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Aaron Rents, Inc. Reports Results for Second Quarter and First Half

07/26/2001

ATLANTA, July 26 /PRNewswire/ -- Aaron Rents, Inc. (NYSE: RNT), the nation's leader in the rental, sales and lease ownership, and specialty retailing of residential and office furniture, consumer electronics and home appliances, today announced revenues and earnings for the second quarter and first half of 2001.

"These results reflect the strong growth of our sales and lease ownership division and are in line with the revised expectations that we announced on July 5, reflecting the costs associated with our accelerated schedule of opening new stores and the effects of the slowdown in our rent-to-rent business," said R. Charles Loudermilk, Sr., Chairman and Chief Executive Officer of Aaron Rents, Inc.

For the three months ended June 30, revenues increased 9% to a record $132.8 million compared to $121.9 million for the second quarter of 2000. Net earnings for the second quarter this year were $5.0 million versus $6.9 million. Diluted earnings per share for the quarter were $.25 compared to $.35 per share for the second quarter last year.

For the first six months of this year, revenues advanced 11% to a record $274.2 million compared to $247.3 million for the first half of 2000. Net earnings for the six months were $12.3 million versus $14.2 million for the corresponding period last year. Diluted earnings per share for the first half of this year were $.61 compared to $.71 per share for the period last year.

The Aaron's Sales and Lease Ownership division increased its second quarter revenues 21% to $93.7 million versus $77.5 million for the second quarter last year. Systemwide revenues for this division, including franchised stores, rose 22% to $139.4 million versus $114.4 million compared to the second quarter a year ago. First half sales and lease ownership revenues increased 22% to $191.5 million compared to $156.8 million last year, and systemwide revenues advanced 24% to $285.3 million compared to $230.1 million for the first half last year.

Revenues from Company-operated sales and leasing stores open in comparable quarters increased 10.6% during the second quarter compared to the same period a year ago. Revenues from the Company's rent-to-rent stores open in comparable quarters were down 9.3% compared to the previous year.

In its accelerated schedule of new store openings, the Company's sales and lease ownership division opened 26 new stores in the second quarter, 16 Company-operated and 10 franchise stores, and added one store through acquisition.

"We are planning to open another 60 Company-operated stores and over 15 franchised stores during the second half of this year," Mr. Loudermilk said. "These new stores will result in the adding of over 120 sales and lease ownership stores during the 2001 year."

While the smaller rent-to-rent division felt the effects of the soft economy during the second quarter, the Company's acquisition of 52 additional Heilig-Meyers real estate locations in early July, for a total of 82 former Heilig-Meyers locations acquired since their Chapter 11 filing, has opened the way for even faster growth in the sales and lease ownership division. The Company expects that its 2001 revenues will exceed $565 million and that systemwide revenues will rise above $750 million for the year.

Aaron Rents, Inc. based in Atlanta, currently has more than 590 Company- operated and franchised stores in 42 states and Puerto Rico for the rental and sale of residential and office furniture, accessories, consumer electronics and household appliances. The Company also manufactures furniture, bedding and accessories at 11 facilities in four states.

Note: Forward-looking statements in this news release are based on current
expectations and are subject to risks and uncertainties, and actual results
may vary materially from the expectations due to such factors as changes in
general economic conditions, competition, pricing, customer demand and other
issues.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this news release regarding Aaron Rents, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties and which could cause actual results to differ from those contained in the forward-looking statements. For a discussion of such risks and uncertainties see "Risk Factors" in the Company's Annual Report on Form 10-K for fiscal 2000, which discussion is incorporated herein by this reference.

                      Aaron Rents, Inc. and Subsidiaries
                     Consolidated Statements of Earnings
                   (In thousands, except per share amounts)

                                  (Unaudited)             (Unaudited)
                               Three Months Ended       Six Months Ended
                                     June 30,               June 30,
                                 2001       2000        2001        2000
    Revenues:
      Rentals and Fees        $100,537    $89,257    $202,605    $176,771
      Retail Sales              14,754     14,530      32,030      31,835
      Non-Retail Sales          13,494     14,392      31,440      31,222
      Other                      3,978      3,731       8,105       7,454
        Total                  132,763    121,910     274,180     247,282

    Costs and Expenses:
      Retail Cost of Sales      10,985     10,191      23,207      22,424
      Non-Retail Cost of Sales  12,773     13,412      29,502      28,905
      Operating Expenses        65,718     55,594     132,272     112,009
      Depreciation of Rental
       Merchandise              33,585     30,219      66,067      58,482
      Interest                   1,704      1,317       3,332       2,544
        Total                  124,765    110,733     254,380     224,364

    Earnings Before Taxes        7,998     11,177      19,800      22,918

    Income Taxes                 3,031      4,248       7,504       8,711

    Net Earnings                $4,967     $6,929     $12,296     $14,207

    Earnings Per Share            $.25       $.35        $.62        $.72

    Earnings Per Share
     Assuming Dilution            $.25       $.35        $.61        $.71

    Weighted Average
     Shares Outstanding         19,911     19,790      19,891      19,845

    Weighted Average
     Shares Outstanding
     Assuming Dilution          20,141     19,905      20,110      19,998

                    

SOURCE Aaron Rents, Inc.

CONTACT: Gilbert L. Danielson, Executive Vice President, Chief Financial Officer of Aaron Rents, Inc., +1-404-231-0011/

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