Exhibit 99.1
AARON RENTS, INC. REPORTS REVENUES FOR FOURTH QUARTER; SAME STORE REVENUES UP
8.0%; EARNINGS UP 34% FOR QUARTER; 44% FOR YEAR
ATLANTA, Feb. 23 /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 and home
appliances and accessories, today announced results for the fourth quarter and
full year of 2004.
For the three months ended December 31, revenues increased 16% to $242.1
million compared to $209.4 million for the fourth quarter of 2003. Net earnings
increased 34% to $13.8 million versus $10.3 million for the same period a year
ago. Diluted earnings per share were $.27 for the quarter compared to $.20 per
share for the comparable period last year.
For the year, revenues increased 23% to $946.5 million compared to $766.8
million for 2003. Net earnings for 2004 were $52.6 million versus $36.4 million
for 2003, a 44% increase. Diluted earnings per share were $1.04 for 2004
compared to $.73 in 2003.
"We are obviously pleased with these results," said R. Charles Loudermilk,
Sr., Chairman and Chief Executive Officer of Aaron Rents. "This is the best year
in the Company's history, now in its 50th year. We plan to continue to
aggressively expand our Aaron's Sales & Lease Ownership business in 2005."
For the fourth quarter the Aaron's Sales & Lease Ownership division
increased its revenues 17% to $214.0 million compared to $183.0 million last
year. For the twelve months, the division's revenues were $831.1 million, a 27%
increase over the $656.5 million recorded for 2003.
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 8.0% during the fourth quarter of 2004 compared to the fourth quarter
of 2003. Same store revenues for Aaron's Sales & Lease Ownership stores open
over two years at the end of December 2004 also increased 4.9% between those
quarters.
Non-retail sales, which are primarily sales of rental merchandise to
franchisees, increased to $42.2 million for the fourth quarter from $38.4
million for the quarter a year ago and to $160.8 million for the year compared
to $120.4 million for 2003. Royalty income from franchisees, which is included
in the Company's other revenues, increased to $4.9 million for the fourth
quarter of 2004 from $3.5 million for the quarter a year ago, and to $17.8
million for the year compared to $14.0 million for last year. The increases in
non-retail sales and royalty income are attributable to an increase in revenues
of the Company's franchisees, who collectively had revenues of $97.2 million
during the fourth quarter and $358.7 million for fiscal 2004, 36% and 28%
increases from the comparable prior year periods, respectively. Revenues of
franchisees, however, are not revenues of Aaron Rents, Inc.
Included in the operating results for the fourth quarter 2004 was an
approximate $750,000 net credit, or $.01 per diluted share, due to a reduction
in the Company's accrual for future personal property tax liabilities offset by
additional expense relating to advertising. Also included in other revenues for
2004 is a pre-tax gain of $5.5 million, or $.07 per diluted share, realized in
the second quarter from the previously announced disposition of the Company's
Rainbow Rentals, Inc. stock when Rainbow Rentals merged with Rent-A-Center, Inc.
in May, 2004.
During the fourth quarter the Aaron's Sales & Lease Ownership division
opened 25 new Company-operated stores and 24 new franchised stores. In addition,
during the quarter the Company acquired nine stores from one of its franchisees,
acquired two stores from an independent rental operator, and acquired the
accounts from three other third party stores. For 2004, a net of 186 sales and
lease ownership stores were added, an over 23% increase for the year in store
count, including the opening of 68 new Company-operated stores and 79 new
franchised stores.
During the year the Company awarded area development agreements to open 160
additional franchised stores. At the end of December there were 301 franchise
stores awarded that are expected to open over the next several years.
At December 31 the Aaron's Sales and Lease Ownership division operated 616
Company-operated stores and its franchisees operated 357 stores. In addition,
the Company had 58 rent-to-rent stores.
"Our guidance for the first quarter of 2005 is to expect revenues in excess
of $270 million and diluted earnings per share in the range of $.29 to $.32,"
Mr. Loudermilk continued. "For the entire 2005 year we continue to expect
Company revenues in excess of $1.1 billion and diluted earnings per share in the
range of $1.13 to $1.20. We plan to increase our store count between 15% and 20%
per year for the next several years."
Aaron Rents will hold a conference call to discuss its quarterly financial
results on Thursday, February 24, 2005, at 10:30 am Eastern Time. The public is
invited to listen in to the conference 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 more than 1,040 Company-
operated and franchised stores in 45 states, Canada, 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 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.
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,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
Revenues:
Rentals and Fees $ 177,975 $ 149,912 $ 694,293 $ 553,773
Retail Sales 13,559 14,468 56,259 68,786
Non-Retail Sales 42,172 38,429 160,774 120,355
Other 8,347 6,581 35,154 23,883
Total 242,053 209,390 946,480 766,797
Costs and Expenses:
Retail Cost of Sales 9,222 10,767 39,380 50,913
Non-Retail Cost of Sales 38,939 35,664 149,207 111,714
Operating Expenses 106,903 92,277 414,518 344,884
Depreciation of Rental
Merchandise 64,079 53,125 253,456 195,661
Interest 1,589 1,260 5,413 5,782
Total 220,732 193,093 861,974 708,954
Earnings Before Taxes 21,321 16,297 84,506 57,843
Income Taxes 7,554 6,031 31,890 21,417
Net Earnings $ 13,767 $ 10,266 $ 52,616 $ 36,426
Earnings Per Share $ .28 $ .20 $ 1.06 $ .74
Earnings Per Share
Assuming Dilution $ .27 $ .20 $ 1.04 $ .73
Weighted Average
Shares Outstanding (1) 49,738 49,140 49,602 48,964
Weighted Average
Shares Outstanding
Assuming Dilution (1) 50,798 50,109 50,575 49,784
(1) Shares outstanding adjusted for a 3-for-2 partial stock split effective
August 16, 2004.
Selected Balance Sheet Data
(In Thousands)
(Unaudited)
December 31, December 31,
2004 2003
------------ ------------
Cash $ 5,865 $ 4,687
Accounts Receivable 32,736 30,878
Rental Merchandise, Net 425,567 343,013
Property, Plant and
Equipment, Net 109,937 99,584
Other Assets, Net 123,417 81,722
Total Assets 697,522 559,884
Bank Debt 45,528 13,870
Senior Notes 50,000 50,000
Total Liabilities 322,344 239,698
Shareholders' Equity $ 375,178 $ 320,186
SOURCE Aaron Rents, Inc.
-0- 02/23/2005
/CONTACT: Gilbert L. Danielson, Executive Vice President,
Chief Financial Officer of Aaron Rents, Inc., +1-404-231-0011, ext. 3334/
/Web site: http://www.aaronrents.com /
_