ATLANTA, Oct. 28 /PRNewswire-FirstCall/ -- 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 and accessories, today announced record revenues and earnings for
the third quarter of 2003.
For the three months ended September 30, revenues increased 19% to
$188.4 million compared to $157.8 million for the third quarter a year ago.
Net earnings increased 29% to $8.7 million versus $6.7 million for the third
quarter 2002. Diluted earnings per share for the third quarter were $.26
compared to $.20 per share last year.
For the first nine months of this year, revenues increased 20% to
$557.4 million compared to $465.7 million for the same period of 2002. Net
earnings for the nine months were $26.2 million versus $19.3 million for the
comparable period last year, a 35% increase. Diluted earnings per share for
the first nine months were $.79 for 2003 compared to $.61 in 2002.
"We are very pleased with these record results in both revenues and
earnings," said R. Charles Loudermilk, Sr., Chairman and Chief Executive
Officer of Aaron Rents. "Our Aaron's Sales & Lease Ownership division
continues to drive our performance, growing rapidly in both revenues and
earnings from both new and existing stores. We are confident this growth will
continue during the remainder of 2003 and on into 2004."
Same store revenues (revenues earned in Company-operated stores) in the
Aaron's Sales and Lease Ownership division for stores open for at least
fifteen months at the end of September 2003 increased 9.8% for the third
quarter of 2003 compared to the third quarter a year ago. Same store revenues
increased 8.2% between the same periods for stores open for at least two years
at the end of September 2003.
Non-GAAP systemwide revenues for the Company, which includes gross
revenues of franchised stores, advanced 18% to $254.4 million for the quarter
versus $216.5 million a year ago. For the nine-month period non-GAAP
systemwide revenues were $756.8 million, up 18% from $639.8 million for the
first nine months of last year.
The Aaron's Sales & Lease Ownership division increased its third quarter
revenues 26% to $161.2 million versus $128.3 million last year. Systemwide
revenues for this division rose 22% to $227.2 million for the third quarter
versus $186.9 million a year ago. Sales and lease ownership revenues for the
first nine months of 2003 increased 27% to $473.4 million compared to
$371.7 million last year, and systemwide revenues for the division advanced
23% to $672.9 million compared to $545.8 million for the first nine months of
last year.
Non-GAAP systemwide revenues are calculated by adding GAAP revenues to the
revenues of the Company's franchisees and subtracting the Company's royalty
revenues. Franchisee revenues, however, are not revenues of Aaron Rents, Inc.
A table reconciling Company revenues to systemwide revenues and Aaron's Sales
& Lease Ownership revenues to the division's systemwide revenues follows
below.
The Aaron's Sales & Lease Ownership division increased its store count
during the third quarter by a net 39 stores. During the quarter the Company
purchased 65 stores, including 20 franchise stores, in seven separate cash
transactions. Of the 45 non-franchise stores acquired, 22 were kept open,
with the rental contracts of the other 23 stores merged into existing Aaron's
stores. In addition, during the quarter three new Company-operated stores
were opened and 14 new franchise stores were added. Subsequent to September
30 the Company acquired an additional three franchise stores.
At September 30 the Aaron's Sales and Lease Ownership division had 482
Company-operated stores and 243 franchise stores open. In addition, the
Company had 64 rent-to-rent stores.
During the first nine months of 2003 the Company has opened 35 new
franchise stores and awarded an additional 26 stores for future opening. At
the end of September there were 198 franchise stores awarded that are expected
to open over the next several years.
"Our guidance for 2003 remains unchanged, with revenues for the year
expected to be in excess of $750 million and systemwide revenues expected to
exceed $1 billion," Mr. Loudermilk continued. "For the fourth quarter of 2003
we expect diluted earnings per share to be in the range of $.29 to $.31 per
share with diluted earnings per share for the full 2003 year in a range of
$1.08 to $1.10 per diluted share. For 2004 we expect diluted earnings per
share in the range of $1.25 to $1.30. Our goal is to increase our combined
Company-operated and franchise store base over the next several years in
excess of 10% per year."
Estimated 2003 systemwide revenues includes the Company's estimated
revenues, other than approximately $14 million to $15 million in royalties,
plus anticipated revenues of franchisees of approximately $265 million to over
$285 million.
Aaron Rents will hold a conference call to discuss its quarterly financial
results on Wednesday, October 29, 2003, at 10:30 am Eastern Time. The public
is invited to listen in to the conference call by webcast accessible through
our website, www.aaronrents.com , in the "Investor Relations" section. The
webcast will be archived for playback at that same site.
Aaron Rents, Inc. based in Atlanta, currently has more than 790 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.
"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
materially from those contained in the forward-looking statements. These
risks and uncertainties include factors such as changes in general economic
conditions, competition, pricing, customer demand and other issues, and the
risks and uncertainties discussed under "Certain Factors Affecting Forward
Looking Statements" in the Company's Annual Report on Form 10-K for fiscal
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 Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Revenues:
Rentals and Fees $141,405 $115,369 $403,861 $341,514
Retail Sales 15,672 17,623 54,318 48,788
Non-Retail Sales 25,499 19,805 81,926 61,069
Other 5,830 5,041 17,302 14,292
Total 188,406 157,838 557,407 465,663
Costs and Expenses:
Retail Cost of Sales 11,900 13,079 40,146 35,845
Non-Retail Cost of Sales 23,571 18,376 76,050 56,552
Operating Expenses 88,111 73,184 252,607 217,972
Depreciation of Rental
Merchandise 49,630 41,394 142,536 121,130
Interest 1,461 1,136 4,522 3,372
Total 174,673 147,169 515,861 434,871
Earnings Before Taxes 13,733 10,669 41,546 30,792
Income Taxes 5,082 3,948 15,386 11,454
Net Earnings $8,651 $6,721 $26,160 $19,338
Earnings Per Share $0.26 $0.21 $0.80 $0.62
Earnings Per Share
Assuming Dilution $0.26 $0.20 $0.79 $0.61
Weighted Average
Shares Outstanding(A) 32,718 32,484 32,603 30,971
Weighted Average
Shares Outstanding
Assuming Dilution(A) 33,424 32,970 33,152 31,448
(A) Shares outstanding adjusted for a 3-for-2 partial stock split effected
in the form of a 50% stock dividend distributed August 15, 2003.
Selected Balance Sheet Data
(In Thousands)
(Unaudited)
September 30, December 31,
2003 2002
Cash $5,456 $96
Accounts Receivable 25,475 26,973
Rental Merchandise, Net 319,478 317,287
Property, Plant and Equipment, Net 93,500 87,094
Total Assets 522,346 483,648
Bank Debt - 7,325
Senior Notes 50,000 50,000
Total Liabilities 212,585 203,103
Shareholders' Equity $309,761 $280,545
Reconciliation of Company Revenues to Systemwide Revenues
(In thousands, except per share amounts)
(Unaudited) (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Total Company Revenues $188,406 $157,838 $557,407 $465,663
Royalty Revenues (3,473) (3,087) (10,496) (9,166)
Franchisees' Revenues 69,460 61,735 209,920 183,320
Systemwide Revenues $254,393 $216,486 $756,831 $639,817
Sales & Lease Ownership:
Revenues $161,243 $128,278 $473,438 $371,673
Royalty Revenues (3,473) (3,087) (10,496) (9,166)
Franchisees' Revenues 69,460 61,735 209,920 183,320
Systemwide Revenues $227,230 $186,926 $672,862 $545,827
SOURCE Aaron Rents, Inc.
CONTACT: Gilbert L. Danielson, Executive Vice President, Chief Financial
Officer of Aaron Rents, Inc., 1-404-231-0011, ext. 3334