Exhibit 99.1
Aaron Rents, Inc. Reports Record First Quarter;
Same Store Revenues up 13.7%;
Raises Outlook for Year
ATLANTA, April 26 /PRNewswire-FirstCall/ -- Aaron Rents, Inc. (NYSE: RNT),
the nation's leader in the sales and lease ownership, specialty retailing and
rental of residential and office furniture, consumer electronics, home
appliances and accessories, today announced record revenues and earnings for
the first quarter of 2004.
The Company's fast-growing Aaron's Sales & Lease Ownership division
increased revenues 33% during the quarter compared to the same quarter a year
ago, including a 13.7% increase in same store revenues.
"We couldn't be more pleased with the results of the Aaron's Sales & Lease
Ownership division," said R. Charles Loudermilk, Sr., Chairman and Chief
Executive Officer of Aaron Rents. "The demand for the products and services
we provide has been extremely strong, and our unique sales and lease ownership
concept is enabling us to expand and increase our penetration into this large
market. Our first quarter results were better than expectations and we are
raising our revenue and earnings forecasts for the remainder of the year."
For the three months ended March 31, 2004 revenues advanced 27% to $242.5
million compared to $191.3 million for the first quarter of 2003. Net
earnings for the first quarter increased 47% to $12.8 million, or $.38 per
diluted share, compared to $8.7 million, or $.27 per diluted share, for the
same period last year. Revenues for the Company's Aaron's Sales & Lease
Ownership division increased 33% for the quarter to $214.5 million versus
$161.9 million in the first quarter of last year. The Company's non-GAAP
systemwide revenues, which includes gross revenues of franchised stores,
advanced 24% to $321.6 million compared to $259.5 million a year ago.
Systemwide revenues for the Aaron's Sales & Lease Ownership division were
$293.6 million, a 28% increase over the $230.1 million in the first quarter of
2003. A table reconciling Company revenues to systemwide revenues is
presented below.
Same store revenues (revenues earned in Company-operated stores open for
the entirety of both periods) in the Aaron's Sales & Lease Ownership division
increased 13.7% during the first quarter of 2004 compared to first quarter of
2003. Same store revenues increased 12.7% for stores open over two years at
the end of March 2004.
During the first quarter the Company awarded area development agreements
to various independent operators to open 53 new Aaron's Sales & Lease
Ownership franchise stores. At the end of March there were 266 franchise
stores awarded that are scheduled to open over the next several years.
The Company acquired six stores during the quarter, including two
franchise stores, and contracts and related merchandise of two additional
stores. The Company's franchisees also purchased the contracts and related
merchandise of eight third party stores, keeping six of the acquired stores
open. Including these acquisitions, the Aaron's Sales & Lease Ownership
division increased its store count during the first quarter by 43 stores, 18
Company-operated stores and 25 franchised stores, bringing the total number of
stores open at March 31 to 830. At the end of March the Company also had 60
rent-to-rent stores open.
"For the second quarter of 2004 we expect revenues to be over $225 million
and diluted earnings per share in the range of $.44 to $.46 per share, which
includes an anticipated $.10 per diluted share gain on the disposition of our
Rainbow Rentals stock in Rainbow Rentals' proposed merger with Rent-A-Center,"
Mr. Loudermilk continued. "We are increasing our guidance for the full year
2004, expecting Company revenues to exceed $950 million (excluding revenues of
franchisees), more than a 24% increase over 2003, with diluted earnings per
share in the range of $1.48 to $1.53, compared to the $1.10 diluted per share
recorded in 2003. Our new store opening plans are unchanged, adding
approximately 140 new stores in 2004, a combination of Company-operated and
franchised stores, and we will also further look for acquisition
opportunities."
Rainbow Rentals, Inc. has scheduled a special meeting of shareholders for
May 12, 2004 to vote on a proposed merger with Rent-A-Center, Inc. According
to the definitive proxy material sent to all Rainbow shareholders in April
2004, subject to shareholder approval and satisfaction of closing conditions,
the merger is expected to close in May 2004.
Aaron Rents will hold a conference call to discuss its quarterly financial
results on Tuesday, April 27, 2004, at 8:30 am Eastern Time. The public is
invited to listen in to the call by webcast accessible through the Company's
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 890 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
2003, which discussion is incorporated herein by this reference. Statements
in this release that are "forward-looking" include without limitation Aaron
Rents' projected revenues, earnings, and store openings for 2004.
Aaron Rents, Inc. and Subsidiaries
Consolidated Statements of Earnings
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2004 2003
Revenues:
Rentals and Fees $172,372 $131,037
Retail Sales 16,471 23,038
Non-Retail Sales 46,499 31,557
Other 7,151 5,628
Total 242,493 191,260
Costs and Expenses:
Retail Cost of Sales 11,710 16,855
Non-Retail Cost of Sales 43,306 29,402
Operating Expenses 102,093 83,119
Depreciation of Rental Merchandise 63,470 46,389
Interest 1,208 1,588
Total 221,787 177,353
Earnings Before Taxes 20,706 13,907
Income Taxes 7,889 5,159
Net Earnings $12,817 $8,748
Earnings Per Share $.39 $.27
Earnings Per Share Assuming Dilution $.38 $.27
Weighted Average Shares Outstanding 32,883 32,528
Weighted Average Shares Outstanding
Assuming Dilution 33,506 32,913
Selected Balance Sheet Data
(In thousands)
(Unaudited)
March 31, December 31,
2004 2003
Cash $95 $95
Accounts Receivable 33,165 30,878
Rental Merchandise, Net 365,681 343,013
Property, Plant and Equipment, Net 99,813 99,584
Total Assets 584,186 555,292
Bank Debt 11,736 13,870
Senior Notes 50,000 50,000
Total Liabilities 245,846 235,106
Shareholders' Equity $338,340 $320,186
Reconciliation of Company Revenues to Systemwide Revenues (1)
(In thousands)
Three Months Ended
March 31,
2004 2003
Total Company Revenues $242,493 $191,260
Royalty Revenues (4,198) (3,590)
Franchisees' Revenues 83,281 71,800
Systemwide Revenues $321,576 $259,470
Sales & Lease Ownership Revenues $214,519 $161,898
Royalty Revenues (4,198) (3,590)
Franchisees' Revenues 83,281 71,800
Systemwide Revenues $293,602 $230,108
(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's revenues, however, are not revenues of Aaron
Rents, Inc.
SOURCE Aaron Rents, Inc.
-0- 04/26/2004
/CONTACT: Gilbert L. Danielson, Executive Vice President, Chief Financial
Officer of Aaron Rents, Inc., +1-678-402-3314/
/Web site: http://www.aaronrents.com /
(RNT)
CO: Aaron Rents, Inc.; Rainbow Rentals, Inc.; Rent-A-Center, Inc.
ST: Georgia
IN: REA
SU: ERN CCA MAV ERP