EXHIBIT 99.1
CONTACT: GILBERT L. DANIELSON
Executive Vice President
Chief Financial Officer
AARON RENTS, INC.
REPORTS RECORD FIRST QUARTER
REVENUES AND EARNINGS
ATLANTA, April 28, 2003 - 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 2003.
The Company's results were driven by its fast-growing Aaron's Sales &
Lease Ownership division, which increased revenues 31% during the quarter
including a 14.1% increase in same store revenues.
"Our Aaron's Sales & Lease Ownership division continues to perform very
well," said R. Charles Loudermilk, Sr., Chairman and Chief Executive Officer of
Aaron Rents, Inc. "The first quarter results were better than anticipated and we
look forward to continuing growth the remainder of the year."
For the three months ended March 31, 2003 revenues advanced 22% to a
record $191.3 million compared to $156.7 million for the first quarter of 2002.
Net earnings for the first quarter increased 48% to a record $8.7 million, or
$.40 per share on a diluted basis, compared to $5.9 million, or $.29 per diluted
share, for the same period last year.
Systemwide revenues for the Company, which includes gross revenues of
franchised stores, advanced 21% to $259.5 million for the quarter versus $215.3
million a year ago. Systemwide revenues is calculated by adding Company revenues
determined in accordance with GAAP of $191.3 million to the revenues of the
Company's franchisees of $71.8 million, and subtracting the Company's royalty
revenues of $3.6 million. Franchisee revenues however are not revenues of Aaron
Rents, Inc.
Same store revenues (revenues earned in stores operated for the entirety of both
periods) in the Aaron's Sales & Lease Ownership division increased 14.1% during
the first quarter of 2003 compared to first quarter of 2002. Same store revenues
increased 6.6% for stores open over two years in both the first quarter of 2003
and 2002.
The Aaron's Sales & Lease Ownership division increased its store count during
the first quarter by 21 stores, 13 Company-operated stores and eight franchised
stores, bringing the total of stores open at March 31 to 665. At the end of
March the Company also had 70 rent-to-rent stores open.
During the first quarter the Company's Sight & Sound stores negatively affected
earnings by approximately $.06 per diluted share. Subsequent to the end of the
quarter, the Company converted six of the 25 Sight & Sound stores to traditional
Aaron's Sales & Lease Ownership stores. In addition, seven other Sight & Sound
stores will be closed with the store's lease volume transferred to nearby
existing Aaron's stores. With the reduction in stores open, the Company expects
the negative financial impact from the Sight & Sound stores to diminish in
future quarters.
"Our outlook for 2003 is recording revenues during the year in the range from
$730 million to $750 million with systemwide revenues exceeding $1 billion," Mr.
Loudermilk continued. "We expect diluted earnings per share in the second
quarter to be in the range of $.38 to $.40 per share, and continue to expect to
earn between $1.55 and $1.65 per diluted share for the full year of 2003."
Systemwide revenues is calculated by adding Company revenues determined in
accordance with GAAP of $730 million to over $750 million to the revenues of the
Company's franchisees of $263 million to over $284 million, and subtracting the
Company's royalty revenues of $13.2 million to over $14.2 million. Franchisee
revenues however are not revenues of Aaron Rents, Inc.
Aaron Rents will hold a conference call to discuss its quarterly financial
results on Tuesday, April 29, 2003, at 10:00 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 740
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 WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER FROM
THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. FOR A DISCUSSION OF SUCH
RISKS AND UNCERTAINTIES, SEE "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)
THREE MONTHS ENDED
MARCH 31,
2003 2002
---- ----
Revenues:
Rentals and Fees $131,037 $112,502
Retail Sales 23,038 17,015
Non-Retail Sales 31,557 22,463
Other 5,628 4,683
Total 191,260 156,663
Costs and Expenses:
Retail Cost of Sales 16,855 12,378
Non-Retail Cost of Sales 29,402 20,828
Operating Expenses 83,119 73,134
Depreciation of Rental
Merchandise 46,389 39,700
Interest 1,588 1,166
Total 177,353 147,206
Earnings Before Taxes 13,907 9,457
Income Taxes 5,159 3,536
Net Earnings $8,748 $5,921
Earnings Per Share $.40 $.30
Earnings Per Share
Assuming Dilution $.40 $.29
Weighted Average
Shares Outstanding 21,685 19,912
Weighted Average
Shares Outstanding
Assuming Dilution 21,942 20,192
SELECTED BALANCE SHEET DATA
(IN THOUSANDS)
(Unaudited)
March 31, December 31,
2003 2002
---- ----
Cash $ 4,777 $ 96
Accounts Receivable 26,811 26,973
Rental Merchandise, Net 318,870 317,287
Property, Plant and
Equipment, Net 88,214 87,094
Total Assets 491,753 483,648
Bank Debt 7,325
Senior Notes 50,000 50,000
Total Liabilities 202,011 203,103
Shareholders' Equity 289,742 280,545
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