ATLANTA, Feb. 24 /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 fourth quarter and the year 2003.
For the three months ended December 31, revenues increased 20% to
$209.4 million compared to $175.0 million for the fourth quarter of last year.
Net earnings increased to $10.3 million versus $8.1 million a year ago.
Diluted earnings per share were $.31 compared to $.25 per share last year.
For the year, revenues advanced 20% to $766.8 million compared to
$640.7 million for the same period of 2002, and net earnings were up 33% for
the year to $36.4 million versus $27.4 million a year ago. Diluted earnings
per share were $1.10 for 2003 compared to $.86 per share last year. Non-GAAP
systemwide revenues for the Company, which includes gross revenues of
franchised stores, advanced 18% to $1.0 billion for the year. A table
reconciling Company revenues to systemwide revenues is presented below.
"We are quite pleased that, as expected, our systemwide revenues exceeded
the $1 billion milestone in 2003 and that Company revenues and earnings for
both the fourth quarter and year were record performances," said R. Charles
Loudermilk, Sr., Chairman and Chief Executive Officer of Aaron Rents, Inc.
"In 2004 we will continue to expand the Company's store base, opening both
Company-operated and franchised Aaron's Sales & Lease Ownership stores, and
supplementing that growth with selective acquisitions. With our proven
Aaron's Sales & Lease Ownership business model, strong customer demand and
increasing market potential, we feel future growth prospects for the Company
are excellent."
The Company's Aaron's Sales & Lease Ownership division increased revenues
for the quarter 24% to $183.0 million. Non-GAAP systemwide revenues for the
Aaron's Sales & Lease Ownership division rose 21% to $250.1 million compared
to $207.2 million for the fourth quarter a year ago. For the year, Aaron's
Sales & Lease Ownership revenues increased 26% to $656.5 million versus
$519.0 million last year, and systemwide revenues in the division advanced 23%
to $923.0 million compared to $753.0 million for 2002. The division's same
store revenues from Company-operated stores open in comparable periods
(excluding Sight & Sound stores) grew 10.6% in the fourth quarter.
The Company's Sight & Sound stores, acquired in 2002, negatively affected
earnings in the fourth quarter by approximately $.02 per diluted share and
$.12 per diluted share for the year. The 11 Sight & Sound stores now open are
not expected to be significantly dilutive to earnings in 2004.
During the fourth quarter, the Aaron's Sales & Lease Ownership division
increased its store count by 62 stores, 18 Company-operated stores and 44
franchised stores. Also, during the fourth quarter the Company awarded area
development agreements to various independent operators to open 86 new Aaron's
Sales & Lease Ownership franchise stores. For 2003 as a whole the Company
awarded area development agreements for the opening of 112 more franchise
stores. At the end of December there were 241 franchise stores awarded that
are expected to open over the next several years.
At December 31, 2003 the Aaron's Sales & Lease Ownership division had 500
Company-operated and 287 franchise stores open. In addition, the Company had
60 rent-to-rent stores in operation.
"Our 2004 guidance remains unchanged at this time. We plan to add
approximately 140 new stores in 2004, a combination of Company-operated and
franchised stores, and will also continue to look for acquisition
opportunities. For the first quarter of 2004 we expect revenues to be over
$220 million and diluted earnings per share in the range of $.32 to $.34 per
share," Mr. Loudermilk continued. "We expect Company revenues to exceed
$900 million (excluding revenues of franchisees) for the full year of 2004
with diluted earnings per share in the range of $1.37 to $1.42, which includes
an anticipated $.10 per diluted share gain on the sale of the Company's 8%
interest in Rainbow Rentals Inc." Rent-A-Center Inc. has recently announced
it has reached an agreement to acquire Rainbow Rentals with closing
anticipated in the second quarter of 2004.
Aaron Rents will hold a conference call to discuss its quarterly and full
year financial results on Wednesday, February 25, 2004, at 10:30 am Eastern
Time. The public is invited to listen to the 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 over 860 Company-
operated and franchised stores in the United States, Puerto Rico, and Canada
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. Statements
in this release that are "forward-looking" include without limitation Aaron
Rents' projected revenues and store openings for 2004.
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,
2003 2002 2003 2002
(Unaudited) (Unaudited)
Revenues:
Rentals and Fees $149,912 $117,665 $553,773 $459,179
Retail Sales 14,468 23,910 68,786 72,698
Non-Retail Sales 38,429 27,900 120,355 88,969
Other 6,581 5,550 23,883 19,842
Total 209,390 175,025 766,797 640,688
Costs and Expenses:
Retail Cost of Sales 10,767 18,011 50,913 53,856
Non-Retail Cost of Sales 35,664 25,855 111,714 82,407
Operating Expenses 92,277 75,374 344,884 293,346
Depreciation of Rental
Merchandise 53,125 41,530 195,661 162,660
Interest 1,260 1,395 5,782 4,767
Total 193,093 162,165 708,954 597,036
Earnings Before Taxes 16,297 12,860 57,843 43,652
Income Taxes 6,031 4,758 21,417 16,212
Net Earnings $10,266 $8,102 $36,426 $27,440
Earnings Per Share $.31 $.25 $1.12 $.87
Earnings Per Share
Assuming Dilution $.31 $.25 $1.10 $.86
Weighted Average
Shares Outstanding 32,760 32,528 32,643 31,364
Weighted Average
Shares Outstanding
Assuming Dilution 33,406 33,000 33,189 31,850
Selected Balance Sheet Data
(In Thousands)
(Unaudited)
December 31, December 31,
2003 2002
Cash $95 $96
Accounts Receivable 30,878 26,973
Rental Merchandise, Net 343,013 317,287
Property, Plant and
Equipment, Net 99,584 87,094
Total Assets 555,292 483,648
Bank Debt 13,870 7,325
Senior Notes 50,000 50,000
Total Liabilities 235,106 203,103
Shareholders' Equity $320,186 $280,545
Reconciliation of Company Revenues to Systemwide Revenues (1)
(In Thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
Total Company Revenues $209,390 $175,025 $766,797 $640,688
Royalty Revenues (3,503) (3,151) (13,999) (12,317)
Franchisees' Revenues 70,632 63,018 280,552 246,338
Systemwide Revenues $276,519 $234,892 $1,033,350 $874,709
Sales & Lease Ownership:
Revenues $183,012 $147,321 $656,450 $518,994
Royalty Revenues (3,503) (3,151) (13,999) (12,317)
Franchisees' Revenues 70,632 63,018 280,552 246,338
Systemwide Revenues $250,141 207,188 $923,003 $753,015
(1) 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.
SOURCE Aaron Rents, Inc.
CONTACT: Gilbert L. Danielson, Executive Vice President, Chief Financial
Officer of Aaron Rents, Inc., +1-404-231-0011