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HHGregg files to raise up to $300M in stock, debt

 IBJ Staff and Bloomberg News
June 24, 2013
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Retailer HHGregg Inc. wants to raise up to $300 million with offerings of company shares and debt with an eye toward bolstering its working capital and growing the chain, according to a filing with regulators.

On Friday, HHGregg filed a prospectus with the U.S. Securities and Exchange Commission to sell up to $300 million in common stock, preferred stock, warrants, debt securities or any combination thereof. The firm did not commit to a timetable, saying it would file specifics about offerings when necessary.

“We intend to use the net proceeds from any sale of securities by us for working capital, store growth and other general corporate purposes,” the company wrote in the prospectus.

As of March 31, Gregg operated 228 stores in 20 states. The Indianapolis-based retailer specializes in selling consumer electronics and appliances.

Many public companies are taking advantage of this year’s strong market performance with secondary stock offerings, according to Bloomberg News. They’ve completed 334 secondary offerings, the most since 1996.

Until recently, Gregg shares have enjoyed a rocketship-like ride. Since the beginning of the year, the stock price has risen about 117 percent, from just above $7 to a high of $17.71 in early June.

Companies may be trying to raise money before pumped-up stock prices fizzle, said Thomas Garcia, head of equity trading at Santa Fe, N.M.-based Thornburg Investment Management Inc., which manages about $85 billion.

“They’re thinking, we might be topping out here, and prices of their companies are at or close to all-time highs,” Garcia said. “If you’re going to do it, you want to do it while the market’s hot.”

The stock market saw a broad decline on Monday morning, and Gregg performed even more poorly. Shares slipped nearly 10 percent, to $14.70, after two hours of trading. The S&P 500 was down 1.8 percent.

The company saw a big drop in earnings in its latest quarter on decreased sales, lower profit margins and higher advertising expenses, it said in May.

The company reported earnings of $9.9 million, or 31 cents per share, for the fiscal fourth quarter, which ended March 31. That compared with $53.6 million, or $1.45 per share, in the same period a year ago.

Last year's quarter, however, included $39.6 million in earnings from a key-man life insurance payment. Adjusted earnings for the year-ago period were $14.5 million, or 39 cents per share.

Revenue for the latest quarter fell 2.6 percent, to $597.6 million.
 

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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