10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2013

OR

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

For the transition period from          to         

Commission file number 001-33600

hhgregg, Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-8819207
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4151 East 96th Street Indianapolis, IN	46240
(Address of principal executive offices)	(Zip Code)

(317) 848-8710

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) 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.    ý  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated Filer	ý
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

The number of shares of hhgregg, Inc.’s common stock outstanding as of January 27, 2014 was 29,492,032.

HHGREGG, INC. AND SUBSIDIARIES

Report on Form 10-Q

For the Quarter Ended December 31, 2013

		Page
Part I. Financial Information
Item 1.	Condensed Consolidated Financial Statements (unaudited):
	Condensed Consolidated Statements of Income for the Three and Nine Months Ended December 31, 2013 and 2012	3
	Condensed Consolidated Balance Sheets as of December 31, 2013 and March 31, 2013	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2013 and 2012	5
	Condensed Consolidated Statement of Stockholders’ Equity for the Nine Months Ended December 31, 2013	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22
Item 4.	Controls and Procedures	22
Part II. Other Information
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 6.	Exhibits	24
Signatures		25

Part I. Financial Information

ITEM 1. Condensed Consolidated Financial Statements

HHGREGG, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Unaudited)

	Three Months Ended						Nine Months Ended
	December 31, 2013			December 31, 2012			December 31, 2013			December 31, 2012
	(In thousands, except share and per share data)
Net sales	$	707,053		$	799,635		$	1,800,290		$	1,877,127
Cost of goods sold	517,773			581,450			1,288,295			1,338,136
Gross profit	189,280			218,185			511,995			538,991
Selling, general and administrative expenses	132,360			139,303			372,059			383,871
Net advertising expense	36,964			38,715			93,399			98,085
Depreciation and amortization expense	10,785			10,416			32,229			29,673
Asset impairment charges	310			504			310			504
Income from operations	8,861			29,247			13,998			26,858
Other expense (income):
Interest expense	695			704			1,856			1,692
Interest income	(2		)	(3		)	(9		)	(8		)
Total other expense	693			701			1,847			1,684
Income before income taxes	8,168			28,546			12,151			25,174
Income tax expense	3,120			11,157			4,685			9,726
Net income	$	5,048		$	17,389		$	7,466		$	15,448
Net income per share
Basic	$	0.17		$	0.51		$	0.24		$	0.44
Diluted	$	0.17		$	0.51		$	0.24		$	0.44
Weighted average shares outstanding-basic	29,915,307			33,934,383			30,617,856			35,099,660
Weighted average shares outstanding-diluted	30,387,251			33,985,113			31,117,896			35,168,497

See accompanying notes to condensed consolidated financial statements.

3

HHGREGG, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

	December 31, 2013			March 31, 2013
	(In thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	2,662		$	48,592
Accounts receivable—trade, less allowances of $45 and $1 as of December 31, 2013 and March 31, 2013, respectively	23,590			24,271
Accounts receivable—other	22,745			18,748
Merchandise inventories, net	384,172			315,562
Prepaid expenses and other current assets	13,648			5,567
Income tax receivable	734			1,414
Deferred income taxes	7,093			5,758
Total current assets	454,644			419,912
Net property and equipment	204,191			217,911
Deferred financing costs, net	2,469			1,992
Deferred income taxes	35,249			35,252
Other assets	1,652			1,354
Total long-term assets	243,561			256,509
Total assets	$	698,205		$	676,421
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	150,528		$	150,333
Line of credit	15,000			—
Customer deposits	46,656			38,042
Accrued liabilities	71,324			49,422
Income tax payable	4,048			2,145
Total current liabilities	287,556			239,942
Long-term liabilities:
Deferred rent	74,574			77,777
Other long-term liabilities	11,816			12,044
Total long-term liabilities	86,390			89,821
Total liabilities	373,946			329,763
Stockholders’ equity:
Preferred stock, par value $.0001; 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2013 and March 31, 2013, respectively	—			—
Common stock, par value $.0001; 150,000,000 shares authorized; 41,121,390 and 40,640,743 shares issued; and 29,492,032 and 31,468,453 outstanding as of December 31, 2013 and March 31, 2013, respectively	4			4
Additional paid-in capital	297,792			287,806
Retained earnings	162,116			154,650
Common stock held in treasury at cost, 11,629,358 and 9,172,290 shares as of December 31, 2013 and March 31, 2013, respectively	(135,653		)	(95,802		)
Total stockholders’ equity	324,259			346,658
Total liabilities and stockholders’ equity	$	698,205		$	676,421

See accompanying notes to condensed consolidated financial statements.

4

HHGREGG, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	December 31, 2013			December 31, 2012
	(In thousands)
Cash flows from operating activities:
Net income	$	7,466		$	15,448
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	32,229			29,673
Amortization of deferred financing costs	469			498
Stock-based compensation	4,151			3,882
Excess tax benefit from stock based compensation	(21		)	(585		)
Gain on sales of property and equipment	(437		)	(216		)
Deferred income taxes	(1,332		)	3,575
Asset impairment charges	310			504
Tenant allowances received from landlords	2,101			8,424
Changes in operating assets and liabilities:
Accounts receivable—trade	681			(1,207		)
Accounts receivable—other	(4,072		)	(8,071		)
Merchandise inventories	(68,610		)	(155,969		)
Income tax receivable	701			(1,356		)
Prepaid expenses and other assets	(8,379		)	1,240
Accounts payable	20,151			84,699
Customer deposits	8,614			11,278
Income tax payable	1,903			3,616
Accrued liabilities	21,902			23,759
Deferred rent	(5,229		)	(4,099		)
Other long-term liabilities	(28		)	198
Net cash provided by operating activities	12,570			15,291
Cash flows from investing activities:
Purchases of property and equipment	(19,888		)	(50,291		)
Proceeds from sales of property and equipment	221			34
Net cash used in investing activities	(19,667		)	(50,257		)
Cash flows from financing activities:
Purchases of treasury stock	(39,851		)	(30,041		)
Proceeds from exercise of stock options	5,814			4,184
Excess tax benefit from stock-based compensation	21			585
Net (decrease) increase in bank overdrafts	(8,764		)	12,153
Net borrowings on line of credit	15,000			—
Net (repayments) borrowings on inventory financing facility	(10,107		)	4,322
Payment of financing costs	(946		)	—
Payments received on notes receivable-related parties	—			41
Net cash used in financing activities	(38,833		)	(8,756		)
Net decrease in cash and cash equivalents	(45,930		)	(43,722		)
Cash and cash equivalents
Beginning of period	48,592			59,244
End of period	$	2,662		$	15,522
Supplemental disclosure of cash flow information:
Interest paid	$	1,359		$	226
Income taxes paid	$	3,412		$	7,509
Capital expenditures included in accounts payable	$	406		$	873

See accompanying notes to condensed consolidated financial statements.

5

HHGREGG, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

Nine Months EndedDecember 31, 2013

(Dollars in thousands, Unaudited)

	Common Shares		Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Common Stock Held in Treasury			Total Stockholders’ Equity
Balance at March 31, 2013	31,468,453		$	—	$	4	$	287,806	$	154,650	$	(95,802	)	$	346,658
Net income									7,466					7,466
Exercise of stock options and vesting of RSUs	480,647		—		—		5,814		—		—			5,814
Stock compensation expense	—		—		—		4,151		—		—			4,151
Excess tax benefit from stock-based compensation, net	—		—		—		21		—		—			21
Repurchase of common stock	(2,457,068	)	—		—		—		—		(39,851		)	(39,851		)
Balance at December 31, 2013	29,492,032		$	—	$	4	$	297,792	$	162,116	$	(135,653	)	$	324,259

See accompanying notes to condensed consolidated financial statements.

6

HHGREGG, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(1) Summary of Significant Accounting Policies

Description of Business

hhgregg, Inc. (the “Company” or “hhgregg”) is a specialty retailer of home appliances, televisions, computers, tablets, wireless devices, consumer electronics, home furniture, mattresses, fitness equipment and related services operating under the name hhgregg^™. As of December 31, 2013, the Company had 228 stores located in Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin. The Company operates in one reportable segment.

Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, these unaudited condensed consolidated financial statements reflect all necessary adjustments, which are of a normal recurring nature, for a fair presentation of such data. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of hhgregg and the notes thereto for the fiscal year ended March 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the SEC on May 20, 2013.

The consolidated results of operations, financial position and cash flows for interim periods are not necessarily indicative of those to be expected for a full year. The Company has made a number of estimates and assumptions relating to the assets and liabilities and the reporting of sales and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of hhgregg and its wholly-owned subsidiary, Gregg Appliances, Inc. (“Gregg Appliances”). Gregg Appliances has a wholly-owned subsidiary, HHG Distributing LLC (“HHG Distributing”), which has no assets or operations.

(2) Fair Value Measurements

The carrying amounts of cash and cash equivalents, accounts receivable—trade, accounts receivable—other, accounts payable and customer deposits approximate fair value because of the short maturity of these instruments. Any outstanding amount on the Company’s line of credit approximates fair value as the interest rate is market based.

Non-recurring Fair Value Measurements

The Company has property and equipment that are measured at fair value on a non-recurring basis when impairment indicators are present.  The assets are adjusted to fair value only when the carrying values exceed the fair values.  The categorization of the framework used to price the assets is considered a Level 3, due to the subjective nature of the unobservable inputs used to determine the fair value. Property and equipment fair values were derived using a discounted cash flow model to estimate the present value of net cash flows that the asset or asset group was expected to generate. The key inputs to the discounted cash flow model generally included our forecasts of net cash generated from revenue, expenses and other significant cash outflows, such as certain capital expenditures, as well as an appropriate discount rate. For the quarter ended December 31, 2013, the Company entered into a lease modification to downsize a store. In conjunction with the downsize, the Company determined that certain of the assets in use would be abandoned at the time construction to downsize begins, and as a result determined this to be a triggering event for an impairment analysis to be performed in accordance with guidance on impairment of long-lived assets. The estimated undiscounted future cash flows generated by the store was less than its carrying amount, therefore the carrying amount of the assets related to this store were reduced to fair value. For the quarter ended December 31, 2012, the Company had one store whose profit contributions were significantly lower than the chain average due to decreased sales. This decrease in profit triggered the need for an impairment analysis to be performed in accordance with guidance on impairment of long-lived assets. The estimated undiscounted future cash flows generated by the store was less than its carrying amount, therefore the carrying amount of the assets related to this store were reduced to fair value.

7

The following table summarizes the fair value remeasurements recorded during the three and nine months ended December 31, 2013 and 2012 (in millions):

	Three and Nine Months Ended
	December 31, 2013		December 31, 2012
Carrying value (pre-asset impairment)	$	0.7	$	0.9
Asset impairment loss (included in income from operations)	0.3		0.5
Remaining net carrying value	$	0.4	$	0.4

(3) Property and Equipment

Property and equipment consisted of the following at December 31, 2013 and March 31, 2013 (in thousands):

	December 31, 2013			March 31, 2013
Machinery and equipment	$	28,516		$	25,328
Store fixtures and furniture	183,151			175,659
Vehicles	2,247			2,269
Signs	19,620			19,163
Leasehold improvements	178,821			172,952
Construction in progress	7,296			5,995
	419,651			401,366
Less accumulated depreciation and amortization	(215,460		)	(183,455		)
Net property and equipment	$	204,191		$	217,911

(4) Net Income per Share

Net income per basic share is calculated based on the weighted-average number of outstanding common shares. Net income per diluted share is calculated based on the weighted-average number of outstanding common shares plus the effect of potential dilutive common shares. When the Company reports net income, the calculation of net income per diluted share excludes shares underlying outstanding stock options and restricted stock units with exercise prices that exceed the average market price of the Company’s common stock for the period and certain options and restricted stock units with unrecognized compensation cost, as the effect would be antidilutive. Potential dilutive common shares are composed of shares of common stock issuable upon the exercise of stock options and restricted stock units.

The following table presents net income per basic and diluted share for the three and nine months ended December 31, 2013 and 2012 (in thousands, except share and per share amounts):

	Three Months Ended				Nine Months Ended
	December 31, 2013		December 31, 2012		December 31, 2013		December 31, 2012
Net income (A)	$	5,048	$	17,389	$	7,466	$	15,448
Weighted average outstanding shares of common stock (B)	29,915,307		33,934,383		30,617,856		35,099,660
Dilutive effect of employee stock options and restricted stock units	471,944		50,730		500,040		68,837
Common stock and potential dilutive common shares (C)	30,387,251		33,985,113		31,117,896		35,168,497
Net income per share:
Basic (A/B)	$	0.17	$	0.51	$	0.24	$	0.44
Diluted (A/C)	$	0.17	$	0.51	$	0.24	$	0.44

Antidilutive shares not included in the net income per diluted share calculation for the three and nine months ended December 31, 2013 were 936,040 and 937,640, respectively. Antidilutive shares not included in the net income per diluted share calculation for the three and nine months ended December 31, 2012 were 3,663,282.

8

(5) Inventories

Net merchandise inventories consisted of the following at December 31, 2013 and March 31, 2013 (in thousands):

	December 31, 2013		March 31, 2013
Appliances	$	143,666	$	120,972
Consumer electronics	164,949		126,019
Computing and wireless	49,613		46,020
Home products	25,944		22,551
Net merchandise inventory	$	384,172	$	315,562

(6) Debt

A summary of debt at December 31, 2013 and March 31, 2013 is as follows (in thousands):

	December 31, 2013		March 31, 2013
Line of credit	$	15,000	$	—

On July 29, 2013, Gregg Appliances entered into Amendment No. 1 to the Amended and Restated Loan and Security Agreement (the “Amended Facility”) to increase the maximum credit available to $400 million from $300 million, subject to borrowing base availability, and extend the term of the facility to expire on July 29, 2018. The facility was set to expire on March 29, 2016.

Interest on borrowings (other than Eurodollar rate borrowings) is payable monthly at a fluctuating rate based on the bank’s prime rate or LIBOR plus an applicable margin based on the average quarterly excess availability. Interest on Eurodollar rate borrowings is payable on the last day of each “interest period” applicable to such borrowing or on the three month anniversary of the beginning of such “interest period” for interest periods greater than three months. The unused line rate is determined based on the amount of the daily average of the outstanding borrowings for the immediately preceding calendar quarter period (the “Daily Average”). For a Daily Average greater than or equal to 50% of the defined borrowing base, the unused line rate is 0.25%. For a Daily Average less than 50% of the defined borrowing base, the unused line rate is 0.375%. The Amended Facility is guaranteed by Gregg Appliances’ wholly-owned subsidiary, HHG Distributing, which has no assets or operations. The guarantee is full and unconditional and Gregg Appliances has no other subsidiaries.

Pursuant to the Amended Facility, the borrowing base is equal to the sum of (i) 90% of the amount of the eligible commercial accounts, (ii) 90% of the amount of eligible commercial and credit card receivables of Gregg Appliances and (iii) 90% of the net recovery percentage multiplied by the value of eligible inventory consistent with the most recent appraisal of such eligible inventory.

Under the Amended Facility, Gregg Appliances is not required to comply with any financial maintenance covenant unless “excess availability” is less than the greater of (i) 10.0% of the lesser of (A) the defined borrowing base or (B) the defined maximum credit or (ii) $20.0 million during the continuance of which event Gregg Appliances is subject to compliance with a fixed charge coverage ratio of 1.0 to 1.0.

Pursuant to the Amended Facility, if Gregg Appliances has “excess availability” of less than 12.5% of the lesser of (A) the defined borrowing base or (B) the defined maximum credit, it may, in certain circumstances more specifically described in the Amended Facility, become subject to cash dominion control.

The Amended Facility places limitations on the ability of Gregg Appliances to, among other things, incur debt, create other liens on its assets, make investments, sell assets, pay dividends, undertake transactions with affiliates, enter into merger transactions, enter into unrelated businesses, open collateral locations outside of the United States, or enter into consignment assignments or floor plan financing arrangements. The Amended Facility also contains various customary representations and warranties, financial and collateral reporting requirements and other affirmative and negative covenants. Gregg Appliances was in compliance with the restrictions and covenants of the Amended Facility at December 31, 2013.

9

As of December 31, 2013, Gregg Appliances had $15.0 million of cash borrowings outstanding under the Amended Facility. As of December 31, 2013, Gregg Appliances had $5.3 million of letters of credit outstanding, which expire through December 31, 2014. The total borrowing availability under the Amended Facility was $224.4 million as of December 31, 2013. The interest rate based on the bank’s prime rate as of December 31, 2013 was 3.75%.

As of March 31, 2013, Gregg Appliances had no borrowings outstanding under the Amended Facility. As of March 31, 2013, Gregg Appliances had $4.9 million of letters of credit outstanding, which expire through December 31, 2013. The total borrowing availability under the Amended Facility was $189.8 million as of March 31, 2013. The interest rate based on the bank’s prime rate as of March 31, 2013 was 4.25%.

(7) Stock-based Compensation

Stock Options

On April 2, 2013, the Company’s Board of Directors approved a one-time voluntary stock option exchange program (the “Offer”), as amended on April 17, 2013. On April 2, 2013, the Company commenced the Offer, which allowed employees to surrender all outstanding and unexercised stock options, whether vested or unvested, that were granted subsequent to July 18, 2007 (the “Eligible Options”), in a one-for-one exchange for new options (the “New Options”). Under the Offer, employees who chose to participate would receive New Options with an exercise price per share equal to the greater of (a) $10.00 or (b) the closing price of the Company’s Common Stock as reported on the New York Stock Exchange on the New Option grant date. Additionally, the Offer did not allow partial tenders of any one particular option grant, however employees could choose to exchange some but not all Eligible Option grants held by any optionee. Options granted prior to July 19, 2007 were not eligible for exchange.

The Offer expired on April 30, 2013. Pursuant to the Offer, a total of 58 eligible participants tendered, and the Company accepted for cancellation, options to purchase an aggregate of 898,665 shares of the Company’s common stock. The eligible stock options that were accepted for cancellation represented approximately 31% of the options eligible for participation in the Exchange Offer. Pursuant to the terms and conditions of the Amended Exchange Offer, on May 1, 2013, the Company issued 898,665 New Options in exchange for the tendered stock options. The Company will recognize the incremental expense resulting from this exchange, aggregating $1.4 million, over the three-year vesting period, in accordance with the Exchange Offer.

The following table summarizes the activity under the Company’s Stock Option Plans for the nine months ended December 31, 2013:

	Number of Options Outstanding		Weighted Average Exercise Price per Share
Outstanding at March 31, 2013	3,322,462		$	15.81
Granted	1,806,805		13.99
Exercised	(480,647	)	12.10
Canceled	(981,328	)	22.19
Expired	(27,002	)	23.53
Outstanding at December 31, 2013	3,640,290		$	13.60

During the nine months ended December 31, 2013, the Company granted options for 1,806,805 shares of common stock under the 2007 Equity Incentive Plan to certain employees and directors of the Company. The options vest in equal amounts over a three-year period beginning on the first anniversary of the date of grant and expire 7 years from the date of the grant. The fair value of each option grant is estimated on the date of grant and is amortized on a straight-line basis over the vesting period.

10

The weighted average estimated fair value of options granted to employees and directors under the 2007 Equity Incentive Plan was $7.09 during the nine months ended December 31, 2013, using the Black-Scholes model with the following weighted average assumptions:

Risk-free interest rate	0.06% - 1.53%
Dividend yield	—
Expected volatility	63.0	%
Expected life of the options (years)	4.5
Forfeitures	7.20	%

Time Vested Restricted Stock Units

During the nine months ended December 31, 2013, the Company granted 27,237 time vested restricted stock units (“RSUs”) under the 2007 Equity Incentive Plan to certain directors of the Company. The RSUs vest three years from the date of grant. Upon vesting, the outstanding number of RSUs will be converted into shares of common stock. RSUs are forfeited if they have not vested before the participant ceases to serve as director for any reason other than death or total permanent disability or certain other circumstances as described in such participant’s RSU agreement. Upon death or disability, the participant is entitled to receive a portion of the award based upon the period of time lapsed between the date of grant of the RSU and the termination of service as a director. The fair value of RSU awards is based on the Company’s stock price at the close of the market on the date of grant. The weighted average grant date fair value for the RSUs issued during the nine months ended December 31, 2013 was $14.32.

The following table summarizes RSU vesting activity for the nine months ended December 31, 2013:

	Shares		Weighted Average Grant-Date Fair Value
Nonvested at March 31, 2013	155,600		$	12.38
Granted	27,237		14.32
Vested	—		—
Forfeited	(14,692	)	12.96
Nonvested at September 30, 2013	168,145		$	12.64

(8) Stockholders’ Equity

The Company filed a universal shelf registration statement which was declared effective on July 3, 2013, registering $300 million principal amount of its securities, which may be sold by hhgregg under such registration statement at any time. Each of Gregg Appliances and HHG Distributing were additional registrants to the shelf registration statement because each may guarantee any debt securities that are issued by hhgregg under the shelf registration statement. Gregg Appliances and HHG Distributing are exempt from reporting under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to Rule 12h-5 under the Exchange Act as: (i) hhgregg has no independent assets or operations; (ii) any guarantees of the subsidiary guarantors of debt securities issued under the shelf registration statement are full and unconditional and joint and several; and (iii) there are no subsidiaries of hhgregg other than Gregg Appliances and HHG Distributing.

(9) Share Repurchase Program

On May 16, 2013, the Company’s Board of Directors authorized a new share repurchase program, which became effective on May 22, 2013 (the “May 2013 Program”), allowing the Company to repurchase up to $50 million of its common stock. The May 2013 Program allows the Company to purchase its common stock on the open market or in privately negotiated transactions in accordance with applicable laws and regulations, and expires on May 22, 2014. The previous share repurchase program expired on May 21, 2013.

11

The following table shows the number and cost of shares repurchased during the nine months ended December 31, 2013 and 2012, respectively ($ in thousands):

	Nine Months Ended
	December 31, 2013		December 31, 2012
May 2013 Program
Number of shares repurchased	2,457,068		—
Cost of shares repurchased	$	39,851	$	—
May 2012 Program
Number of shares repurchased	—		3,558,600
Cost of shares repurchased	$	—	$	30,041

As of December 31, 2013, the Company had $10.1 million remaining under the May 2013 Program. The repurchased shares are classified as treasury stock within stockholders’ equity in the accompanying condensed consolidated balance sheets.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Our MD&A is presented in five sections:

• Overview

• Critical Accounting Polices

• Results of Operations

• Liquidity and Capital Resources

• Contractual Obligations

Our MD&A should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes contained herein and the Consolidated Financial Statements for the fiscal year ended March 31, 2013, included in our latest Annual Report on Form 10-K, as filed with the SEC on May 20, 2013.

Overview

hhgregg, Inc. is a specialty retailer of home appliances, televisions, computers, tablets, wireless devices, consumer electronics, home furniture, mattresses, fitness equipment and related services operating under the name hhgregg^™. As of December 31, 2013, we operated 228 stores in Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin. References to fiscal years in this report relate to the respective 12 month period ended March 31. Our 2014 fiscal year is the 12 month period ending on March 31, 2014.

Throughout our MD&A, we refer to comparable store sales. Comparable store sales is comprised of net sales at stores in operation for at least 14 full months, including remodeled and relocated stores, as well as net sales for our e-commerce site. The method of calculating comparable store sales varies across the retail industry, and our method of calculating comparable store sales may not be the same as other retailers’ methods.

This overview section is divided into four sub-sections discussing our operating strategy and performance, store development strategy, business strategy and core philosophies and seasonality.

Operating Strategy and Performance. We focus the majority of our floor space, advertising expense and distribution infrastructure on the marketing, delivery and installation of a wide selection of premium appliance and consumer electronics products. We display nearly 350 models of major appliances and 100 models of flat panel televisions in our stores with a broad assortment of models in the middle- to upper-end of product price ranges. Appliance and consumer electronics sales comprised 84% and 83% of our net sales mix for the three months ended December 31, 2013 and 2012, and 85% and 86% of our net sales mix for the nine months ended December 31, 2013 and 2012.

We strive to differentiate ourselves through our customer purchase experience starting with a highly-trained, consultative commissioned sales force which educates our customers on the features and benefits of our products, followed by rapid product delivery and installation, and ending with post-sales support services. We carefully monitor our competition to ensure that our prices are competitive in the market place. Our experience has been that informed customers often choose to buy a more heavily-featured product once they understand the applicability and benefits of its features. Heavily-featured products typically carry higher average selling prices and higher margins than less-featured, entry-level price point products.

For fiscal 2014 we have implemented three major initiatives in response to our continuing comparable store sales decline which are: to reshape our sales mix, expand our customer base and enhance our service offerings.

Our first initiative for fiscal 2014 is to reshape our sales mix through a continued increase in focus on the appliance category as well as the introduction of new product categories. Our sales in the appliance category have increased on a comparative basis over the past ten quarters, and this category has proven to be a centerpiece of our business. To maintain this growth, we are placing greater emphasis on our in home delivery capabilities for appliances. We also are enhancing our in store cooking and built-in displays, and providing a product assortment based upon geography and preferences within the geography. The U.S. Census Bureau's data on New Residential Construction shows that 2013 U.S. Housing Start-Up’s experienced a 12% increase for the quarterly period ended December 31, 2013 over the prior year comparable period. We expect that as the U.S. housing market and general economy continues to improve, the appliance industry will experience increases in demand. While this data indicates that the housing market has improved year over year, there is no guarantee that the improvement in the housing market will continue and won't be impacted in the future by factors such as rising interest rates.

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Additionally, during our previous fiscal year, we tested and launched new products and categories, including home furniture and home fitness products. Based on the success of testing an expanded furniture assortment, we rolled out an expanded offering of furniture products. Additionally, we rolled out new mid-price product offerings of bedding and fitness equipment. The consumer electronics category will continue to be an important category for us, however, we will continue to place greater emphasis on other areas of our sales mix as we further develop new categories. As it relates to our computing and wireless category, we plan to provide an expanded offering of connected devices, and have fully rolled out the Apple iPad and iPod to all stores. We expect that with the continued innovations to connected devices, we will utilize these products to drive greater traffic to our stores. Our ultimate goal of reshaping our sales mix is to lift the average sales units of our stores.

Our second initiative for fiscal 2014 is to expand our customer base through increased credit offerings. Over the past 12 months, our non-recourse private label credit card penetration has increased 230 basis points to 36% of transactions. We continue to encourage the use of the card, not only through in store payment options, but through offers such as our 5% discount on qualifying merchandise. In addition to our private label credit card, during the second fiscal quarter of 2014 we rolled out a “lease to own” option through a third party provider in all of our stores. This allows us to provide an alternative credit offering to customers who historically had been turned down for credit through our private label card. Additionally, during the third fiscal quarter we rolled out a secondary finance offering for the lower-middle income consumer. We believe that enhancing our credit offerings will generate greater brand loyalty and higher average sales per transaction, resulting in an overall more profitable relationship with customers. Our credit offerings are non-recourse to us, consequently, we bear no risk for any potential delinquencies.

Our third initiative for fiscal 2014 is to enhance our service offerings, with particular emphasis on our website capabilities. During fiscal 2014 we have added the following features to our website: an expanded aisle concept which tripled our product assortment online by carrying products that are not available in stores; updated our mobile commerce site by allowing greater functionality, including transacting through the site and intuitive navigation; omnichannel shopping experience improvements for our customers; and improved checkout and payment options including accepting hhgregg credit card applications on our website. In the year ahead, we expect to continue to expand our online product assortment, integrate the omnichannel shopping experience with with the implementation of a new point of sale system, and to make social media enhancements. The new point of sale system that we plan to implement will not only have new digital capabilities, but expedite the check-out process to decrease the time to complete a sale. We also intend to improve our delivery service by utilizing new devices that better communicate expected delivery timing with the consumer.

Store Development Strategy. Over the past several years, we have adhered closely to a development strategy of adding stores to metropolitan markets in clusters to achieve rapid market share penetration and more efficiently leverage our distribution network, advertising and regional management costs. Our long-term expansion plans include looking for new markets where we believe there is significant underlying demand for stores, typically in areas that have historically demonstrated above-average economic growth, strong household incomes and growth in new housing starts and/or remodeling activity. Our markets typically include most or all of our major competitors. We plan to continue to follow our approach of building store density in each major market and distribution area, which in the past has helped us to improve our market share and realize operating efficiencies.

Our near term expectations will be to continue to shift the balance of our focus to sales and profit productivity in our existing store base before we resume store growth and expansion plans. We plan to enhance our store productivity within our existing markets through growth in both new and existing businesses, increased focus on large deliverable home products, and growth of our competencies with our e-commerce platform.

In the nine months ended December 31, 2013, we relocated four stores, and began construction on one new store that is planned to open during the first fiscal quarter of 2015.

Business Strategy and Core Philosophies. Our business strategy is focused around offering our customers a superior purchase experience. From the time the customers walk in the door, they experience a well-designed, customer-friendly store. Our stores are brightly lit and have clearly distinguished departments that allow our customers to find what they are looking for. We greet and assist our customers with our highly-trained consultative sales force, who educate the customers about the different product features.

We believe our products are rich in features and innovation. We believe that customers find it helpful to have someone explain the features and benefits of a product as this assistance allows them the opportunity to buy the product that most closely matches their needs. We focus our product assortment on big box items requiring in-home delivery and installation in order to utilize our service offerings. We follow up on the customer purchase experience by offering next-day delivery on many of our products and in-home installation service.

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While we believe many of our product offerings are considered essential items by our customers, other products and certain features are viewed as discretionary purchases. As a result, our results of operations are susceptible to a challenging macro-economic environment. Factors such as changes in consumer confidence, unemployment, and consumer credit availability have negatively impacted our core product categories and added volatility to our overall business. As consumers show a more cautious approach to purchases of discretionary items, customer traffic and spending patterns continue to be difficult to predict. By providing a knowledgeable consultative sales force, delivery capabilities, credit offerings and expanded product offerings, we believe we offer our customers a differentiated value proposition.

Retail appliance sales are correlated to the housing industry and housing turnover. As more people purchase existing homes in the market, appliance sales tend to trend upward. Conversely, when demand in the housing market declines, appliance sales are also negatively impacted. The appliance industry has benefited from increased innovation in energy efficient products. While these energy efficient products typically carry a higher average selling price than traditional products, they save the consumer significant dollars in annual energy savings. Average unit selling prices of major appliances are not expected to change dramatically in the foreseeable future.

According to the NPD Consumer Electronics Data for the three month period ended December 31, 2013, sales for the consumer electronics industry have decreased 8.5% from the comparable prior year period. The consumer electronics industry depends on new product innovations to drive sales and profitability. Innovative, heavily-featured products are typically introduced at relatively high price points. Over time, price points are reduced to drive consumption. Accordingly, there has been consistent price compression in flat panel televisions for equivalent screen sizes in recent years, which was further compressed during the current quarterly period ended December 31, 2013 as retailers provided increased promotional offerings for the holiday. According to the NPD TV Market Pulse reports for the three months ended December 31, 2013, flat-panel TV sales units were 1% less than the comparable prior year period, and the average selling price has decreased by approximately 4%. The industry has seen falling demand as new technology innovation has been insufficient, which has resulted in gross margin rate declines, and average selling price declines. Other consumer electronics categories have also experienced significant demand pressure. Cameras, camcorders, mp3 players, and GPS devices have been largely replaced by the use of smart phones. As such, we continue to shift our product mix away from these categories and into the computing and wireless category. In future years, we will continue to evaluate our mix of product offerings in the consumer electronics category to maximize profit margins without significant loss of market share, while also featuring key opening price points to drive traffic.

The computing and wireless product category drives traffic into our stores. As a result, we have enhanced our offerings of such products. We have fully rolled out the offering of Apple iPod and Apple iPad products to all stores.

In addition to testing new products in existing categories, we have also expanded our product assortment within the home products category, which fit our core competencies, including home furniture and fitness equipment. We will continue to refine our assortment in this category as we learn more about their success in our stores.

We also rolled out additional credit offerings for our consumers. As over one-third of our sales today are transacted on the hhgregg private label credit card, we want to expand our consumer base to allow new consumers to shop in our stores. We added a “lease to own” program through a third party provider chain-wide, and added a secondary financing offer for the lower-middle income consumer. These programs are non-recourse to the Company through the use of third party solutions.

Seasonality. Our business is seasonal, with a higher portion of net sales and operating profit realized during the quarter that ends December 31 due to the overall demand for consumer electronics during the holiday shopping season. Appliance revenue is impacted by seasonal weather patterns, but is less seasonal than our consumer electronics business and helps to offset the seasonality of our overall business.

Critical Accounting Policies

We describe our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended March 31, 2013 in our latest Annual Report on Form 10-K filed with the SEC on May 20, 2013. There have been no significant changes in our critical accounting policies and estimates since the end of fiscal 2013.

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Results of Operations

Operating Performance. The following table presents selected unaudited condensed consolidated financial data (in thousands, except share amounts, per share amounts, and store count data):

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
(unaudited)	2013			2012			2013			2012
Net sales	$	707,053		$	799,635		$	1,800,290		$	1,877,127
Net sales % decrease	(11.6		)%	(3.6		)%	(4.1		)%	(0.1		)%
Comparable store sales % decrease (1)	(11.2		)%	(9.7		)%	(6.4		)%	(8.3		)%
Gross profit as a % of net sales	26.8		%	27.3		%	28.4		%	28.7		%
SG&A as a % of net sales	18.7		%	17.4		%	20.7		%	20.4		%
Net advertising expense as a % of net sales	5.2		%	4.8		%	5.2		%	5.2		%
Depreciation and amortization expense as a % of net sales	1.5		%	1.3		%	1.8		%	1.6		%
Income from operations as a % of net sales	1.3		%	3.7		%	0.8		%	1.4		%
Net interest expense as a % of net sales	0.1		%	0.1		%	0.1		%	0.1		%
Net income	$	5,048		$	17,389		$	7,466		$	15,448
Net income per diluted share	$	0.17		$	0.51		$	0.24		$	0.44
Weighted average shares outstanding—diluted	30,387,251			33,985,113			31,117,896			35,168,497
Number of stores open at the end of period	228			228

⁽¹⁾  Comprised of net sales at stores in operation for at least 14 full months, including remodeled and relocated stores, as well as net sales for our e-commerce site.

Net income was $5.0 million for the three months ended December 31, 2013, or $0.17 per diluted share, compared with net income of $17.4 million, or $0.51 per diluted share, for the comparable prior year period. For the nine months ended December 31, 2013, net income was $7.5 million, or $0.24 per diluted share, compared with net income of $15.4 million, or $0.44 per diluted share for the comparable prior year period. The decrease in net income for the three months ended December 31, 2013 was largely due to a comparable store sales decrease of 11.2% and a decrease in gross margin. The decrease in net income for the nine month period ended December 31, 2013 was largely due to a comparable store sales decrease of 6.4% and a decrease in gross margin.

Net sales for the three months ended December 31, 2013decreased11.6% to $707.1 million from $799.6 million in the comparable prior year period. The decrease in net sales for the three month period was the result of a comparable store sales decrease of 11.2%. Net sales for the nine months ended December 31, 2013 decreased 4.1% to $1.80 billion from $1.88 billion in the comparable prior year period. The decrease in net sales for the nine month period was the result of a comparable store sales decrease of 6.4%.

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Net sales mix and comparable store sales percentage changes by product category for the three and nine months ended December 31, 2013 and 2012 were as follows:

	Net Sales Mix Summary								Comparable Store Sales Summary
	Three Months Ended December 31,				Nine Months Ended December 31,				Three Months Ended December 31,				Nine Months Ended December 31,
	2013		2012		2013		2012		2013		2012		2013		2012
Appliances	41	%	35	%	47	%	42	%	1.5	%	6.1	%	3.8	%	4.4	%
Consumer electronics (1)	43	%	48	%	38	%	44	%	(19.7	)%	(24.1	)%	(18.8	)%	(21.7	)%
Computing and wireless (2)	12	%	14	%	10	%	11	%	(24.5	)%	15.1	%	(12.4	)%	12.7	%
Home products (3)	4	%	3	%	5	%	3	%	36.1	%	23.4	%	57.7	%	5.4	%
Total	100	%	100	%	100	%	100	%	(11.2	)%	(9.7	)%	(6.4	)%	(8.3	)%

⁽¹⁾ Primarily consists of accessories, audio, personal electronics and televisions.

⁽²⁾ Primarily consists of computers, mobile phones and tablets.

⁽³⁾ Primarily consists of fitness equipment, furniture and mattresses.

The decrease in comparable store sales for the three months ended December 31, 2013 was driven primarily by a decrease in comparable store sales in the consumer electronics and computing and wireless categories, partially offset by an increase in the appliance and home products categories. The appliance category increase in comparable store sales was driven by an increase in units sold. The home products category increase in comparable store sales was a result of sales of furniture and fitness equipment. The consumer electronics category comparable store sales decline was driven primarily by a double digit comparable store sales decrease in video, largely resulting from our strategy of not fully participating in the increased promotional offerings that occurred across a variety of retail formats during the three months ended December 31, 2013. The computing and wireless category decrease in comparable store sales was driven by a decrease in demand for laptop computers and mobile phones and a lower average selling price for tablets.

Three Months Ended December 31, 2013 Compared to Three Months Ended December 31,2012

Gross profit margin, expressed as gross profit as a percentage of net sales, decreased for the three months ended December 31, 2013 to 26.8% from 27.3% for the comparable prior year period. The decrease is due to a decline in gross profit margin rates across all categories primarily due to the promotional nature of this holiday season.

SG&A expense, as a percentage of net sales, increased 130 basis points for the three months ended December 31, 2013 compared to the prior year period. The increase in SG&A as a percentage of net sales was a result of increases in wage expense, occupancy costs, and product services as a percentage of net sales, primarily due to the deleveraging effect of the net sales decline.

Net advertising expense, as a percentage of net sales, increased 39 basis points during the three months ended December 31, 2013 compared to the prior year period. While we reduced our gross advertising spend from the prior year, the increase as a percentage of net sales was primarily due to the deleveraging effect of the net sales decline.

Depreciation expense, as a percentage of net sales, increased 22 basis points for the three months ended December 31, 2013 compared to the prior year period. The increase as a percentage of net sales was primarily due to the deleveraging effect of the net sales decline.

Our effective income tax rate for the three months ended December 31, 2013decreased to 38.2% from 39.1% in the comparable prior year period. The decrease in our effective income tax rate is primarily the result of an increase in federal and state income tax credits recognized compared to the comparable prior year period.

Nine Months Ended December 31, 2013 Compared to Nine Months Ended December 31,2012

Gross profit margin, expressed as gross profit as a percentage of net sales, decreased for the nine months ended December 31, 2013 to 28.4% from 28.7% for the comparable prior year period. The decrease is a result of decreases in gross profit margin rates across the majority of our categories, partially offset by a favorable product sales mix shift.

SG&A expense, as a percentage of net sales, increased 22 basis points for the nine months ended December 31, 2013 compared to the prior year period. The increase in SG&A as a percentage of net sales was a result of an increase in product services and occupancy costs as a percentage of net sales due to the deleveraging effect of the net sales decline, partially offset by the decrease in bank transaction fees and employee benefits as a percentage of net sales due to cost cutting measures.

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Net advertising expense, as a percentage of net sales, remained consistent for the nine months ended December 31, 2013 compared to the prior year period. This was driven largely by decreased advertising spend in comparable markets, offset by the deleveraging effect of the net sales decline.

Depreciation expense, as a percentage of net sales, increased 21 basis points for the nine months ended December 31, 2013 compared to the prior year period. The increase as a percentage of net sales was primarily due to the deleveraging effect of the net sales decline.

Our effective income tax rate remained unchanged at 38.6% for the nine months ended December 31, 2013 compared to the comparable prior year period. 

Liquidity and Capital Resources

The following table presents a summary on a consolidated basis of our net cash provided by (used in) operating, investing and financing activities (dollars are in thousands):

	Nine Months Ended
	December 31, 2013			December 31, 2012
Net cash provided by operating activities	$	12,570		$	15,291
Net cash used in investing activities	(19,667		)	(50,257		)
Net cash used in financing activities	(38,833		)	(8,756		)

Our liquidity requirements arise primarily from our need to fund working capital requirements and capital expenditures. We make capital expenditures principally to fund our expansion strategy, which includes, among other things, investments in new stores and new distribution facilities, remodeling and relocation of existing stores, as well as information technology and other infrastructure-related projects.

During fiscal 2014, we relocated four stores, and began construction on one new store that is planned to open during the first fiscal quarter of 2015. In addition, we plan to continue to invest in our infrastructure, including management information systems and distribution capabilities, as well as incur capital remodeling and improvement costs. Capital expenditures for fiscal 2014 will be funded through cash and cash equivalents, borrowings under our Amended Facility described below and tenant allowances from landlords.

Cash Provided by Operating Activities.Net cash provided by operating activities primarily consists of net income as adjusted for increases or decreases in working capital and non-cash charges such as depreciation, deferred taxes and stock compensation expense. Cash provided by operating activities was $12.6 million and $15.3 million for the nine months ended December 31, 2013 and 2012, respectively. The decrease in cash provided by operating activities is primarily due to a decrease in net income, a decrease in accounts payable due to the timing of payments and overall lower inventory requirements as compared to the prior year, an increase in the percentage of owned merchandise inventory despite the lower inventory levels previously mentioned, the net change in our other current operating assets and liabilities, and the decrease in cash received from landlords for tenant allowances due to opening fewer stores in the current period compared to the prior period. The net change in other current operating assets and liabilities was primarily a result of differences in timing of customer sales and vendor payments.

Cash Used In Investing Activities.Net cash used in investing activities was $19.7 million and $50.3 million for the nine months ended December 31, 2013 and 2012, respectively. The decrease in cash used in investing activities is due to less purchases of property and equipment associated with the opening of new stores. In the nine months ended December 31, 2013, we relocated four stores, and began construction on one new store opening in the first fiscal quarter of 2015. In the nine months ended December 31, 2012, we opened 20 new stores.

Cash Used In Financing Activities.Net cash used in financing activities was $38.8 million and $8.8 million for the nine months ended December 31, 2013 and 2012, respectively. The increase in cash used in financing activities is primarily due to a decrease in funds provided by bank overdrafts of $20.9 million, a decrease in net borrowings on an inventory financing facility of $14.4 million, an increase in funds used for treasury stock repurchases of $9.8 million, and funds used for payment of financing costs of $0.9 million, offset by an increase in borrowings under the Amended Facility described below of $15.0 million and an increase in funds provided by the exercise of stock options of $1.6 million.

Amended Facility. On July 29, 2013, Gregg Appliances, Inc. (“Gregg Appliances”), our wholly-owned subsidiary, entered into Amendment No. 1 to its Amended and Restated Loan and Security Agreement (the “Amended Facility”) to increase the

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maximum credit available to $400 million from $300 million, subject to borrowing base availability, and extend the term of the facility to expire on July 29, 2018. The facility was set to expire on March 29, 2016.

Interest on borrowings (other than Eurodollar rate borrowings) is payable monthly at a fluctuating rate based on the bank’s prime rate or LIBOR plus an applicable margin based on the average quarterly excess availability. Interest on Eurodollar rate borrowings is payable on the last day of each “interest period” applicable to such borrowing or on the three month anniversary of the beginning of such “interest period” for interest periods greater than three months. The unused line rate was determined based on the amount of the daily average of the outstanding borrowings for the immediately preceding calendar quarter period (the “Daily Average”). For a Daily Average greater than or equal to 50% of the defined borrowing base, the unused line rate was 0.25%. For a Daily Average less than 50% of the defined borrowing base, the unused line rate was 0.375%. The Amended Facility is guaranteed by Gregg Appliances’ wholly-owned subsidiary, HHG Distributing, which has no assets or operations. The guarantee is full and unconditional and Gregg Appliances has no other subsidiaries.

Pursuant to the Amended Facility, the borrowing base is equal to the sum of (i) 90% of all commercial accounts, (ii) 90% of all commercial and credit card receivables of Gregg Appliances and (iii) 90% of the net recovery percentage of the eligible inventory multiplied by the value of such eligible inventory consistent with the most recent appraisal of such eligible inventory, in each case subject to customary reserves and eligibility criteria.

Under the Amended Facility, Gregg Appliances is not required to comply with any financial maintenance covenant unless “excess availability” is less than the greater of (i) 10.0% of the lesser of (A) the defined borrowing base or (B) the defined maximum credit or (ii) $20.0 million during the continuance of which event Gregg Appliances is subject to compliance with a fixed charge coverage ratio of 1.0 to 1.0.

Pursuant to the Amended Facility, if Gregg Appliances has “excess availability” of less than 12.5% of the lesser of (A) the defined borrowing base or (B) the defined maximum credit, it may, in certain circumstances more specifically described in the Amended Facility, become subject to cash dominion control.

The Amended Facility places limitations on the ability of Gregg Appliances to, among other things, incur debt, create other liens on its assets, make investments, sell assets, pay dividends, undertake transactions with affiliates, enter into merger transactions, enter into unrelated businesses, open collateral locations outside of the United States, or enter into consignment assignments or floor plan financing arrangements. The Amended Facility also contains various customary representations and warranties, financial and collateral reporting requirements and other affirmative and negative covenants. Gregg Appliances was in compliance with the restrictions and covenants of the Amended Facility at December 31, 2013.

As of December 31, 2013, Gregg Appliances had $15.0 million of cash borrowings outstanding under the Amended Facility. As of December 31, 2013, Gregg Appliances had $5.3 million of letters of credit outstanding, which expire through December 31, 2014. The total borrowing availability under the Amended Facility was $224.4 million as of December 31, 2013. The interest rate based on the bank’s prime rate as of December 31, 2013 was 3.75%.

As of March 31, 2013, Gregg Appliances had no borrowings outstanding under the Amended Facility. As of March 31, 2013, Gregg Appliances had $4.9 million of letters of credit outstanding, which expire through December 31, 2013. The total borrowing availability under the Amended Facility was $189.8 million as of March 31, 2013. The interest rate based on the bank’s prime rate as of March 31, 2013 was 4.25%.

Inventory Financing Facility. We have an inventory financing facility, which is a $20 million unsecured credit line that is non-interest bearing and is not collateralized with the inventory purchased. The facility includes customary covenants as well as customary events of default.

Long Term Liquidity. Anticipated cash flows from operations and funds available from our Amended Facility, together with cash on hand, should provide sufficient funds to finance our operations for the foreseeable future. Our cash on hand has decreased from $48.6 million as of March 31, 2013 to $2.6 million as of December 31, 2013, which is primarily a result of the timing of purchases of inventory and an increase in the level of owned inventory due to purchases for the holiday season. There have been no changes to the terms of our purchase agreements with inventory suppliers. As a normal part of our business, we consider opportunities to refinance our existing indebtedness, based on market conditions. Although we may refinance all or part of our existing indebtedness in the future, there can be no assurances that we will do so. Changes in our operating plans, lower than anticipated sales, increased expenses, acquisitions or other events may require us to seek additional debt or equity financing. There can be no guarantee that financing will be available on acceptable terms or at all. Additional debt financing, if available, could impose additional cash payment obligations, additional covenants and operating restrictions.

Contractual Obligations

We entered into lease commitments totaling approximately $12.0 million over their respective lease terms during the three months ended December 31, 2013. There have been no other significant changes in our contractual obligations during the period covered by this report. See our “Management’s Discussion and Analysis of Financial Condition and Results of

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Operations” for the fiscal year ended March 31, 2013 in our latest Annual Report on Form 10-K filed with the SEC on May 20, 2013 and our Quarterly Report on Form 10-Q filed with the SEC on August 1, 2013 for additional information regarding our contractual obligations.

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Cautionary Note Regarding Forward-Looking Statements

Some of the statements in this document constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our business’ or our industry’s actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. Such statements include, in particular, statements about our plans, strategies, prospects, changes, outlook and trends in our business and the markets in which we operate; customer preferences; the impact of our fiscal 2014 initiatives; the impact of enhanced in store cooking and built-in displays on appliance sales; the impact of competition on prices; refinements to our product mix and to customer services and service offerings, including in our appliance category and on our website and mobile site; expectations around the U.S. housing market and general economy; efforts to increase the use of our private label credit card and supplemental credit programs; the impact of our enhanced credit offerings and non-recourse nature of such offerings; how we entice discretionary purchases; shifts in product mix of consumer electronics and home products including, furniture, fitness equipment, and computing and wireless; investments in our delivery and installation capabilities; the success of our general initiatives and initiatives in our consumer electronics category and strategies to offset declines in that category; variations and enhancements of our product offerings; updates and refinements to our omni-channel experience, including our e-commerce site and timing and the impact of our new point of sale system; the impact of our initiatives to drive sales; our long term and near term store development and expansion strategies; steps to slow store growth and enhance store productivity in existing markets; the impact of our customer purchase experience; predictions around customer spending patterns; factors impacting our gross profit rate; impact of consumer demand and pricing pressures on certain products; outlook for sales of major appliances, including price changes; factors impacting the decrease in consumer electronics sales, gross margin rate declines, and average selling price declines for the industry, including, the steps taken by retailers in the current period to further compress prices of televisions, insufficient innovations in consumer electronics to maintain demand, and the obsolescence of certain devices which have been replaced by smart phones; the seasonality of our business; our income tax rate; plans to refinance our indebtedness or seek additional financing and ability to secure additional debt financing; plans regarding new store openings and investment in our infrastructure; the impact of litigation; and our expected capital expenditures and expected sources of funding found under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “tends,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of those terms or other comparable terminology. These statements are only predictions. We have based these forward-looking statements on its current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, these forward looking statements are projections only and involve known and unknown risks and uncertainties, many of which are beyond our control. Actual events or results may differ materially because of market conditions in our industry or other factors. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our latest Annual Report on Form 10-K filed with the SEC on May 20, 2013 and the Risk Factors set forth in this Quarterly Reports on Form 10-Q and our Annual Report on Form 10-K filed with the SEC on May 20, 2013. The forward-looking statements are made as of the date of this document and we assume no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

In addition to the risks inherent in our operations, we are exposed to certain market risks, including interest rate risk.

As of December 31, 2013, our debt was comprised of our Amended Facility.

Interest on borrowings under our Amended Facility is payable monthly at a fluctuating rate based on the bank’s prime, LIBOR, or Eurodollar rates plus an applicable margin based on the average quarterly excess availability. As of December 31, 2013, we had $15.0 million in outstanding borrowings on our Amended Facility. A hypothetical 100 basis point increase in the bank's prime rate would decrease our annual pre-tax income by approximately $0.2 million.

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as appropriate to allow timely decisions regarding required disclosure. We have established a Disclosure Committee, consisting of certain members of management, to assist in this evaluation. Our Disclosure Committee meets on a quarterly basis and more often if necessary.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act), as of December 31, 2013. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2013, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended December 31, 2013, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Other Information

ITEM 1. Legal Proceedings

We are engaged in various legal proceedings in the ordinary course of business and have certain unresolved claims pending. The ultimate liability, if any, for the aggregate amounts claimed cannot be determined at this time. However, management believes, based on the examination of these matters and experiences to date, that the ultimate liability, if any, in excess of amounts already provided for in the unaudited condensed consolidated financial statements is not likely to have a material effect on our consolidated financial position, results of operations or cash flows.

ITEM 1A. Risk Factors

Except for the new risk factor below, there have been no material changes to the risk factors set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on May 20, 2013. The risks disclosed in our Annual Report on Form 10-K , and below 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 operating results.

We could incur charges due to impairment of long-lived assets.

At December 31, 2013, we had long-lived asset balances of $204.2 million, which are subject to periodic testing for impairment. See Note 2 of Notes to Condensed Consolidated Financial Statements for further information. A significant amount of judgment is involved in the periodic testing. Failure to achieve sufficient levels of cash flow generated from operations at individual store locations could result in impairment charges for the related fixed assets, which could have a material adverse effect on our reported results of operations. Impairment charges, if any, resulting from the periodic testing are non-cash.

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

The following table sets forth the information with respect to repurchases of our common stock for the three months ended December 31, 2013 (in thousands, except share and per share amounts):

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Maximum Dollar Value of Shares that May Yet Be  Purchased Under the Plans or Programs (1)
October 1, 2013 to October 31, 2013	—	—		—	$	25,786
November 1, 2013 to November 30, 2013	962,893	$	16.24	962,893	10,149
December 1, 2013 to December 31, 2013	—	—		—	10,149
Total	962,893	$	16.24	962,893	$	10,149

(1) All of the above repurchases were made on the open market at prevailing market rates plus related expenses under our May 2013 Program, which authorized the repurchase of up to $50 million of our common stock. The May 2013 Program was authorized by our Board of Directors on May 16, 2013 and expires on May 22, 2014.

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ITEM 6. Exhibits

10.36	Employment Agreement, dated May 20, 2013, between Gregg Appliances, Inc. and Andrew S. Giesler.
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from hhgregg, Inc.’s Form 10-Q for the quarterly period ended December 31, 2013, formatted in an XBRL Interactive Data File: (i) Condensed Consolidated Statements of Operations-unaudited; (ii) Condensed Consolidated Balance Sheets-unaudited; (iii) Condensed Consolidated Statements of Cash Flows-unaudited; (iv) Condensed Consolidated Statement of Stockholders’ Equity-unaudited; and (v) Notes to Condensed Consolidated Financial Statements-unaudited.

* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

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SIGNATURES

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.

	HHGREGG, INC.
By:	/s/ Jeremy J. Aguilar
	Jeremy J. Aguilar Chief Financial Officer (Principal Financial Officer)

Dated: January 30, 2014

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EX-10.36

Exhibit 10.36

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of May 20, 2013 (“Effective Date”), by and between Gregg Appliances, Inc. (“Company”), and Andrew Giesler(“Executive”). Executive desires to be employed or to continue to be employed by the Company. The Company desires to employ or to continue to employ Executive provided it is afforded the protections of this Agreement. In consideration of the foregoing, the Company’s employment of Executive, and the promises and covenants contained in this Agreement, the Company and Executive agree as follows:

1.Employment Terms

1.1.Employment. The Company agrees to employ Executive, and Executive agrees to be employed by the Company, for a period beginning on the Effective Date and continuing until terminated by either party. Executive will serve initially in the position of SVP, Finance and will have those duties and responsibilities that the Company assigns to Executive from time to time. The Company, in its sole discretion, may assign Executive a different position or title, or new or different duties and responsibilities, from time to time during Executive’s employment with the Company.

1.2.Compensation And Benefits. For all services to be rendered by Executive during Executive’s employment under this Agreement, and as consideration for complying with the covenants herein, the Company will pay and provide the following to Executive:

(a) During Executive’s employment, the Company will pay Executive a salary or other designated compensation (“Base Salary and Incentive”). Executive’s initial Base Salary and Incentive shall be determined by mutual agreement between the Company and Executive. The Company and Executive acknowledge and agree that the Company, in its sole discretion, may adjust the manner and amount of Executive’s Base Salary and Incentive (or any other elements of compensation) from time to time during Executive’s employment with the Company. The Base Salary and Incentive shall be paid to Executive consistent with the customary payroll practices of the Company. The Base Salary and Incentive shall be subject to standard payroll withholding deductions as required by law and withholding for benefits in which Executive elects to participate. To the extent stock options are made available to Executive, Executive’s receipt of any such stock options are contingent upon Executive executing and fully complying with the terms of this Agreement.

(b) During Executive’s employment, Executive will be entitled to participate in the Company’s employee benefit plans to which other employees of the Company are generally entitled to participate; provided, however, Executive’s entitlement to participate in such benefit plans is subject to the eligibility requirements and other terms and conditions of such benefit plans. Executive acknowledges and agrees that the Company, in its sole discretion, may change, amend or discontinue any of its employee benefit plans or programs at any time during Executive’s employment with the Company, and nothing contained in this Agreement shall obligate the Company to institute, maintain or refrain from changing, amending or discontinuing any benefit plan or program.

1.3.Best Efforts And Duty Of Loyalty. During Executive’s employment Executive will: (a) devote Executive’s best efforts to the furtherance of the business of the Company; (b) will not engage, directly or indirectly, in any activity, employment or business venture, that is competitive with the Company’s business in any respect; (c)  will not take any action, or make any omission, that deprives the Company of any business opportunities or otherwise act in a manner that conflicts with the best interest of the Company or is detrimental to its business and (d) will not engage in any outside work or other employment without the Company’s express written permission.

1.4.Company Property. All tangible materials, equipment, documents, copies of documents, data compilations (in whatever form), and electronically created or stored materials that Executive receives or makes in the course of Executive’s employment are and remain the property of the Company, and Executive will immediately return such property upon the Company’s request or upon termination of Executive’s employment.

1.5.Employment Policies. Executive will abide by any employment or work rules and/or policies that the Company currently has or may adopt, amend or implement from time to time during Executive’s employment.

1.6.Termination. Executive’s employment is on an at‑will basis and this Agreement does not guarantee employment for any specific duration. Either the Company or Executive may terminate the employment relationship at any time for any reason, or no reason, with or without advance notice.

1.7.Severance Benefits.

(a) Pay. If the Company terminates Executive’s employment, it shall pay Executive, as severance pay, an amount equivalent to twelve (12) months of Executive’s base salary, subject to applicable withholdings and deductions. Payment will be made ratably over the twelve (12) month period immediately following the termination of Executive’s employment (the "Severance Period"), consistent with the customary payroll practices of the Company. Provided, however, Executive will not be entitled to the severance discussed in this Section 1.7(a) if Executive voluntarily resigns his employment or if the Company terminates his employment for Cause (as defined below). Provided further that any unpaid severance due to Executive will be reduced by an amount equal to the gross wages Executive earns from other employment (including self employment) during the Severance Period. During the Severance Period, Executive agrees to notify the Company's then current Chief Human Resources Officer within seven (7) calendar days of Executive obtaining other employment (including self employment) and will notify the Company of the amount of the gross monthly wages paid pursuant to such employment.

(b) Additional Insurance Stipend. If the Company terminates Executive’s employment, the Company shall pay Executive a lump sum stipend equal to 167% of the product of twelve (12) times the monthly COBRA premium that corresponds, as of the date of Executive’s termination of employment, to the health, dental, and vision coverage that Executive had in effect under the Company’s health, dental and vision plans immediately prior to termination of employment. The stipend will be subject to all applicable withholdings and deductions, and will be paid to Executive on the same payroll date as the first installment of severance pay described above in Section 1.7(a). Executive may apply the stipend towards Executive’s purchase of COBRA continuation coverage or for any other purpose. Provided, however, Executive will not be entitled to any payment from the Company as described in this Section 1.7(b) if Executive voluntarily resigns his employment or if the Company terminates his employment for Cause (as defined below).

Except for Executive’s rights under COBRA or as otherwise provided by this Agreement, the terms of any applicable benefit plan or applicable law, Executive’s eligibility to participate in, and/or his receipt of, all employee benefits and perquisites will terminate as of the date Executive’s employment terminates.

(c) Outplacement Assistance. If the Company terminates Executive’s employment, the Company will provide Executive with outplacement services for a period of twelve (12) months after the date of termination to assist Executive in his search for new employment. Such outplacement services shall be consistent with those that the Company has provided to former employees. Provided, however, Executive will not be entitled to the outplacement benefits discussed in this Section 1.7(c) if Executive voluntarily resigns his employment or if the Company terminates his employment for Cause (as defined below).

(d) Termination Because Of Change In Control.

(i) If the Company terminates Executive’s employment within twelve (12) months following a Change in Control (as defined below), the Company shall pay Executive, as severance pay, an amount equivalent to twelve (12) months of Executive’s base salary, subject to applicable withholdings and deductions. Payment will be made ratably over the twelve (12) month period immediately following the termination of Executive’s employment, (the "Change in Control Severance Period") consistent with the customary payroll practices of the Company. Provided, however, Executive will not be entitled to the severance discussed in this Section 1.7(d)(i) if Executive voluntarily resigns his employment or if the Company terminates his employment for Cause (as defined below). Provided further that any unpaid severance due to Executive will be reduced by an amount equal to the gross wages Executive earns from other employment (including self employment) during the Change in Control Severance Period. During the Change in Control Severance Period, Executive agrees to notify the Company's then current Chief Human Resources Officer within seven (7) calendar days of Executive obtaining other employment (including self employment) and will notify the Company of the amount of the gross monthly wages paid pursuant to such employment.

(ii) Subject to the procedural conditions prescribed below, the Company shall also provide Executive with the severance benefits set forth in Subsection 1.7(d)(i) above upon any voluntary resignation of Executive if any one (1) of the following events occurs within twelve (12) months following a Change in Control (as defined below):

(A) A material diminution in Executive’s base compensation from the level of such base compensation immediately prior to the Change in Control (as defined below).

(B) A material diminution in Executive’s authority, duties, or responsibilities from his authority, duties, or responsibilities immediately prior to the Change in Control (as defined below).

(C) A material change in the geographic location at which Executive is assigned to perform his duties and responsibilities on behalf of the Company from such geographic location immediately prior to the Change in Control (as defined below).

For the Executive to be entitled to severance benefits because of his resignation following the occurrence of one (1) of the listed events, each of the following procedural conditions must be satisfied: (i) within ninety (90) calendar days of the initial occurrence of the event, the Executive must give written notice to the Company of such occurrence; (ii) the Company must have failed to remedy that occurrence within thirty (30) calendar days after receiving such notice, and (iii) the Executive must resign no later than 150 calendar days after the initial occurrence of the event.

(iii) If Executive is entitled to severance benefits under this Section 1.7(d) (under either (i) or (ii) of such Section), the Company shall pay Executive a lump sum stipend equal to 167% of the product of twelve (12) times the monthly COBRA premium that corresponds, as of the date of Executive’s termination of employment, to the health, dental, and vision coverage that Executive had in effect under the Company’s health, dental and vision plans immediately prior to termination of employment. The stipend will be subject to all applicable withholdings and deductions, and will be paid to Executive on the same payroll date as the first installment of severance pay described above in this Section 1.7(d). Executive may apply the stipend towards Executive’s purchase of COBRA continuation coverage or for any other purpose. Provided, however, Executive will not be entitled to any payment from the Company towards COBRA premiums as described in this Section 1.7(d)(iii) if Executive voluntarily resigns his employment (other than pursuant to the provisions of Section 1.7(d)(ii)) or if the Company terminates his employment for Cause (as defined below).

(iv) If the Company terminates Executive’s employment, or if Executive voluntarily resigns, within twelve (12) months following a Change in Control, and if Executive receives severance benefits under this Section 1.7(d), Executive forfeits, and is not eligible for, severance benefits under Section 1.7(a) and (b).

(e) Confidentiality. Executive agrees that receipt of the severance described in Sections 1.7(a), (b), (c), and (d) will remain confidential between Executive and Executive’s counsel (if any), and will not be revealed to anyone else whatsoever (except Executive’s spouse or tax preparer who shall also be bound by this confidentiality provision) unless under subpoena or court order.

(f) For purposes of this Section 1.7, the term

(i) “Cause” means the Company’s termination of Executive’s employment for a reason listed below:

(I) Executive’s failure or refusal to perform specific lawful directives of the senior officers of the Company;

(II) Dishonesty of Executive affecting the Company;

(III) Violation of any Company policy;

(IV) Being under the influence of alcohol or using illegal drugs in a manner which interferes with the performance of Executive’s duties and responsibilities under this Agreement;

(V) Executive’s conviction of a felony or of any crime involving moral turpitude, fraud or misrepresentation;

(VI) Any misconduct of Executive resulting in material loss to the Company, or material damage to the reputation of the Company, or theft or defalcation from the Company;

(VII) Executive’s neglect or failure to substantially perform Executive’s material duties and responsibilities under this Agreement; or

(VIII) Any material breach (not covered by any of clauses (I) through (VII) above) of any of the provisions of this Agreement.

(ii) “Change in Control” of the Company means (i) a merger, consolidation, business combination or similar transaction involving the Company as a result of which the holders of the voting securities of the Company prior to such transaction in the aggregate cease to own at least 70% of the voting securities of the entity surviving or resulting from such transaction (or the ultimate parent entity thereof), (ii) a sale, lease, exchange, transfer or other disposition of more than 25% of the assets of the Company and its subsidiaries, taken as a whole, in a single transaction or a series of related transactions, or (iii) the acquisition, by a person or group (as such term is defined under Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of more than 25% of the voting securities of the Company whether by tender or exchange offer or otherwise.

(g) Release Agreement. As a prior condition to receiving the severance benefits described in Sections 1.7(a), (b), (c) and (d) above, Executive agrees that he will first execute and deliver to the Company the Release Agreement attached as Exhibit A to this Agreement.

(h) Section 409A Compliance. Notwithstanding any other provision of this Agreement, the total amount of the severance benefits payable to Executive under this Agreement shall not exceed two times the lesser of (a) Executive’s Annual Compensation (as defined below), or (b) the annual limitation on compensation in effect as of Executive’s termination date under Internal Revenue Code (“Code”) Section 401(a)(17), which is $255,000 in 2013. If the amount of Executive’s total severance benefits under this Agreement would exceed this limit, Executive’s severance benefits will be reduced (in the manner determined by the Company) to the extent necessary to prevent them from exceeding this limit. For purposes of this Section 1.7(h), “Annual Compensation” means the total of all compensation (including wages, salary, and any other benefits of monetary value, whether paid in cash or otherwise) that was paid to Executive for services performed for the Company during the calendar year prior to the calendar year in which the termination of employment occurs (or if Executive worked for the Company for less than that entire calendar year, the total compensation that Executive would have been paid at Executive’s usual rate of compensation had Executive worked for the Company for the entire calendar year.)

(i) No Excess Parachute Payments. Notwithstanding any other provision of this Agreement, if any portion of the benefits provided in Section 1.7 of this Agreement or under any other agreement with or plan of the Company (in the aggregate “Total Payments”) would constitute a “parachute payment” (as hereinafter defined), then the payments to be made to Executive under this Agreement shall be reduced such that the value of the aggregate Total Payments that Executive is entitled to receive shall be One Dollar ($1.00) less than the maximum amount which Executive may receive without becoming subject to the tax imposed by Code Section 4999, and which the Company may pay without loss of deduction under Section 280G of the Code. For purposes of this Agreement, the term “parachute payment” shall have the meaning assigned to it in Section 280G of the Code, and such “parachute payment” shall be valued as provided therein.

(j) Delay of Severance Payments to Specified Employee.Notwithstanding any other provision of this Agreement, if any amount payable to Executive under this Agreement on account of Executive’s separation from service with the Company constitutes deferred compensation within the meaning of Code Section 409A, and Executive is a Specified Employee on the date of his separation from service, payment of the amount shall be delayed until the first business day that is at least six (6) months after the date on which Executive’s separation from service occurred. For these purposes, “Specified Employee” has the meaning given to that term in Code Section 409A(a)(2)(B)(i) and interpretive regulations.

2.Non‑Disclosure And Non‑Compete Terms

2.1.Non-Disclosure of Confidential Information.

(a) Definition. As used in this Agreement, the term “Confidential Information” means any and all of the Company’s trade secrets, confidential and proprietary information and all other non-public information and data of or about the Company or its business, including, intellectual property, customer lists, information about or received from customers, information about or received from business partners, information received from third parties that the Company is obligated to keep confidential, marketing plans and strategies, information about suppliers, pricing information, cost information, research and development information, business methods and processes, computer codes, business plans, financial information, contract information, data compilations, personnel information and

information about prospective customers or prospective products and services, whether or not reduced to writing or other tangible medium of expression, including, work product created by Executive in rendering services for the Company.

(b) Non-Disclosure. During Executive’s employment and thereafter, Executive will not use or disclose any Confidential Information to others, except as authorized in writing by the Company or in the performance of work assigned to Executive by the Company. Executive agrees that the Company owns the Confidential Information and Executive has no rights, title or interest in any of the Confidential Information. Executive will abide by the Company’s policies protecting the Confidential Information.

(c) Return Of Information And Sworn Statement. At the Company’s request or upon voluntary or involuntary termination of Executive’s employment, Executive will immediately deliver to the Company any and all materials (including all copies and electronically stored data) containing any Confidential Information in Executive’s possession or subject to Executive’s custody or control. Executive will, if requested by the Company, provide a sworn written statement disclosing whether Executive has returned to the Company all materials (including all copies and electronically stored data) containing any Confidential Information previously in Executive’s possession or subject to Executive’s custody or control.

(d) Continuing Obligation. Executive’s confidentiality obligations shall continue as long as the Confidential Information remains confidential. Those obligations shall not apply to information which becomes generally known to the public through no fault or action of Executive or others who were under confidentiality obligations as to such information.

2.2.Non-Competition Covenants.

(a) Definitions.For purposes of this Agreement, the term

(i) “Company Competitive Business” means any business that sells, offers or provides any Company Competing Products/Services.

(ii) “Company Restricted Geographic Area” means: the States of (I) Indiana; (II) Ohio; (III) Kentucky; (IV) Tennessee; (V) North Carolina; (VI) South Carolina; (VII) Georgia; (VIII) Alabama; (IX) Delaware; (X) Florida; (XI) Illinois; (XII) Louisiana; (XIII) Maryland; (XIV) Mississippi; (XV) Missouri; (XVI) New Jersey; (XVII) Pennsylvania; (XVIII) Virginia; (XIX) West Virginia; (XX) Wisconsin; (XXI) all states in which the Company is located as of the termination of Executive’s employment;  and (XXII) all states in which Executive has engaged in any business activities on behalf of, or for the benefit of, the Company at any time during the twenty four (24) months immediately preceding the termination of Executive’s employment and (XI) within a fifty (50) mile radius of any Company store or distribution center.

(iii) “Company Competing Products/Services” means:  (1) any products and/or services that are similar to and competitive with the products and/or services that are offered, sold, provided or serviced by the Company as of the Effective Date provided the Company is offering, providing, selling or servicing such product or service as of the termination of Executive’s employment with the Company; and/or (2) any products and/or services that are similar to and competitive with any other new types of products and/or services offered, provided, sold or serviced by the Company after the Effective Date provided the Company is offering, providing, selling or servicing such new type of product or service as of the termination of Executive’s employment.

(b) Non-Compete Obligations. In the below identified capacities, during Executive’s employment and for a period of twelve (12) months immediately after Executive’s voluntary or involuntary termination ("Restricted Period"), Executive will not (1) engage in any Company Competitive Business within the Company Restricted Geographic Area and (2) will not engage in any Company Competitive Business outside the Company Restricted Geographic Area if such work impacts or influences any Company Competitive Business within the Company Restricted Geographic Area:

(i) in the same or similar capacity or function to that in which Executive worked for the Company,

(ii) in any sales or marketing capacity,

(iii) in any officer, executive or managerial capacity,

(iv) in any business development capacity,

(v) in any ownership capacity (provided, however, Executive may own up to 1% of any class of securities that is listed or admitted to trading on a national securities exchange or in a recognized over-the-counter market), or

(vi) in any other capacity in which Executive’s knowledge of the Confidential Information would facilitate or support Executive’s work for the Company Competitive Business.

(c) Other Restrictions. During the Restricted Period, Executive:

(i) will not accept employment with, work for, or act in any other capacity for any Company Competitive Business if in such employment, work or capacity Executive likely would inevitably use and/or disclose any of the Company’s Confidential Information.

(ii) will not solicit, recruit, hire, employ or attempt to hire or employ, or assist any person or entity in the recruitment or hiring of, any person who is an employee of the Company, or otherwise urge, induce or seek to induce any person to terminate his/her employment with the Company, or recommend or suggest to any person or entity that it recruit, hire or engage any person who is an employee of the Company.

(iii) will not urge, induce or seek to induce any of the Company’s independent contractors, subcontractors, business partners, distributors, brokers, consultants, sales representatives, vendors or suppliers to terminate their relationship with, or representation of, the Company or to cancel, withdraw, reduce, limit or in any manner modify any such person’s or entity’s business with, or representation of, the Company.

(d) Notice Obligation. During the Restricted Period, Executive will, before beginning employment with or providing services to any other business enterprise, whether as an employee, independent contractor, consultant, advisor or otherwise: (i) notify the Company in writing of the proposed employment or services engagement, including the details concerning the identity of the business enterprise and the nature of the proposed employment or services engagement; and (ii) notify such business enterprise of this Agreement and provide such business enterprise with a copy of this Agreement.

(e) Capacities. The covenants contained in this Section 2.2 prohibit Executive from engaging in certain activities directly or indirectly, whether on Executive’s own behalf or on the behalf of any other person or entity, and regardless of the capacity in which Executive is acting, including as an employee, independent contractor, owner, partner or advisor.

(f) Extension Of Covenants. If Executive violates any of the non-competition covenants contained in this Section 2.2, the duration of all such covenants shall automatically be extended by the length of time during which Executive was in violation of any such covenant, including, but not limited to, an extension for the period from the date of Executive’s first violation until an injunction is entered enjoining such violation.

(g) Period Of Employment For Non-Competition Purposes.For purposes of the non-competition covenants set forth in Section 2.2 of this Agreement, the term “Executive’s employment” includes not only the period during which Executive is directly employed by the Company, but also any period thereafter during which Executive provides services to the Company in any manner whatsoever, including without limitation as a consultant, independent contractor or leased employee. All post-employment restrictions shall begin to run from the time when Executive stops providing services to the Company in any manner whatsoever.

2.3.Severability; Reformation Of Restrictions.

(a) Separateness. The covenants and restrictions in this Agreement are separate and divisible. To the extent any covenant, provision or portion of this Agreement is determined to be unenforceable or invalid, such unenforceability or invalidity shall not affect the enforceability or validity of the remainder of this Agreement.

(b) Reformation. If any particular covenant, provision or portion of this Agreement is determined to be invalid or unenforceable, that covenant, provision or portion will automatically be deemed reformed such that it or they will have the closest effect permitted by law to the original form and shall be given effect and enforced as reformed to whatever extent would be enforceable under law. A court interpreting any non-competition or non-disclosure provision of this Agreement shall, if necessary, reform any such provision to make it enforceable under the law.

2.4.Remedies. A breach or threatened breach of this Agreement by Executive will give rise to irreparable injury to the Company and money damages will not be adequate relief for such injury. The Company shall be entitled to obtain equitable relief, including, but not limited to, temporary restraining orders, preliminary injunctions and/or permanent injunctions, without having to post any bond or other security, in addition to any other legal remedies which may be available, including the recovery of monetary damages from Executive. The Company also shall be entitled to recover from Executive all litigation costs and attorneys’ fees incurred by the Company in any action or proceeding relating to this Agreement in which the Company prevails in any respect, including, but not limited to, any action or proceeding in which the Company seeks enforcement of this Agreement or seeks relief from Executive’s violation of this Agreement.

2.5.Survival Of Obligations. Certain of Executive’s obligations under this Agreement, including, Executive’s non-disclosure and non-competition obligations, survive the voluntary or involuntary termination of Executive’s employment with the Company. No breach of any contractual or legal duty by the Company shall excuse or terminate Executive’s obligations under Sections 2.1 and 2.2 of this Agreement or to preclude the Company from obtaining injunctive relief for Executive’s violation or threatened violation of such covenants.

2.6.Reasonableness Of Terms. The restrictions imposed upon Executive under this Agreement are reasonable and necessary for the protection of the Company’s legitimate interests, including for the protection of the Company’s trade secrets and Confidential Information, particularly given that: (a) the Company is engaged in a highly competitive business; (b) Executive will have access to and will help develop Confidential Information; (c) the Company’s scope of operations and marketing activities are coextensive with the Restricted Geographic Area; (d) Executive will be privy to a substantial amount of the Confidential Information; and (e) Executive would be able to compete effectively against the Company from any location within the Restricted Geographic Area. The restrictions in this Agreement will not pose any substantial hardship on Executive and Executive will reasonably be able to earn a livelihood without violating any provision of this Agreement.

3.General Provisions

3.1.Governing Law; Choice Of Forum.

(a) Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of Indiana, without giving effect to any choice or conflict of law rule (whether Indiana or any other jurisdiction) that would cause the law of any jurisdiction other than Indiana to apply. This Agreement is intended to supplement the provisions of the Uniform Trade Secrets Act, as amended from time to time, and the duties Executive owes to the Company under the common law, including, the duty of loyalty. This Agreement does not nullify any legal duties or obligations Executive owes to the Company under the common law or applicable statutes.

(b) Forum. Any legal action relating to this Agreement shall be commenced and maintained exclusively before any appropriate state court in Marion County, Indiana, or in the United States District Court for the Southern District of Indiana, Indianapolis Division. The parties irrevocably consent and submit to the jurisdiction and venue of such courts and waive any right to challenge or otherwise object to personal jurisdiction or venue (including, any objection based on inconvenient forum grounds) in any action commenced or maintained in such courts.

3.2.Successors And Assigns. The Company has the right to assign this Agreement. This Agreement shall inure to the benefit of, and may be enforced by, successors and assigns of the Company, including by asset assignment, stock sale, merger, consolidation or other corporate reorganization. This Agreement shall be binding on Executive, Executive’s executors, administrators, personal representatives or other successors in interest. Executive does not have the right to assign this Agreement.

3.3.No Conflicting Agreements; No Use Of Others’ Trade Secrets. Executive represents and warrants to the Company that: (a) Executive’s employment with the Company and the performance of Executive’s employment duties will not constitute a breach of any agreements to which Executive is a party, including without limitation any employment or non-competition agreement with any former employer; and (b) Executive has not brought and will not bring to the Company and will not use or disclose during the performance of Executive’s employment services for the Company any documents, materials or information subject to any legally enforceable restrictions or obligations as to confidentiality or secrecy.

3.4.Entire Agreement; No Waiver And Modification. This document constitutes the entire agreement of the parties on the subjects specifically addressed in it, and supersedes any prior oral or written agreements, understandings, or representations, on these subjects. The Company’s decision or failure to insist, in one or more instances, upon performance of any of the provisions of this Agreement or to pursue its rights under it is not a waiver of any such provisions or the relinquishment of any

such rights. This Agreement may not be changed except by a written document signed by both Executive and a duly authorized officer of the Company.

3.5.Negotiated Agreement. This Agreement is the result of negotiations between the parties, and no party shall be deemed to be the drafter of this Agreement. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning and not strictly for or against any party.

3.6.Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one agreement. Signatures transmitted by facsimile or other electronic means are acceptable as much as original signatures for execution of this Agreement.

3.7.Post-Employment Cooperation.After the voluntary or involuntary termination of Executive's employment, Executive agrees and covenants that if the Company desires Executive to provide any information or testimony relating to any judicial, administrative or other proceeding involving the Company or to provide information relating to work transition matters, Executive will cooperate in making himself reasonably available for such purposes and will provide truthful information and/or testimony. Executive shall provide such cooperation without any additional compensation or remuneration. If after the voluntary or involuntary termination of Executive's employment should Executive be served with a subpoena in any legal proceeding relating to the Company, Executive agrees: (a) to inform the Company immediately of the subpoena; (b) to cooperate with the Company and its attorneys in preparing for any depositions or other formal process by which evidence is taken or received; and (c) to provide truthful testimony in response to questions that are within the scope of proper discovery. Executive further agrees to comply with any reasonable, lawful directions by the Company's attorneys should any litigation relating to the Company involve Executive as a witness.

GREGG APPLIANCES INC.	EXECUTIVE
By: /s/ Charles Young	/s/ Andrew S. Giesler
Charles Young	Andrew S. Giesler
Chief Human Resources Officer	SVP, Finance
May 20, 2013
	Date: May 20, 2013

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis L. May, certify that:

1. I have reviewed this quarterly report on Form 10-Q of hhgregg, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Dennis L. May
	Dennis L. May President and Chief Executive Officer

Dated: January 30, 2014

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeremy J. Aguilar, certify that:

1. I have reviewed this quarterly report on Form 10-Q of hhgregg, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Jeremy J. Aguilar
	Jeremy J. Aguilar Chief Financial Officer

Dated: January 30, 2014

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the hhgregg, Inc. (the “Company”) Quarterly Report on Form 10-Q for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dennis L. May, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Dennis L. May
	Dennis L. May President and Chief Executive Officer

Dated: January 30, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the hhgregg, Inc. (the “Company”) Quarterly Report on Form 10-Q for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeremy J. Aguilar, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Jeremy J. Aguilar
	Jeremy J. Aguilar Chief Financial Officer

Dated: January 30, 2014

XML

Stock-based Compensation (Black Scholes Model Weighted Average Assumptions) (Details)	3 Months Ended	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Risk-free interest rate, minimum	0.00%
Risk-free interest rate, maximum	1.53%
Dividend yield		0.00%
Expected volatility		63.00%
Expected life of the options (years)		4 years 6 months
Forfeitures		7.20%

XML

Property and Equipment (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Mar. 31, 2013
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 419,651	$ 401,366
Less accumulated depreciation and amortization	(215,460)	(183,455)
Net property and equipment	204,191	217,911
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	28,516	25,328
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	183,151	175,659
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	2,247	2,269
Signs [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	19,620	19,163
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	178,821	172,952
Construction in progress [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 7,296	$ 5,995

XML

Share Repurchase Program (Number and Cost of Share Repurchased) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Equity, Class of Treasury Stock [Line Items]
Cost of shares repurchased	$ 39,851
May 2013 Program [Member]
Equity, Class of Treasury Stock [Line Items]
Number of shares repurchased	2,457,068	0
Cost of shares repurchased	39,851	0
May 2012 Program [Member]
Equity, Class of Treasury Stock [Line Items]
Number of shares repurchased	0	3,558,600
Cost of shares repurchased	$ 0	$ 30,041

XML

Property and Equipment

9 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment consisted of the following at December 31, 2013 and March 31, 2013 (in thousands):

	December 31, 2013			March 31, 2013
Machinery and equipment	$	28,516		$	25,328
Store fixtures and furniture	183,151			175,659
Vehicles	2,247			2,269
Signs	19,620			19,163
Leasehold improvements	178,821			172,952
Construction in progress	7,296			5,995
	419,651			401,366
Less accumulated depreciation and amortization	(215,460		)	(183,455		)
Net property and equipment	$	204,191		$	217,911

XML

Debt (Summary of Debt) (Details) (USD $)	Dec. 31, 2013	Mar. 31, 2013
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 400,000,000	$ 300,000,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit	$ 15,000,000	$ 0

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Mar. 31, 2013
Schedule of Inventory [Line Items]
Net merchandise inventory	$ 384,172	$ 315,562
Appliances [Member]
Schedule of Inventory [Line Items]
Net merchandise inventory	143,666	120,972
Consumer electronics [Member]
Schedule of Inventory [Line Items]
Net merchandise inventory	164,949	126,019
Computing and wireless [Member]
Schedule of Inventory [Line Items]
Net merchandise inventory	49,613	46,020
Home products [Member]
Schedule of Inventory [Line Items]
Net merchandise inventory	$ 25,944	$ 22,551

XML

Debt (Additional Information) (Details) (USD $)	9 Months Ended
	Dec. 31, 2013	Mar. 31, 2013
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 400,000,000	$ 300,000,000
Line of credit facility, maturity date	Jul. 29, 2018
Line of credit facility borrowing base percentage of eligible commercial accounts	90.00%
Line of credit facility borrowing base percentage of the eligible commercial and credit card receivables	90.00%
Line of credit facility borrowing base percentage of eligible inventory	90.00%
Financial maintenance covenant, percentage of excess availability	10.00%
Financial maintenance covenant, excess availability	20,000,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Financial maintenance covenant, percentage of excess availability	12.50%
Line of Credit	15,000,000	0
Line of credit facility, total borrowing availability	224,400,000	189,800,000
Line of credit, interest rate	3.75%	4.25%
Letters of Credit Outstanding, Amount	$ 5,300,000	$ 4,900,000
Lower Limit [Member]
Debt Instrument [Line Items]
Unused line rate for a daily average greater than or equal to 50% of the defined borrowing base	0.25%
Upper Limit [Member]
Debt Instrument [Line Items]
Unused line rate for a daily average greater than or equal to 50% of the defined borrowing base	0.375%
Line of Credit [Member]
Debt Instrument [Line Items]
Financial maintenance covenant, fixed charge coverage ratio	1.0

XML

Stock-based Compensation (Summary of Stock Option Plans Activity) (Details) (Stock Options [Member], USD $)	9 Months Ended
	Dec. 31, 2013
Stock Options [Member]
Number of Options Outstanding
Beginning Balance	3,322,462
Granted	1,806,805
Exercised	(480,647)
Canceled	(981,328)
Expired	(27,002)
Ending Balance	3,640,290
Weighted Average Exercise Price per Share
Beginning Balance	$ 15.81
Granted	$ 13.99
Exercised	$ 12.10
Canceled	$ 22.19
Expired	$ 23.53
Ending Balance	$ 13.60

XML

Fair Value Measurements

9 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The carrying amounts of cash and cash equivalents, accounts receivable—trade, accounts receivable—other, accounts payable and customer deposits approximate fair value because of the short maturity of these instruments. Any outstanding amount on the Company’s line of credit approximates fair value as the interest rate is market based.

Non-recurring Fair Value Measurements

The Company has property and equipment that are measured at fair value on a non-recurring basis when impairment indicators are present.  The assets are adjusted to fair value only when the carrying values exceed the fair values.  The categorization of the framework used to price the assets is considered a Level 3, due to the subjective nature of the unobservable inputs used to determine the fair value. Property and equipment fair values were derived using a discounted cash flow model to estimate the present value of net cash flows that the asset or asset group was expected to generate. The key inputs to the discounted cash flow model generally included our forecasts of net cash generated from revenue, expenses and other significant cash outflows, such as certain capital expenditures, as well as an appropriate discount rate. For the quarter ended December 31, 2013, the Company entered into a lease modification to downsize a store. In conjunction with the downsize, the Company determined that certain of the assets in use would be abandoned at the time construction to downsize begins, and as a result determined this to be a triggering event for an impairment analysis to be performed in accordance with guidance on impairment of long-lived assets. The estimated undiscounted future cash flows generated by the store was less than its carrying amount, therefore the carrying amount of the assets related to this store were reduced to fair value. For the quarter ended December 31, 2012, the Company had one store whose profit contributions were significantly lower than the chain average due to decreased sales. This decrease in profit triggered the need for an impairment analysis to be performed in accordance with guidance on impairment of long-lived assets. The estimated undiscounted future cash flows generated by the store was less than its carrying amount, therefore the carrying amount of the assets related to this store were reduced to fair value.

The following table summarizes the fair value remeasurements recorded during the three and nine months ended December 31, 2013 and 2012 (in millions):

	Three and Nine Months Ended
	December 31, 2013		December 31, 2012
Carrying value (pre-asset impairment)	$	0.7	$	0.9
Asset impairment loss (included in income from operations)	0.3		0.5
Remaining net carrying value	$	0.4	$	0.4

XML

Stock-based Compensation (Additional Information) (Details) (USD $)	9 Months Ended
	Dec. 31, 2013
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, granted	1,806,805
Stock Options [Member] | Equity Incentive Plan 2007 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, vesting period	3 years
Options, expiration term	7 years
Options, weighted-average estimated fair value of options granted	$ 7.09
Time Vested Restricted Stock Units [Member] | Equity Incentive Plan 2007 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units, granted	27,237
Restricted stock units, vesting term	3 years
Restricted stock units, weighted average grant date fair value	$ 14.32

XML

Condensed Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]
Net sales	$ 707,053	$ 799,635	$ 1,800,290	$ 1,877,127
Cost of goods sold	517,773	581,450	1,288,295	1,338,136
Gross profit	189,280	218,185	511,995	538,991
Selling, general and administrative expenses	132,360	139,303	372,059	383,871
Net advertising expense	36,964	38,715	93,399	98,085
Depreciation and amortization expense	10,785	10,416	32,229	29,673
Asset Impairment Charges	310	504	310	504
Income from operations	8,861	29,247	13,998	26,858
Other expense (income):
Interest expense	695	704	1,856	1,692
Interest income	(2)	(3)	(9)	(8)
Total other expense	693	701	1,847	1,684
Income before income taxes	8,168	28,546	12,151	25,174
Income tax expense	3,120	11,157	4,685	9,726
Net income	$ 5,048	$ 17,389	$ 7,466	$ 15,448
Net income per share
Basic (in dollars per share)	$ 0.17	$ 0.51	$ 0.24	$ 0.44
Diluted (in dollars per share)	$ 0.17	$ 0.51	$ 0.24	$ 0.44
Weighted average shares outstanding-basic	29,915,307	33,934,383	30,617,856	35,099,660
Weighted average shares outstanding-diluted	30,387,251	33,985,113	31,117,896	35,168,497

XML

Condensed Consolidated Statement of Stockholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock	Preferred Stock	Additional Paid-in Capital	Retained Earnings	Common Stock Held in Treasury
Beginning Balance at Mar. 31, 2013	$ 346,658	$ 4	$ 0	$ 287,806	$ 154,650	$ (95,802)
Beginning Balance (in shares) at Mar. 31, 2013		31,468,453
Net income	7,466				7,466
Exercise of stock options and vesting of RSUs (in shares)		480,647
Exercise of stock options and vesting of RSUs	5,814			5,814
Stock compensation expense	4,151			4,151
Excess tax benefit from stock-based compensation, net	21			21
Repurchase of common stock (in shares)		(2,457,068)
Repurchase of common stock	(39,851)					(39,851)
Ending Balance at Dec. 31, 2013	$ 324,259	$ 4	$ 0	$ 297,792	$ 162,116	$ (135,653)
Ending Balance (in shares) at Dec. 31, 2013		29,492,032

XML

Stock-based Compensation Narrative of Exchange Program (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	9 Months Ended
	Apr. 30, 2013 participants	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ShareBasedCompensationArrangementByShareBasedPaymentAwardShareConversion	1
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit	$ 10.00
hgg_ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfPlanParticipants	58
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures	898,665
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsPercentOfOptionsCancelled	31.00%
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 1.4
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years

XML

Share Repurchase Program (Tables)

9 Months Ended

Dec. 31, 2013

Share Repurchase Program Disclosure [Abstract]

Number and cost of shares repurchased

The following table shows the number and cost of shares repurchased during the nine months ended December 31, 2013 and 2012, respectively ($ in thousands):

	Nine Months Ended
	December 31, 2013		December 31, 2012
May 2013 Program
Number of shares repurchased	2,457,068		—
Cost of shares repurchased	$	39,851	$	—
May 2012 Program
Number of shares repurchased	—		3,558,600
Cost of shares repurchased	$	—	$	30,041

XML

Stockholders' Equity (Details) (USD $) In Millions, unless otherwise specified	Jul. 03, 2013
Equity [Abstract]
Shelf registration statement maximum amount of securities authorized for issuance	$ 300

XML

Fair Value Measurements Fair Value Measurements (Details) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of Stores Measured for Impairment				1
Asset Carrying Value, Before Impairment			$ 700,000	$ 900,000
Asset Impairment Charges	310,000	504,000	310,000	504,000
Asset Carrying Value, After Impairment			$ 400,000	$ 400,000

XML

Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Description of Business

hhgregg, Inc. (the “Company” or “hhgregg”) is a specialty retailer of home appliances, televisions, computers, tablets, wireless devices, consumer electronics, home furniture, mattresses, fitness equipment and related services operating under the name hhgregg^™. As of December 31, 2013, the Company had 228 stores located in Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin. The Company operates in one reportable segment.

Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, these unaudited condensed consolidated financial statements reflect all necessary adjustments, which are of a normal recurring nature, for a fair presentation of such data. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of hhgregg and the notes thereto for the fiscal year ended March 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the SEC on May 20, 2013.

The consolidated results of operations, financial position and cash flows for interim periods are not necessarily indicative of those to be expected for a full year. The Company has made a number of estimates and assumptions relating to the assets and liabilities and the reporting of sales and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of hhgregg and its wholly-owned subsidiary, Gregg Appliances, Inc. (“Gregg Appliances”). Gregg Appliances has a wholly-owned subsidiary, HHG Distributing LLC (“HHG Distributing”), which has no assets or operations.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Mar. 31, 2013
Current assets:
Cash and cash equivalents	$ 2,662	$ 48,592
Accounts receivable—trade, less allowances of $45 and $1 as of December 31, 2013 and March 31, 2013, respectively	23,590	24,271
Accounts receivable—other	22,745	18,748
Merchandise inventories, net	384,172	315,562
Prepaid expenses and other current assets	13,648	5,567
Income tax receivable	734	1,414
Deferred income taxes	7,093	5,758
Total current assets	454,644	419,912
Net property and equipment	204,191	217,911
Deferred financing costs, net	2,469	1,992
Deferred income taxes	35,249	35,252
Other assets	1,652	1,354
Total long-term assets	243,561	256,509
Total assets	698,205	676,421
Current liabilities:
Accounts payable	150,528	150,333
Line of Credit Facility, Amount Outstanding	15,000	0
Customer deposits	46,656	38,042
Accrued liabilities	71,324	49,422
Income tax payable	4,048	2,145
Total current liabilities	287,556	239,942
Long-term liabilities:
Deferred rent	74,574	77,777
Other long-term liabilities	11,816	12,044
Total long-term liabilities	86,390	89,821
Total liabilities	373,946	329,763
Stockholders’ equity:
Preferred stock, par value $.0001; 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2013 and March 31, 2013, respectively	0	0
Common stock, par value $.0001; 150,000,000 shares authorized; 41,121,390 and 40,640,743 shares issued; and 29,492,032 and 31,468,453 outstanding as of December 31, 2013 and March 31, 2013, respectively	4	4
Additional paid-in capital	297,792	287,806
Retained earnings	162,116	154,650
Common stock held in treasury at cost, 11,629,358 and 9,172,290 shares as of December 31, 2013 and March 31, 2013, respectively	(135,653)	(95,802)
Total stockholders’ equity	324,259	346,658
Total liabilities and stockholders’ equity	$ 698,205	$ 676,421

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Property and Equipment (Tables)

9 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consisted of the following at December 31, 2013 and March 31, 2013 (in thousands):

	December 31, 2013			March 31, 2013
Machinery and equipment	$	28,516		$	25,328
Store fixtures and furniture	183,151			175,659
Vehicles	2,247			2,269
Signs	19,620			19,163
Leasehold improvements	178,821			172,952
Construction in progress	7,296			5,995
	419,651			401,366
Less accumulated depreciation and amortization	(215,460		)	(183,455		)
Net property and equipment	$	204,191		$	217,911

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Document and Entity Information	9 Months Ended
	Dec. 31, 2013	Jan. 27, 2014
Document Documentand Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Trading Symbol	HGG
Entity Registrant Name	HHGREGG, INC.
Entity Central Index Key	0001396279
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		29,492,032

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Net Income (Loss) per Share (Tables)

9 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Net Income Loss Per Basic and Diluted Share

The following table presents net income per basic and diluted share for the three and nine months ended December 31, 2013 and 2012 (in thousands, except share and per share amounts):

	Three Months Ended				Nine Months Ended
	December 31, 2013		December 31, 2012		December 31, 2013		December 31, 2012
Net income (A)	$	5,048	$	17,389	$	7,466	$	15,448
Weighted average outstanding shares of common stock (B)	29,915,307		33,934,383		30,617,856		35,099,660
Dilutive effect of employee stock options and restricted stock units	471,944		50,730		500,040		68,837
Common stock and potential dilutive common shares (C)	30,387,251		33,985,113		31,117,896		35,168,497
Net income per share:
Basic (A/B)	$	0.17	$	0.51	$	0.24	$	0.44
Diluted (A/C)	$	0.17	$	0.51	$	0.24	$	0.44

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Mar. 31, 2013
Statement of Financial Position [Abstract]
Accounts receivable-trade, allowances	$ 45	$ 1
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	150,000,000	150,000,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares issued	41,121,390	40,640,743
Common stock, outstanding	29,492,032	31,468,453
Common stock held in treasury at cost, shares	11,629,358	9,172,290

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Debt

9 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Debt

Debt

A summary of debt at December 31, 2013 and March 31, 2013 is as follows (in thousands):

	December 31, 2013		March 31, 2013
Line of credit	$	15,000	$	—

On July 29, 2013, Gregg Appliances entered into Amendment No. 1 to the Amended and Restated Loan and Security Agreement (the “Amended Facility”) to increase the maximum credit available to $400 million from $300 million, subject to borrowing base availability, and extend the term of the facility to expire on July 29, 2018. The facility was set to expire on March 29, 2016.

Interest on borrowings (other than Eurodollar rate borrowings) is payable monthly at a fluctuating rate based on the bank’s prime rate or LIBOR plus an applicable margin based on the average quarterly excess availability. Interest on Eurodollar rate borrowings is payable on the last day of each “interest period” applicable to such borrowing or on the three month anniversary of the beginning of such “interest period” for interest periods greater than three months. The unused line rate is determined based on the amount of the daily average of the outstanding borrowings for the immediately preceding calendar quarter period (the “Daily Average”). For a Daily Average greater than or equal to 50% of the defined borrowing base, the unused line rate is 0.25%. For a Daily Average less than 50% of the defined borrowing base, the unused line rate is 0.375%. The Amended Facility is guaranteed by Gregg Appliances’ wholly-owned subsidiary, HHG Distributing, which has no assets or operations. The guarantee is full and unconditional and Gregg Appliances has no other subsidiaries.

Pursuant to the Amended Facility, the borrowing base is equal to the sum of (i) 90% of the amount of the eligible commercial accounts, (ii) 90% of the amount of eligible commercial and credit card receivables of Gregg Appliances and (iii) 90% of the net recovery percentage multiplied by the value of eligible inventory consistent with the most recent appraisal of such eligible inventory.

Under the Amended Facility, Gregg Appliances is not required to comply with any financial maintenance covenant unless “excess availability” is less than the greater of (i) 10.0% of the lesser of (A) the defined borrowing base or (B) the defined maximum credit or (ii) $20.0 million during the continuance of which event Gregg Appliances is subject to compliance with a fixed charge coverage ratio of 1.0 to 1.0.

Pursuant to the Amended Facility, if Gregg Appliances has “excess availability” of less than 12.5% of the lesser of (A) the defined borrowing base or (B) the defined maximum credit, it may, in certain circumstances more specifically described in the Amended Facility, become subject to cash dominion control.

The Amended Facility places limitations on the ability of Gregg Appliances to, among other things, incur debt, create other liens on its assets, make investments, sell assets, pay dividends, undertake transactions with affiliates, enter into merger transactions, enter into unrelated businesses, open collateral locations outside of the United States, or enter into consignment assignments or floor plan financing arrangements. The Amended Facility also contains various customary representations and warranties, financial and collateral reporting requirements and other affirmative and negative covenants. Gregg Appliances was in compliance with the restrictions and covenants of the Amended Facility at December 31, 2013.

As of December 31, 2013, Gregg Appliances had $15.0 million of cash borrowings outstanding under the Amended Facility. As of December 31, 2013, Gregg Appliances had $5.3 million of letters of credit outstanding, which expire through December 31, 2014. The total borrowing availability under the Amended Facility was $224.4 million as of December 31, 2013. The interest rate based on the bank’s prime rate as of December 31, 2013 was 3.75%.

As of March 31, 2013, Gregg Appliances had no borrowings outstanding under the Amended Facility. As of March 31, 2013, Gregg Appliances had $4.9 million of letters of credit outstanding, which expire through December 31, 2013. The total borrowing availability under the Amended Facility was $189.8 million as of March 31, 2013. The interest rate based on the bank’s prime rate as of March 31, 2013 was 4.25%.

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Inventories

9 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

Inventories

Inventories

Net merchandise inventories consisted of the following at December 31, 2013 and March 31, 2013 (in thousands):

	December 31, 2013		March 31, 2013
Appliances	$	143,666	$	120,972
Consumer electronics	164,949		126,019
Computing and wireless	49,613		46,020
Home products	25,944		22,551
Net merchandise inventory	$	384,172	$	315,562

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Summary of Significant Accounting Policies (Details)	9 Months Ended
	Dec. 31, 2013 Segment Store
Accounting Policies [Abstract]
Number of stores	228
Number of reportable segments	1

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Inventories (Tables)

9 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

Net Merchandise Inventories

Net merchandise inventories consisted of the following at December 31, 2013 and March 31, 2013 (in thousands):

	December 31, 2013		March 31, 2013
Appliances	$	143,666	$	120,972
Consumer electronics	164,949		126,019
Computing and wireless	49,613		46,020
Home products	25,944		22,551
Net merchandise inventory	$	384,172	$	315,562

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Share Repurchase Program

9 Months Ended

Dec. 31, 2013

Share Repurchase Program Disclosure [Abstract]

Share Repurchase Program

Share Repurchase Program

On May 16, 2013, the Company’s Board of Directors authorized a new share repurchase program, which became effective on May 22, 2013 (the “May 2013 Program”), allowing the Company to repurchase up to $50 million of its common stock. The May 2013 Program allows the Company to purchase its common stock on the open market or in privately negotiated transactions in accordance with applicable laws and regulations, and expires on May 22, 2014. The previous share repurchase program expired on May 21, 2013.

The following table shows the number and cost of shares repurchased during the nine months ended December 31, 2013 and 2012, respectively ($ in thousands):

	Nine Months Ended
	December 31, 2013		December 31, 2012
May 2013 Program
Number of shares repurchased	2,457,068		—
Cost of shares repurchased	$	39,851	$	—
May 2012 Program
Number of shares repurchased	—		3,558,600
Cost of shares repurchased	$	—	$	30,041

As of December 31, 2013, the Company had $10.1 million remaining under the May 2013 Program. The repurchased shares are classified as treasury stock within stockholders’ equity in the accompanying condensed consolidated balance sheets.

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Stock-based Compensation

9 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

Stock-based Compensation

Stock Options

On April 2, 2013, the Company’s Board of Directors approved a one-time voluntary stock option exchange program (the “Offer”), as amended on April 17, 2013. On April 2, 2013, the Company commenced the Offer, which allowed employees to surrender all outstanding and unexercised stock options, whether vested or unvested, that were granted subsequent to July 18, 2007 (the “Eligible Options”), in a one-for-one exchange for new options (the “New Options”). Under the Offer, employees who chose to participate would receive New Options with an exercise price per share equal to the greater of (a) $10.00 or (b) the closing price of the Company’s Common Stock as reported on the New York Stock Exchange on the New Option grant date. Additionally, the Offer did not allow partial tenders of any one particular option grant, however employees could choose to exchange some but not all Eligible Option grants held by any optionee. Options granted prior to July 19, 2007 were not eligible for exchange.

The Offer expired on April 30, 2013. Pursuant to the Offer, a total of 58 eligible participants tendered, and the Company accepted for cancellation, options to purchase an aggregate of 898,665 shares of the Company’s common stock. The eligible stock options that were accepted for cancellation represented approximately 31% of the options eligible for participation in the Exchange Offer. Pursuant to the terms and conditions of the Amended Exchange Offer, on May 1, 2013, the Company issued 898,665 New Options in exchange for the tendered stock options. The Company will recognize the incremental expense resulting from this exchange, aggregating $1.4 million, over the three-year vesting period, in accordance with the Exchange Offer.

The following table summarizes the activity under the Company’s Stock Option Plans for the nine months ended December 31, 2013:

	Number of Options Outstanding		Weighted Average Exercise Price per Share
Outstanding at March 31, 2013	3,322,462		$	15.81
Granted	1,806,805		13.99
Exercised	(480,647	)	12.10
Canceled	(981,328	)	22.19
Expired	(27,002	)	23.53
Outstanding at December 31, 2013	3,640,290		$	13.60

During the nine months ended December 31, 2013, the Company granted options for 1,806,805 shares of common stock under the 2007 Equity Incentive Plan to certain employees and directors of the Company. The options vest in equal amounts over a three-year period beginning on the first anniversary of the date of grant and expire 7 years from the date of the grant. The fair value of each option grant is estimated on the date of grant and is amortized on a straight-line basis over the vesting period.

The weighted average estimated fair value of options granted to employees and directors under the 2007 Equity Incentive Plan was $7.09 during the nine months ended December 31, 2013, using the Black-Scholes model with the following weighted average assumptions:

Risk-free interest rate	0.06% - 1.53%
Dividend yield	—
Expected volatility	63.0	%
Expected life of the options (years)	4.5
Forfeitures	7.20	%

Time Vested Restricted Stock Units

During the nine months ended December 31, 2013, the Company granted 27,237 time vested restricted stock units (“RSUs”) under the 2007 Equity Incentive Plan to certain directors of the Company. The RSUs vest three years from the date of grant. Upon vesting, the outstanding number of RSUs will be converted into shares of common stock. RSUs are forfeited if they have not vested before the participant ceases to serve as director for any reason other than death or total permanent disability or certain other circumstances as described in such participant’s RSU agreement. Upon death or disability, the participant is entitled to receive a portion of the award based upon the period of time lapsed between the date of grant of the RSU and the termination of service as a director. The fair value of RSU awards is based on the Company’s stock price at the close of the market on the date of grant. The weighted average grant date fair value for the RSUs issued during the nine months ended December 31, 2013 was $14.32.

The following table summarizes RSU vesting activity for the nine months ended December 31, 2013:

	Shares		Weighted Average Grant-Date Fair Value
Nonvested at March 31, 2013	155,600		$	12.38
Granted	27,237		14.32
Vested	—		—
Forfeited	(14,692	)	12.96
Nonvested at September 30, 2013	168,145		$	12.64

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Stockholders' Equity

9 Months Ended

Dec. 31, 2013

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

The Company filed a universal shelf registration statement which was declared effective on July 3, 2013, registering $300 million principal amount of its securities, which may be sold by hhgregg under such registration statement at any time. Each of Gregg Appliances and HHG Distributing were additional registrants to the shelf registration statement because each may guarantee any debt securities that are issued by hhgregg under the shelf registration statement. Gregg Appliances and HHG Distributing are exempt from reporting under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to Rule 12h-5 under the Exchange Act as: (i) hhgregg has no independent assets or operations; (ii) any guarantees of the subsidiary guarantors of debt securities issued under the shelf registration statement are full and unconditional and joint and several; and (iii) there are no subsidiaries of hhgregg other than Gregg Appliances and HHG Distributing.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Description of Business

Description of Business

hhgregg, Inc. (the “Company” or “hhgregg”) is a specialty retailer of home appliances, televisions, computers, tablets, wireless devices, consumer electronics, home furniture, mattresses, fitness equipment and related services operating under the name hhgregg^™. As of December 31, 2013, the Company had 228 stores located in Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin. The Company operates in one reportable segment.

Interim FInancial Information

Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, these unaudited condensed consolidated financial statements reflect all necessary adjustments, which are of a normal recurring nature, for a fair presentation of such data. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of hhgregg and the notes thereto for the fiscal year ended March 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the SEC on May 20, 2013.

The consolidated results of operations, financial position and cash flows for interim periods are not necessarily indicative of those to be expected for a full year. The Company has made a number of estimates and assumptions relating to the assets and liabilities and the reporting of sales and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates.

Principles of Consolidation

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of hhgregg and its wholly-owned subsidiary, Gregg Appliances, Inc. (“Gregg Appliances”). Gregg Appliances has a wholly-owned subsidiary, HHG Distributing LLC (“HHG Distributing”), which has no assets or operations.

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Stock-based Compensation (Summary of RSU Vesting Activity) (Details) (Restricted Stock Units (RSUs) [Member], USD $)	9 Months Ended
	Dec. 31, 2013
Restricted Stock Units (RSUs) [Member]
Shares
Beginning Balance	155,600
Granted	27,237
Vested	0
Forfeited	(14,692)
Ending Balance	168,145
Weighted Average Grant-Date Fair Value
Beginning Balance	$ 12.38
Granted	$ 14.32
Vested	$ 0.00
Forfeited	$ 12.96
Ending Balance	$ 12.64

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Stock-based Compensation (Tables)

9 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Stock Option Plans Activity

The following table summarizes the activity under the Company’s Stock Option Plans for the nine months ended December 31, 2013:

	Number of Options Outstanding		Weighted Average Exercise Price per Share
Outstanding at March 31, 2013	3,322,462		$	15.81
Granted	1,806,805		13.99
Exercised	(480,647	)	12.10
Canceled	(981,328	)	22.19
Expired	(27,002	)	23.53
Outstanding at December 31, 2013	3,640,290		$	13.60

Black Scholes Model Weighted Average Assumptions

The weighted average estimated fair value of options granted to employees and directors under the 2007 Equity Incentive Plan was $7.09 during the nine months ended December 31, 2013, using the Black-Scholes model with the following weighted average assumptions:

Risk-free interest rate	0.06% - 1.53%
Dividend yield	—
Expected volatility	63.0	%
Expected life of the options (years)	4.5
Forfeitures	7.20	%

Summary of RSU Vesting Activity

The following table summarizes RSU vesting activity for the nine months ended December 31, 2013:

	Shares		Weighted Average Grant-Date Fair Value
Nonvested at March 31, 2013	155,600		$	12.38
Granted	27,237		14.32
Vested	—		—
Forfeited	(14,692	)	12.96
Nonvested at September 30, 2013	168,145		$	12.64

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Net Income (Loss) per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Abstract]
Net income (A)	$ 5,048	$ 17,389	$ 7,466	$ 15,448
Weighted average outstanding shares of common stock (B)	29,915,307	33,934,383	30,617,856	35,099,660
Dilutive effect of employee stock options and restricted stock units	471,944	50,730	500,040	68,837
Common stock and potential dilutive common shares (C)	30,387,251	33,985,113	31,117,896	35,168,497
Net income per share:
Basic (in dollars per share)	$ 0.17	$ 0.51	$ 0.24	$ 0.44
Diluted (A/C) (in dollars per share)	$ 0.17	$ 0.51	$ 0.24	$ 0.44

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net income	$ 7,466	$ 15,448
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	32,229	29,673
Amortization of deferred financing costs	469	498
Stock-based compensation	4,151	3,882
Excess tax benefit from stock based compensation	(21)	(585)
Gain on sales of property and equipment	(437)	(216)
Deferred income taxes	(1,332)	3,575
Asset Impairment Charges	310	504
Tenant allowances received from landlords	2,101	8,424
Changes in operating assets and liabilities:
Accounts receivable—trade	681	(1,207)
Accounts receivable—other	(4,072)	(8,071)
Merchandise inventories	(68,610)	(155,969)
Income tax receivable	701	(1,356)
Prepaid expenses and other assets	(8,379)	1,240
Accounts payable	20,151	84,699
Customer deposits	8,614	11,278
Increase (Decrease) in Income Taxes Payable	1,903	3,616
Accrued liabilities	21,902	23,759
Deferred rent	(5,229)	(4,099)
Other long-term liabilities	(28)	198
Net cash provided by operating activities	12,570	15,291
Cash flows from investing activities:
Purchases of property and equipment	(19,888)	(50,291)
Proceeds from sales of property and equipment	221	34
Net cash used in investing activities	(19,667)	(50,257)
Cash flows from financing activities:
Purchases of treasury stock	(39,851)	(30,041)
Proceeds from exercise of stock options	5,814	4,184
Excess tax benefit from stock-based compensation	21	585
Net (decrease) increase in bank overdrafts	(8,764)	12,153
Proceeds from (Repayments of) Lines of Credit	15,000	0
Net (repayments) borrowings on inventory financing facility	(10,107)	4,322
Payments of Financing Costs	(946)	0
Proceeds from Related Party Debt	0	41
Net cash used in financing activities	(38,833)	(8,756)
Net decrease in cash and cash equivalents	(45,930)	(43,722)
Cash and cash equivalents
Beginning of period	48,592	59,244
End of period	2,662	15,522
Supplemental disclosure of cash flow information:
Interest paid	1,359	226
Income taxes paid	3,412	7,509
Capital expenditures included in accounts payable	$ 406	$ 873

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Net Income (Loss) per Share

9 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Net Income (Loss) per Share

Net Income per Share

Net income per basic share is calculated based on the weighted-average number of outstanding common shares. Net income per diluted share is calculated based on the weighted-average number of outstanding common shares plus the effect of potential dilutive common shares. When the Company reports net income, the calculation of net income per diluted share excludes shares underlying outstanding stock options and restricted stock units with exercise prices that exceed the average market price of the Company’s common stock for the period and certain options and restricted stock units with unrecognized compensation cost, as the effect would be antidilutive. Potential dilutive common shares are composed of shares of common stock issuable upon the exercise of stock options and restricted stock units.

The following table presents net income per basic and diluted share for the three and nine months ended December 31, 2013 and 2012 (in thousands, except share and per share amounts):

	Three Months Ended				Nine Months Ended
	December 31, 2013		December 31, 2012		December 31, 2013		December 31, 2012
Net income (A)	$	5,048	$	17,389	$	7,466	$	15,448
Weighted average outstanding shares of common stock (B)	29,915,307		33,934,383		30,617,856		35,099,660
Dilutive effect of employee stock options and restricted stock units	471,944		50,730		500,040		68,837
Common stock and potential dilutive common shares (C)	30,387,251		33,985,113		31,117,896		35,168,497
Net income per share:
Basic (A/B)	$	0.17	$	0.51	$	0.24	$	0.44
Diluted (A/C)	$	0.17	$	0.51	$	0.24	$	0.44

Antidilutive shares not included in the net income per diluted share calculation for the three and nine months ended December 31, 2013 were 936,040 and 937,640, respectively.

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Net Income (Loss) per Share (Additional Information) (Details)	3 Months Ended	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Abstract]
Antidilutive shares not included in the net income per diluted share calculation	936,040	937,640	3,663,282

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Share Repurchase Program (Additional Information) (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	9 Months Ended
	May 31, 2013	Dec. 31, 2013
Share Repurchase Program Disclosure [Abstract]
Common stock share repurchase program, authorized amount	$ 50
Common stock share repurchase program, expiration date	May 22, 2014
Common stock share repurchase program, remaining authorized amount		$ 10.1

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Debt (Tables)

9 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Summary of Debt

A summary of debt at December 31, 2013 and March 31, 2013 is as follows (in thousands):

	December 31, 2013		March 31, 2013
Line of credit	$	15,000	$	—