The Company attained record revenues on the strength of its fast-growing Aaron's
Sales & Lease Ownership division, which increased revenues 26% during the
quarter including a 7.4% growth in same store revenues.
"This record growth is in line with our expectations," said R. Charles
Loudermilk, Sr., Chairman and Chief Executive Officer of Aaron Rents, Inc. "We
are especially pleased with the revenue growth of our new stores opened during
the last several years, including the 117 additional stores opened during the
record expansion of 2001. We achieved this record growth during the first
quarter while at the same time reducing our bank debt by $22 million, or over
30%, from the levels at the end of 2001. We feel this is remarkable
performance."
For the three months ended March 31, 2002 revenues advanced 11% to a record
$156.7 million compared to $141.4 million for the first quarter of 2001. Net
earnings for the first quarter were $5.9 million and $.29 per share on a diluted
basis compared to $.37 per share for the same period last year. Effective
January 1, 2002 the Company adopted SFAS No. 142 which eliminated the
amortization of goodwill and had the effect of increasing net earnings for the
first quarter of 2002 by $.01 per diluted share.
Systemwide revenues for the Company, which includes revenues of franchised
stores, advanced 14% to $215.3 million for the quarter versus $189.4 million a
year ago.
Net earnings were adversely impacted during the first quarter of 2002 by
approximately $.09 per diluted share due the start-up expenses related to the
rapid opening of new stores in 2001, the majority of which were opened during
the summer of last year. Also, during the quarter the Company changed its method
of depreciating merchandise in the Aaron's Sales & Lease Ownership division from
depreciating new merchandise as soon as it is delivered to stores to not
depreciating the merchandise until it initially goes out on lease. This change
in accounting method increased net earnings by approximately $.02 per diluted
share during the current quarter.
The Company's Aaron's Sales & Lease Ownership division continued its strong
expansion, increasing its revenues 26% to a record $123.3 million for the first
quarter compared to $97.8 million for the same period in 2001. Systemwide
revenues for the division were $181.9 million, an increase of 25% over last
year's first quarter. Revenues from Company-operated sales and lease ownership
stores open in comparable quarters increased 7.4% during the first quarter
compared to the same period a year ago. The division increased its store count
during the quarter by six stores, four Company-operated stores and two
franchised stores, bringing the total of stores open at March 31 to 579. At the
end of March the Company also had 74 rent-to-rent stores open.
The Company's debt under its revolving credit agreement at the end of March was
approximately $50 million, a decrease of $22 million from the levels at the end
of December 2001.
"Our outlook for 2002 remains at recording revenues during the year in excess of
$610 million with systemwide revenues exceeding $800 million," Mr. Loudermilk
continued. "We anticipate that the Aaron's Sales & Lease Ownership division will
continue growing revenues on a quarterly basis during 2002 in excess of 20%. For
2002 we expect diluted earnings per share in the second quarter to be in the
range of $.27 to $.30 per share, and for the year earnings in the range of $1.20
to $1.30 per share. We continue to anticipate a strong year in 2003."
Aaron Rents, Inc., based in Atlanta, currently has more than 650 Company-
operated and franchised stores across the United 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 which could cause actual results to differ from those
contained in the forward-looking statements. For a discussion of such risks and
uncertainties, see "Certain Factors Affecting Forward Looking Statements" in the
Company's Annual Report on Form 10-K for fiscal 2001, which discussion is
incorporated herein by this reference.
Aaron Rents, Inc. and Subsidiaries
Consolidated Statements of Earnings
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2002 2001
Revenues:
Rentals and Fees $112,502 $102,068
Retail Sales 17,015 17,276
Non-Retail Sales 22,463 17,946
Other 4,683 4,127
Total 156,663 141,417
Costs and Expenses:
Retail Cost of Sales 12,378 12,222
Non-Retail Cost of Sales 20,828 16,729
Operating Expenses 73,134 66,554
Depreciation of Rental
Merchandise 39,700 32,482
Interest 1,166 1,628
Total 147,206 129,615
Earnings Before Taxes 9,457 11,802
Income Taxes 3,536 4,473
Net Earnings $5,921 $7,329
Earnings Per Share $.30 $.37
Earnings Per Share
Assuming Dilution $.29 $.37
Weighted Average
Shares Outstanding 19,912 19,870
Weighted Average
Shares Outstanding
Assuming Dilution 20,192 20,074
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CONTACT: Gilbert L. Danielson, Executive Vice President and Chief
Financial Officer of Aaron Rents, Inc., +1-404-231-0011, ext. 3334
URL: http://www.aaronrents.com
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