Exhibit 99.1
AARON RENTS, INC. REPORTS RECORD FIRST QUARTER REVENUES UP 24%;
SAME STORE REVENUES UP 10.7%
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
three months ended March 31, 2006.
For the first quarter of 2006, revenues increased 24% to $347.3 million
compared to $279.3 million for the same quarter a year ago. Net earnings
increased 17% to $21.6 million versus $18.4 million last year. Diluted earnings
per share were $.42 compared to $.36 per diluted share in the first quarter of
2005.
"We are extremely pleased with these results and feel good about our
prospects for the remainder of the 2006 year," said R. Charles Loudermilk, Sr.,
Chairman and Chief Executive Officer of Aaron Rents. "Our management team has
consistently performed at a level that has delivered superior results to our
shareholders, and this quarter was no exception."
For the first quarter, the Aaron's Sales & Lease Ownership division
increased its revenues 26% to $314.3 million compared to $248.7 million last
year. 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 10.7% during the first quarter of 2006 compared to the first quarter
of 2005. Same store revenues also increased 7.0% for Aaron's Sales & Lease
Ownership stores open over two years at the end of March 2006.
The Aaron's Corporate Furnishings division increased revenues 7% during the
quarter to $32.3 million compared to $30.2 million recorded in the first quarter
a year ago.
Consolidated rentals and fees increased 22% and franchise royalties and fees
increased 14% during the first quarter of 2006 compared to the same period a
year ago. Non-retail sales, which are primarily sales of merchandise to Aaron's
Sales & Lease Ownership franchisees, increased 40% for the quarter compared to
the first quarter of last year. The increases in the Company's franchise
revenues and the shipments of non-retail sales are the result of an increase in
revenues of the Company's franchisees, who collectively had revenues of $127.4
million during the first quarter of 2006, an 18% increase over the comparable
prior year period. Revenues of franchisees, however, are not revenues of Aaron
Rents, Inc.
Included in first quarter results was a $950,000 pre-tax expense, or
approximately $.01 per diluted share, resulting from the Company's adoption on
January 1, 2006 of accounting for stock options as compensation expense under
the guidelines of Statement of Financial Accounting Standards No. 123R.
During the quarter the Aaron's Sales & Lease Ownership division opened 13
new Company-operated stores and 11 new franchised stores. In addition, the
Company acquired three franchised stores and the accounts from two other third
party stores were purchased and merged into existing stores. In addition, area
development agreements were awarded to open five additional franchised stores.
At the end of March there were 250 franchised stores awarded that are expected
to open over the next several years.
At March 31, 2006, the Aaron's Sales & Lease Ownership division accounted
for 755 Company-operated stores, 400 franchised stores, and nine RIMCO stores.
The Company also had 59 corporate furnishings stores.
"Our guidance for the second quarter of 2006 is to expect revenues in excess
of $310 million and diluted earnings per share, prior to the proposed stock
offering announced separately today, in the range of $.34 to $.36," Mr.
Loudermilk continued. "For the entire 2006 year we continue to expect Company
revenues in excess of $1.3 billion (excluding revenues of franchisees) and
diluted earnings per share, again before the proposed issuance of additional
shares, in the range of $1.45 to $1.55. We plan to increase our store count
approximately 15% per year over the next several years."
Aaron Rents will hold a conference call to discuss its quarterly financial
results on Thursday, April 27, 2006, 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 1,225
Company-operated and franchised stores in 46 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 12 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 "Risk Factors" in the Company's Annual Report on
Form 10-K for fiscal 2005, 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
future periods.
Aaron Rents, Inc. and Subsidiaries
Consolidated Statements of Earnings
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
---------------------------
2006 2005
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Revenues:
Rentals and Fees $ 254,246 $ 209,145
Retail Sales 19,170 16,043
Non-Retail Sales 64,027 45,571
Franchise Royalties and Fees 8,223 7,191
Other 1,621 1,398
Total 347,287 279,348
Costs and Expenses:
Retail Cost of Sales 12,406 10,736
Non-Retail Cost of Sales 59,791 42,633
Operating Expenses 143,956 119,631
Depreciation of Rental Merchandise 93,281 75,130
Interest 3,222 1,600
Total 312,656 249,730
Earnings Before Taxes 34,631 29,618
Income Taxes 13,070 11,196
Net Earnings $ 21,561 $ 18,422
Earnings Per Share $ .43 $ .37
Earnings Per Share Assuming Dilution $ .42 $ .36
Weighted Average Shares Outstanding 50,185 49,767
Weighted Average Shares Outstanding
Assuming Dilution 51,085 50,747
Selected Balance Sheet Data
(In thousands)
(Unaudited)
March 31, December 31,
2006 2005
------------ ------------
Cash $ 6,179 $ 6,973
Accounts Receivable 43,563 42,812
Rental Merchandise, Net 569,140 550,932
Property, Plant and Equipment, Net 134,367 133,759
Other Assets, Net 129,381 124,039
Total Assets 882,630 858,515
Bank Debt 81,037 91,336
Senior Notes 100,000 100,000
Total Liabilities 420,371 424,044
Shareholders' Equity $ 462,259 $ 434,471
SOURCE Aaron Rents, Inc.
-0- 04/26/2006
/CONTACT: Gilbert L. Danielson, Executive Vice President, Chief Financial
Officer of Aaron Rents, Inc., +1-678-402-3314/
/Web site: http://www.aaronrents.com/