UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                             ----------------------

                                    FORM 10-Q/A

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                  Commission File Number 000-50421
       April 30, 2007
                                  CONN'S, INC.
             (Exact name of registrant as specified in its charter)

       A Delaware Corporation                                06-1672840
    (State or other jurisdiction                          (I.R.S. Employer
  of incorporation or organization)                     Identification Number)

                               3295 College Street
                              Beaumont, Texas 77701
                                 (409) 832-1696
                   (Address, including zip code, and telephone
                  number, including area code, of registrant's
                          principal executive offices)

                                      NONE
                     (Former name, former address and former
                   fiscal year, if changed since last report)


Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [ x ] No [ ]


Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
One): Large accelerated filer [ ] Accelerated filer [ x ] Non-accelerated  filer
[ ]


Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [ ] No [ x ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of May 29, 2007:



                    Class                                     Outstanding
-------------------------------------------         ----------------------------
  Common stock, $.01 par value per share                      23,428,658





                                EXPLANATORY NOTE

                Correction of Consolidated Financial Statements

     We are amending our Quarterly  Report on Form 10-Q (the "Original  Filing")
for the quarter ended April 30, 2007,  to correct a mistake in our  consolidated
balance sheet as of April 30, 2007 filed with our Quarterly  Report on Form 10-Q
for the quarter ended April 30, 2007,  which was filed with the  Securities  and
Exchange  Commission  on  May  31,  2007.  This  amendment  and  correction  are
necessitated  by a  typographical  error  in the  consolidated  balance  sheets,
specifically in the line entitled "Accounts payable".

     All of the information in this Form 10-Q/A is as of April 30, 2007 and does
not reflect  any  subsequent  information  or events  other than the  correction
indicated  above.  Only the following items have been amended as a result of the
correction:

Part I - Item 1 - Financial Statements, Consolidated Balance Sheets, Page 1

Other  than as  discussed  above,  this  Form  10-Q/A  does not  reflect  events
occurring  after  the  filing  of  the  Original  Filing  or  modify  or  update
disclosures  (including  the  exhibits  to  the  Original  Filing)  affected  by
subsequent events.  Accordingly,  this Form 10-Q/A should be read in conjunction
with our periodic  filings  made with the  Securities  and  Exchange  Commission
subsequent to the date of the Original Filing, including any amendments to those
filings. In addition,  this Form 10-Q/A includes updated certifications from our
Chief Executive  Officer and Chief Financial Officer as Exhibits 31.1, 31.2, and
32.1.


                                       i


                                TABLE OF CONTENTS
                                -----------------




PART I.       FINANCIAL INFORMATION                                                                   Page No.
              ---------------------                                                                   --------

                                                                                                     
Item 1.       Financial Statements...........................................................................1
-------

              Consolidated Balance Sheets as of January 31, 2007 and April 30, 2007..........................1

              Consolidated Statements of Operations for the three months ended
                  April 30, 2006 and 2007....................................................................2

              Consolidated Statement of Stockholders' Equity for the three months ended
                  April 30, 2007.............................................................................3

              Consolidated Statements of Cash Flows for the three months ended
                  April 30, 2006 and 2007....................................................................4

              Notes to Consolidated Financial Statements.....................................................5

Item 2.       Management's Discussion and Analysis of Financial Condition
-------           and Results of Operations.................................................................12

Item 3.       Quantitative and Qualitative Disclosures About Market Risk....................................26
-------

Item 4.       Controls and Procedures.......................................................................26
-------

PART II.      OTHER INFORMATION
              -----------------

Item 1.       Legal Proceedings.............................................................................26
-------

Item 1A.      Risk Factors..................................................................................26
-------

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds...................................27
-------

Item 5.       Other Information.............................................................................27
-------

Item 6.       Exhibits......................................................................................27
-------


SIGNATURE ..................................................................................................28



                                       ii


Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
                                  Conn's, Inc.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)




                                                                    January 31,   April 30,
                                    Assets                             2007         2007
                                                                    -----------  -----------
Current assets                                                                   (unaudited)
                                                                           
Cash and cash equivalents .......................................   $    56,570  $    52,880
Accounts receivable, net ........................................        31,448       29,592
Interests in securitized assets .................................       136,848      150,552
Inventories .....................................................        87,098       81,255
Deferred income taxes ...........................................           551          856
Prepaid expenses and other assets ...............................         5,247        7,368
                                                                    -----------  -----------
      Total current assets ......................................       317,762      322,503
Non-current deferred income tax asset ...........................         2,920           --
Property and equipment
Land ............................................................         9,102        6,781
Buildings .......................................................        13,896        8,691
Equipment and fixtures ..........................................        13,650       14,441
Transportation equipment ........................................         3,022        2,958
Leasehold improvements ..........................................        66,761       68,307
                                                                    -----------  -----------
      Subtotal ..................................................       106,431      101,178
Less accumulated depreciation ...................................       (46,991)     (48,849)
                                                                    -----------  -----------
      Total property and equipment, net .........................        59,440       52,329
Goodwill, net ...................................................         9,617        9,617
Debt issuance costs and other assets, net .......................           208          195
                                                                    -----------  -----------
      Total assets .............................................    $   389,947  $   384,644
                                                                    ===========  ===========
                      Liabilities and Stockholders' Equity
Current liabilities
Current portion of long-term debt ...............................   $       110  $       104
Accounts payable ................................................        54,045       35,583
Accrued compensation and related expenses .......................         9,234        7,921
Accrued expenses ................................................        20,424       20,320
Income taxes payable ............................................         3,693        4,293
Deferred revenues and allowances ................................         9,516       12,065
                                                                    -----------  -----------
      Total current liabilities .................................        97,022       80,286
Long-term debt ..................................................            88           59
Non-current deferred income tax liability .......................            --        1,503
Deferred gains on sales of property .............................           309        1,500
Stockholders' equity
Preferred stock ($0.01 par value, 1,000,000 shares authorized;
   none issued or outstanding) ..................................            --           --
Common stock ($0.01 par value, 40,000,000 shares authorized;
     23,809,522 and 23,850,760 shares issued at January 31, 2007
     and April 30, 2007, respectively) ..........................           238          238
Additional paid-in capital ......................................        93,365       94,415
Accumulated other comprehensive income ..........................         6,305           --
Retained earnings ...............................................       196,417      214,994
Treasury stock, at cost, 168,000 and 346,000 shares, respectively        (3,797)      (8,351)
                                                                    -----------  -----------
      Total stockholders' equity ................................       292,528      301,296
                                                                    -----------  -----------
         Total liabilities and stockholders' equity .............   $   389,947  $   384,644
                                                                    ===========  ===========


See notes to consolidated financial statements.



                                       1


                                  Conn's, Inc.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                 (unaudited)
                   (in thousands, except earnings per share)

                                                           Three Months Ended
                                                                April 30,
                                                         ----------------------
                                                           2006         2007
                                                         ---------    ---------

Revenues
   Product sales .....................................   $ 158,509    $ 166,639
   Service maintenance agreement commissions, net ....       7,967        9,281
   Service revenues ..................................       5,229        5,445
                                                         ---------    ---------

     Total net sales .................................     171,705      181,365
   Finance charges and other .........................      20,483       23,945
                                                         ---------    ---------

     Total revenues ..................................     192,188      205,310

Cost and expenses
   Cost of goods sold, including warehousing
    and occupancy costs ..............................     125,729      131,971
   Cost of parts sold, including warehousing
    and occupancy costs ..............................       1,565        1,866
   Selling, general and administrative expense .......      46,664       51,636
   Provision for bad debts ...........................          43          560
                                                         ---------    ---------

     Total cost and expenses .........................     174,001      186,033
                                                         ---------    ---------

Operating income .....................................      18,187       19,277
Interest income, net .................................        (184)        (240)
Other income, net ....................................         (33)        (831)
                                                         ---------    ---------

Income before income taxes ...........................      18,404       20,348

Provision for income taxes ...........................       6,455        7,402
                                                         ---------    ---------

Net income ...........................................   $  11,949    $  12,946
                                                         =========    =========

Earnings per share
   Basic .............................................   $    0.51    $    0.55
   Diluted ...........................................   $    0.49    $    0.54
Average common shares outstanding
   Basic .............................................      23,596       23,567
   Diluted ...........................................      24,448       24,121


See notes to consolidated financial statements.


                                       2




                                                         Conn's, Inc.
                                       CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                              Three Months Ended April 30, 2007
                                                         (unaudited)
                                         (in thousands, except descriptive shares)


                                                              Accum.
                                                              Other
                                                             Compre-     Additional
                                        Common Stock         hensive      Paid-in       Retained     Treasury
                                    Shares       Amount       Income      Capital       Earnings      Stock         Total
                                  ----------   ----------   ----------   ----------    ----------   ----------    ----------

                                                                                             
Balance January 31, 2007 ......       23,810   $      238   $    6,305   $   93,365    $  196,417   $   (3,797)   $  292,528

Cumulative effect of changes in
 accounting principles ........                                 (6,305)                     5,631                       (674)

Exercise of options to acquire
 shares of common stock,
 incl. tax benefit ............           38                                    468                                      468

Issuance of shares of common
 stock under Employee
 Stock Purchase Plan ..........            3                                     64                                       64

Stock-based compensation ......                                                 518                                      518

Purchase of 178,000 shares
 of treasury stock ............                                                                         (4,554)       (4,554)

Net income ....................                                                            12,946                     12,946

                                  ----------   ----------   ----------   ----------    ----------   ----------    ----------
Balance April 30, 2007 ........       23,851   $      238   $       --   $   94,415    $  214,994   $   (8,351)   $  301,296
                                  ==========   ==========   ==========   ==========    ==========   ==========    ==========


See notes to consolidated financial statements.



                                                             3





                                  Conn's, Inc.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (unaudited) (in thousands)




                                                                                  Three Months Ended
                                                                                        April 30,
                                                                                 ----------------------
                                                                                   2006         2007
                                                                                 ---------    ---------
Cash flows from operating activities
                                                                                        
 Net income ..................................................................   $  11,949    $  12,946
 Adjustments to reconcile net income to net cash used in operating activities:
   Depreciation ..............................................................       3,006        3,217
   Amortization ..............................................................         (97)        (161)
   Provision for bad debts ...................................................          43          560
   Stock-based compensation ..................................................         393          518
   Discounts on promotional credit ...........................................         217          631
   Gains recognized on sales of receivables ..................................      (5,131)      (5,377)
   Loss on mark-to-market of interests in securitized assets .................          --          115
   Provision for deferred income taxes .......................................       1,369          869
   Gains from sales of property and equipment ................................         (33)        (831)
 Changes in operating assets and liabilities:
   Accounts receivable .......................................................       2,563       (7,775)
   Inventory .................................................................      (6,541)       5,843
   Prepaid expenses and other assets .........................................        (506)      (2,121)
   Accounts payable ..........................................................      (4,036)     (18,462)
   Accrued expenses ..........................................................      (8,520)      (1,417)
   Income taxes payable ......................................................      (3,325)       4,226
   Deferred revenue and allowances ...........................................         265        1,607
                                                                                 ---------    ---------
Net cash used in operating activities ........................................      (8,384)      (5,612)
                                                                                 ---------    ---------
Cash flows from investing activities
 Purchase of property and equipment ..........................................      (7,023)      (2,748)
 Proceeds from sales of property .............................................          48        8,727
                                                                                 ---------    ---------
Net cash provided by (used in) investing activities ..........................      (6,975)       5,979
                                                                                 ---------    ---------
Cash flows from financing activities
 Proceeds from stock issued under employee benefit plans .....................       1,132          530
 Purchase of treasury stock ..................................................          --       (4,554)
 Excess tax benefits from stock-based compensation ...........................         133            2
 Borrowings under lines of credit ............................................       3,200           --
 Payments on lines of credit .................................................      (3,200)          --
 Increase in debt issuance costs .............................................         (22)          --
 Payment of promissory notes .................................................        (136)         (35)
                                                                                 ---------    ---------
Net cash provided by (used in) financing activities ..........................       1,107       (4,057)
                                                                                 ---------    ---------
Net change in cash ...........................................................     (14,252)      (3,690)
Cash and cash equivalents
 Beginning of the year .......................................................      45,176       56,570
                                                                                 ---------    ---------
 End of period ...............................................................   $  30,924    $  52,880
                                                                                 =========    =========

See notes to consolidated financial statements.




                                       4


                                  Conn's , Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)
                                 April 30, 2007

1.  Summary of Significant Accounting Policies

    Basis of Presentation.  The accompanying  unaudited,  condensed consolidated
financial statements have been prepared in accordance with accounting principles
generally  accepted in the United States for interim  financial  information and
with  the   instructions  to  Form  10-Q  and  Article  10  of  Regulation  S-X.
Accordingly,  they do not include all of the information and footnotes  required
by accounting  principles  generally  accepted in the United States for complete
financial  statements.   The  accompanying   financial  statements  reflect  all
adjustments  that  are,  in the  opinion  of  management,  necessary  for a fair
statement of the results for the interim periods presented. All such adjustments
are of a normal recurring  nature.  Operating results for the three month period
ended April 30, 2007 are not  necessarily  indicative of the results that may be
expected for the year ending January 31, 2008. The financial  statements  should
be  read  in   conjunction   with  the  Company's  (as  defined  below)  audited
consolidated  financial  statements  and  the  notes  thereto  included  in  the
Company's Annual Report on Form 10-K filed on March 29, 2007.

    The  Company's  balance  sheet at January 31, 2007 has been derived from the
audited  financial  statements  at that  date but does  not  include  all of the
information and footnotes required by accounting  principles  generally accepted
in the  United  States  for  complete  financial  presentation.  Please  see the
Company's  Form 10-K for the fiscal  year ended  January 31, 2007 for a complete
presentation of the audited financial statements at that date, together with all
required  footnotes,  and for a complete  presentation  and  explanation  of the
components and presentations of the financial statements.

    Principles of Consolidation.  The consolidated  financial statements include
the accounts of Conn's,  Inc. and its subsidiaries,  limited liability companies
and limited  partnerships,  all of which are  wholly-owned  (the  Company).  All
material  intercompany   transactions  and  balances  have  been  eliminated  in
consolidation.

    The  Company  enters  into  securitization  transactions  to sell its retail
installment   and  revolving   customer   receivables   and  retains   servicing
responsibilities and subordinated interests.  These securitization  transactions
are accounted for as sales in accordance with Statement of Financial  Accounting
Standards  (SFAS) No. 140,  Accounting  for Transfers and Servicing of Financial
Assets and Extinguishment of Liabilities, as amended by SFAS No. 155, Accounting
for Certain Hybrid Financial  Instruments,  because the Company has relinquished
control of the  receivables.  Additionally,  the  Company  has  transferred  the
receivables to a qualifying special purpose entity (QSPE). Accordingly,  neither
the  transferred  receivables  nor the  accounts of the QSPE are included in the
consolidated  financial  statements  of  the  Company.  The  Company's  retained
interest in the transferred receivables is valued under the requirements of SFAS
No. 157, Fair Value Measurements.

    Use of Estimates. The preparation of financial statements in conformity with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.


                                       5


    Earnings Per Share. In accordance with SFAS No. 128, Earnings per Share, the
Company  calculates  basic  earnings  per share by  dividing  net  income by the
weighted average number of common shares outstanding. Diluted earnings per share
include the dilutive effects of any stock options  granted,  as calculated under
the treasury-stock method. The following table sets forth the shares outstanding
for the earnings per share calculations:




                                                                                       Three Months Ended
                                                                                            April 30,
                                                                                    -------------------------
                                                                                       2006          2007
                                                                                    -----------   -----------
                                                                                             
    Common stock outstanding, net of treasury stock, beginning of period ........    23,571,564    23,641,522
    Weighted average common stock issued in stock option exercises ..............        24,095         8,261
    Weighted average common stock issued to employee stock purchase plan ........           722         1,144
    Less: Weighted average treasury shares purchased ............................            --       (84,401)
                                                                                    -----------   -----------
    Shares used in computing basic earnings per share ...........................    23,596,381    23,566,526
    Dilutive effect of stock options, net of assumed repurchase of treasury stock       851,192       554,153
                                                                                    -----------   -----------
    Shares used in computing diluted earnings per share .........................    24,447,573    24,120,679
                                                                                    ===========   ===========



    Application of APB 21 to Promotional Credit Programs that Exceed One Year in
Duration.  The Company  offers  promotional  credit  payment  plans,  on certain
products,  that extend beyond one year. In accordance  with APB 21,  Interest on
Receivables  and  Payables,  such  sales  are  discounted  to their  fair  value
resulting in a reduction in sales and  receivables,  and the amortization of the
discount  amount  over the  term of the  deferred  interest  payment  plan.  The
difference  between the gross sale and the  discounted  amount is reflected as a
reduction of Product sales in the consolidated  statements of operations and the
amount of the  discount  being  amortized  in the current  period is recorded in
Finance  charges and other.  For the three months ended April 30, 2006 and 2007,
Product sales were reduced by $1.0 million and $2.0 million,  respectively,  and
Finance  charges  and other was  increased  by $0.7  million  and $1.3  million,
respectively,  to  effect  the  adjustment  to fair  value  and to  reflect  the
appropriate amortization of the discount.

    Texas Tax Law Changes.  On May 18, 2006,  the Governor of Texas signed a tax
bill that modified the existing  franchise tax, with the most significant change
being the  replacement of the existing base with a tax based on margin.  Taxable
margin is generally  defined as total federal tax revenues  minus the greater of
(a) cost of goods sold or (b) compensation. The tax rate to be paid by retailers
and  wholesalers is 0.5% on taxable  margin.  This will result in an increase in
taxes  paid by the  Company,  as  franchise  taxes paid have  totaled  less than
$50,000 per year for the last several years.

    The tax changes  impacted  earnings  beginning in the quarter ended July 31,
2006. For the quarter ended April 30, 2007, the Company accrued,  net of federal
tax benefit,  approximately  $218,000 in additional tax liability as a result of
the new margin tax.

    Sale and  Leaseback  Transactions.  During the three  months ended April 30,
2007, the Company  completed  transactions  involving certain real estate assets
that qualify for sales-leaseback  treatment. As a result, a portion of the gains
resulting from the  transactions are being deferred and amortized as a reduction
of rent  expense on a  straight-line  basis over the  minimum  lease  term.  The
deferred gains of $1.3 million  recorded during the three months ended April 30,
2007, are included in deferred revenues and allowances.

    Sales Taxes.  The Company records and reports all sales taxes collected on a
net basis in the financial statements.

    Reclassifications.  Certain  reclassifications  have  been made in the prior
year's financial statements to conform to the current year's presentation.


                                       6


2.   Adoption of New Accounting Pronouncements

    On  February  1, 2007,  the  Company  was  required  to adopt SFAS No.  155,
Accounting for Certain Hybrid Financial  Instruments.  Among other things,  this
statement  establishes  a  requirement  to  evaluate  interests  in  securitized
financial assets to identify interests that are freestanding derivatives or that
are hybrid financial  instruments that contain an embedded derivative  requiring
bifurcation.  Additionally,  the Company had the option to choose to early adopt
the  provisions of SFAS No. 159, The Fair Value Option for Financial  Assets and
Financial   Liabilities.   Essentially,   the  Company  had  to  decide  between
bifurcation of the embedded  derivative and the fair value option in determining
how it would  account  for its  Interests  in  securitized  assets.  The Company
elected to early  adopt SFAS No. 159  because  it  believes  it  provides a more
easily understood presentation for financial statement users. Historically,  the
Company had valued and reported  its  interests  in  securitized  assets at fair
value,   though  most  changes  in  the  fair  value  were   recorded  in  Other
comprehensive  income. The fair value option simplifies the treatment of changes
in the fair value of the asset,  by reflecting  all changes in the fair value of
its Interests in securitized assets in current earnings,  in Finance charges and
other,  beginning  February 1, 2007.  For the three months ended April 30, 2007,
Finance charges and other included gains of $0.1 million,  reflecting the growth
of the portfolio and  mark-to-market  adjustments  for other changes in the fair
value (see discussion of SFAS No. 157 below). SFAS Nos. 155 and 159 do not allow
for retrospective application of these changes in accounting principle, as such,
no  adjustments  have  been  made  to the  amounts  disclosed  in the  financial
statements for periods ending prior to February 1, 2007. However, the balance in
Other  comprehensive  income,  as of January 31, 2007,  of $6.3  million,  which
represented unrecognized gains on the fair value of the Interests in securitized
assets,  was  included in a  cumulative-effect  adjustment  that was recorded in
Retained earnings, effective February 1, 2007.

    Because of its  adoption of SFAS No. 159,  effective  February 1, 2007,  the
Company  was  required  to adopt the  provisions  of SFAS No.  157,  Fair  Value
Measurements.  This  statement  establishes a framework for measuring fair value
and defines  fair value as "the price that would be received to sell an asset or
paid  to  transfer  a  liability  in  an  orderly   transaction  between  market
participants at the measurement  date." The Company  estimates the fair value of
its Interests in securitized assets using a discounted cash flow model with most
of the inputs used being unobservable  inputs. The primary  unobservable inputs,
which  are  derived  from  the  Company's  historical  experience,  include  the
portfolio yield,  credit loss rate,  discount rate, payment rate and delinquency
rate and reflect the  Company's own  assumptions  about the  assumptions  market
participants  would use in determining  fair value.  In determining  the cost of
borrowings,  the Company uses current actual  borrowing rates, and adjusts them,
as appropriate,  using interest rate futures data from market sources to project
interest  rates  over  time.  Changes in the  assumptions  over time,  including
varying credit portfolio performance, market interest rate changes or a shift in
the mix of funding sources,  could result in significant  volatility in the fair
value of the  Interest  in  securitized  assets,  and thus the  earnings  of the
Company.  The following is a reconciliation of the beginning and ending balances
of the Interests in securitized assets for the three months ended April 30, 2007
(in thousands):

  Balance of Interests in securitized assets at January 31, 2007 ..   $ 136,848

  Amounts recorded in Finance charges and other:
      Fair value increase associated with portfolio growth ........         226
      Fair value increase due to higher expected portfolio yield ..         269
      Fair value increase due to lower discount rate ..............         335
      Fair value decrease due to higher expected borrowing cost ...        (633)
      Other changes ...............................................         (96)
                                                                      ---------
      Total Gains and Losses included in Finance charges and other          101

  Increase in principal balance of subordinated security due to
    transfers of receivables ......................................      13,603

                                                                      ---------
  Balance of Interests in securitized assets at April 30, 2007 ....   $ 150,552
                                                                      =========


                                       7


    Effective February 1, 2007, the Company was required to adopt the provisions
SFAS No. 156, Accounting for Servicing of Financial Assets, an Amendment of FASB
Statement No. 140. This statement requires companies to measure servicing assets
or servicing liabilities at fair value at each reporting date and report changes
in fair value in earnings in the period the changes occur, or amortize servicing
assets or servicing  liabilities  in  proportion  to and over the  estimated net
servicing income or loss and assess  servicing  assets or servicing  liabilities
for impairment or increased obligation based on the fair value at each reporting
date.  The  Company  receives a  servicing  fee each month equal to 0.25% of the
average  outstanding sold portfolio  balance,  plus late fees and other customer
fees collected. Servicing fees collected during the three months ended April 30,
2006 and 2007,  totaled $5.0  million and $5.8  million,  respectively,  and are
reflected in Finance  charges and other. In connection with the adoption of SFAS
No. 156 the Company  elected to measure its servicing asset or liability at fair
value, and report changes in the fair value in earnings in the period of change.
As such, a $0.7 million  cumulative-effect  adjustment  was recorded to Retained
earnings at February 1, 2007,  net of related tax  effects,  to recognize a $1.1
million  servicing  liability.  The Company uses a discounted cash flow model to
estimate its servicing  liability  using the portfolio  performance and discount
rate assumptions  discussed above, and an estimate of the servicing fee a market
participant would require to service the portfolio.  In developing its estimate,
based  on the  provisions  of SFAS  No.  157,  the  Company  reviewed  available
information  regarding  the  servicing  fees  received  by other  companies  and
estimated an expected risk premium a market participant would add to the current
fee structure to receive  adequate  compensation.  During the three months ended
April 30, 2007, the Company  recorded $37,000 of expense related to the increase
in the estimated fair value of the servicing  liability,  in Finance charges and
other.  The increase in the liability was largely  driven by the increase in the
balance of the sold portfolio.

    Effective February 1, 2007, the Company adopted FASB  Interpretation No. 48,
Accounting for Uncertainty in Income Taxes, an  interpretation of FASB Statement
109 (FIN 48). This  statement  clarifies  the criteria  that an  individual  tax
position  must  satisfy for some or all of the  benefits of that  position to be
recognized in a company's financial statements.  FIN 48 prescribes a recognition
threshold  of  more-likely-than-not,  and a  measurement  attribute  for all tax
positions  taken  or  expected  to be  taken  on a tax  return,  in  order to be
recognized in the financial statements. No cumulative adjustment was required to
effect the adoption of FIN 48 and the Company currently has no liability accrued
or potential penalties or interest recorded for uncertain tax positions.  To the
extent penalties and interest are incurred, the Company records these charges as
a component of its Provision  for income  taxes.  The Company is subject to U.S.
federal  income tax as well as income tax in multiple state  jurisdictions.  Tax
returns for the fiscal years  subsequent  to January 31,  2003,  remain open for
examination by the Company's major taxing jurisdictions.


                                       8


3.   Supplemental Disclosure of Revenue and Comprehensive Income

    The following is a summary of the  classification of the amounts included as
Finance charges and other for the three months ended April 30, 2006 and 2007 (in
thousands):

                                                          Three Months Ended
                                                               April 30,
                                                        ----------------------
                                                         2006           2007
                                                        -------        -------
  Securitization income ........................        $15,237        $17,960
  Income from receivables not sold .............            335            265
  Insurance commissions ........................          4,266          5,261
  Other ........................................            645            459
                                                        -------        -------
  Finance charges and other ....................        $20,483        $23,945
                                                        =======        =======

    The  components  of total  comprehensive  income for the three  months ended
April 30, 2006 and 2007 are presented in the table below (in thousands):

                                                          Three Months Ended
                                                               April 30,
                                                         ---------------------
                                                           2006         2007
                                                         --------     --------
  Net income ........................................    $ 11,949     $ 12,946
  Adjustment of fair value of securitized assets ....         773           --
  Taxes on adjustment of fair value .................        (264)          --
                                                         --------     --------
  Total comprehensive income ........................    $ 12,458     $ 12,946
                                                         ========     ========

4. Supplemental Disclosure Regarding Managed Receivables

    The following tables present quantitative  information about the receivables
portfolios managed by the Company (in thousands):




                                               Total Principal Amount of   Principal Amount 60 Days
                                                      Receivables             or More Past Due (1)
                                               -----------   -----------   -----------   -----------
                                               January 31,    April 30,    January 31,    April 30,
                                                  2007          2007          2007          2007
                                               -----------   -----------   -----------   -----------
    Primary portfolio:
                                                                             
               Installment .................   $   382,482   $   387,609   $    24,853   $    22,568
               Revolving ...................        53,125        52,809         1,171         1,216
                                               -----------   -----------   -----------   -----------
    Subtotal ...............................       435,607       440,418        26,024        23,784
    Secondary portfolio:
               Installment .................       133,944       143,744        11,638        11,401
                                               -----------   -----------   -----------   -----------
    Total receivables managed ..............       569,551       584,162        37,662        35,185
    Less receivables sold ..................       559,619       574,562        35,677        33,315
                                               -----------   -----------   -----------   -----------
    Receivables not sold ...................         9,932         9,600   $     1,985   $     1,870
                                                                           ===========   ===========
    Non-customer receivables ...............        21,516        19,992
                                               -----------   -----------
              Total accounts receivable, net   $    31,448   $    29,592
                                               ===========   ===========

    (1) Amounts are based on end of period  balances.  The  principal  amount 60
    days  or  more  past  due  relative  to  total  receivables  managed  is not
    necessarily  indicative of relative  balances expected at other times during
    the year due to seasonal fluctuations in delinquency.




                                       9



                                     Average Balances   Credit Charge-offs (1)
                                   ------------------    --------------------
                                   Three Months Ended    Three Months Ended
                                        April 30,           April 30, (1)
                                   ------------------    --------------------
                                     2006       2007       2006       2007
                                   --------   --------   --------   ---------
    Primary portfolio:
               Installment .....   $373,072   $383,652
               Revolving .......     42,553     52,986
                                   --------   --------
    Subtotal ...................    415,625    436,638   $  3,610   $   2,924
    Secondary portfolio:
               Installment .....    104,610    139,310      1,029         960
                                   --------   --------   --------   ---------
    Total receivables managed ..    520,235    575,948      4,639       3,884
    Less receivables sold ......    509,809    566,222      4,486       3,687
                                   --------   --------   --------   ---------
    Receivables not sold .......   $ 10,426   $  9,726   $    153   $     197
                                   ========   ========   ========   =========

    (1) Amounts represent total credit charge-offs,  net of recoveries, on total
    receivables.  The  increased  level of credit  losses for three months ended
    April 30, 2006 is primarily a result of the bankruptcy law change in October
    2005 and the impact on our credit  operations of Hurricane Rita that hit the
    Gulf Coast during September 2005.

5. Debt and Letters of Credit

    At April  30,  2007,  the  Company  had  $49.1  million  of its $50  million
revolving credit facility  available for borrowings.  The amounts utilized under
the  revolving  credit  facility  reflected  $0.9 million  related to letters of
credit issued.

    There  were  no  amounts  outstanding  under  a  short-term  revolving  bank
agreement  that  provides up to $8.0  million of  availability  on an  unsecured
basis.  This  unsecured  facility  matures in June 2007 and is in the process of
being renewed.

    The Company utilizes  unsecured letters of credit to secure a portion of the
QSPE's  asset-backed  securitization  program,  deductibles  under the Company's
property and casualty insurance programs and international product purchases. At
April 30, 2007, the Company had outstanding unsecured letters of credit of $21.9
million.  These  letters  of  credit  were  issued  under  the  three  following
facilities:

        o   The  Company  has a  $5.0  million  sub  limit  provided  under  its
            revolving  line of credit for stand-by and import letters of credit.
            At  April  30,  2007,   $0.9  million  of  letters  of  credit  were
            outstanding and callable at the option of the Company's property and
            casualty  insurance  carriers  if the  Company  does not  honor  its
            requirement to fund deductible amounts as billed under its insurance
            programs.

        o   The Company has  arranged  for a $20.0  million  stand-by  letter of
            credit to  provide  assurance  to the  trustee  of the  asset-backed
            securitization  program that funds collected by the Company,  as the
            servicer, would be remitted as required under the base indenture and
            other related documents. The letter of credit has a term of one year
            and expires in August 2007.

        o   The Company obtained a $10.0 million commitment for trade letters of
            credit  to  secure   product   purchases   under  an   international
            arrangement.  At April 30, 2007, there was $1.0 million  outstanding
            under this commitment.  The letter of credit  commitment  expires in
            May 2007 and is in the process of being renewed. No letter of credit
            issued under this  commitment can have an expiration  date more than
            180 days after the commitment expiration date.

    The maximum potential amount of future payments under these letter of credit
facilities  is  considered  to be the  aggregate  face  amount of each letter of
credit commitment, which total $35.0 million as of April 30, 2007.


                                       10


6. Contingencies

    Legal Proceedings.  The Company is involved in routine litigation incidental
to its business  from time to time.  Currently,  the Company does not expect the
outcome  of any of this  routine  litigation  to have a  material  affect on its
financial condition,  results of operations or cash flows.  However, the results
of these  proceedings  cannot be predicted with certainty,  and changes in facts
and  circumstances   could  impact  the  Company's   estimate  of  reserves  for
litigation.

    Service  Maintenance  Agreement  Obligations.   The  Company  sells  service
maintenance agreements that extend the period of covered warranty service on the
products the Company sells.  For certain of the service  maintenance  agreements
sold, the Company is the obligor for payment of qualifying  claims.  The Company
is responsible for administering  the program,  including setting the pricing of
the agreements sold and paying the claims. The typical term for these agreements
is between  12 and 36 months.  The  pricing  is set based on  historical  claims
experience and expectations about future claims.  While the Company is unable to
estimate  maximum  potential  claim  exposure,  it  has  a  history  of  overall
profitability  upon the ultimate  resolution  of agreements  sold.  The revenues
related to the agreements  sold are deferred at the time of sale and recorded in
revenues in the statement of  operations  over the life of the  agreements.  The
revenues  deferred  related to these  agreements  totaled  $3.6 million and $3.9
million,  respectively,  as of  January  31,  2007 and April 30,  2007,  and are
included on the face of the balance sheet in Deferred revenues and allowances.


                                       11


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Forward-Looking Statements


    This report contains forward-looking statements. We sometimes use words such
as "believe," "may," "will,"  "estimate,"  "continue,"  "anticipate,"  "intend,"
"expect,"  "project"  and  similar  expressions,  as  they  relate  to  us,  our
management   and  our   industry,   to  identify   forward-looking   statements.
Forward-looking   statements  relate  to  our  expectations,   beliefs,   plans,
strategies,  prospects, future performance,  anticipated trends and other future
events.  We have based our  forward-looking  statements  largely on our  current
expectations and projections  about future events and financial trends affecting
our  business.  Actual  results  may  differ  materially.  Some  of  the  risks,
uncertainties  and assumptions  about us that may cause actual results to differ
from these forward-looking statements include, but are not limited to:

        o   the success of our growth strategy and plans  regarding  opening new
            stores and entering adjacent and new markets, including our plans to
            continue  expanding into the Dallas/Fort Worth Metroplex,  and South
            Texas;

        o   our intention to update or expand existing stores;

        o   our ability to obtain capital for required capital  expenditures and
            costs  related  to the  opening of new stores or to update or expand
            existing stores;

        o   our  cash  flows from  operations,  borrowings  from  our  revolving
            line  of  credit  and  proceeds  from  securitizations  to  fund our
            operations, debt repayment and expansion;

        o   the ability of the QSPE to obtain additional funding for the purpose
            of purchasing our receivables;

        o   the effect of rising  interest rates that could increase our cost of
            borrowing or reduce securitization income;

        o   inability to make customer  financing  programs available that allow
            consumers  to  purchase  products  at levels  that can  support  our
            growth;

        o   the potential for  deterioration  in the  delinquency  status of the
            sold or owned  credit  portfolios  or  higher  than  historical  net
            charge-offs in the portfolios could adversely impact earnings;

        o   the long-term  effect of the change in bankruptcy  laws could effect
            net charge-offs in the credit portfolio which could adversely impact
            earnings;

        o   technological and market  developments,  growth trends and projected
            sales in the  home  appliance  and  consumer  electronics  industry,
            including,  with respect to digital  products,  DVD  players,  HDTV,
            digital radio, home networking  devices and other new products,  and
            our ability to capitalize on such growth;

        o   the  potential  for price  erosion  or lower  unit  sales that could
            result in declines in revenues;

        o   higher  oil and gas prices  could  adversely  affect our  customers'
            shopping decisions and patterns, as well as the cost of our delivery
            and service operations and our cost of products,  if vendors pass on
            their additional fuel costs through increased pricing for products;

        o   the ability to attract and retain qualified personnel;

        o   both short-term and long-term  impact of adverse weather  conditions
            (e.g.  hurricanes)  that could result in  volatility in our revenues
            and increased expenses and casualty losses;


                                       12


        o   changes  in  laws  and  regulations  and/or  interest,  premium  and
            commission  rates  allowed  by  regulators  on  our  credit,  credit
            insurance  and service  maintenance  agreements  as allowed by those
            laws and regulations;

        o   our relationships with key suppliers;

        o   the  adequacy  of  our  distribution  and  information  systems  and
            management experience to support our expansion plans;

        o   the  accuracy  of our  expectations  regarding  competition  and our
            competitive advantages;

        o   the  potential for market share erosion that could result in reduced
            revenues;

        o   the  accuracy  of  our  expectations  regarding  the  similarity  or
            dissimilarity  of our existing markets as compared to new markets we
            enter; and

        o   the outcome of litigation affecting our business.

    Additional  important  factors that could cause our actual results to differ
materially from our  expectations are discussed under "Risk Factors" in our Form
10-K filed with the Securities  Exchange  Commission on March 29, 2007. In light
of these risks,  uncertainties and assumptions,  the forward-looking  events and
circumstances discussed in this report might not happen.

    The  forward-looking  statements  in  this  report  reflect  our  views  and
assumptions  only as of the date of this report.  We undertake no  obligation to
update publicly or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by law.

    All forward-looking  statements  attributable to us, or to persons acting on
our behalf,  are  expressly  qualified  in their  entirety  by these  cautionary
statements.

General

    We intend for the  following  discussion  and analysis to provide you with a
better understanding of our financial condition and performance in the indicated
periods,  including  an analysis of those key factors  that  contributed  to our
financial condition and performance and that are, or are expected to be, the key
"drivers" of our business.

    On  February  1, 2007,  we were  required to adopt  Statement  of  Financial
Accounting  Standard  (SFAS) No. 155,  Accounting for Certain  Hybrid  Financial
Instruments.  Among other things,  this  statement  established a requirement to
evaluate  interests in securitized  financial assets to identify  interests that
are  freestanding  derivatives  or that are hybrid  financial  instruments  that
contain an embedded derivative requiring bifurcation.  Additionally,  we had the
option to choose to early adopt the  provisions  of SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities. We elected to early adopt
SFAS  No.  159  because  we  believe  it  provides  a  more  easily   understood
presentation  for  financial  statement  users.  This  election  resulted  in us
including all changes in the fair value of our Interests in  securitized  assets
in current earnings,  in Finance charges and other,  beginning February 1, 2007.
Previously,  most  changes in the fair  value of our  Interests  in  securitized
assets  were  recorded  in Other  comprehensive  income,  which was  included in
Stockholders'  equity.  SFAS Nos.  155 and 159 do not  allow  for  retrospective
application  of these changes in accounting  principle,  as such, no adjustments
have been made to the amounts disclosed in the financial  statements for periods
ending prior to February 1, 2007.  Additionally,  effective February 1, 2007, we
adopted SFAS No. 157, Fair Value Measurements, which established a framework for
measuring fair value,  based on the  assumptions we believe market  participants
would  use to value  assets  or  liabilities  to be  exchanged.  Changes  in the
assumptions over time,  including varying credit portfolio  performance,  market
interest rate changes or a shift in the mix of funding sources,  could result in
significant  volatility in the fair value of the Interest in securitized assets,
and thus our earnings. We were also required to adopt the provisions of SFAS No.
156,  Accounting  for  Servicing of Financial  Assets,  effective on February 1,
2007.  As a  result  of the  adoption  of this  pronouncement,  along  with  the
requirements of SFAS No. 157, we recorded a $1.1 million servicing  liability on
the balance sheet in Deferred  revenues and allowances.  Any changes in the fair
value of the liability will be recorded in the period of change in the statement
of operations in Finance charges and other. As with the other changes  discussed
above,  no  adjustments  have been made to the financial  statements for periods
ending prior to February 1, 2007. See the notes to the financial  statements for
discussion of the impacts on the financial statements for the three months ended
April 30, 2007.


                                       13


    We are a  specialty  retailer  that sells major home  appliances,  including
refrigerators,  freezers,  washers, dryers, dishwashers and ranges, a variety of
consumer  electronics,   including  micro-display  projection,  plasma  and  LCD
flat-panel  televisions,  camcorders,  digital  cameras,  DVD  players  and home
theater products,  lawn and garden products,  mattresses and furniture.  We also
sell home office  equipment,  including  computers and computer  accessories and
continue to introduce additional product categories for the consumer and home to
help increase same store sales and to respond to our  customers'  product needs.
We require our sales associates to be knowledgeable of all of our products,  but
to specialize in certain specific product categories.

    We currently  operate 62 retail  locations in Texas and Louisiana,  and have
several other stores under development.

    Unlike many of our competitors,  we provide flexible in-house credit options
for  our  customers.   In  the  last  three  years,  we  financed,  on  average,
approximately  58% of our retail sales through our internal credit programs.  We
finance a large  portion of our  customer  receivables  through an  asset-backed
securitization  facility, and we derive servicing fee income and interest income
from these assets. As part of our asset-backed  securitization facility, we have
created a qualifying  special purpose  entity,  which we refer to as the QSPE or
the issuer, to purchase customer  receivables from us and to issue  asset-backed
and variable  funding notes to third parties to finance its  acquisition  of the
receivables.  We transfer  receivables,  consisting  of retail  installment  and
revolving  account  receivables  extended  to our  customers,  to the  issuer in
exchange for cash and subordinated securities.

    We also derive  revenues  from repair  services on the  products we sell and
from product  delivery and  installation  services we provide to our  customers.
Additionally,  acting as an agent for  unaffiliated  companies,  we sell  credit
insurance  and service  maintenance  agreements  to protect our  customers  from
credit losses due to death,  disability,  involuntary  unemployment and property
damage and product  failure not covered by a  manufacturers'  warranty.  We also
derive revenues from the sale of extended service maintenance agreements,  under
which we are the primary  obligor,  to protect the customers  after the original
manufacturer's warranty or service maintenance agreement has expired.

    Our business is moderately  seasonal,  with a slightly  greater share of our
revenues,  pretax and net income  realized during the quarter ending January 31,
due primarily to the holiday selling season.

Executive Overview

    This  narrative  is intended to provide an executive  level  overview of our
operations for the three months ended April 30, 2007. A detailed  explanation of
the changes in our operations for these periods as compared to the prior year is
included under Results of Operations.  As explained in that section,  our pretax
income for the  quarter  ended  April 30, 2007  increased  approximately  10.6%,
primarily as a result of higher revenues and gross margin  dollars.  Some of the
more specific items impacting our operating and pretax income were:

o    Same store sales for the quarter  declined by 0.3% over the same period for
     the prior year as compared to the 16.1% same store sales growth experienced
     in the  prior  year  period,  largely  as a result of  Hurricanes  Rita and
     Katrina.  The decline was mitigated by our ability to grow same store sales
     in the non-storm impacted markets sufficiently to absorb the decline in the
     impacted markets. The same store sales increase in the markets not impacted
     by  Hurricanes  Rita and Katrina,  was 2.9% for the quarter ended April 30,
     2007.  These other markets  accounted for 82.3% of same store Product sales
     and Service maintenance agreement commissions during the three months ended
     April 30, 2007.


                                       14


o    Our continued expansion in the Dallas/Fort Worth market and the addition of
     stores in our  existing  Houston  and San  Antonio  markets  had a positive
     impact  on  our  revenues.  We  achieved  approximately  $11.0  million  of
     increases in product sales and service  maintenance  agreement  commissions
     for the quarter ended April 30, 2007,  from the new stores that were opened
     in these markets after  February 1, 2006. Our plans provide for the opening
     of additional  stores in and around existing  markets during fiscal 2008 as
     we focus on leveraging our existing infrastructure.

o    Deferred interest and "same as cash" plans continue to be an important part
     of our sales  promotion plans and are utilized to provide a wide variety of
     financing to enable us to appeal to a broader  customer base. For the three
     months ended April 30, 2007, $47.7 million,  or 28.6%, of our product sales
     were financed by deferred interest and "same as cash" plans. This volume of
     promotional credit as a percent of product sales is consistent with our use
     of this type of credit  product before the hurricanes in late 2005. For the
     comparable  period  in the prior  year  gross  product  sales  financed  by
     deferred  interest and "same as cash" sales were $35.4  million,  or 22.3%.
     The credit  portfolio grew at an annualized  rate of 10%,  benefited by 31%
     annualized growth in promotional credit balances.  Promotional credit (same
     as cash and deferred interest  programs) is reserved for our highest credit
     quality customers,  thereby reducing the overall risk in the portfolio, and
     is used  primarily  to finance  sales of our highest  margin  products.  We
     expect to continue to offer extended term promotional credit in the future.

o    Our gross  margin  for the  quarter  increased  from 33.8% to 34.8% for the
     three months  ended April 30, 2007 when  compared to the same period in the
     prior year,  primarily as a result of a change in our revenue mix as higher
     margin Service  maintenance  agreement  commissions and Finance charges and
     other grew faster than Product  sales.  Our product  sales gross margin was
     consistent with the prior year.

o    Finance  charges and other  increased 16.9% for the quarter ended April 30,
     2007 as:

        o   securitization income increased by 17.9% for the quarter ended April
            30, 2007. The quarterly  improvement  was driven by a 17.8% decrease
            in net credit losses from the prior year period,  which was impacted
            primarily  by the  bankruptcy  law  change in  October  2005 and the
            disruption to our credit operations caused by Hurricane Rita.

        o   Insurance  commissions  grew 23.3%,  primarily  as a result of lower
            credit   charge-offs,    which   resulted   in   reduced   insurance
            cancellations.

o    During  the  three  months  ended  April 30,  2007,  Selling,  general  and
     administrative  (SG&A) expense  increased as a percent of revenues to 25.1%
     from 24.3% when compared to the prior year,  primarily  from  increased net
     advertising  expense and occupancy  cost,  including  property  taxes, as a
     percent of revenues.

o    Operating  margin  decreased  from 9.5% to 9.4% for the three  months ended
     April  30,  2007 when  compared  to the same  period in the prior  year due
     primarily to increased SG&A expense.

Operational Changes and Resulting Outlook

    We have several  locations in and around Texas that we believe are promising
and,  along  with new  stores in  existing  markets,  are in  various  stages of
development for opening in fiscal year 2008.

    On May 18, 2006,  the Governor of Texas signed a tax bill that  modifies the
existing  franchise tax, with the most significant  change being the replacement
of the  existing  base with a tax based on margin.  Taxable  margin is generally
defined as total  federal  tax  revenues  minus the greater of (a) cost of goods
sold or (b)  compensation.  The tax rate to be paid by retailers and wholesalers
is 0.5% on taxable margin.  This will result in an increase in taxes paid by us,
as  franchise  taxes paid have  totaled  less than $50,000 per year for the last
several years. The tax changes impacted earnings  beginning in the quarter ended
July 31, 2006. For the quarter ended April 30, 2007, we accrued,  net of federal
tax benefit,  approximately  $218,000 in additional tax liability as a result of
the new margin tax. We expect our  effective  tax rate on Income  before  income
taxes to be between  36% and 37%,  compared to an average of 35.4% over the past
three fiscal years.


                                       15


    The  consumer  electronics  industry  depends on new  products to drive same
store sales increases.  Typically,  these new products,  such as high-definition
televisions,  DVD players,  digital  cameras and MP3 players are  introduced  at
relatively  high price  points  that are then  gradually  reduced as the product
becomes mainstream. To sustain positive same store sales growth, unit sales must
increase at a rate greater than the decline in product prices. The affordability
of the  product  helps  drive the unit  sales  growth.  However,  as a result of
relatively short product life cycles in the consumer electronics industry, which
limit the amount of time  available for sales volume to increase,  combined with
rapid  price  erosion in the  industry,  retailers  are  challenged  to maintain
overall gross margin levels and positive same store sales. This has historically
been our  experience,  and we continue  to adjust our  marketing  strategies  to
address this challenge  through the  introduction of new product  categories and
new products within our existing categories.

Application of Critical Accounting Policies

    In applying the accounting  policies that we use to prepare our consolidated
financial  statements,  we necessarily make accounting estimates that affect our
reported amounts of assets,  liabilities,  revenues and expenses.  Some of these
accounting  estimates  require us to make  assumptions  about  matters  that are
highly  uncertain at the time we make the  accounting  estimates.  We base these
assumptions  and  the  resulting  estimates  on  authoritative   pronouncements,
historical  information and other factors that we believe to be reasonable under
the circumstances, and we evaluate these assumptions and estimates on an ongoing
basis. We could reasonably use different  accounting  estimates,  and changes in
our accounting  estimates could occur from period to period,  with the result in
each case being a material change in the financial statement presentation of our
financial condition or results of operations.  We refer to accounting  estimates
of this type as "critical  accounting  estimates."  We believe that the critical
accounting  estimates  discussed  below are among  those  most  important  to an
understanding of our consolidated financial statements as of April 30, 2007.

    Transfers of Financial Assets.  We transfer  customer  receivables to a QSPE
that issues asset-backed  securities to third party lenders using these accounts
as collateral,  and we continue to service these accounts after the transfer. We
recognize  the  sale  of  these  accounts  when  we  relinquish  control  of the
transferred  financial  asset in accordance  with SFAS No. 140,  Accounting  for
Transfers and Servicing of Financial Assets and  Extinguishment  of Liabilities,
as amended by SFAS No. 155, Accounting for Certain Hybrid Financial Instruments.
As we transfer the accounts we record an asset  representing our interest in the
cash flows of the QSPE,  which is the difference  between the interest earned on
customer  accounts and the cost  associated  with  financing  and  servicing the
transferred  accounts,  including a provision for bad debts  associated with the
transferred accounts, plus our retained interest in the transferred receivables,
discounted  using a market rate of interest.  We  recognize  the income from our
interest in these  transferred  accounts as gains on the  transfer of the asset,
interest  income and servicing  fees. This income is recorded as Finance charges
and other in our  consolidated  statements  of  operations.  Additionally,  as a
result of our  adoption of SFAS No.  159,  The Fair Value  Option for  Financial
Assets and  Financial  Liabilities,  effective  February 1, 2007,  we record all
changes  in the fair  value of our  Interest  in  securitized  assets in current
earnings,  in Finance  charges and other.  Previously,  most changes in the fair
value  of  our   Interests  in   securitized   assets  were  recorded  in  Other
comprehensive income.  Effective February 1, 2007, we adopted SFAS No. 157, Fair
Value  Measurements,  which  established a framework  for measuring  fair value,
based on the  assumptions a company  believes market  participants  would use to
value assets or liabilities to be exchanged.  The gain or loss recognized on the
sales of the  receivables  is based on our best  estimates  of key  assumptions,
including  forecasted credit losses,  payment rates, forward yield curves, costs
of  servicing  the  accounts  and  appropriate  discount  rates,  based  on  our
expectations of the  assumptions  that a market  participant  would use. We were
required to adopt the  provisions of SFAS No. 156,  Accounting  for Servicing of
Financial Assets,  effective on February 1, 2007. As a result of the adoption of
this  pronouncement  we recorded a servicing  liability on the balance  sheet in
Deferred  revenues  and  allowances  and any  changes  in the fair  value of the
liability are recorded in the period of change in the statement of operations in
Finance charges and other. We estimate the fair value of our servicing liability
using the portfolio  performance and discount rate assumptions  discussed above,
and an estimate  of the  servicing  fee a market  participant  would  require to
service the  portfolio.  The use of different  estimates or  assumptions  in the
valuation of our Interest in  securitized  assets or servicing  liability  could
produce different  financial results.  Additionally,  changes in the assumptions
over time, including varying credit portfolio performance,  market interest rate
changes or a shift in the mix of funding  sources,  could result in  significant
volatility in the fair value of the Interest in securitized assets, and thus our
earnings.  For  example,  if we had assumed a 10.0%  reduction  in net  interest
spread  (which might be caused by rising  interest  rates or reductions in rates
charged on the accounts  transferred),  our interest in  securitized  assets and
Finance  charges and other would have been  reduced by $6.0  million as of April
30, 2007. If the assumption  used for estimating  credit losses was increased by
0.5%,  the impact to Finance  charges and other  would have been a reduction  in
revenues and pretax income of $2.3 million.


                                       16


    Deferred Taxes. We have net deferred tax liabilities of  approximately  $0.6
million  as of April 30,  2007.  If we had  assumed  that the future tax rate at
which  these  deferred  items  would  reverse  was 50 basis  points  higher than
currently  anticipated,  we would have  increased the net deferred tax liability
and decreased net income by approximately $9,000.

    Revenue  Recognition.   Revenues  from  the  sale  of  retail  products  are
recognized at the time the product is delivered to the  customer.  Such revenues
are  recognized  net of any  adjustments  for  sales  incentive  offers  such as
discounts, coupons, rebates, or other free products or services and discounts of
promotional  credit  sales that will  extend  beyond one year.  We sell  service
maintenance  agreements  and credit  insurance  contracts on behalf of unrelated
third  parties.  For  contracts  where the third parties are the obligors on the
contract, commissions are recognized in revenues at the time of sale, and in the
case of retrospective  commissions,  at the time that they are earned.  Where we
sell service  maintenance  renewal  agreements  in which we are deemed to be the
obligor on the contract at the time of sale, revenue is recognized ratably, on a
straight-line basis, over the term of the service maintenance  agreement.  These
service maintenance  agreements are renewal contracts that provide our customers
protection  against  product  repair costs arising  after the  expiration of the
manufacturer's warranty and the third party obligor contracts.  These agreements
typically range from 12 months to 36 months. These agreements are separate units
of accounting under Emerging Issues Task Force No. 00-21,  Revenue  Arrangements
with Multiple Deliverables.  The amount of service maintenance agreement revenue
deferred  at April 30,  2007 and  January  31,  2007 was $3.9  million  and $3.6
million,  respectively,  and is included in Deferred  revenues and allowances in
the accompanying balance sheets.

    Vendor  Allowances.  We receive  funds from  vendors  for price  protection,
product  rebates,  marketing  and  training  and  promotion  programs  which are
recorded on the  accrual  basis as a reduction  to the related  product  cost or
advertising  expense  according to the nature of the program.  We accrue rebates
based on the  satisfaction  of  terms of the  program  and  sales of  qualifying
products  even though  funds may not be  received  until the end of a quarter or
year. If the programs are related to product purchases, the allowances,  credits
or payments  are recorded as a reduction  of product  cost;  if the programs are
related to promotion or marketing of the product,  the allowances,  credits,  or
payments  are recorded as a reduction  of  advertising  expense in the period in
which the expense is incurred.

    Accounting for Share-Based  Compensation.  We adopted Statement of Financial
Accounting Standards No. 123R, Share-Based Payment,  effective February 1, 2006,
using  the  modified  retrospective   application  transition.   This  statement
establishes  standards  for  accounting  for  transactions  in which  an  entity
exchanges its equity  instruments for goods or services,  focusing  primarily on
accounting for  transactions in which an entity obtains an employee's  services.
The statement  requires a public entity to measure the cost of employee services
received in exchange for an award of equity instruments, based on the grant-date
fair value of the award,  and record that cost over the period  during which the
employee is required to provide service in exchange for the award The fair value
assigned to awards of share-based  compensation  are based on assumptions  about
the risk-free  interest  rate,  average  expected life of the award and expected
stock  price  volatility  over  the  life of the  award.  The  use of  different
estimates or assumptions could produce different financial results.

    Accounting for Leases.  The  accounting for leases is governed  primarily by
SFAS No. 13, Accounting for Leases. As required by the standard, we analyze each
lease, at its inception,  to determine  whether it should be accounted for as an
operating lease or a capital lease. Additionally, monthly lease expense for each
operating lease is calculated as the average of all payments  required under the
minimum lease term,  including rent  escalations.  Generally,  the minimum lease
term begins with the date we take  possession  of the  property  and ends on the
last day of the minimum lease term, and includes all rent holidays, but excludes
renewal terms that are at our option. Any tenant improvement allowances received
are deferred  and  amortized  into income as a reduction  of lease  expense on a
straight line basis over the minimum lease term. The  amortization  of leasehold
improvements  is  computed  on a straight  line  basis  over the  shorter of the
remaining  lease term or the  estimated  useful  life of the  improvements.  For
transactions that qualify for treatment as a sale-leaseback, any gain or loss is
deferred and amortized as rent expense on a straight-line basis over the minimum
lease  term.  Any  deferred  gain would be included  in  Deferred  revenues  and
allowances  and any  deferred  loss  would be  included  in Other  assets on the
consolidated balance sheets.


                                       17


Results of Operations

    The following table sets forth certain  statement of operations  information
as a percentage of total revenues for the periods indicated:




                                                                   Three Months Ended
                                                                         April 30,
                                                                  ---------    ---------
                                                                    2006         2007
                                                                  ---------    ---------
Revenues:
                                                                         
   Product sales ..............................................      82.5 %       81.1 %
   Service maintenance agreement commissions (net) ............       4.1          4.5
   Service revenues ...........................................       2.7          2.7
                                                                  ---------    ---------
     Total net sales ..........................................      89.3         88.3
   Finance charges and other ..................................      10.7         11.7
                                                                  ---------    ---------
          Total revenues ......................................     100.0        100.0
Costs and expenses:

   Cost of goods sold, including warehousing and occupancy cost      65.4         64.3
   Cost of parts sold, including warehousing and occupancy cost       0.8          0.9
   Selling, general and administrative expense ................      24.3         25.1
   Provision for bad debts ....................................       0.0          0.3
                                                                  ---------    ---------
          Total costs and expenses ............................      90.5         90.6
                                                                  ---------    ---------
   Operating income ...........................................       9.5          9.4
   Interest income, net .......................................      (0.1)        (0.1)
   Other income, net ..........................................       0.0         (0.4)
                                                                  ---------    ---------
   Income before income taxes .................................       9.6          9.9
   Provision for income taxes .................................       3.4          3.6
                                                                  ---------    ---------
   Net income .................................................       6.2 %        6.3 %
                                                                  =========    =========



    The table above identifies several changes in our operations for the current
quarter,  including  changes in revenue and expense  categories  expressed  as a
percentage of revenues.  These changes are discussed in the Executive  Overview,
and in more detail in the  discussion  of  operating  results  beginning  in the
analysis below.

    Same store sales growth is  calculated  by comparing  the reported  sales by
store for all stores that were open  throughout  a period to  reported  sales by
store for all stores that were open throughout the prior year period. Sales from
closed stores have been removed from each period.  Sales from  relocated  stores
have been included in each period  because each store was  relocated  within the
same general geographic market. Sales from expanded stores have been included in
each period.

    The  presentation  of gross margins may not be comparable to other retailers
since we include  the cost of our in-home  delivery  service as part of Selling,
general and administrative  expense.  Similarly,  we include the cost related to
operating  our  purchasing  function  in  Selling,  general  and  administrative
expense.  It is our understanding that other retailers may include such costs as
part of their cost of goods sold.


                                       18


Three Months Ended April 30, 2007 Compared to Three Months Ended April 30, 2006

    Revenues.  Total revenues  increased by $13.1 million,  or 6.8%, from $192.2
million for the three  months  ended  April 30,  2006 to $205.3  million for the
three months ended April 30, 2007. The increase was attributable to increases in
net sales of $9.6  million,  or 5.6%,  and $3.5  million,  or 16.9%,  in finance
charges and other revenue.

    The $9.6 million increase in net sales was made up of the following:

    o   a $0.6  million  same store sales  decrease of 0.3%,  as compared to the
        16.1% same store  sales  growth  experienced  in the prior year  period,
        largely as a result of  Hurricanes  Rita and  Katrina.  The  decline was
        mitigated  by our  ability  to grow same  store  sales in the  non-storm
        impacted  markets  sufficiently  to absorb the  decline in the  impacted
        markets.  The same store sales  increase in the markets not  impacted by
        Hurricanes Rita and Katrina was 2.9%. These other markets  accounted for
        82.3% of same store  Product  sales and  Service  maintenance  agreement
        commissions during the three months ended April 30, 2007.

    o   a $11.0 million increase generated by six retail locations that were not
        open for three consecutive months in each period;

    o   a $1.0  million  decrease  resulted  from an  increase in  discounts  on
        extended-term  promotional credit sales (those with terms longer than 12
        months); and

    o   a $0.2 million increase resulted from an increase in service revenues.

    The components of the $9.6 million increase in net sales were a $8.1 million
increase in Product  sales and a $1.5  million  increase in service  maintenance
agreement commissions and service revenues. The $8.1 million increase in product
sales resulted from the following:

    o   approximately  $4.0 million  increase  attributable to increases in unit
        sales, due to increased consumer electronics and furniture sales, and

    o   approximately  $4.1 million  increase  attributable to increases in unit
        price  points.  The  price  point  impact  was  driven  by  a  shift  to
        higher-priced  flat-panel televisions and high-efficiency laundry items,
        partially  offset  by a  decline  in the  average  price  points  on our
        furniture, track and mattresses categories and the $1.0 million increase
        in discounts on extended-term promotional credit sales.

    The $1.5 million increase in service maintenance agreement sales and service
revenues  was  driven  primarily  by  reduced  service   maintenance   agreement
cancellations,  as credit  charge-offs  decreased  as compared to the prior year
period.


                                       19


         The  following  table  presents  the  makeup  of net  sales by  product
category in each quarter,  including service maintenance  agreement  commissions
and service revenues, expressed both in dollar amounts and as a percent of total
net sales.  Classification  of sales has been adjusted from previous  filings to
ensure comparability between the categories.




                                      Three Months Ended April 30,
                                -----------------------------------------
                                        2006                 2007
                                -------------------   -------------------   Percent
          Category               Amount    Percent     Amount    Percent    Increase
                                --------   --------   --------   --------   --------
                                                                           
Major home appliances .......   $ 61,649     35.9 %   $57,707     31.8 %      (6.4)%         (1)
Consumer electronics ........     53,636     31.2      58,823     32.4         9.7           (2)
Track .......................     23,264     13.5      21,681     12.0        (6.8)          (3)
Delivery ....................      2,872      1.7       3,063      1.7         6.7           (4)
Lawn and garden .............      5,273      3.1       6,156      3.4        16.7           (5)
Mattresses ..................      5,095      3.0       4,404      2.4       (13.6)          (6)
Furniture ...................      5,406      3.2      13,513      7.5       150.0           (7)
Other .......................      1,314      0.8       1,292      0.7        (1.7)
                                --------   --------   --------   --------
     Total product sales ....    158,509     92.4     166,639     91.9         5.1
Service maintenance agreement
  commissions ...............      7,967      4.6       9,281      5.1        16.5           (8)
Service revenues ............      5,229      3.0       5,445      3.0         4.1           (9)
                                --------   --------   --------   --------
     Total net sales ........   $171,705    100.0 %   $181,365   100.0 %       5.6 %
                                ========   ========   ========   ========



----------------------------------
(1)      This decrease is due to higher than normal demand for these products in
         the prior year due to consumers  replacing  appliances after Hurricanes
         Katrina and Rita.
(2)      This increase is due to increased unit volume in the area of flat-panel
         and micro-display televisions, which also have higher price points than
         traditional tube and projection televisions.
(3)      The decline in track sales (consisting  largely of computers,  computer
         peripherals,   portable   electronics  and  small  appliances)  is  due
         primarily  to  reduced   sales  of  portable   electronics,   including
         camcorders and portable CRT televisions.
(4)      This increase is consistent with the overall increase in product sales.
(5)      A delayed  selling season due to dry weather  negatively  impacted this
         category in the prior year.
(6)      This  decrease  is  due to a change in the price  points  offered  that
         negatively impacted our sales efforts.
(7)      This  increase  is  due to  the  increased  emphasis  on the  sales  of
         furniture,  primarily  sofas,  recliners and entertainment centers, and
         new products added to this category.
(8)      This increase is due to the increase in product sales,  increased sales
         penetration  as we  introduced  SMA  coverage on some of our  furniture
         products and decreased SMA cancellations as credit charge-offs declined
         as compared to the prior year period.
(9)      This increase is driven by increased  units in operation as we continue
         to grow  product  sales and an  increase  in the cost of parts  used to
         repair   higher-priced   technology   (flat-panel   and   micro-display
         televisions, etc.).

    Revenue  from Finance  charges and other  increased  by  approximately  $3.5
million,  or 16.9%, from $20.5 million for the three months ended April 30, 2006
to $24.0  million for the three months ended April 30,  2007.  It increased  due
primarily to an increase in securitization  income of $2.7 million, or 17.9% and
an increase in insurance commissions of $1.0 million, partially offset by a $0.2
million decrease in service maintenance agreement retrospective commissions. The
securitization  income comparison was impacted by a 17.8% decrease in net credit
losses for the quarter ended April 30, 2007, due to the impact in the prior year
of Hurricane Rita on our credit operations and increased  bankruptcy filings due
to the new bankruptcy laws that took effect in October 2005. Our net credit loss
rate of 2.7% for the three months  ended April 30,  2007,  marks a return to our
historical  loss  levels.  Additionally,  securitization  income,  for the three
months  ended April 30, 2007,  was  positively  impacted,  in the amount of $0.1
million,  as we  recorded  the  increase in the fair value of our  Interests  in
securitized assets in current earnings, due to the mark-to-market adjustment now
required under SFAS No. 159. This increase in fair value was driven primarily by
the  growth of the  portfolio,  higher  expected  yield on the  portfolio  and a
decrease in the discount rate, partially offset by higher expected funding costs
(see  the  notes  to  the  financial  statements  for  additional  information).
Insurance  commissions  increased  primarily due to increased  sales and reduced
insurance  cancellations  as credit  charge-offs  declined  from the prior  year
period.

                                       20


    Cost of Goods Sold. Cost of goods sold, including  warehousing and occupancy
cost,  increased by $6.3  million,  or 5.0%,  from $125.7  million for the three
months  ended April 30, 2006 to $132.0  million for the three months ended April
30, 2007. This increase was consistent with the 5.1% growth in net product sales
during the three months ended April 30, 2007. Cost of products sold was 79.2% of
net product  sales in the quarter  ended April 30, 2007 and 79.3% in the quarter
ended April 30, 2006.

    Cost of Parts Sold. Cost of parts sold, including  warehousing and occupancy
cost, increased approximately $0.3 million, or 16.0%, for the three months ended
April 30, 2007 as compared to the three months  ended April 30,  2006,  due to a
24.5% increase in parts sales.

    Selling,   General  and  Administrative   Expense.   Selling,   general  and
administrative  expense increased by $4.9 million,  or 10.5%, from $46.7 million
for the three months ended April 30, 2006 to $51.6  million for the three months
ended April 30, 2007. As a percentage of total revenues, it increased from 24.3%
to 25.1%. The increase in expense resulted primarily from higher net advertising
expense and occupancy cost,  including property taxes, as a percent of revenues.
The occupancy  cost increase is  attributable  primarily to the additions of new
stores.

    Provision for Bad Debts. The provision for bad debts on non-credit portfolio
receivables  and credit  portfolio  receivables  retained by the Company and not
transferred to the QSPE increased by $0.5 million, during the three months ended
April 30, 2007, as compared to the three months ended April 30, 2006,  primarily
as  a  result  of  provision   adjustments  due  to  increased   credit  losses.
Additionally,  the  provision  for bad debts in the three months ended April 30,
2007,  benefited from a $0.1 million reserve  adjustment  related to the special
reserves  recorded as a result of the  hurricanes in 2005.  See the notes to the
financial  statements for  information  regarding the  performance of the credit
portfolio.

    Interest  Income,  net. Net interest  income  improved by $56,000,  from net
interest  income of $184,000  for the three  months  ended April 30, 2006 to net
interest  income of $240,000 for the three months ended April 30, 2007.  The net
improvement in interest (income) expense was primarily attributable to increased
interest income from invested funds, driven largely by higher yields.

    Other Income,  net. Other income improved by $798,000,  from $33,000 for the
three months ended April 30, 2006,  to $831,000 for the three months ended April
30,  2007,  primarily  resulting  from gains  recognized  on the sale of company
assets.  Additionally,  there  were  gains  realized,  but  not  recognized,  on
transactions  qualifying for  sale-leaseback  accounting that have been deferred
and will be amortized as a reduction  of rent expense on a  straight-line  basis
over the minimum lease terms.

    Provision for Income Taxes. The provision for income taxes increased by $0.9
million,  or 13.8%, from $6.5 million for the three months ended April 30, 2006,
to $7.4 million for the three  months ended April 30, 2007.  The increase in the
Provision for income taxes is attributable  to increased  pretax income of 10.6%
and the impact of the new Texas margin tax. Our effective tax rate  increased to
36.4% from 35.1% due to the impact of the Texas margin tax.

Liquidity and Capital Resources

    Current Activities

    Historically  we have financed our operations  through a combination of cash
flow generated from operations,  and external  borrowings,  including  primarily
bank debt,  extended  terms  provided by our vendors  for  inventory  purchases,
acquisition  of  inventory  under  consignment  arrangements  and  transfers  of
receivables under our asset-backed securitization facilities.

    As of April 30, 2007, we had approximately $44.9 million in excess cash, the
majority  of which was  generated  through the  operations  of the  Company.  In
addition to the excess cash, we had $49.1  million  under our revolving  line of
credit,  net of standby  letters of credit  issued,  and $8.0 million  under our
unsecured bank line of credit  available to us for general  corporate  purposes,
$30.1 million under extended  vendor terms for purchases of inventory and $142.5
million in commitments available to our QSPE for the transfer of receivables.


                                       21


    In its  regularly  scheduled  meeting  on  August  24,  2006,  our  Board of
Directors  authorized  the  repurchase of up to $50 million of our common stock,
dependent  on market  conditions  and the price of the stock.  We expect to fund
these  purchases with a combination of excess cash,  cash flow from  operations,
borrowings under our revolving  credit  facilities and proceeds from the sale of
owned  properties.  Through April 30, 2007, we had spent $8.4 million under this
authorization to acquire 346,000 shares of our common stock.

    A summary of the significant financial covenants that govern our bank credit
facility  compared  to our  actual  compliance  status  at April  30,  2007,  is
presented below:



                                                                                              Required
                                                                                              Minimum/
                                                                              Actual          Maximum
                                                                          --------------   --------------
                                                                                      
  Debt service coverage ratio must exceed required minimum                 4.55 to 1.00     2.00 to 1.00
  Total adjusted leverage ratio must be lower than required maximum        1.58 to 1.00     3.00 to 1.00
  Consolidated net worth must exceed required minimum                     $299.5 million   $189.6 million
  Charge-off ratio must be lower than required maximum                     0.02 to 1.00     0.06 to 1.00
  Extension ratio must be lower than required maximum                      0.02 to 1.00     0.05 to 1.00
  Thirty-day delinquency ratio must be lower than required maximum         0.07 to 1.00     0.13 to 1.00



    Note:  All terms in the above table are defined by the bank credit  facility
    and may or may not agree  directly to the  financial  statement  captions in
    this document.

    We will  continue  to finance our  operations  and future  growth  through a
combination  of cash flow generated  from  operations  and external  borrowings,
including primarily bank debt, extended vendor terms for purchases of inventory,
acquisition  of  inventory  under   consignment   arrangements  and  the  QSPE's
asset-backed securitization facilities. Based on our current operating plans, we
believe that cash generated from operations, available borrowings under our bank
credit facility and unsecured  credit line,  extended vendor terms for purchases
of inventory, acquisition of inventory under consignment arrangements and access
to  the  unfunded  portion  of  the  variable  funding  portion  of  the  QSPE's
asset-backed  securitization  program will be sufficient to fund our operations,
store expansion and updating activities,  stock repurchases, if any, and capital
programs through at least January 31, 2008.  However,  there are several factors
that could decrease cash provided by operating activities, including:

    o   reduced demand for our products;

    o   more stringent vendor terms on our inventory purchases;

    o   loss of ability to acquire inventory on consignment;

    o   increases  in  product  cost  that  we may not be able to pass on to our
        customers;

    o   reductions in product pricing due to competitor promotional activities;

    o   changes in inventory  requirements based on longer delivery times of the
        manufacturers or other  requirements  which would negatively  impact our
        delivery and distribution capabilities;

    o   increases in the retained portion of our receivables portfolio under our
        current  QSPE's  asset-backed  securitization  program  as a  result  of
        changes in performance or types of receivables transferred  (promotional
        versus non-promotional and primary versus secondary portfolio),  or as a
        result of a change in the mix of funding sources  available to the QSPE,
        requiring higher collateral levels;

    o   inability to expand our capacity for financing our receivables portfolio
        under new or replacement QSPE asset-backed  securitization programs or a
        requirement  that we retain a higher  percentage of the credit portfolio
        under such new programs;


                                       22


    o   increases in program costs (interest and administrative fees relative to
        our   receivables   portfolio   associated   with  the  funding  of  our
        receivables); and

    o   increases in personnel costs.

    During the three  months  ended April 30,  2007,  net cash used in operating
activities  decreased  $2.8 million from $8.4 million for the three months ended
April 30,  2006 to $5.6  million  for the three  months  ended  April 30,  2007.
Operating  cash flows for both periods were  negatively  impacted by higher than
normal payments on accounts  payable and accrued  expenses,  as discussed below.
The net decrease in cash used in operations for the three months ended April 30,
2007, was driven primarily by payments on accounts payable,  which was driven by
the timing of  receipts  of  inventory,  and  increased  investment  in accounts
receivable. Our increased investment in accounts receivable was due primarily to
increased  balances  in  the  sold  portfolio  and a  lower  funding  rate  as a
percentage of the sold  portfolio.  The lower funding rate is being  impacted by
the QSPE's pay down of its 2002 Series B bond issuance. The net decrease in cash
used in operations for the three months ended April 30, 2006, resulted primarily
from the  timing  of  payments  of  accounts  payable  and  federal  income  and
employment taxes, which had been extended due to the impact of hurricanes in the
prior fiscal year.  Those extended terms ended and deadlines were reached in the
quarter ended April 30, 2006, and we were required to satisfy those obligations,
negatively impacting our operating cash flows by approximately $18.9 million.

    As noted above, we offer  promotional  credit programs to certain  customers
that provide for "same as cash" or deferred  interest  interest-free  periods of
varying terms, generally three, six, 12, 18, 24 and 36 months. The various "same
as cash"  promotional  accounts  and  deferred  interest  program  accounts  are
eligible for  securitization up to the limits provided for in our securitization
agreements.  This limit is currently 30.0% of eligible securitized  receivables.
If we exceed  this 30.0%  limit,  we would be  required to use some of our other
capital  resources to carry the  unfunded  balances of the  receivables  for the
promotional   period.  The  percentage  of  eligible   securitized   receivables
represented by promotional receivables was 17.9% and 21.1%, as of April 30, 2006
and 2007.  The  weighted  average  promotional  period was 11.7  months and 14.1
months for  promotional  receivables  outstanding as of April 30, 2006 and 2007,
respectively.  The weighted  average  remaining  term on those same  promotional
receivables  was 7.3 months and 10.7  months as of both April 30, 2006 and 2007,
respectively.  While overall these  promotional  receivables have a much shorter
weighted average term than non-promotional  receivables,  we receive less income
on these  receivables,  resulting in a reduction of the net interest margin used
in the calculation of the gain on the sale of receivables.

    Net cash from investing  activities  increased by $13.0  million,  from $7.0
million used in the 2006 period to $6.0 million provided in the 2007 period. The
increase in cash provided by investing  activities  resulted  primarily from the
sales of property and equipment,  partially  offset by purchases of property and
equipment.  We entered into leases for certain of the properties  sold. The cash
expended for property and equipment was used primarily for  construction  of new
stores and the  reformatting  of existing  stores to better  support our current
product mix.  Based on current  plans,  we expect to increase  expenditures  for
property  and  equipment in the  remainder of fiscal 2008 as we open  additional
stores.

    Net cash from  financing  activities  decreased  by $5.2  million  from $1.1
million  provided  during the three  months ended April 30, 2006 to $4.1 million
used during the three months ended April 30, 2007. The decrease in cash provided
by financing  activities  resulted  primarily from increases in the cash used to
purchase  treasury  stock and a decline  in  proceeds  from stock  issued  under
employee  benefit  plans.  During the three months ended April 30, 2007, we used
$4.6 million to purchase 178,000 shares of our common stock.

    Off-Balance Sheet Financing Arrangements

    Since we extend  credit in  connection  with a large  portion of our retail,
service  maintenance  and credit  insurance  sales,  we have created a qualified
special purpose entity, which we refer to as the QSPE or the issuer, to purchase
customer  receivables  from us and to issue  asset-backed  and variable  funding
notes to  third  parties  to  obtain  cash  for  these  purchases.  We  transfer
receivables,  consisting of retail installment  contracts and revolving accounts
extended to our customers,  to the issuer in exchange for cash and subordinated,
unsecured promissory notes. To finance its acquisition of these receivables, the
issuer has  issued the notes and bonds  described  below to third  parties.  The
unsecured  promissory  notes issued to us are  subordinate  to these third party
notes and bonds.


                                       23


    At April 30,  2007,  the issuer had issued  three series of notes and bonds:
the 2002  Series A  variable  funding  note  with a total  availability  of $300
million,  three  classes  of 2002  Series  B  bonds  with  an  aggregate  amount
outstanding of $130 million,  of which $8.0 million was required to be placed in
a restricted cash account for the benefit of the bondholders,  and three classes
of 2006 Series A bonds with an aggregate amount outstanding of $150 million,  of
which $6.0 million was  required to be placed in a  restricted  cash account for
the  benefit  of the  bondholders.  If the net  portfolio  yield,  as defined by
agreements,  falls below 5.0%, then the issuer may be required to fund additions
to the cash reserves in the restricted cash accounts. At April 30, 2007, the net
portfolio yield was in compliance with this requirement.  Private  institutional
investors, primarily insurance companies, purchased the 2002 Series B bonds at a
weighted fixed rate of 5.25% and 2006 Series A bonds at a weighted fixed rate of
5.75%.

    We continue to service the transferred accounts for the QSPE, and we receive
a monthly  servicing  fee, so long as we act as servicer,  in an amount equal to
..0025%  multiplied  by the average  aggregate  principal  amount of  receivables
serviced,  including the amount of average aggregate defaulted receivables.  The
issuer  records  revenues  equal to the interest  charged to the customer on the
receivables less losses, the cost of funds, the program administration fees paid
in connection with either the 2002 Series A, 2002 Series B or 2006 Series A bond
holders,  the  servicing  fee and  additional  earnings  to the extent  they are
available.

    The 2002 Series A variable  funding  note permits the issuer to borrow funds
up to $300 million to purchase receivables from us or make principal payments on
other bonds,  thereby  functioning as a "basket" to accumulate  receivables.  As
issuer  borrowings  under the 2002 Series A variable  funding note approach $300
million,  the issuer is  required  to request an  increase  in the 2002 Series A
amount or issue a new series of bonds and use the  proceeds to pay down the then
outstanding  balance of the 2002  Series A variable  funding  note,  so that the
basket will once again become  available to accumulate  new  receivables or meet
other  obligations  required under the  transaction  documents.  As of April 30,
2007,  borrowings  under the 2002  Series A variable  funding  note were  $157.5
million.

    We  are  not  directly   liable  to  the  lenders  under  the   asset-backed
securitization  facility.  If the  issuer is  unable to repay the 2002  Series A
note,  2002  Series B bonds  and 2006  Series A bonds  due to its  inability  to
collect  the  transferred  customer  accounts,  the  issuer  could  not  pay the
subordinated  notes it has  issued  to us in  partial  payment  for  transferred
customer  accounts,  and the 2002 Series B and 2006 Series A bond holders  could
claim the balance in its $14.0  million  restricted  cash  account.  We are also
contingently  liable  under a $20.0  million  letter of credit that  secures the
performance of our  obligations or services under the servicing  agreement as it
relates  to  the   transferred   assets  that  are  part  of  the   asset-backed
securitization facility.

    The  issuer  is  subject  to  certain  affirmative  and  negative  covenants
contained  in the  transaction  documents  governing  the 2002 Series A variable
funding note, and the 2002 Series B and 2006 Series A bonds, including covenants
that restrict,  subject to specified exceptions: the incurrence of non-permitted
indebtedness  and  other  obligations  and the  granting  of  additional  liens;
mergers,  acquisitions,  investments and  disposition of assets;  and the use of
proceeds of the program.  The issuer also makes  representations  and warranties
relating to compliance with certain laws,  payment of taxes,  maintenance of its
separate legal entity,  preservation of its existence,  protection of collateral
and  financial  reporting.  In  addition,  the  program  requires  the issuer to
maintain a minimum net worth.


                                       24


    A summary of the significant financial covenants that govern the 2002 Series
A variable funding note compared to actual  compliance status at April 30, 2007,
is presented below:




                                                                           Required
                                                                           Minimum/
                                                         As reported       Maximum
                                                        -------------   -------------
                                                                  
  Issuer interest must exceed required minimum          $58.0 million   $57.5 million
  Gross loss rate must be lower than required maximum       3.5%            10.0%
  Net portfolio yield must exceed required minimum          8.4%             2.0%
  Payment rate must exceed required minimum                 6.7%             3.0%



    Note:  All terms in the above table are defined by the asset  backed  credit
    facility  and may or may  not  agree  directly  to the  financial  statement
    captions in this document.

    Events of default under the 2002 Series A variable funding note and the 2002
Series B and 2006 Series A bonds, subject to grace periods and notice provisions
in some  circumstances,  include,  among  others:  failure  of the issuer to pay
principal,  interest or fees; violation by the issuer of any of its covenants or
agreements;  inaccuracy  of any  representation  or warranty made by the issuer;
certain servicer defaults;  failure of the trustee to have a valid and perfected
first  priority   security   interest  in  the  collateral;   default  under  or
acceleration of certain other  indebtedness;  bankruptcy and insolvency  events;
failure to maintain certain loss ratios and portfolio  yield;  change of control
provisions and certain other events  pertaining to us. The issuer's  obligations
under the program are secured by the receivables and proceeds.


         Securitization Facilities
         We finance most of our customer receivables through asset-backed
         securitization facilities




                                                                    
                                                                        ---------------------------
                                                                       |     2002 Series A Note    |
                                                              -------> |        $300 million       |
                                                              |        |    Credit Rating: P1/A1   |
                                                              |        | Three Pillars Funding LLC |
                                                              |         ---------------------------
                  Customer Receivables                        |
         --------- ------------> -----------------            |         --------------------------
        |  Retail |             |    Qualifying   |           |        |   2002 Series B Bonds    |
        |  Sales  |             | Special Purpose |           |        |       $130 million       |
        |  Entity |             |      Entity     |  <--------|------> |  Private Institutional   |
        |         |             |     ("QSPE")    |           |        |        Investors         |
        |         |             |                 |           |        | Class A: $78.0 mm (Aaa)  |
        |         |             |                 |           |        |  Class B: $37.6 mm (A2)  |
        |         |             |                 |           |        | Class C: $14.4 mm (Baa2) |
         --------- <------------ -----------------            |         --------------------------
                                                              |
                  1. Cash Proceeds                            |         --------------------------
                  2. Subordinated Securities                  |        |   2006 Series A Bonds    |
                  3. Right to Receive Cash Flows              |        |       $150 million       |
                     Equal to Interest Spread                 |        |  Private Institutional   |
                                                              -------> |        Investors         |
                                                                       |  Class A: $90 mm (Aaa)   |
                                                                       |  Class B: $43.3 mm (A2)  |
                                                                       | Class C: $16.7 mm (Baa2) |
                                                                        --------------------------



    Both the bank credit facility and the  asset-backed  securitization  program
are  significant  factors  relative to our ongoing  liquidity and our ability to
meet the cash needs associated with the growth of our business. Our inability to
use either of these programs because of a failure to comply with their covenants
would  adversely  affect our  continued  growth.  Funding of current  and future
receivables  under  the  QSPE's  asset-backed   securitization  program  can  be
adversely  affected  if  we  exceed  certain  predetermined  levels  of  re-aged
receivables,  size  of  the  secondary  portfolio,  the  amount  of  promotional
receivables, write-offs, bankruptcies or other ineligible receivable amounts. If
the funding under the QSPE's asset-backed  securitization program was reduced or
terminated,  we would have to draw down our bank credit  facility  more  quickly
than we have estimated.


                                       25


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

    Interest  rates  under  our  bank  credit  facility  are  variable  and  are
determined,  at our option, as the base rate, which is the greater of prime rate
or federal  funds rate plus 0.50% plus the base rate  margin,  which ranges from
0.00% to 0.50%,  or LIBOR  plus the LIBOR  margin,  which  ranges  from 0.75% to
1.75%. Accordingly,  changes in the prime rate, the federal funds rate or LIBOR,
which are  affected  by changes in  interest  rates  generally,  will affect the
interest rate on, and therefore our costs under,  our bank credit  facility.  We
are also exposed to interest rate risk  associated  with our interest only strip
and the subordinated  securities we receive from our sales of receivables to the
QSPE.

    There have been no material changes in our interest rate risks since January
31, 2007.

Item 4.  Controls and Procedures

    An evaluation was performed under the supervision and with the participation
of our  management,  including our Chief  Executive  Officer and Chief Financial
Officer,  regarding the effectiveness of our disclosure  controls and procedures
(as defined in 15d-15(e) of the  Securities  Exchange Act of 1934 (the  Exchange
Act) as of the end of the period covered by this quarterly report. Based on that
evaluation, our management,  including our Chief Executive Officer and our Chief
Financial  Officer,  concluded that our  disclosure  controls and procedures are
effective  in timely  alerting  them to  material  information  relating  to our
Company (including its consolidated subsidiaries) required to be included in our
periodic filings with the Securities and Exchange Commission. There have been no
changes in our internal  control over financial  reporting that occurred  during
the  quarter  ended  April  30,  2007  that  have  materially  affected,  or are
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

    We are involved in routine  litigation  incidental to our business from time
to  time.  Currently,  we do not  expect  the  outcome  of any of  this  routine
litigation  to have a material  affect on our  financial  condition,  results of
operations or cash flows.  However,  the results of these proceedings  cannot be
predicted with certainty,  and changes in facts and  circumstances  could impact
our estimate of reserves for litigation.

Item 1A.  Risk Factors

    In addition to the other  information  set forth in this report,  you should
carefully  consider the factors  discussed in Part I, "Item 1A. Risk Factors" in
our Annual Report on Form 10-K for the year ended January 31, 2007,  which could
materially affect our business, financial condition or future results. The risks
described  in our Annual  Report on Form 10-K are not the only risks  facing our
Company. Additional risks and uncertainties not currently known to us or that we
currently  deem to be  immaterial  also  may  materially  adversely  affect  our
business, financial condition and/or operating results.


                                       26


Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

    On August 25, 2006, we announced  that our Board of Directors had authorized
a common stock repurchase program, permitting us to purchase, from time to time,
in the open market and in privately negotiated transactions,  up to an aggregate
of $50.0 million of our common  stock,  dependent on market  conditions  and the
price of the stock.  During the quarter  ended April 30,  2007,  we effected the
following repurchases of our common stock:




                                                                   Total # of Shares        Approximate
                                                                      Purchased as        Dollar Value of
                                      Total # of      Average       Part of Publicly      Shares That May
                                        shares      Price Paid         Announced          Yet Be Purchased
                                      purchased      per share          Programs         Under the Programs
           Period
           ------                     ----------    ----------     -----------------     ------------------

                                                                             
February 1 - February 28, 2007          48,900      $   26.64            48,900          $   44,909,674

March 1 - March 31, 2007                63,300      $   23.95            63,300          $   43,393,358

April 1 - April 30, 2007                65,800      $   26.29            65,800          $   41,663,398
                                      ----------                   -----------------

Total                                  178,000                          178,000
                                      ==========                   =================



Item 5.  Other Information

    There have been no  material  changes to the  procedures  by which  security
holders may recommend  nominees to our board of directors since we last provided
disclosure in response to the  requirements of Item  7(d)(2)(ii)(G)  of Schedule
14A.

Item 6.  Exhibits

    The exhibits  required to be  furnished  pursuant to Item 6 of Form 10-Q are
listed in the Exhibit Index filed herewith,  which Exhibit Index is incorporated
herein by reference.


                                       27


                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                           CONN'S, INC.

                                           By:      /s/ David L. Rogers
                                                    ----------------------------
                                                    David L. Rogers
                                                    Chief Financial Officer
                                                    (Principal Financial Officer
                                                    and duly authorized to
                                                    sign this report on behalf
                                                    of the registrant)

Date: June 11, 2007


                                       28


                                INDEX TO EXHIBITS

Exhibit
Number                                  Description
------                                  -----------

  2        Agreement  and Plan of Merger dated  January 15,  2003,  by and among
           Conn's,  Inc.,  Conn  Appliances,  Inc. and Conn's  Merger Sub,  Inc.
           (incorporated  herein  by  reference  to  Exhibit 2 to  Conn's,  Inc.
           registration  statement  on Form S-1 (file no.  333-109046)  as filed
           with the Securities and Exchange Commission on September 23, 2003).

  3.1      Certificate of Incorporation of Conn's, Inc.  (incorporated herein by
           reference to Exhibit 3.1 to Conn's,  Inc.  registration  statement on
           Form S-1 (file  no.  333-109046)  as filed  with the  Securities  and
           Exchange Commission on September 23, 2003).

  3.1.1    Certificate  of  Amendment to the  Certificate  of  Incorporation  of
           Conn's, Inc. dated June 3, 2004 (incorporated  herein by reference to
           Exhibit  3.1.1 to Conn's,  Inc.  Form 10-Q for the  quarterly  period
           ended  April  30,  2004  (File  No.  000-50421)  as  filed  with  the
           Securities and Exchange Commission on June 7, 2004).

  3.2      Bylaws of Conn's, Inc.  (incorporated  herein by reference to Exhibit
           3.2 to  Conn's,  Inc.  registration  statement  on Form S-1 (file no.
           333-109046) as filed with the  Securities and Exchange  Commission on
           September 23, 2003).

  3.2.1    Amendment  to the  Bylaws of  Conn's,  Inc.  (incorporated  herein by
           reference  to  Exhibit  3.2.1 to Conn's  Form 10-Q for the  quarterly
           period  ended April 30, 2004 (File No.  000-50421)  as filed with the
           Securities and Exchange Commission on June 7, 2004).

  4.1      Specimen of  certificate  for shares of Conn's,  Inc.'s  common stock
           (incorporated  herein by  reference  to Exhibit  4.1 to Conn's,  Inc.
           registration  statement  on Form S-1 (file no.  333-109046)  as filed
           with the Securities and Exchange Commission on October 29, 2003).

  10.1     Amended and Restated 2003 Incentive  Stock Option Plan  (incorporated
           herein by  reference  to Exhibit  10.1 to Conn's,  Inc.  registration
           statement  on Form  S-1  (file  no.  333-109046)  as  filed  with the
           Securities and Exchange Commission on September 23, 2003).t

  10.1.1   Amendment to the Conn's,  Inc.  Amended and Restated  2003  Incentive
           Stock  Option Plan  (incorporated  herein by  reference to Exhibit to
           Conn's 10.1.1 Form 10-Q for the quarterly period ended April 30, 2004
           (File  No.  000-50421)  as filed  with the  Securities  and  Exchange
           Commission on June 7, 2004).t

  10.1.2   Form of Stock Option Agreement  (incorporated  herein by reference to
           Exhibit 10.1.2 to Conn's,  Inc. Form 10-K for the annual period ended
           January 31, 2005 (File No.  000-50421)  as filed with the  Securities
           and Exchange Commission on April 5, 2005).t

  10.2     2003 Non-Employee  Director Stock Option Plan (incorporated herein by
           reference to Exhibit 10.2 to Conn's, Inc.  registration  statement on
           Form S-1  (file  no.  333-109046)as  filed  with the  Securities  and
           Exchange Commission on September 23, 2003).t

  10.2.1   Form of Stock Option Agreement  (incorporated  herein by reference to
           Exhibit 10.2.1 to Conn's,  Inc. Form 10-K for the annual period ended
           January 31, 2005 (File No.  000-50421)  as filed with the  Securities
           and Exchange Commission on April 5, 2005).t

  10.3     Employee  Stock  Purchase Plan  (incorporated  herein by reference to
           Exhibit 10.3 to Conn's, Inc. registration statement on Form S-1 (file
           no. 333-109046) as filed with the Securities and Exchange  Commission
           on September 23, 2003).t


                                       29


  10.4     Conn's  401(k)  Retirement  Savings  Plan  (incorporated   herein  by
           reference to Exhibit 10.4 to Conn's, Inc.  registration  statement on
           Form S-1 (file  no.  333-109046)  as filed  with the  Securities  and
           Exchange Commission on September 23, 2003).t

  10.5     Shopping  Center Lease  Agreement  dated May 3, 2000,  by and between
           Beaumont Development Group, L.P., f/k/a Fiesta Mart, Inc., as Lessor,
           and CAI,  L.P., as Lessee,  for the property  located at 3295 College
           Street, Suite A, Beaumont, Texas (incorporated herein by reference to
           Exhibit 10.5 to Conn's, Inc. registration statement on Form S-1 (file
           no. 333-109046) as filed with the Securities and Exchange  Commission
           on September 23, 2003).

  10.5.1   First  Amendment to Shopping  Center Lease  Agreement dated September
           11, 2001, by and among Beaumont Development Group, L.P., f/k/a Fiesta
           Mart,  Inc., as Lessor,  and CAI,  L.P., as Lessee,  for the property
           located  at  3295   College   Street,   Suite  A,   Beaumont,   Texas
           (incorporated  herein by reference to Exhibit 10.5.1 to Conn's,  Inc.
           registration  statement  on Form S-1 (file no.  333-109046)  as filed
           with the Securities and Exchange Commission on September 23, 2003).

  10.6     Industrial  Real  Estate  Lease dated June 16,  2000,  by and between
           American National  Insurance  Company,  as Lessor,  and CAI, L.P., as
           Lessee,  for the property  located at 8550-A Market Street,  Houston,
           Texas  (incorporated  herein by  reference to Exhibit 10.6 to Conn's,
           Inc.  registration  statement  on Form S-1 (file no.  333-109046)  as
           filed with the  Securities  and Exchange  Commission on September 23,
           2003).

  10.6.1   First  Renewal of Lease  dated  November  24,  2004,  by and  between
           American National  Insurance  Company,  as Lessor,  and CAI, L.P., as
           Lessee,  for the property  located at 8550-A Market Street,  Houston,
           Texas (incorporated  herein by reference to Exhibit 10.6.1 to Conn's,
           Inc. Form 10-K for the annual period ended January 31, 2005 (File No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           April 5, 2005).

  10.7     Lease  Agreement  dated  December 5, 2000,  by and  between  Prologis
           Development  Services,  Inc.,  f/k/a  The  Northwestern  Mutual  Life
           Insurance  Company,  as Lessor,  and CAI,  L.P.,  as Lessee,  for the
           property  located at 4810  Eisenhauer  Road,  Suite 240, San Antonio,
           Texas  (incorporated  herein by  reference to Exhibit 10.7 to Conn's,
           Inc.  registration  statement  on Form S-1 (file no.  333-109046)  as
           filed with the  Securities  and Exchange  Commission on September 23,
           2003).

  10.7.1   Lease Amendment No. 1 dated November 2, 2001, by and between Prologis
           Development  Services,  Inc.,  f/k/a  The  Northwestern  Mutual  Life
           Insurance  Company,  as Lessor,  and CAI,  L.P.,  as Lessee,  for the
           property  located at 4810  Eisenhauer  Road,  Suite 240, San Antonio,
           Texas (incorporated  herein by reference to Exhibit 10.7.1 to Conn's,
           Inc.  registration  statement  on Form S-1 (file no.  333-109046)  as
           filed with the  Securities  and Exchange  Commission on September 23,
           2003).

  10.8     Lease Agreement dated June 24, 2005, by and between Cabot Properties,
           Inc. as Lessor, and CAI, L.P., as Lessee, for the property located at
           1132  Valwood  Parkway,  Carrollton,  Texas  (incorporated  herein by
           reference to Exhibit 99.1 to Conn's,  Inc. Current Report on Form 8-K
           (file  no.  000-50421)  as filed  with the  Securities  and  Exchange
           Commission on June 29, 2005).

  10.9     Credit   Agreement   dated  October  31,  2005,  by  and  among  Conn
           Appliances,  Inc. and the  Borrowers  thereunder,  the Lenders  party
           thereto, JPMorgan Chase Bank, National Association, as Administrative
           Agent,  Bank of America,  N.A., as  Syndication  Agent,  and SunTrust
           Bank, as  Documentation  Agent  (incorporated  herein by reference to
           Exhibit 10.9 to Conn's,  Inc. Quarterly Report on Form 10-Q (file no.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           December 1, 2005).

  10.9.1   Letter of Credit  Agreement  dated  November  12, 2004 by and between
           Conn  Appliances,  Inc. and CAI Credit  Insurance  Agency,  Inc., the
           financial  institutions  listed on the signature  pages thereto,  and
           JPMorgan Chase Bank, as Administrative  Agent (incorporated herein by
           reference to Exhibit 99.2 to Conn's Inc.  Current  Report on Form 8-K
           (File  No.  000-50421)  as filed  with the  Securities  and  Exchange
           Commission on November 17, 2004).


                                       30


  10.9.2   First  Amendment  to Credit  Agreement  dated  August 28, 2006 by and
           between Conn Appliances,  Inc. and CAI Credit Insurance Agency, Inc.,
           the financial institutions listed on the signature pages thereto, and
           JPMorgan Chase Bank, as Administrative  Agent (incorporated herein by
           reference to Exhibit 10.1 to Conn's Inc.  Current  Report on Form 8-K
           (File  No.  000-50421)  as filed  with the  Securities  and  Exchange
           Commission on August 28, 2006).

  10.10    Receivables  Purchase Agreement dated September 1, 2002, by and among
           Conn Funding II, L.P., as Purchaser,  Conn Appliances,  Inc. and CAI,
           L.P.,  collectively  as  Originator  and Seller,  and Conn Funding I,
           L.P., as Initial Seller  (incorporated herein by reference to Exhibit
           10.10 to Conn's,  Inc.  registration  statement on Form S-1 (file no.
           333-109046) as filed with the  Securities and Exchange  Commission on
           September 23, 2003).

  10.10.1  First  Amendment to Receivables  Purchase  Agreement  dated August 1,
           2006,  by and  among  Conn  Funding  II,  L.P.,  as  Purchaser,  Conn
           Appliances, Inc. and CAI, L.P., collectively as Originator and Seller
           (incorporated  herein by reference to Exhibit 10.10.1 to Conn's, Inc.
           Form 10-Q for the  quarterly  period  ended  July 31,  2006 (File No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           September 15, 2006).

  10.11    Base Indenture  dated  September 1, 2002, by and between Conn Funding
           II,  L.P.,  as  Issuer,  and Wells  Fargo  Bank  Minnesota,  National
           Association,  as Trustee (incorporated herein by reference to Exhibit
           10.11 to Conn's,  Inc.  registration  statement on Form S-1 (file no.
           333-109046) as filed with the  Securities and Exchange  Commission on
           September 23, 2003).



  10.11.1  First  Supplemental  Indenture  dated October 29, 2004 by and between
           Conn  Funding II,  L.P.,  as Issuer,  and Wells Fargo Bank,  National
           Association,  as Trustee (incorporated herein by reference to Exhibit
           99.1 to Conn's,  Inc. Current Report on Form 8-K (File No. 000-50421)
           as filed with the Securities  and Exchange  Commission on November 4,
           2004).


  10.11.2  Second  Supplemental  Indenture  dated  August 1, 2006 by and between
           Conn  Funding II,  L.P.,  as Issuer,  and Wells Fargo Bank,  National
           Association,  as Trustee (incorporated herein by reference to Exhibit
           99.1 to Conn's,  Inc. Current Report on Form 8-K (File No. 000-50421)
           as filed with the  Securities  and Exchange  Commission on August 23,
           2006).

  10.12    Series 2002-A  Supplement to Base Indenture  dated September 1, 2002,
           by and between Conn Funding II, L.P., as Issuer, and Wells Fargo Bank
           Minnesota,  National Association,  as Trustee (incorporated herein by
           reference to Exhibit 10.12 to Conn's, Inc. registration  statement on
           Form S-1 (file  no.  333-109046)  as filed  with the  Securities  and
           Exchange Commission on September 23, 2003).

  10.12.1  Amendment to Series  2002-A  Supplement  dated March 28, 2003, by and
           between  Conn  Funding  II,  L.P.  as  Issuer,  and Wells  Fargo Bank
           Minnesota,  National Association,  as Trustee (incorporated herein by
           reference to Exhibit 10.12.1 to Conn's, Inc. Form 10-K for the annual
           period ended January 31, 2005 (File No.  000-50421) as filed with the
           Securities and Exchange Commission on April 5, 2005).

  10.12.2  Amendment  No. 2 to Series 2002-A  Supplement  dated July 1, 2004, by
           and between Conn Funding II,  L.P.,  as Issuer,  and Wells Fargo Bank
           Minnesota,  National Association,  as Trustee (incorporated herein by
           reference to Exhibit 10.12.2 to Conn's, Inc. Form 10-K for the annual
           period ended January 31, 2005 (File No.  000-50421) as filed with the
           Securities and Exchange Commission on April 5, 2005).

  10.12.3  Amendment No. 3 to Series 2002-A Supplement. dated August 1, 2006, by
           and between Conn Funding II, L.P.,  as Issuer,  and Wells Fargo Bank,
           National Association, as Trustee (incorporated herein by reference to
           Exhibit  10.12.3 to Conn's,  Inc. Form 10-Q for the quarterly  period
           ended July 31, 2006 (File No. 000-50421) as filed with the Securities
           and Exchange Commission on September 15, 2006).


                                       31


  10.13    Series 2002-B  Supplement to Base Indenture  dated September 1, 2002,
           by and between Conn Funding II, L.P., as Issuer, and Wells Fargo Bank
           Minnesota,  National Association,  as Trustee (incorporated herein by
           reference to Exhibit 10.13 to Conn's, Inc. registration  statement on
           Form S-1 (file  no.  333-109046)  as filed  with the  Securities  and
           Exchange Commission on September 23, 2003).

  10.13.1  Amendment to Series  2002-B  Supplement  dated March 28, 2003, by and
           between  Conn  Funding  II,  L.P.,  as Issuer,  and Wells  Fargo Bank
           Minnesota,  National Association,  as Trustee (incorporated herein by
           reference to Exhibit 10.13.1 to Conn's, Inc. Form 10-K for the annual
           period ended January 31, 2005 (File No.  000-50421) as filed with the
           Securities and Exchange Commission on April 5, 2005). 10.14 Servicing
           Agreement  dated  September  1, 2002,  by and among Conn  Funding II,
           L.P.,  as  Issuer,  CAI,  L.P.,  as  Servicer,  and Wells  Fargo Bank
           Minnesota,  National Association,  as Trustee (incorporated herein by
           reference to Exhibit 10.14 to Conn's, Inc. registration  statement on
           Form S-1 (file  no.  333-109046)  as filed  with the  Securities  and
           Exchange Commission on September 23, 2003).

  10.14.1  First  Amendment to Servicing  Agreement  dated June 24, 2005, by and
           among Conn Funding II, L.P., as Issuer,  CAI, L.P., as Servicer,  and
           Wells  Fargo Bank,  National  Association,  as Trustee  (incorporated
           herein by reference to Exhibit 10.14.1 to Conn's,  Inc. Form 10-Q for
           the  quarterly  period  ended July 31, 2005 (File No.  000-50421)  as
           filed  with the  Securities  and  Exchange  Commission  on August 30,
           2005).

  10.14.2  Second  Amendment to Servicing  Agreement dated November 28, 2005, by
           and among Conn Funding II, L.P.,  as 10.14.2  Issuer,  CAI,  L.P., as
           Servicer,  and Wells Fargo  Bank,  National  Association,  as Trustee
           (incorporated  herein by reference to Exhibit 10.14.2 to Conn's, Inc.
           Form 10-Q for the  quarterly  period ended October 31, 2005 (File No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           December 1, 2005).

  10.14.3  Third  Amendment to Servicing  Agreement  dated May 16, 2006,  by and
           among Conn Funding II, L.P., as Issuer,  CAI, L.P., as Servicer,  and
           Wells  Fargo Bank,  National  Association,  as Trustee  (incorporated
           herein by reference to Exhibit 10.14.3 to Conn's,  Inc. Form 10-Q for
           the  quarterly  period  ended July 31, 2006 (File No.  000-50421)  as
           filed with the  Securities  and Exchange  Commission on September 15,
           2006).

  10.14.4  Fourth Amendment to Servicing  Agreement dated August 1, 2006, by and
           among Conn Funding II, L.P., as Issuer,  CAI, L.P., as Servicer,  and
           Wells  Fargo Bank,  National  Association,  as Trustee  (incorporated
           herein by reference to Exhibit 10.14.4 to Conn's,  Inc. Form 10-Q for
           the  quarterly  period  ended July 31, 2006 (File No.  000-50421)  as
           filed with the  Securities  and Exchange  Commission on September 15,
           2006).

  10.15    Form  of  Executive  Employment  Agreement  (incorporated  herein  by
           reference to Exhibit 10.15 to Conn's, Inc. registration  statement on
           Form S-1 (file  no.  333-109046)  as filed  with the  Securities  and
           Exchange Commission on October 29, 2003).t

  10.15.1  First  Amendment to Executive  Employment  Agreement  between Conn's,
           Inc. and Thomas J. Frank,  Sr.,  Approved by the stockholders May 26,
           2005 (incorporated  herein by reference to Exhibit 10.15.1 to Conn's,
           Inc. Form 10-Q for the quarterly period ended July 31, 2005 (file No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           August 30, 2005).t

  10.16    Form of Indemnification  Agreement  (incorporated herein by reference
           to Exhibit 10.16 to Conn's, Inc.  registration  statement on Form S-1
           (file no.  333-109046)  as filed  with the  Securities  and  Exchange
           Commission on September 23, 2003).t

  10.17    Description  of  Compensation   Payable  to  Non-Employee   Directors
           (incorporated  herein by reference  to Form 8-K (file no.  000-50421)
           filed with the Securities and Exchange Commission on June 2, 2005).t


                                       32


  10.18    Dealer Agreement  between Conn  Appliances,  Inc. and Voyager Service
           Programs,  Inc. effective as of January 1, 1998 (incorporated  herein
           by  reference  to  Exhibit  10.19 to Conn's,  Inc.  Form 10-K for the
           annual  period ended  January 31, 2006 (File No.  000-50421) as filed
           with the Securities and Exchange Commission on March 30, 2006).

  10.18.1  Amendment #1 to Dealer Agreement by and among Conn Appliances,  Inc.,
           CAI, L.P.,  Federal Warranty Service  Corporation and Voyager Service
           Programs,  Inc. effective as of July 1, 2005 (incorporated  herein by
           reference to Exhibit 10.19.1 to Conn's, Inc. Form 10-K for the annual
           period ended January 31, 2006 (File No.  000-50421) as filed with the
           Securities and Exchange Commission on March 30, 2006).

  10.18.2  Amendment #2 to Dealer Agreement by and among Conn Appliances,  Inc.,
           CAI, L.P.,  Federal Warranty Service  Corporation and Voyager Service
           Programs,  Inc. effective as of July 1, 2005 (incorporated  herein by
           reference to Exhibit 10.19.2 to Conn's, Inc. Form 10-K for the annual
           period ended January 31, 2006 (File No.  000-50421) as filed with the
           Securities and Exchange Commission on March 30, 2006).

  10.18.3  Amendment #3 to Dealer Agreement by and among Conn Appliances,  Inc.,
           CAI, L.P.,  Federal Warranty Service  Corporation and Voyager Service
           Programs,  Inc. effective as of July 1, 2005 (incorporated  herein by
           reference to Exhibit 10.19.3 to Conn's, Inc. Form 10-K for the annual
           period ended January 31, 2006 (File No.  000-50421) as filed with the
           Securities and Exchange Commission on March 30, 2006).

  10.18.4  Amendment #4 to Dealer Agreement by and among Conn Appliances,  Inc.,
           CAI, L.P.,  Federal Warranty Service  Corporation and Voyager Service
           Programs,  Inc. effective as of July 1, 2005 (incorporated  herein by
           reference to Exhibit 10.19.4 to Conn's, Inc. Form 10-K for the annual
           period ended January 31, 2006 (File No.  000-50421) as filed with the
           Securities and Exchange Commission on March 30, 2006).

  10.19    Service Expense Reimbursement  Agreement between Affiliates Insurance
           Agency,  Inc. and American Bankers Life Assurance Company of Florida,
           American Bankers  Insurance  Company Ranchers & Farmers County Mutual
           Insurance  Company,   Voyager  Life  Insurance  Company  and  Voyager
           Property  and  Casualty  Insurance  Company  effective  July 1,  1998
           (incorporated  herein by reference to Exhibit  10.20 to Conn's,  Inc.
           Form 10-K for the annual  period  ended  January  31,  2006 (File No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           March 30, 2006).

  10.19.1  First  Amendment to Service  Expense  Reimbursement  Agreement by and
           among CAI, L.P.,  Affiliates Insurance Agency, Inc., American Bankers
           Life  Assurance  Company  of  Florida,  Voyager  Property  & Casualty
           Insurance  Company,   American  Bankers  Life  Assurance  Company  of
           Florida,  American Bankers  Insurance Company of Florida and American
           Bankers General  Agency,  Inc.  effective July 1, 2005  (incorporated
           herein by reference to Exhibit 10.20.1 to Conn's,  Inc. Form 10-K for
           the annual  period  ended  January 31, 2006 (File No.  000-50421)  as
           filed with the Securities and Exchange Commission on March 30, 2006).

  10.20    Service Expense Reimbursement  Agreement between CAI Credit Insurance
           Agency,  Inc. and American Bankers Life Assurance Company of Florida,
           American Bankers  Insurance  Company Ranchers & Farmers County Mutual
           Insurance  Company,   Voyager  Life  Insurance  Company  and  Voyager
           Property  and  Casualty  Insurance  Company  effective  July 1,  1998
           (incorporated  herein by reference to Exhibit  10.21 to Conn's,  Inc.
           Form 10-K for the annual  period  ended  January  31,  2006 (File No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           March 30, 2006).


                                       33


  10.20.1  First  Amendment to Service  Expense  Reimbursement  Agreement by and
           among CAI  Credit  Insurance  Agency,  Inc.,  American  Bankers  Life
           Assurance Company of Florida,  Voyager Property & Casualty  Insurance
           Company, American Bankers Life Assurance Company of Florida, American
           Bankers  Insurance Company of Florida,  American  Reliable  Insurance
           Company,  and American Bankers General Agency, Inc. effective July 1,
           2005 (incorporated  herein by reference to Exhibit 10.21.1 to Conn's,
           Inc. Form 10-K for the annual period ended January 31, 2006 (File No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           March 30, 2006).

  10.21    Consolidated  Addendum and Amendment to Service Expense Reimbursement
           Agreements  by  and  among  Certain  Member   Companies  of  Assurant
           Solutions, CAI Credit Insurance Agency, Inc. and Affiliates Insurance
           Agency,  Inc.  effective  April  1,  2004  (incorporated   herein  by
           reference to Exhibit  10.22 to Conn's,  Inc. Form 10-K for the annual
           period ended January 31, 2006 (File No.  000-50421) as filed with the
           Securities and Exchange Commission on March 30, 2006).

  10.22    Series 2006-A Supplement to Base Indenture,  dated August 1, 2006, by
           and between Conn Funding II, L.P.,  as Issuer,  and Wells Fargo Bank,
           National Association, as Trustee (incorporated herein by reference to
           Exhibit  10.23 to Conn's,  Inc.  Form 10-Q for the  quarterly  period
           ended July 31, 2006 (File No. 000-50421) as filed with the Securities
           and Exchange Commission on September 15, 2006).

  10.23    Fourth  Amended and Restated  Subordination  and Priority  Agreement,
           dated  August  31,  2006,  by and among  Bank of  America,  N.A.  and
           JPMorgan Chase Bank, as Agent, and Conn  Appliances,  Inc. and/or its
           subsidiary  CAI,  L.P  (incorporated  herein by  reference to Exhibit
           10.24 to  Conn's,  Inc.  Form  10-Q for the  quarterly  period  ended
           October 31, 2006 (File No.  000-50421)  as filed with the  Securities
           and Exchange Commission on November 30, 2006).

  10.23.1  Fourth  Amended and  Restated  Security  Agreement,  dated August 31,
           2006,  by and among Conn  Appliances,  Inc. and CAI, L.P. and Bank of
           America, N.A. (incorporated herein by reference to Exhibit 10.24.1 to
           Conn's,  Inc.  Form 10-Q for the  quarterly  period ended October 31,
           2006 (File No.  000-50421) as filed with the  Securities and Exchange
           Commission on November 30, 2006)..

  10.24    Letter of Credit and  Reimbursement  Agreement,  dated  September  1,
           2002, by and among CAI, L.P., Conn Funding II, L.P. and SunTrust Bank
           (incorporated  herein by reference to Exhibit  10.25 to Conn's,  Inc.
           Form 10-Q for the  quarterly  period ended October 31, 2006 (File No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           November 30, 2006).

  10.24.1  Amendment to Standby  Letter of Credit dated August 23, 2006,  by and
           among  CAI,   L.P.,   Conn  Funding  II,  L.P.   and  SunTrust   Bank
           (incorporated  herein by reference to Exhibit 10.25.1 to Conn's, Inc.
           Form 10-Q for the  quarterly  period ended October 31, 2006 (File No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           November 30, 2006).

  10.24.2  Amendment to Standby  Letter of Credit dated  September  20, 2006, by
           and among  CAI,  L.P.,  Conn  Funding  II,  L.P.  and  SunTrust  Bank
           (incorporated  herein by reference to Exhibit 10.25.2 to Conn's, Inc.
           Form 10-Q for the  quarterly  period ended October 31, 2006 (File No.
           000-50421) as filed with the  Securities  and Exchange  Commission on
           November 30, 2006).

  11.1     Statement  re:  computation  of earnings per share is included  under
           Note 1 to the financial statements.

  21       Subsidiaries  of Conn's,  Inc.  (incorporated  herein by reference to
           Exhibit 21 to Conn's, Inc.  registration  statement on Form S-1 (file
           no. 333-109046) as filed with the Securities and Exchange  Commission
           on September 23, 2003).

  31.1     Rule  13a-14(a)/15d-14(a)  Certification  (Chief  Executive  Officer)
           (filed herewith).

  31.2     Rule  13a-14(a)/15d-14(a)  Certification  (Chief  Financial  Officer)
           (filed herewith).


                                       34


  32.1     Section  1350  Certification   (Chief  Executive  Officer  and  Chief
           Financial Officer) (furnished herewith).

  99.1     Subcertification  by  Chief  Operating  Officer  in  support  of Rule
           13a-14(a)/15d-14(a)  Certification  (Chief Executive  Officer) (filed
           herewith).

  99.2     Subcertification by Treasurer in support of Rule  13a-14(a)/15d-14(a)
           Certification (Chief Financial Officer) (filed herewith).

  99.3     Subcertification by Secretary in support of Rule  13a-14(a)/15d-14(a)
           Certification (Chief Financial Officer) (filed herewith).

  99.4     Subcertification of Chief Operating Officer,  Treasurer and Secretary
           in support of Section 1350  Certifications  (Chief Executive  Officer
           and Chief Financial Officer) (furnished herewith).

  t        Management contract or compensatory plan or arrangement.


                                       35