1
EXHIBIT 13
FINANCIAL HIGHLIGHTS
YEAR ENDED YEAR ENDED
(DOLLAR AMOUNTS IN THOUSANDS, DECEMBER 31, DECEMBER 31, PERCENTAGE
EXCEPT PER SHARE) 2000 1999 CHANGE
- -------------------------------------------------------------------------------------
Operating Results
Revenues $ 502,920 $ 437,359 15.0%
Earnings Before Taxes 43,906 41,302 6.3
Net Earnings 27,261 25,602 6.5
Earnings Per Share 1.38 1.28 7.8
Earnings Per Share
Assuming Dilution 1.37 1.26 8.7
- -------------------------------------------------------------------------------------
Financial Position
Total Assets $ 380,379 $ 318,408 19.5%
Rental Merchandise, Net 267,713 219,831 21.8
Interest-Bearing Debt 104,769 72,760 44.0
Shareholders' Equity 208,538 183,718 13.5
Book Value Per Share 10.50 9.22 13.8
Debt to Capitalization 33.4% 28.4%
Pre-Tax Profit Margin 8.7 9.4
Net Profit Margin 5.4 5.9
Return on Average Equity 13.9 14.5
- -------------------------------------------------------------------------------------
Stores Open
Sales & Lease Ownership 263 213 23.5%
Sales & Lease Ownership Franchised 193 155 24.5
Rent-to-Rent 98 107 (8.4)
- -------------------------------------------------------------------------------------
Total Stores 554 475 16.6%
Revenues by calendar year
[CHART]
Net Earnings by calendar year
[CHART]
2
SELECTED FINANCIAL
INFORMATION
(DOLLAR AMOUNTS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
IN THOUSANDS DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
EXCEPT PER SHARE) 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------
Operating Results
Systemwide Revenues(1) $ 656,096 $ 547,255 $ 464,175 $ 364,306 $ 306,200
Revenues:
Rentals & Fees $ 359,880 $ 318,154 $ 289,272 $ 231,207 $ 208,463
Sales 127,915 107,690 81,561 73,223 61,527
Other 15,125 11,515 8,826 6,321 4,255
------------------------------------------------------------------------
502,920 437,359 379,659 310,751 274,245
------------------------------------------------------------------------
Costs & Expenses:
Cost of Sales 105,152 87,705 62,017 55,914 46,168
Operating Expenses 227,587 201,923 189,719 149,728 135,012
Depreciation of
Rental Merchandise 120,650 102,324 89,171 71,151 64,437
Interest 5,625 4,105 3,561 3,721 3,449
------------------------------------------------------------------------
459,014 396,057 344,468 280,514 249,066
------------------------------------------------------------------------
Earnings Before
Income Taxes 43,906 41,302 35,191 30,237 25,179
Income Taxes 16,645 15,700 13,707 11,841 9,786
------------------------------------------------------------------------
Net Earnings $ 27,261 $ 25,602 $ 21,484 $ 18,396 $ 15,393
------------------------------------------------------------------------
Earnings Per Share $ 1.38 $ 1.28 $ 1.06 $ .96 $ .81
Earnings Per Share
Assuming Dilution 1.37 1.26 1.04 .94 .77
------------------------------------------------------------------------
Dividends Per Share:
Common $ .04 $ .04 $ .04 $ .04 $ .04
Class A .04 .04 .04 .04 .04
- ------------------------------------------------------------------------------------------------------
Financial Position
Rental Merchandise, Net $ 267,713 $ 219,831 $ 194,163 $ 176,968 $ 149,984
Property, Plant &
Equipment, Net 63,174 55,918 50,113 39,757 33,267
Total Assets 380,379 318,408 272,174 239,382 198,103
Interest-Bearing Debt 104,769 72,760 51,727 76,486 55,365
Shareholders' Equity 208,538 183,718 168,871 116,455 107,335
- ------------------------------------------------------------------------------------------------------
At Year End
Stores Open:
Company-Operated 361 320 291 292 240
Franchised 193 155 136 101 61
Rental Agreements in Effect 281,000 254,000 227,400 219,800 179,600
Number of Employees 3,900 3,600 3,400 3,100 2,550
- ------------------------------------------------------------------------------------------------------
(1) Systemwide revenues include rental revenues of franchised Aaron's Sales
& Lease Ownership stores.
3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Year Ended December 31, 2000 versus Year Ended December 31, 1999
Total revenues for 2000 increased $65.6 million (15.0%) to $502.9 million
compared to $437.4 million in 1999 due primarily to a $41.7 million (13.1%)
increase in rentals and fees revenues, plus a $20.1 million (44.3%) increase in
non-retail sales. Of this increase in rentals and fees revenues, $37.7 million
was attributable to Aaron's Sales & Lease Ownership, the Company's rental
purchase division. Rentals and fees revenues from the Company's rent-to-rent
operations increased $4.0 million during the same period.
Revenues from retail sales increased $121,000 (.2%) to $62.4 million in 2000,
from $62.3 million for the same period last year. Non-retail sales, which
primarily represent merchandise sold to Aaron's Sales & Lease Ownership
franchisees, increased $20.1 million (44.3%) to $65.5 million compared to $45.4
million for the same period last year. The increased sales are due to the growth
of the franchise operations.
Other revenues for 2000 increased $3.6 million (31.4%) to $15.1 million
compared to $11.5 million in 1999. This increase was attributable to franchise
fee and royalty income increasing $3.3 million (36.3%) to $12.4 million compared
to $9.1 million last year, reflecting the net addition of 38 new franchised
stores in 2000 and improved operating revenues at mature franchised stores.
Cost of sales from retail sales decreased $1.1 million (2.4%) to $44.2
million compared to $45.3 million, and as a percentage of sales, decreased to
70.7% from 72.6% primarily due to product mix. Cost of sales from non-retail
sales increased $18.5 million (43.7%) to $61.0 million from $42.5 million, and
as a percentage of sales, decreased to 93.1% from 93.5%. The increased margins
on non-retail sales was primarily the result of slightly higher margins on
certain products sold to franchisees.
Operating expenses increased $25.7 million (12.7%) to $227.6 million from
$201.9 million. As a percentage of total revenues, operating expenses were 45.3%
in 2000 and 46.2% in 1999. Operating expenses decreased as a percentage of total
revenues between years primarily due to increased revenues in the Aaron's Sales
& Lease Ownership division.
Depreciation of rental merchandise increased $18.3 million (17.9%) to $120.7
million, from $102.3 million, and as a percentage of total rentals and fees
increased to 33.5% from 32.2% in 1999. The increase as a percentage of rentals
and fees is primarily due to a greater percentage of the Company's rentals and
fees coming from the Aaron's Sales & Lease Ownership division which depreciates
its rental merchandise at a faster rate than the rent-to-rent division.
Interest expense increased $1.5 million (37.0%) to $5.6 million compared to
$4.1 million. As a percentage of total revenues, interest expense was 1.1% in
2000 compared to .9% in 1999. The increase in interest expense as a percentage
of revenues was due to increased interest rates along with higher daily average
debt levels.
The Company manages its exposure to changes in short-term interest rates,
particularly to reduce the impact on its floating-rate revolving credit
facility, by entering into interest rate swap agreements. The counterparties to
these contracts are high credit quality commercial banks. Consequently, credit
risk, which is inherent in all swaps, has been minimized to a large extent.
Interest expense is adjusted for the differential to be paid or received as
interest rates change. The effect of such adjustments on interest expense has
not been significant. The level of floating-rate debt fixed by swap agreements
was $40.0 million during the year and the Company does not expect a significant
change in this amount in 2001. Accordingly, the Company does not believe it has
material exposure of potential near-term losses in future earnings, and/or cash
flows from reasonably possible near-term changes in market rates.
Income tax expense increased $945,000 (6.0%) to $16.6 million compared to
$15.7 million. The Company's effective tax rate was 37.9% in 2000 compared to
38.0% in 1999.
As a result, net earnings increased $1.7 million (6.5%) to $27.3 million for
2000 compared to $25.6 million for the same period in 1999. As a percentage of
total revenues, net earnings were 5.4% in 2000 and 5.9% in 1999.
The decrease in net earnings as a percentage of total revenues is the result
of startup losses associated with the increased rate at which the Company opened
new Aaron's Sales & Lease Ownership stores with 32 stores opened in 2000
compared to 17 in 1999.
Year Ended December 31, 1999 versus Year Ended December 31, 1998
Total revenues for 1999 increased $57.7 million (15.2%) to $437.4 million
compared to $379.7 million in 1998 due primarily to a $28.9 million (10.0%)
increase in rentals and fees revenues, plus a $26.4 million (139.1%) increase in
non-retail sales. Of this increase in rentals and fees revenues, $32.7 million
was attributable to the Aaron's Sales & Lease Ownership division. Rentals and
fees from the Company's rent-to-rent operations increased $2.0 million excluding
$5.8 million of rentals and fees from the Company's convention furnishings
division, which was sold in the fourth quarter of 1998.
Revenues from retail sales decreased $280,000 (.4%) to $62.3 million in 1999
from $62.6 million for the same period in 1998. The decrease was the result of
new sales in the rent-to-rent division decreasing and the discontinued sale of
prepaid cellular air time in the rental purchase division. Non-retail sales,
which primarily represent merchandise sold to Aaron's Sales & Lease Ownership
franchisees, increased $26.4 million (139.1%) to $45.4 million compared to $19.0
million for the same period in 1998. The increased sales are due to the growth
of the franchise operations coupled with the addition of a new distribution
center.
4
Other revenues for 1999 increased $2.7 million (30.5%) to $11.5 million
compared to $8.8 million in 1998. This increase was attributable to franchise
fee and royalty income increasing $1.8 million (25.3%) to $9.1 million compared
to $7.3 million in 1998, reflecting the net addition of 19 new franchised stores
in 1999 and increasing operating revenues at mature franchised stores.
Cost of sales from retail sales increased $868,000 (2.0%) to $45.3 million
compared to $44.4 million, and as a percentage of sales, increased slightly to
72.6% from 70.9% primarily due to product mix. Cost of sales from non-retail
sales increased $24.8 million (140.8%) to $42.5 million from $17.6 million, and
as a percentage of sales, increased to 93.5% from 92.9%. The reduced margins on
non-retail sales was primarily the result of lower margins on certain products
sold to franchisees.
Operating expenses increased $12.2 million (6.4%) to $201.9 million from
$189.7 million. As a percentage of total revenues, operating expenses were 46.2%
in 1999 and 50.0% in 1998. Operating expenses decreased as a percentage of total
revenues between years primarily due to increased revenues in the Aaron's Sales
& Lease Ownership division and the sale of the Company's convention furnishings
division which had higher operating expenses than traditional rent-to-rent and
rental purchase operations.
Depreciation of rental merchandise increased $13.2 million (14.8%) to $102.3
million, from $89.2 million, and as a percentage of total rentals and fees, was
32.2% compared to 30.8% in 1998. The increase as a percentage of rentals and
fees is primarily due to a greater percentage of the Company's rentals and fees
coming from the Aaron's Sales & Lease Ownership division which depreciates its
rental merchandise at a faster rate than the rent-to-rent division.
Interest expense increased $544,000 (15.3%) to $4.1 million compared to $3.6
million. As a percentage of total revenues, interest expense remained unchanged
at 0.9%.
Income tax expense increased $2.0 million (14.5%) to $15.7 million compared
to $13.7 million. The Company's effective tax rate was 38.0% in 1999 compared to
39.0% in 1998.
As a result, net earnings increased $4.1 million (19.2%) to $25.6 million for
1999 compared to $21.5 million for the same period in 1998. As a percentage of
total revenues, net earnings were 5.9% in 1999 and 5.7% in 1998.
Liquidity and Capital Resources
Cash flows from operations for the years ended December 31, 2000 and 1999
were $166.2 million and $140.3 million, respectively. Such cash flows include
profits on the sale of rental return merchandise. The Company's primary capital
requirements consist of acquiring rental merchandise for both rent-to-rent and
Company-operated Aaron's Sales & Lease Ownership stores. As the Company
continues to grow, the need for additional rental merchandise will continue to
be the Company's major capital requirement. These capital requirements
historically have been financed through bank credit, cash flow from operations,
trade credit, proceeds from the sale of rental return merchandise and stock
offerings.
The Company has financed its growth through a revolving credit agreement with
several banks, trade credit and internally generated funds. The revolving credit
agreement provides for unsecured borrowings up to $90.0 million which includes a
$6.0 million credit line to fund daily working capital requirements. At December
31, 2000, an aggregate of $90.0 million was outstanding under this facility,
bearing interest at a weighted average variable rate of 7.04%. The Company uses
interest rate swap agreements as part of its overall long-term financing
program. At December 31, 2000, the Company had swap agreements with notional
principal amounts of $40.0 million which effectively fixed the interest rates on
an equal amount of the Company's revolving credit agreement at 6.93%.
In 2000, the Company entered into a credit agreement with two banks providing
for unsecured borrowings up to $10,000,000. At December 31, 2000 and aggregate
of $10,000,000 bearing interest at libor plus 1.00% was outstanding under the
agreement. The debt matures in 2001. In addition, the Company issued $4,200,000
of industrial development corporation revenue bonds. The average weighted
borrowing rate on these bonds in 2000 was 4.55%. No principal payments are due
on the bonds until maturity in 2015.
On April 28, 1998, the Company issued through a public offering 2.1 million
shares of Common Stock. The net proceeds to the Company after deducting
underwriting discounts and offering expenses were $40.0 million. The proceeds
were used to reduce bank debt.
The Company believes that the expected cash flows from operations, proceeds
from the sale of rental return merchandise, bank borrowings and vendor credit
will be sufficient to fund the Company's capital and liquidity needs for at
least the next 24 months.
During 2000, 327,500 shares of the Company's stock were purchased at an
aggregate cost of $4.6 million and the Company was authorized to purchase an
additional 1,284,690 shares at December 31, 2000.
The Company has paid dividends for fourteen consecutive years. A $.02 per
share dividend on Common Stock and on Class A Common Stock was paid in January
2000 and July 2000, for a total fiscal year cash outlay of $792,000. The Company
currently expects to continue its policy of paying dividends.
5
CONSOLIDATED
BALANCE SHEETS
DECEMBER 31, DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE DATA) 2000 1999
- ---------------------------------------------------------------------------------------
Assets
Cash $ 95 $ 99
Accounts Receivable 23,637 21,030
Rental Merchandise 381,930 316,294
Less: Accumulated Depreciation (114,217) (96,463)
-----------------------------
267,713 219,831
Property, Plant & Equipment, Net 63,174 55,918
Prepaid Expenses & Other Assets 25,760 21,530
-----------------------------
Total Assets $ 380,379 $ 318,408
- ---------------------------------------------------------------------------------------
Liabilities & Shareholders' Equity
Accounts Payable & Accrued Expenses $ 34,693 $ 36,941
Dividends Payable 399 399
Deferred Income Taxes Payable 20,986 14,410
Customer Deposits & Advance Payments 10,994 10,180
Bank Debt 100,000 72,225
Other Debt 4,769 535
-----------------------------
Total Liabilities 171,841 134,690
Commitments & Contingencies
Shareholders' Equity
Common Stock, Par Value $.50 Per Share;
Authorized: 25,000,000 Shares;
Shares Issued: 18,270,987 9,135 9,135
Class A Common Stock, Par Value $.50 Per Share;
Authorized: 25,000,000 Shares;
Shares Issued: 5,361,761 2,681 2,681
Additional Paid-In Capital 53,662 54,181
Retained Earnings 185,782 159,313
-----------------------------
251,260 225,310
Less: Treasury Shares at Cost,
Common Stock, 2,230,446 Shares at December 31, 2000
& 2,177,956 Shares at December 31, 1999 (28,486) (27,356)
Class A Common Stock, 1,532,255 Shares (14,236) (14,236)
-----------------------------
Total Shareholders' Equity 208,538 183,718
-----------------------------
Total Liabilities & Shareholders' Equity $ 380,379 $ 318,408
- ---------------------------------------------------------------------------------------
The accompanying notes are an integral part of the Consolidated Financial
Statements.
6
CONSOLIDATED STATEMENTS
OF EARNINGS
YEAR ENDED YEAR ENDED YEAR ENDED
(IN THOUSANDS, DECEMBER 31, DECEMBER 31, DECEMBER 31,
EXCEPT PER SHARE) 2000 1999 1998
- ------------------------------------------------------------------------------------
Revenues
Rentals & Fees $ 359,880 $ 318,154 $ 289,272
Retail Sales 62,417 62,296 62,576
Non-Retail Sales 65,498 45,394 18,985
Other 15,125 11,515 8,826
--------------------------------------------
502,920 437,359 379,659
- ------------------------------------------------------------------------------------
Costs & Expenses
Retail Cost of Sales 44,156 45,254 44,386
Non-Retail Cost of Sales 60,996 42,451 17,631
Operating Expenses 227,587 201,923 189,719
Depreciation of Rental Merchandise 120,650 102,324 89,171
Interest 5,625 4,105 3,561
--------------------------------------------
459,014 396,057 344,468
--------------------------------------------
Earnings Before Income Taxes 43,906 41,302 35,191
Income Taxes 16,645 15,700 13,707
--------------------------------------------
Net Earnings $ 27,261 $ 25,602 $ 21,484
--------------------------------------------
Earnings Per Share $ 1.38 $ 1.28 $ 1.06
Earnings Per Share Assuming Dilution 1.37 1.26 1.04
- ------------------------------------------------------------------------------------
The accompanying notes are an integral part of the Consolidated Financial
Statements.
CONSOLIDATED STATEMENTS
OF SHAREHOLDERS' EQUITY
ADDITIONAL
TREASURY STOCK COMMON STOCK PAID-IN RETAINED
(IN THOUSANDS) SHARES AMOUNT COMMON CLASS CAPITAL EARNINGS
- -----------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 (2,583) $ (23,659) $ 8,085 $ 2,681 $ 15,484 $ 113,864
Stock Offering 1,050 38,908
Reacquired Shares (736) (10,560)
Dividends (837)
Reissued Shares 235 2,479 (108)
Net Earnings 21,484
- -----------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 (3,084) (31,740) 9,135 2,681 54,284 134,511
Reacquired Shares (860) (12,673)
Dividends (800)
Reissued Shares 234 2,821 (103)
Net Earnings 25,602
- -----------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 (3,710) (41,592) 9,135 2,681 54,181 159,313
Reacquired Shares (328) (4,625)
Dividends (792)
Reissued Shares 275 3,495 (519)
Net Earnings 27,261
- -----------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2000 (3,763) $ (42,722) $ 9,135 $ 2,681 $ 53,662 $ 185,782
- -----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the Consolidated Financial
Statements.
7
CONSOLIDATED STATEMENTS
OF CASH FLOWS
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
(IN THOUSANDS) 2000 1999 1998
==========================================================================================
Operating Activities
Net Earnings $ 27,261 $ 25,602 $ 21,484
Depreciation & Amortization 133,109 112,746 98,090
Deferred Income Taxes 6,576 6,599 1,124
Change in Accounts Payable &
Accrued Expenses (2,248) 3,480 3,109
Change in Accounts Receivable (2,607) (4,804) (4,432)
Other Changes, Net 4,074 (3,330) 1,253
----------------------------------------------
Cash Provided by Operating Activities 166,165 140,293 120,628
==========================================================================================
Investing Activities
Additions to Property, Plant & Equipment (23,761) (21,030) (22,209)
Book Value of Property Retired or Sold 7,326 5,833 3,521
Additions to Rental Merchandise (279,580) (218,933) (174,496)
Book Value of Rental Merchandise Sold 115,601 95,840 69,018
Contracts & Other Assets Acquired (14,273) (11,393) (1,841)
----------------------------------------------
Cash Used by Investing Activities (194,687) (149,683) (126,007)
==========================================================================================
Financing Activities
Proceeds from Revolving Credit Agreement 198,403 180,213 157,622
Repayments on Revolving Credit Agreement (170,628) (158,399) (183,115)
Proceeds from Common Stock Offering 39,958
Increase (Decrease) in Other Debt 4,234 (781) 734
Dividends Paid (792) (816) (801)
Acquisition of Treasury Stock (4,625) (12,673) (10,560)
Issuance of Stock under Stock Option Plans 1,926 1,850 1,540
----------------------------------------------
Cash Provided by Financing Activities 28,518 9,394 5,378
(Decrease) Increase in Cash (4) 4 (1)
Cash at Beginning of Year 99 95 96
----------------------------------------------
Cash at End of Year $ 95 $ 99 $ 95
----------------------------------------------
Cash Paid During the Year:
Interest $ 5,674 $ 4,025 $ 4,082
Income Taxes 5,762 15,289 10,004
==========================================================================================
The accompanying notes are an integral part of the Consolidated Financial
Statements.
8
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
As of December 31, 2000 and 1999, and for the Years Ended December 31, 2000,
1999 and 1998.
Note A: Summary of Significant Accounting Policies
BASIS OF PRESENTATION -- The consolidated financial statements include the
accounts of Aaron Rents, Inc. and its wholly-owned subsidiaries (the Company).
All significant intercompany accounts and transactions have been eliminated. The
preparation of the Company's consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in these financial
statements and accompanying notes. Actual results could differ from those
estimates.
LINE OF BUSINESS -- The Company is engaged in the business of renting and
selling residential and office furniture, consumer electronics, appliances and
other merchandise throughout the U.S. and Puerto Rico. The Company manufactures
furniture principally for its rental and sales operations.
RENTAL MERCHANDISE consists primarily of residential and office furniture,
consumer electronics, appliances and other merchandise and is recorded at cost.
The sales & lease ownership division depreciates merchandise over the
agreement period, generally 12 months, when on rent, and 36 months, when not on
rent, to a 0% salvage value. This method is similar to a method referred to as
the income forecasting method in the rental purchase industry. The rent-to-rent
division depreciates merchandise over its estimated useful life which ranges
from 6 months to 60 months, net of its salvage value which ranges from 0% to
60%. All rental merchandise is available for rental and sale.
PROPERTY, PLANT AND EQUIPMENT are recorded at cost. Depreciation and
amortization are computed on a straight-line basis over the estimated useful
lives of the respective assets, which are from 8 to 27 years for buildings and
improvements and from 1 to 5 years for other depreciable property and equipment.
Gains and losses related to dispositions and retirements are expensed as
incurred. Maintenance and repairs are also expensed as incurred; renewals and
betterments are capitalized.
DEFERRED INCOME TAXES are provided for temporary differences between the
amounts of assets and liabilities for financial and tax reporting purposes. Such
temporary differences arise principally from the use of accelerated depreciation
methods on rental merchandise for tax purposes.
COST OF SALES includes the net book value of merchandise sold, primarily
using specific identification in the sales & lease ownership division and
first-in, first-out in the rent-to-rent division. It is not practicable to
allocate operating expenses between selling and rental operations.
SHIPPING AND HANDLING COSTS -- Shipping and handling costs are classified as
operating expenses in the accompanying consolidated statements of operations and
totaled approximately $17,397,000 in 2000, $15,129,000 in 1999 and $13,458,000
in 1998.
ADVERTISING -- The Company expenses advertising costs as incurred. Such costs
aggregated $11,937,000 in 2000, $12,496,000 in 1999, and $11,523,000 in 1998.
STOCK BASED COMPENSATION -- The Company has elected to follow Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees and
related Interpretations in accounting for its employee stock options and adopted
the disclosure-only provisions of Statement of Financial Accounting Standards
No. 123, Accounting for Stock Based Compensation (FAS 123). The Company grants
stock options for a fixed number of shares to employees with an exercise price
equal to the fair value of the shares at the date of grant and, accordingly,
recognizes no compensation expense for the stock option grants. Income tax
benefits resulting from stock option exercises credited to additional paid-in
capital totaled approximately $540,000, $867,000 and $830,000, in 2000, 1999 and
1998, respectively.
EXCESS COSTS OVER NET ASSETS ACQUIRED -- Goodwill is amortized on a
straight-line basis over a period of twenty years. Long-lived assets, including
goodwill, are periodically reviewed for impairment based on an assessment of
future operations. The Company records impairment losses on long-lived assets
used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. Measurement of an impairment loss is based on the
estimated fair value of the asset.
FAIR VALUE OF FINANCIAL INSTRUMENTS -- The carrying amounts reflected in the
consolidated balance sheets for cash, accounts receivable, bank and other debt
approximate their respective fair values.
REVENUE RECOGNITION -- Rental revenues are recognized as revenue in the month
they are due. Rental payments received prior to the month due are recorded as
deferred rental revenue. Revenues from the sale of residential and office
furniture and other merchandise are recognized at the time of shipment.
9
NEW ACCOUNTING PRONOUNCEMENTS -- In June 1998, the FASB issued Statement No.
133, Accounting for Derivative Instruments and Hedging Activities (Statement
133). The statement requires the Company to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges must be adjusted to
fair value through income. If the derivative is a hedge, depending on the nature
of the hedge, changes in the fair value of derivatives are either offset against
the change in fair value of the hedged assets, liabilities, or firm commitments
through earnings or recognized in comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings.
The Company adopted Statement 133 on January 1, 2001. The cumulative effect
of this adoption had no significant effect on the Company's financial position
or results of operations.
Note B: Earnings Per Share
Earnings per share is computed by dividing net income by the weighted average
number of common shares outstanding during the year which were 19,825,000 shares
in 2000, 20,062,000 shares in 1999, and 20,312,000 in 1998. The computation of
earnings per share assuming dilution includes the dilutive effect of stock
options and awards. Such stock options and awards had the effect of increasing
the weighted average shares outstanding assuming dilution by 142,000 in 2000,
273,000 in 1999 and 421,000 in 1998, respectively.
Note C: Property, Plant & Equipment
DECEMBER 31, DECEMBER 31,
(IN THOUSANDS) 2000 1999
- --------------------------------------------------------------------------------
Land $ 8,977 $ 8,837
Buildings & Improvements 28,681 25,612
Leasehold Improvements & Signs 34,128 31,294
Fixtures & Equipment 25,786 24,622
Construction in Progress 2,051 1,043
---------------------------
99,623 91,408
Less: Accumulated Depreciation & Amortization (36,449) (35,490)
---------------------------
$ 63,174 $ 55,918
- --------------------------------------------------------------------------------
Note D: Debt
BANK DEBT -- The Company has a revolving credit agreement with four banks
providing for unsecured borrowings up to $90,000,000, which includes a
$6,000,000 credit line to fund daily working capital requirements. Amounts
borrowed bear interest at the lower of the lender's prime rate, LIBOR plus .50%,
or the rate at which certificates of deposit are offered in the secondary market
plus .625%. The pricing under the working capital line is based upon overnight
bank borrowing rates. At December 31, 2000 and 1999, an aggregate of $90,000,000
(bearing interest at 7.04%) and $72,225,000 (bearing interest at 6.88%),
respectively, was outstanding under this agreement. The Company pays a .22%
commitment fee on unused balances. The weighted average interest rate on
borrowings under the revolving credit agreement (before giving effect to
interest rate swaps) was 7.07% in 2000, 5.94% in 1999 and 6.41% in 1998. The
effects of interest rate swaps on the weighted average interest rate were not
material.
The Company has entered into interest rate swap agreements that effectively
fix the interest rate on $20,000,000 of borrowings under the revolving credit
agreement at an average rate of 7.0% until November 2003 and an additional
$20,000,000 at an average rate of 6.85% until June 2005. These swap agreements
involve the receipt of amounts when the floating rates exceed the fixed rates
and the payment of amounts when the fixed rates exceed the floating rates in
such agreements over the life of the agreements. The differential to be paid or
received is accrued as interest rates change and is recognized as an adjustment
to the floating rate interest expense related to the debt. The related amount
payable to or receivable from counterparties is included in accrued liabilities
or other assets. Unrealized losses under the swap agreements aggregated $804,000
at December 31, 2000.
The revolving credit agreement may be terminated on ninety days' notice by
the Company or six months' notice by the lenders. The debt is payable in 60
monthly installments following the termination date if terminated by the
lenders.
The agreement requires that the Company not permit its consolidated net worth
as of the last day of any fiscal quarter to be less than the sum of (a)
$105,000,000 plus (b) 50% of the Company's consolidated
10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
net income (but not loss) for the period beginning July 1, 1997 and ending on
the last day of such fiscal quarter. It also places other restrictions on
additional borrowings and requires the maintenance of certain financial ratios.
At December 31, 2000, $61,640,000 of retained earnings were available for
dividend payments and stock repurchases under the debt restrictions.
In September 2000, the Company entered into a credit agreement with two
banks providing for unsecured borrowings up to $10,000,000. At December 31, 2000
an aggregate of $10,000,000 bearing interest at LIBOR plus 1.00% was outstanding
under the agreement. The debt matures in 2001.
OTHER DEBT -- Other debt at December 31, 2000 of $4,769,000 is primarily
comprised of $4,200,000 of industrial development corporation revenue bonds. The
average weighted borrowing rate on these bonds in 2000 was 4.55%. No principal
payments are due on the bonds until maturity in 2015.
Note E: Income Taxes
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
(IN THOUSANDS) 2000 1999 1998
- ---------------------------------------------------------------------------------
Current Income Tax Expense:
Federal $ 9,461 $ 8,020 $ 11,422
State 608 1,081 1,161
--------------------------------------------
10,069 9,101 12,583
Deferred Income Tax Expense:
Federal 5,520 5,989 949
State 1,056 610 175
--------------------------------------------
6,576 6,599 1,124
--------------------------------------------
$ 16,645 $ 15,700 $ 13,707
- ---------------------------------------------------------------------------------
Significant components of the Company's deferred income tax liabilities and
assets are as follows:
DECEMBER 31, DECEMBER 31,
(IN THOUSANDS) 2000 1999
- -----------------------------------------------------------------------------
Deferred Tax Liabilities:
Rental Merchandise and
Property, Plant & Equipment $ 25,770 $ 19,345
Other, Net 1,531 577
---------------------------
Total Deferred Tax Liabilities 27,301 19,922
Deferred Tax Assets:
Accrued Liabilities 1,324 961
Advance Payments 3,179 2,858
Other, Net 1,812 1,693
---------------------------
Total Deferred Tax Assets 6,315 5,512
---------------------------
Net Deferred Tax Liabilities $ 20,986 $ 14,410
- -----------------------------------------------------------------------------
The Company's effective tax rate differs from the federal income tax
statutory rate as follows:
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2000 1999 1998
- -----------------------------------------------------------------------------------
Statutory Rate 35.0% 35.0% 35.0%
Increases in Taxes
Resulting From:
State Income Taxes,
Net of Federal Income
Tax Benefit 2.5 2.7 2.4
Other, Net 0.4 0.3 1.6
----------------------------------------------
Effective Tax Rate 37.9% 38.0% 39.0%
- -----------------------------------------------------------------------------------
11
Note F: Commitments
The Company leases warehouse and retail store space for substantially all of its
operations under operating leases expiring at various times through 2013. Most
of the leases contain renewal options for additional periods ranging from 1 to
15 years or provide for options to purchase the related property at
predetermined purchase prices which do not represent bargain purchase options.
The Company also leases transportation equipment under operating leases expiring
during the next 3 years. Management expects that most leases will be renewed or
replaced by other leases in the normal course of business.
Future minimum rental payments, including guaranteed residual values,
required under operating leases that have initial or remaining non-cancelable
terms in excess of one year as of December 31, 2000, are as follows: $28,238,000
in 2001; $19,892,000 in 2002; $14,388,000 in 2003; $10,558,000 in 2004;
$9,252,000 in 2005; and $6,404,000 thereafter.
Rental expense was $30,659,000 in 2000; $28,851,000 in 1999; and
$25,563,000 in 1998.
The Company leases one building from an officer of the Company under a
lease expiring in 2008 for annual rentals aggregating $212,700.
The Company maintains a 401(k) savings plan for all full-time employees
with at least one year of service with the Company and who meet certain
eligibility requirements. The plan allows employees to contribute up to 10% of
their annual compensation with 50% matching by the Company on the first 4% of
compensation. The Company's expense related to the plan was $427,000 in 2000;
$447,000 in 1999; and $415,000 in 1998.
Note G: Shareholders' Equity
In February 1999, the Company's Board of Directors authorized the repurchase of
up to 2,000,000 shares of the Company's Common Stock and/or Class A Common
Stock. During 2000, 327,500 shares of the Company's common shares were purchased
at an aggregate cost of $4,625,000 and the Company was authorized to purchase an
additional 1,284,690 at December 31, 2000. At December 31, 2000, the Company
held a total of 3,762,701 common shares in its treasury.
On April 28, 1998, the Company issued, through a public offering, 2,100,000
shares of Common Stock. The net proceeds to the Company after deducting
underwriting discounts and offering expenses were $39,958,000. The net proceeds
were used to reduce indebtedness and for general business purposes.
The Company has 1,000,000 shares of preferred stock authorized. The shares
are issuable in series with terms for each series fixed by the Board and such
issuance is subject to approval by the Board of Directors. No preferred shares
have been issued.
Note H: Stock Options
The Company has stock option plans under which options to purchase shares of the
Company's Common Stock are granted to certain key employees. Under the plans,
options granted become exercisable after a period of two or three years and
unexercised options lapse five or ten years after the date of the grant. Options
are subject to forfeiture upon termination of service. Under the plans,
1,425,000 of the Company shares are reserved for issuance at December 31, 2000.
The weighted average fair value of options granted was $8.11 in 2000, $9.55 in
1999 and $9.26 in 1998.
Pro forma information regarding net earnings and earnings per share is
required by FAS 123, and has been determined as if the Company had accounted for
its employee stock options granted in 2000, 1999 and 1998 under the fair value
method. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted average
assumptions for 2000, 1999 and 1998, respectively: risk-free interest rates of
6.47%, 6.36% and 5.36%, a dividend yield of .28%, .23% and .26%; a volatility
factor of the expected market price of the Company's Common Stock of .45, .42
and .43; and a weighted average expected life of the option of 8 years.
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.
12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:
YEARS ENDED DECEMBER 31,
(IN THOUSANDS EXCEPT PER SHARE) 2000 1999 1998
- -----------------------------------------------------------------------------------------
Pro Forma Net Earnings $25,910 $24,424 $20,076
Pro Forma Earnings Per Share 1.31 1.22 .99
Pro Forma Earnings Per Share
Assuming Dilution 1.30 1.20 .97
- -----------------------------------------------------------------------------------------
The table below summarizes option activity for the periods indicated in the
Company's stock option plans.
WEIGHTED
AVERAGE
EXERCISE
(IN THOUSANDS EXCEPT PER SHARE) OPTIONS PRICE
- -----------------------------------------------------------------------------------------
Outstanding at December 31, 1997 1,585 $10.07
Granted 133 16.73
Exercised (235) 6.53
Forfeited (101) 15.47
- ----------------------------------------------------------------------------------------
Outstanding at December 31, 1998 1,382 10.92
Granted 230 16.74
Exercised (233) 7.91
Forfeited (77) 16.33
- ----------------------------------------------------------------------------------------
Outstanding at December 31, 1999 1,302 12.17
Granted 405 13.73
Exercised (235) 8.22
Forfeited (95) 16.18
- ----------------------------------------------------------------------------------------
Outstanding at December 31, 2000 1,377 13.02
- ----------------------------------------------------------------------------------------
Exercisable at December 31, 2000 726 $11.38
- ----------------------------------------------------------------------------------------
The following table summarizes information about stock options outstanding
at December 31, 2000.
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- ------------------------------------------------------------------ ----------------------------------------------
WEIGHTED AVERAGE WEIGHTED WEIGHTED
NUMBER REMAINING AVERAGE NUMBER AVERAGE
OUTSTANDING CONTRACTUAL EXERCISE EXERCISABLE EXERCISE
RANGE OF EXERCISE PRICES DECEMBER 31, 2000 LIFE PRICE DECEMBER 31, 2000 PRICE
- ------------------------------------------------------------------ ----------------------------------------------
$ 9.87 - $10.00 544,500 5.27 years $ 9.88 544,500 $9.88
$10.01 - $15.00 449,500 9.18 years 13.49
$15.01 - $20.25 383,250 8.16 years 16.94 182,000 15.94
- ------------------------------------------------------------------ ----------------------------------------------
$ 9.87 - $20.25 1,377,250 7.19 years $13.02 726,500 $11.38
- ------------------------------------------------------------------ ----------------------------------------------
13
Note I: Franchising of Aaron's Sales & Lease Ownership Stores
The Company franchises Aaron's Sales & Lease Ownership stores. As of December
31, 2000 and December 31, 1999, 339 and 277 franchises had been awarded,
respectively. Franchisees pay a non-refundable initial franchise fee of $35,000
and an ongoing royalty of 5% of cash receipts. Franchise fees and area
development franchise fees are generated from the sale of rights to develop, own
and operate Aaron's Sales & Lease Ownership stores. These fees are recognized
when substantially all of the Company's obligations per location are satisfied
(generally at the date of the store opening). Franchise fees and area
development fees received prior to the substantial completion of the Company's
obligations are deferred. The Company includes this income in Other Revenues in
the Consolidated Statement of Earnings.
The Company has guaranteed certain debt obligations of some of the
franchisees amounting to $39,127,000 at December 31, 2000. The Company receives
a guarantee and servicing fee based on such franchisees' outstanding debt
obligations which it recognizes as income as earned. The Company has recourse
rights to the assets securing the debt obligations. As a result, the Company
does not expect to incur any significant losses under these guarantees.
Note J: Acquisitions and Dispositions
During 1998, the Company acquired five rental purchase stores from a franchisee
and acquired a lamp designer and manufacturer, Lamps Forever, Inc. The aggregate
purchase price of these 1998 acquisitions was not significant. In 1999, the
Company acquired 18 rental purchase stores with an aggregate purchase price of
$10,252,000. The excess cost over the fair market value of tangible assets
acquired was approximately $5,985,000. Also in 1999, the Company acquired two
rent-to-rent stores. The aggregate purchase price of these 1999 acquisitions was
not significant. During 2000, the Company acquired 20 rental purchase stores
including nine stores purchased from franchisees and 10 stores located in Puerto
Rico. The aggregate purchase price of these 2000 acquisitions was $14,273,000
and the excess cost over the fair market value of tangible assets acquired was
approximately $7,150,000.
These acquisitions were accounted for under the purchase method and,
accordingly, the results of operations of the acquired businesses are included
in the Company's results of operations from their dates of acquisition. The
effect of these acquisitions on the 2000, 1999 and 1998 consolidated financial
statements was not significant.
In October 1998, the Company sold substantially all of the assets of its
convention furnishings division. In 2000, the Company sold four of its
rent-to-rent stores and an additional four in 1999. The effect of these sales on
the consolidated financial statements was not significant.
Note K: Segments
DESCRIPTION OF PRODUCTS AND SERVICES OF REPORTABLE SEGMENTS
Aaron Rents, Inc. has four reportable segments: sales & lease ownership,
rent-to-rent, franchise and manufacturing. The sales & lease ownership division
offers electronics, residential furniture and appliances to consumers primarily
on a monthly payment basis with no credit requirements. The rent-to-rent
division rents and sells residential and office furniture to businesses and
consumers who meet certain minimum credit requirements. The Company's franchise
operation sells and supports franchises of its sales & lease ownership concept.
The manufacturing division manufactures upholstery, office furniture, lamps and
accessories, and bedding predominantly for use by the other divisions.
The principal source of revenue in the "Other" category was the Company's
convention furnishings division which was sold during 1998.
MEASUREMENT OF SEGMENT PROFIT OR LOSS AND SEGMENT ASSETS
The Company evaluates performance and allocates resources based on revenue
growth and pre-tax profit or loss from operations. The accounting policies of
the reportable segments are the same as those described in the summary of
significant accounting policies except that the sales & lease ownership division
revenues and certain other items are presented on a cash basis. Intersegment
sales are completed at internally negotiated amounts ensuring competitiveness
with outside vendors. Since the intersegment profit and loss affect inventory
valuation, depreciation and cost of goods sold are adjusted when intersegment
profit is eliminated in consolidation.
FACTORS USED BY MANAGEMENT TO IDENTIFY THE REPORTABLE SEGMENTS
Aaron Rents, Inc.'s reportable segments are business units that service
different customer profiles using distinct payment arrangements. The reportable
segments are each managed separately because of differences in both customer
base and infrastructure.
14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Information on segments and a reconciliation to earnings before income taxes are
as follows:
YEARS ENDED DECEMBER 31,
(IN THOUSANDS) 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------
Revenues From External Customers:
Sales & Lease Ownership $ 312,921 $ 252,284 $ 193,283
Rent-to-Rent 174,918 173,579 173,657
Franchise 12,621 9,079 7,209
Other 4,057 1,551 5,470
Manufacturing 54,340 54,550 52,628
Elimination of Intersegment Revenues (54,807) (53,941) (52,067)
Cash to Accrual Adjustments (1,130) 257 (521)
-----------------------------------------------
Total Revenues From External Customers $ 502,920 $ 437,359 $ 379,659
-----------------------------------------------
Earnings Before Income Taxes:
Sales & Lease Ownership $ 19,527 $ 20,630 $ 11,668
Rent-to-Rent 16,346 14,369 19,565
Franchise 7,484 5,042 3,607
Other (943) (1,072) (744)
Manufacturing 728 717 1,068
-----------------------------------------------
Earnings Before Income Taxes For Reportable Segments 43,142 39,686 35,164
Elimination of Intersegment Profit (441) (357) (901)
Cash to Accrual Adjustments (804) 855 (344)
Other Allocations & Adjustments 2,009 1,118 1,272
-----------------------------------------------
Total Earnings Before Income Taxes $ 43,906 $ 41,302 $ 35,191
-----------------------------------------------
Assets:
Sales & Lease Ownership $ 205,043 $ 139,177 $ 103,930
Rent-to-Rent 128,163 138,349 138,734
Franchise 12,961 10,755 5,415
Other 17,485 16,097 9,286
Manufacturing 16,727 14,030 14,809
-----------------------------------------------
Total Assets $ 380,379 $ 318,408 $ 272,174
-----------------------------------------------
Depreciation & Amortization:
Sales & Lease Ownership $ 97,139 $ 78,385 $ 67,401
Rent-to-Rent 34,557 32,946 29,327
Franchise 412 347 276
Other 354 492 562
Manufacturing 647 576 524
-----------------------------------------------
Total Depreciation & Amortization $ 133,109 $ 112,746 $ 98,090
-----------------------------------------------
Interest Expense:
Sales & Lease Ownership $ 2,750 $ 1,702 $ 2,826
Rent-to-Rent 2,496 2,317 1,698
Franchise 144 117 48
Other 235 (31) (1,011)
Manufacturing 406
Elimination of Intersegment Allocations (406)
-----------------------------------------------
Total Interest Expense $ 5,625 $ 4,105 $ 3,561
- --------------------------------------------------------------------------------------------------------------
15
Note L: Quarterly Financial Information (Unaudited)
FIRST SECOND THIRD FOURTH
(IN THOUSANDS EXCEPT PER SHARE) QUARTER QUARTER QUARTER QUARTER
- ----------------------------------------------------------------------------------------
Year Ended December 31, 2000
Revenues $125,372 $121,910 $124,850 $130,788
Gross Profit 65,660 64,357 64,818 67,158
Earnings Before Taxes 11,741 11,177 10,799 10,189
Net Earnings 7,278 6,929 6,706 6,348
Earnings Per Share $ .37 $ .35 $ .34 $ .32
Earnings Per Share Assuming Dilution .36 .35 .34 .32
- ----------------------------------------------------------------------------------------
Year Ended December 31, 1999
Revenues $104,303 $107,364 $109,379 $116,313
Gross Profit 57,706 59,246 59,340 59,523
Earnings Before Taxes 10,779 10,615 9,860 10,048
Net Earnings 6,679 6,575 6,108 6,240
Earnings Per Share $ .33 $ .33 $ .30 $ .32
Earnings Per Share Assuming Dilution .33 .32 .30 .31
- ----------------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of Aaron Rents, Inc.:
We have audited the accompanying consolidated balance sheets of Aaron Rents,
Inc. and Subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of earnings, shareholders' equity and cash flows for the
years ended December 31, 2000, 1999 and 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Aaron Rents,
Inc. and Subsidiaries as of December 31, 2000 and 1999, and the consolidated
results of their operations and their cash flows for the years ended December
31, 2000, 1999 and 1998, in conformity with accounting principles generally
accepted in the United States.
/s/ Ernst & Young LLP
Atlanta, Georgia
February 19, 2001
16
COMMON STOCK MARKET
PRICES & DIVIDENDS
The following table shows, for the periods indicated, the range of high and low
prices per share for the Common Stock and Class A Common Stock and the cash
dividends declared per share.
The Company's Common Stock and Class A Common Stock are listed on the New
York Stock Exchange under the symbols "RNT" and "RNT.A," respectively.
The approximate number of shareholders of the Company's Common Stock and
Class A Common Stock at March 15, 2001, was 4,000. The closing price for the
Common Stock and Class A Common Stock on March 15, 2001, was $15.65 and $15.35,
respectively.
CASH
DIVIDENDS
CLASS A COMMON STOCK HIGH LOW PER SHARE
- -----------------------------------------------------------------
December 31, 2000
First Quarter $17.89 $13.46
Second Quarter 14.96 11.45 .02
Third Quarter 15.48 12.61
Fourth Quarter 18.00 11.74 .02
- -----------------------------------------------------------------
December 31, 1999
First Quarter $17.00 $12.88
Second Quarter 22.25 15.06 .02
Third Quarter 22.00 16.50
Fourth Quarter 20.00 15.25 .02
- -----------------------------------------------------------------
CASH
DIVIDENDS
CLASS A COMMON STOCK HIGH LOW PER SHARE
- -----------------------------------------------------------------
December 31, 2000
First Quarter $18.58 $16.46
Second Quarter 17.08 14.59 .02
Third Quarter 16.10 15.35
Fourth Quarter 15.92 13.44 .02
- -----------------------------------------------------------------
December 31, 1999
First Quarter $15.50 $11.63
Second Quarter 18.00 11.88 .02
Third Quarter 18.56 14.75
Fourth Quarter 20.00 14.75 .02
- -----------------------------------------------------------------
STORE LOCATION MAP
[MAP]
At December 31, 2000
- - Company-Operated Sales & Lease Ownership 263
- - Franchised Sales & Lease Ownership 193
- - Rent-to-Rent 98
------
Total Stores 554
- --------------------------------------------------
- - Manufacturing & Distribution Centers 17