The Company's major division, Aaron's Sales & Lease Ownership, continued its
high-growth performance by increasing revenues 28% for the second quarter and
27% for the first half of the year. The division's same store revenue growth for
the second quarter was 9.9%.
"We are very pleased with these results, which are driven by the continuing
expansion in the Aaron's Sales & Lease Ownership division," said R. Charles
Loudermilk, Sr., Chairman and Chief Executive Officer of Aaron Rents, Inc. "We
feel we are in an excellent position to continue to show improving performance
in upcoming quarters."
For the three months ended June 30, revenues increased 14% to a record $151.2
million compared to $132.8 million for the second quarter of 2001. Net earnings
for the second quarter this year increased 35% to $6.7 million versus $5.0
million last year. Diluted earnings per share for the quarter were $.32 compared
to $.25 per share for the second quarter a year ago.
For the first six months of this year, revenues advanced 12% to a record $307.8
million compared to $274.2 million for the first half of 2001. Net earnings for
the six months were $12.6 million versus $12.3 million for the corresponding
period last year. Diluted earnings per share for the first half were $.62 for
2002 and $.61 for 2001.
Systemwide revenues for the Company, which includes revenues of franchised
stores, advanced 17% to $208.0 million for the quarter and 15% to $423.3 million
for the six months.
The Aaron's Sales & Lease Ownership division increased its second quarter
revenues 28% to $120.1 million versus $93.7 million for the second quarter last
year. Systemwide revenues for this division, including franchised stores, rose
27% to $177.0 million versus $139.4 million compared to the second quarter a
year ago. First half sales and lease ownership revenues increased 27% to $243.4
million compared to $191.5 million last year, and systemwide revenues advanced
26% to $358.9 million compared to $285.3 million for the first half of last
year.
Net earnings were adversely impacted during the second quarter and first six
months of 2002 by approximately $.05 and $.14 diluted earnings per share,
respectively, resulting from the start-up expenses associated with the rapid
opening of Aaron's Sales & Lease Ownership stores during 2001. In addition, the
Company's earnings were positively affected during the quarter and first six
months by two accounting changes. First, diluted earnings per share increased
approximately $.04 and $.07 in the quarter and year to date period,
respectively, due to a January 1, 2002 change in the method of depreciating
merchandise in the Aaron's Sales & Lease Ownership division. Second, diluted
earnings per share increased $.01 and $.02 in the quarter and first six months,
respectively, as a result of the goodwill non-amortization provisions of a new
accounting standard.
The Aaron's Sales & Lease Ownership division increased its store count during
the second quarter by seven stores, one Company-operated store and six
franchised stores, bringing the total of stores open at June 30 to 586. At the
end of June the Company also had 73 rent-to-rent stores open.
During June 2002 the Company sold 1,725,000 of Common Stock in a secondary stock
offering, using the proceeds of $34.3 million to pay down its bank debt, which
was reduced to $26.3 million at the end of June.
"We are revising our guidance for 2002, and now expect revenues during the year
in excess of $615 million with systemwide revenues exceeding $840 million," Mr.
Loudermilk continued. "For the third quarter of 2002 we expect diluted earnings
per share to be in the range of $.30 to $.32 per share with earnings per share
for the full 2002 year in a range of $1.27 to $1.32 per diluted share. Our
initial outlook for 2003 is achieving diluted earnings per share in the range of
$1.55 to $1.65. We are very positive on the future prospects for the Company."
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 10 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 Registration
Statement on Form S-3, file number 333-88392, filed with the Securities and
Exchange Commission on May 16, 2002, 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,
2002 2001 2002 2001
Revenues:
Rentals and $113,643 $100,537 $226,145 $202,605
Fees
Retail Sales 14,150 14,754 31,165 32,030
Non-Retail
Sales 18,801 13,494 41,264 31,440
Other 4,568 3,978 9,251 8,105
Total 151,162 132,763 307,825 274,180
Costs and Expenses
Retail Cost of
Sales 10,388 10,985 22,766 23,207
Non-Retail Cost
of Sales 17,348 12,773 38,176 29,502
Operating
Expenses 71,654 65,718 144,788 132,272
Depreciation of
Rental
Merchandise 40,036 33,585 79,736 66,067
Interest 1,070 1,704 2,236 3,332
Total 140,496 124,765 287,702 254,380
Earnings Before
Taxes 10,666 7,998 20,123 19,800
Income Taxes 3,970 3,031 7,506 7,504
Net Earnings $6,696 $4,967 $12,617 $12,296
Earnings Per
Share $.33 $.25 $.63 $.62
Earnings Per Share
Assuming
Dilution $.32 $.25 $.62 $.61
Weighted Average
Shares
Outstanding 20,353 19,911 20,134 19,891
Weighted Average
Shares Outstanding
Assuming
Dilution 20,761 20,141 20,489 20,110
CONTACT: Gilbert L. Danielson, Executive Vice President and Chief
Financial Officer of Aaron Rents, Inc., +1-404-231-0011