The Company achieved record revenues in 2001 led by its rapidly growing Aaron's
Sales and Lease Ownership division, which increased revenues over 20% in 2001
including an 7.7% increase in same store revenues for the year while expanding
its store count by 117 stores, an increase of 26% in stores open. The outlook
for 2002 is a continuing quarterly growth rate of more than 20% in sales and
lease ownership revenues, stated R. Charles Loudermilk, Sr., Chairman and Chief
Executive Officer of Aaron Rents, Inc.
"We are very pleased with our record expansion of stores in 2001," said Mr.
Loudermilk. "Although this rapid opening of new stores affected earnings during
the year, it has set the stage for strong future revenue and earnings growth."
For the three months ended December 31, revenues advanced to a record $140.0
million, up 7% compared to $130.8 million for the fourth quarter of 2000. Net
earnings for the fourth quarter of 2001 were $2.0 million, or $.10 per diluted
share, compared to $6.3 million, or $.32 per diluted share, in the prior year.
Revenues for the year ended December 31 gained 9% to $546.7 million versus
$502.9 million for 2000. Net earnings for 2001 were $12.3 million, or $.61 per
diluted share, compared to net earnings of $27.3 million, or $1.37 per diluted
share, a year ago.
Net earnings were adversely impacted in 2001 by the investment associated with
the rapid opening of new sales and lease ownership stores. These openings
reduced diluted earnings per share by approximately $.15 in the fourth quarter
and $.42 for the year. In addition, during the third quarter the Company
recorded special non-cash charges of $5.6 million, or $.18 per diluted share,
relating to the recording of future real estate lease obligations of closed
rent-to-rent stores and the write-down of inventory and other assets within the
division. Excluding these special charges, diluted earnings per share would have
been $.79 in 2001.
Revenues of the Aaron's Sales and Lease Ownership division increased 20% to a
record $107.2 million for the fourth quarter of 2001 compared to $89.1 million
for the corresponding quarter of 2000. For the year 2001, sales and lease
ownership revenues advanced 21% to a record $394.8 million compared to $325.8
million last year. Revenues from Company-operated sales and lease ownership
stores open in comparable periods grew 5.0% in the fourth quarter and 7.7% for
the year.
Company systemwide revenues, including revenues from franchised sales and lease
ownership stores, also set record levels increasing 10% to $189.1 million for
the quarter and rising 12% to $735.4 million for the year.
The Company's debt under its revolving credit agreement at the end of year was
$72 million, down $28 million from the levels at the end of December 2000.
The total count at year end of sales and lease ownership stores open, including
both Company-operated and franchised stores, reached 573, an addition of 117
stores for the year -- a 26% increase on top of a 24% growth the previous year.
At December 31, 2001 the Company had a total of 648 stores open systemwide,
including 209 franchised stores, in 43 states and Puerto Rico.
"The outlook for 2002 and 2003 is very positive," Loudermilk continued. "We
expect in 2002 that revenues will be in excess of $610 million with systemwide
revenues exceeding $800 million, and that revenues in the sales and lease
ownership division will continue growing at a quarterly rate of more than 20%.
After several years of accelerated new store growth we anticipate a lesser
number of openings in 2002, approximately 10 Company-operated and 20 franchised
Aaron's Sales and Lease Ownership stores, as we focus on building revenues and
earnings in existing stores. For the first quarter we expect diluted earnings
per share to be in the range of $.23 to $.27 per share, and for the year
earnings in the range of $1.15 to $1.25 per share. We anticipate that 2003 will
be a very strong year for the Company with earnings growth in excess of 25% as
our Aaron's Sales and Lease Ownership stores mature in revenues and earnings."
Aaron Rents, Inc., based in Atlanta, currently has more than 650
Company-operated and franchised stores across the United States and in Puerto
Rico for the rental and sale of residential and office furniture, accessories,
consumer electronics and household appliances. The Company 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)
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
Revenues:
Rentals and Fees $101,419 $93,649 $403,385 $359,880
Retail Sales 13,520 14,116 60,481 62,417
Non-Retail Sales 20,132 19,039 66,212 65,498
Other 4,914 3,984 16,603 15,125
Total 139,985 130,788 546,681 502,920
Costs and Expenses:
Retail Cost of Sales 9,920 10,216 43,987 44,156
Non-Retail Cost of
Sales 18,730 17,872 61,999 60,996
Operating Expenses 69,349 59,285 276,682 227,587
Depreciation of Rental
Merchandise 37,562 31,558 137,900 120,650
Interest 1,211 1,668 6,258 5,625
Total 136,772 120,599 526,826 459,014
Earnings Before Taxes 3,213 10,189 19,855 43,906
Income Taxes 1,212 3,841 7,519 16,645
Net Earnings $2,001 $6,348 $12,336 $27,261
Earnings Per Share $.10 $.32 $.62 $1.38
Earnings Per Share
Assuming Dilution $.10 $.32 $.61 $1.37
Weighted Average
Shares Outstanding 19,969 19,816 19,928 19,825
Weighted Average
Shares Outstanding
Assuming Dilution 20,153 19,962 20,141 19,967
CONTACT: Gilbert L. Danielson, Executive Vice President, Chief Financial
Officer of Aaron Rents, Inc., +1-404-231-0011