charlotte, Spartanburg/Greenville and Denver. The primary offset to retail SG&A leverage was higher comp and benefit expense, driven primarily by the impact of unfavorable medical expenses as we've experienced significantly higher cost of claims. We also experienced modest occupancy cost deleverage on the impact of new and expanded stores. An additional callout is that we have held corporate overhead roughly flat as a percentage of sales, despite planned increases to support growth. We have added talent in many areas of the country beyond just credit plans. During the quarter, we recognized $1 million in expenses related to professional fees associated with our review of strategic alternatives as well as the class action lawsuit. These expenses compared to prior-year expenses of $1.5 million, which were associated with facility closures. Adjusting to exclude these items, retail operating margins increased 180 basis points to 14.2% during the quarter from 12.4% a year ago, coming in at $46.1 million, which was a 29.2% increase to last year. This result demonstrates that we have been able to convert improving gross margin to improving net margins and increased overall profit contribution from the retail segment. Taking a look at the credit segment, finance charges and other revenues were $70.4 million for Q2 of fiscal 2016, up $6.4 million or 9.5% versus Q2 of last year. This was driven by a 24.5% increase in the average balance of the portfolio, partly offset by a decline in interest income and fee yield. Drivers of this decline included, first, the introduction of 18 and 24 month equal payment, no-interest finance programs beginning in October of 2014 to certain higher credit quality borrowers. Second, a higher provision for uncollectible interest. And, third, our discontinuation of charging customers certain payment fees. SG&A expense in the credit segment for the quarter grew 12.7% versus the same period last year, driven by the addition of collections personnel to service the 23.1% year-over-year increase in the customer portfolio balance, together with the anticipated near-term portfolio growth. Credit SG&A as a percentage of average total customer portfolio balance, which we use as a key metric, leveraged by 90 basis points over last year, despite also being affected by the unfavorable medical expenses we experienced during the quarter. This improvement reflects higher employee productivity as we have been able to reduce turnover and improve tenure. The provision for bad debts increased during Q2 by $12.1 million during last year to $51.6 million. The increase resulted from several factors, including a 24.5% increase in the average receivable portfolio balance, a 26.1% increase in origination volume compared to last year, a year-over-year increase of 50 basis points in 60-plus- day delinquencies, an increase in the proportion of new customers within the total portfolio balance compared to the prior-year period, and, finally, an increase in the balance of customer receivables accounted for as troubled debt restructurings. As a result of these factors, the reserve for bad debt as a percentage of the average portfolio balance was 14.5%, compared to 13.9% in the second quarter of last year. Interest expense increased by $3.8 million in Q2 year-over-year driven by an increase in the average debt balance outstanding as well as an increase in the effective interest rate. The increase in the effective interest rate was primarily due to our issuance of the Senior Notes on July 1, 2014. Turning now to balance sheet and liquidity. As of July 31, 61% of our $173.6 million in inventory was financed with outstanding accounts payables. Our inventory turn rate was approximately 5.0 for the quarter flat to last year. Now moving to Slide 19 of the deck, we have reformatted the presentation to better reflect our liquidity position. For each time period we now show cash as well as available liquidity and borrowing capacity. In addition to historical periods, we've also added a pro forma view tied to when we close the transactions. As I mentioned a moment ago, upon closing of the securitization transaction, our liquidity will increase very substantially. As shown in the bar on the right-hand side of the graph, at closing we expect to have a cash balance of approximately $380 million and an additional $190 million in borrowing capacity on our ABL, reflecting the borrowing base of inventory and newly generated customer receivables. That leaves another $690 million in capacity which would become available as we continue to originate customer receivables and then roll into our borrowing base. Taken together, the $380 million in cash, combined with the $880 million in ABL capacity, brings total liquidity sources to $1.26 billion upon closing of the securitization. In connection with this transaction, Conn's has entered an amendment of its credit facility with its lenders which adjusts the covenants and calculations to reflect the corresponding charges in our capital changes in our capital structure. Key points of that amendment, which is incorporated into an 8-K filing today, include permitting the repurchase of up to $75 million in shares of high-yield notes outstanding, redefining fixed charges to exclude the $75 million in repurchases and redefining the leverage ratio such that cash is netted out of total liabilities in the calculation. As of the end of the quarter, we were well within compliance of our debt covenants and also expect to be well within compliance of the amended covenants at the close of the transaction. Finally, we wanted to take a moment to discuss guidance. For the third quarter of fiscal 2016, we expect the percent of bad debt charge-offs to average outstanding balance to range between 11.25% and 11.75%. Interest income and fee yield should range from 16% to 16.5%. For the full fiscal year of 2016, we are reaffirming our expectations for the change in same-store sales to range from flat to up low single digits. We are updating our guidance for retail gross margin to now be in the range of 40.5% to 41.5%. And finally, we are reaffirming our plans to open 15 to 18 new stores for the fiscal year including five in Q3 with three plans for Q4 and no additional store closures during the remainder of the year. Though all of the changes announced today, we are canceling our plan participation in investor conferences, at least for the month of September. However, we do expect to get out to meet investors in the near future. In closing, we've presented a good deal of information today which all relates to the execution of a carefully considered plan, developed by Management and our Board, to transform the business and position the company for future growth, while reducing risk and enhancing shareholder value. To summarize from a financial perspective, we just executed a non-recourse securitization of over $1.4 billion in customer receivables and are actively marketing the residual equity. We will have $380 million in cash after paying down our revolving credit facility. Our Board has authorized a $75 million repurchase program and we are looking to expand this. At the same time, our strong retail execution is delivering significant EBIT increases in that segment and our credit segment performance is stabilizing with expectations for continued modest portfolio improvements. We believe that all these factors continue to position us well for future growth in the business and in returns to shareholders. At this point I'd like to turn the call back over to Mike for some closing comments.

Thank you, Tom. On behalf of myself and all the Conn's employees, I'd like to take a moment to thank Theo for his guidance and leadership over the past five years. We've all benefited from the opportunities created as he led the transformation of the business. I personally have enjoyed and appreciate getting to know and work with Theo, and wish him well as he moves on to his next adventure. With that, Jonathan, we'll open up for Q&A.

[Operator Instructions] Our first question comes from the line of Brian Nagel from Oppenheimer. Your question please.

Hi, good afternoon. I guess good morning still. Lots of details today, thank you. My question I wanted – I guess this is probably mostly for Mike. You laid out in your prepared comments just some numbers, but how should we think about – in light of the securitization deal you announced today, how should we think about what remains the, sort of to say, the risk to Conn's? Is it simply that $130 million you called out or is there – are there other metrics we should consider, particularly maybe a fluctuating interest rate environment or if there's underlying changes in the performance of the portfolio?

No, there is relative to the assets securitized our risk is the $130 million debt balance on our balance sheet as of the close of the transaction. That would be the limit to our exposure so whatever happens with cash flows within the securitization transaction stays within the securitization transaction with the bondholders.

Okay. And then a second question, again you touched on this in your prepared comments, too, but at what point – looking at the 60-plus-day delinquency rate, and understanding a lot of things are happening behind that, but we have talked for a while now about tightening lending standards. At what point should we begin to see that moderate and where do we now think that – what should be determined as a healthy rate? It was 60 plus day delinquency rate for Conn's.

Well, I think start with – I think we have been seeing it moderate so the difference year-over-year has continued to tighten and I commented on the call that the delinquency rate for origination for beings originated in the last 12 months is 50 basis points lower than for the comparable period in the year ago period. So part of this is just continuing to rollout the older originations and season the more recent vintages in and then topped on a static pool basis, that the originations from the last six months, the last fiscal year and the first quarter of this fiscal year are performing better from a static pool delinquency basis than the same pools of accounts in the prior year, in the comparable periods and noted that the charge-off rate has been declining sequentially for three quarters now, so I think we're seeing that moderation in the performance and the benefits of the change in underwriting and the higher credit accounts added to the portfolio. We haven't stated a specific goal or guidance for the delinquency rate but if we assuming we maintain the current origination pace we would expect for delinquency rates to be better for most of the year or next year on a year-over-year basis.

That's helpful. And I guess as one final question, sorry to bounce around here, but as I'm listening to the comments today and reading the press release, it seems that the securitization deal – not to put words in your mouth, this is a first step and you're still working towards that larger flow type arrangement. First of all, I wanted to make sure I understood that correctly. But then the question after that is are there any time parameters we should think about in terms of when the pieces will be in place to actually establish that flow-type arrangement?

We don't have a specific timeline. We did talk in the comments about we think we need to do more than one securitization transaction so we'll need to do a couple of periodic transactions and work to sell the residual and some of that is just to deliver the information that investors need to see to understand and the cash flows of the securitized portfolio and be able to tighten the pricing around it. We talked about we didn’t get bids on the sale of the portfolio but at the end of the day what we did, we delivered the financing structure that those bidders would have used but we just didn't pay them to deliver that financing structure and then allows us to market the residual to a broader group.

Okay, thank you.

Thank you.

Thank you. Our next question comes from the line of Rick Nelson from Stephens. Your question please.

I'd like to talk about the economics of the securitization. The all-in cost of funding, you indicated 9.1%, how that compares to your prior cost of funding and other alternatives that might have been out there, why you chose this route?

We chose this route, Rick, because while this transaction was higher priced than our existing facilities, it was the cost of getting back into the market and it's also important to note what also add cost this was a committed transaction so Credit Suisse [ph] did this as a bought deal and so we had our basic underwriting costs or fees plus additional underwriting fees for the fact this was a committed transaction and going forward, we would expect to do marketed transactions that the underwriting fees would tighten considerably from what we paid in this deal, along with the structuring expenses to develop the first transaction structure. And then with the future transactions being more recently originated receivables, the tenor on the bonds should be longer so that will help spread those costs over a longer period of time and ultimately we would expect a coupon rate that would be an all-in cost comparable to the ABL facility in the long term.

Okay. Can you discuss any triggers with the agreement to trap cash?

There are no triggers to track cash. Remember this is non-recourse to Conn's as a retailer and public Company and all of the cash flow, the bond holders the only cash they get are the cash flows from the receivables in the securitization transaction and so there are reserves maintained but they're built into the projected cash flows to model out that were modeled out to build the bond structure and still result in a residual cash flow piece that we're working on selling.

Okay that was helpful. So if the principal and interest doesn't hit that 6.03 coupon, there is no requirement then for Conn’s to back-stop at all?

That is correct. It is non-recourse to Conn's and there is no back stop. That goes stop. That goes back to the earlier question, our maximum exposure is the $130 million net book value of that residual asset that we have on our books, so the worst case scenario is that cash flow isn't recovered and that asset isn't worth what we've got it on the books but beyond that we have no further exposure.

Okay. Thanks and good luck.

Thank you.

Thank you. Our next question comes from the line of Peter Keith from Piper Jaffray. Your question please?

Hi, thank you very much. Theo, congratulations on your transition. I assume we'll continue to hear from you periodically. I wanted to just ask about potential dilution or maybe even accretion on both EPS and EBITDA from the securitization both with and without the sale of that residual asset. If you could kind of give us the puts and takes on how we could think about what I assume will be some dilution, that would be helpful. And obviously touching on that remaining risk of the asset and also the servicing fee that you've agreed upon.

Yes, Peter this is Theo, I’ll try to take a stab at some of that at a high level and fill in some gaps but the servicing fee is expected to cover the related costs with a slight profit margin so that would generally be beneficial. The cost of funding is somewhat higher but as Mike pointed out and that would be dilutive but as Mike pointed out we anticipate in the long term with this type of structure to be able to deliver equal to or better than cost of funding. In addition, we have the benefit of any potential securities repurchases which would be accretive to earnings including potential purchases of bonds or Senior Notes as well as equity in the form of Common Stock. So the puts and takes are really servicing fee profitability. We retain as Mike pointed out, we retain all of the credit insurance income, we'll have a cost of funding – temporary cost of funding dilutive impact. And then as we redeploy capital and securities repurchases, we will receive the benefits in earnings from those repurchases.

And I'd just point out while it is a higher cost to enter that market, it is a fixed term bond and we'll amortize relatively quickly and the weighted average life is less than a year for the outstanding so we would expect as we do add-on deals we grow balances again on the ABL facility will start to blend our of capital back down.

Okay, that's helpful puts and takes. If we look out to next year – and I know you're not providing any guidance, per se, but would you expect this type of structure and to add the cost of funding comes down with future securitizations? Should we think about the impact of the securitization being potentially accretive to next year or would it the most definitely be dilutive?

We're not providing specific guidance, as you noted, but the life of the issuance of the chart securitization is about seven months so the impact of that securitization will decline, will also receive the benefit of interest earnings in a holding period for the receivables that we put on the balance sheet which will also benefit earnings so it just depends on the timing of redeployment of capital and the next securitization transaction and its pricing whether or not it would be dilutive for next year but I'll summarize by saying that if you look at the ultimate outcome for the Company of entering into the securitization market our anticipation is that that would not be dilutive in the long term.

Okay, that's helpful. Could you provide us maybe some thoughts on the sale of that residual asset? I hate to box you into a time frame, but is this something that would be decided upon quickly or might it take past the end of the year?

We're actively engaged in dialogue with potential purchasers right now so it's something that could possibly take place quickly but in the event that we are not able to receive the appropriate value for the residual then it could extend to next year before able to sell or we could retain for the life of the residual, which is fairly short, as well. So those are the alternatives but we're actively in dialogue with a number of purchasers right now.

Okay thank you. One last question. How should we think about your decision as you're returning some of that excess cash with the $75 million repurchase – your decision on balancing whether it's share repurchase or Senior Note paydown? Is there a way that we could think about that?

Well you can do what we've done, Peter and look at the returns or implied returns to shareholders from the different alternatives and that will be a critical factor in the decision to that allocation between those two potential repurchase activities in the short-term. In addition, we'll also monitor the behavior of those markets and that will be a factor as if there is any choppiness or trading – trading in the bonds as an example, that could be an opportunity for us to support bondholders and the value of those securities and the same is true on the equity side. So a part of it will depend on relative valuation and part depending on the behavior of those two markets.

Okay, thank you very much for answering all my questions.

Thank you, Peter.

Thank you. Our next question comes from the line of Brad Thomas from KeyBanc Capital Markets. Your question please.

Yes, thank you. Good morning. And Theo let me wish all the best as well.

Thank you.

I wanted just to follow up on Peter’s question about the impact to the income statement as we look forward here. Just as we think about revenue and operating income, can you help me just think through the puts and the takes here, obviously you have investors that are now getting access to the payments from the customers, but you all now are getting the servicing fee. How does that affect how we should model, the revenues and then what’s the impact on operating income as we look forward?

So it’s simple in the short-term. Until we sell the residual, everything will still be consolidated on balance sheet and you won’t see any impact to the financial statements. Your adjustment will be borrowing cost. If we sell the residual then the financial statements will change, if we were able to derecognize the assets and the liabilities and we’ll have a broader discussion at that time when and if we get that transaction completed.

Got you. So Mike, on a – call it forward four quarter basis, we should just be increasing your cost by the higher borrowing cost on $1.4 billion?

That’s correct, just model in at $1.1 billion.

Great.

And then – right, and then – and if you look in the earnings presentation, it talks about the average life and gives you some info to help you model the bonds and their amortization and how quickly they will pay down and so you can model in what periods those paydowns and the change in interest will impact.

Got you, great. And as we think about capital structure for the company, I understand that this is just the first step in optimizing how your credit business fits into the whole company. But as we think about capital structure and that $75 million that you’re authorizing today. If there weren’t covenants in place, what would the appropriate authorization be or what would the appropriate leverage ratio be for the company do you think?

Well, we’re – this is Tom. We’re still going through and assessing that. Certainly what’s important to us is to maintain the access to multiple components of the financing market. So we’ll – it will be a combination of cash, but it will also have continued utilization of the ABL, that’s why we’re remaining in the high yield market as well. So that’s something that we’re in the process of formulating, but to build on the comments we made earlier, we believe that number moving forward is certainly in excess of the $75 million we’re looking at now. And so we’ll just evaluate making sure that we maintain liquidity to be able to operate the business at the time of the receivables even in the event of challenges in the capital markets. And so those are all factors that are on our minds.

Got you. And if I could just ask one last housekeeping question here, I know we’re running pretty long. But I think Mike it was you who referenced working with FICO and potential changes in the origination model. I guess the question would really be as you think about the underwriting standards for your customer, do you think that there are going to be any changes coming as a result of how you’re working with FICO?

I think what we would really be working on and fine tuning with them, Brad, is the decision algorithm that scores customer ability and probability to pay. And just updating for kind of changes in customer behavior in the economy over the last couple of years. We are not talking about broad strokes and trying to change average FICO or anything like that in the portfolio at this time.

Got you.

Just trying to improve the predictive power of the model.

Understood. Thanks again for all the color. Thanks guys.

You bet, thank you.

Thank you. Our next question comes from the line of David Magee from SunTrust. Your question please.

Hi, everybody. So, just not to beat a dead horse, but if you were able to sell the residual say before year end, next year we wouldn’t have the provision, is that a fair, the provision would be off the income statements?

It depends if we enter into a flow agreement that would be true, but under our current expectation, we would be periodic transactions and it would require some limited amount of provision should be required every time we originate.

And would you still have the same SG&A burden for the credit business in that scenario too?

Yes. The – as long as we are originating and servicing, which is our plan then operationally we would continue to see the same expense levels relative to executing the business plan.

Okay.

We should – but as we grow, we would still – we would expect to continue to lever credit expenses as we have this year.

Thank you. And then lastly, and I apologize if I missed this, but any color on the new store performance? And how you might be approaching how you open new stores in new markets as we go into next year would be helpful. Thank you.

Yes, the new stores continue to perform well and they’re profitable virtually from the moment they open four walls and including allocated overhead. So the new stores are performing well. We’re continuing to execute the strategy. We talked about the last several quarters where if we're entering a market we're seeking to open more of the stores we ultimately expect to have in that market at the same time or near the same time. So we get better leverage on our marketing expenditures. And we’re opening stores that are supported by existing warehouses to the extent possible and when we open a new warehouse. We would expect that that warehouse would already have stores open, but it supports, so we leverage those warehouse costs. But overall the stores are doing really well. We singled out the example of Memphis in one of the slides. Very different ethnic demographics than some of our other successful markets, we’re doing very well there, very well in Charlotte. We think those will be the outstanding markets for us in the long-term. And so don't see anything in the performance of the new stores in the eastern part of the country that would tell us we need to revise our store opening plan.

Great, thanks and good luck.

Thank you.

Thank you.

All right, thank you everyone for joining.

Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.