ATLANTA, Feb. 16 /PRNewswire-FirstCall/ -- Aaron Rents, Inc.
(NYSE:RNT), the nation's leader in sales and lease ownership,
specialty retailing and rental of residential and office furniture,
consumer electronics and home appliances and accessories, today
announced revenues and earnings for the fourth quarter and fiscal
year ended December 31, 2008. As previously announced, on November
6, 2008 the Company consummated the sale of substantially all of
the assets of its Aaron's Corporate Furnishings division. The
Company no longer includes the revenues and expenses of the Aaron's
Corporate Furnishings division in its continuing operations, and
now reports the net earnings of the division as discontinued
operations. Prior periods are restated to reflect this change in
accounting treatment. For the fourth quarter of 2008, revenues
increased 11% to $404.9 million compared to $364.7 million for the
fourth quarter in 2007. Net earnings were $21.1 million versus
$15.5 million last year. Diluted earnings per share were $.39
compared to $.28 per share a year ago, a 39% increase. Diluted
earnings per share from continuing operations were $.39 versus $.26
for the fourth quarter of 2007, up 50%. For the year, revenues
increased 14% to $1.593 billion compared to $1.395 billion for
2007. Net earnings were $90.2 million versus $80.3 million a year
ago. Diluted earnings per share were up 14% to $1.66 for 2008
compared to $1.46 in 2007. Diluted earnings per share from
continuing operations were $1.58 versus $1.33 last year, a 19%
increase. "There is no question we are pleased and excited with
these results," said Robert C. Loudermilk, Jr., President and Chief
Executive Officer of Aaron Rents. "As we have experienced for quite
some time, we continue to gain revenues and customers even in this
economic environment. As more people see the availability of their
credit diminish or disappear, we expect our business will continue
to be strong as we satisfy our customers' ongoing demand for basic
home furnishings." 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 6.2%
during the fourth quarter of 2008 compared to the fourth quarter of
2007. Same store revenues also increased 3.1% for Aaron's Sales
& Lease Ownership stores open over two years at the end of
December 2008. The Company had 740,000 corporate customers and
363,000 franchise customers at the end of the year, a 19% increase
in total customers over the number at the end of 2007 (customers of
our franchisees, however, are not customers of Aaron Rents, Inc).
The customer count on a same store basis for Company-operated
stores was up 12% in the fourth quarter compared to the same
quarter last year. The Company recorded no significant gains from
the sale of stores in the fourth quarter of 2008. The Company's
other revenues in the fourth quarter of 2007 included a $1.9
million gain from the sale of Company-operated stores. The Company
realized a total of $8.5 million and $2.7 million in gains recorded
in other revenues during fiscal 2008 and 2007, respectively,
relating to store sales as well as a $4.9 million gain from the
sale of a parking deck at the Company's corporate headquarters in
the 2007 first quarter. Division Results The Aaron's Sales &
Lease Ownership division increased its revenues in the fourth
quarter of 2008 to $398.8 million, an 11% increase over the $358.6
million in revenues in the fourth quarter of 2007. For the year,
division revenues were $1.569 billion, a 15% increase over the
$1.366 billion recorded last year. The net earnings from
discontinued operations for the fourth quarter of 2008 were
$69,000, compared to net earnings of $1.1 million in the prior
year. Included in the earnings for the fourth quarter 2008 was a
pre-tax gain of $1.2 million from the sale of the Aaron's Corporate
Furnishings division. For the fiscal year, discontinued operations
had net earnings of $4.4 million compared to $6.9 million for the
2007 year. Components of Revenue Consolidated rentals and fees
increased 10% for the fourth quarter and 13% for the year.
Franchise royalties and fees increased 15% in the fourth quarter
and 16% for the year. Non-retail sales, which are primarily sales
of rental merchandise to Aaron's Sales & Lease Ownership
franchisees, increased 14% for the quarter compared to the fourth
quarter last year and 18% for the 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 $171.8 million during
the fourth quarter and $665.5 million for the 2008 year, both 19%
increases over the comparable 2007 periods. Same store revenues for
franchised stores were up 13.8% for the quarter compared to the
same quarter last year. Revenues of franchisees, however, are not
revenues of Aaron Rents, Inc. Store Count During the fourth quarter
of 2008 the Aaron's Sales & Lease Ownership division opened 26
new Company-operated stores and 30 new franchised stores. It also
acquired the accounts of 18 stores, purchased one store, and sold
11 stores in transactions with several competitors. In addition,
the Company acquired 35 franchised stores during the quarter and
opened three new Aaron's Office Furniture stores. The sale of the
47 Aaron's Corporate Furnishings stores, the merging of 20 RIMCO
stores into Aaron's Sales & Lease Ownership stores, and the
closure of seven Company-operated stores and two franchised stores
reduced total store count by 76 stores in the fourth quarter. For
the 2008 year, the Company opened 49 new Company-operated stores
and 68 new franchised stores. After the numerous acquisitions,
sales, and other realignments described above, the Company's total
net systemwide store count from its continuing operations increased
2.9% for the year. During the fourth quarter and fiscal year the
Company awarded area development agreements to open 24 and 149
additional franchised stores, respectively. At the end of December
2008 there were 282 franchised stores awarded that are expected to
be opened over the next several years. At December 31, 2008 the
Aaron's Sales & Lease Ownership division accounted for 1,027
Company-operated stores, 495 franchised stores, 10 Company-operated
RIMCO stores, and nine franchised RIMCO stores. The Company also
had 16 Aaron's Office Furniture stores. The total number of stores
open at the end of 2008 was 1,557. First Quarter and Full Year 2009
Outlook The Company has updated its guidance for 2009 and expects
to achieve the following: -- First quarter revenues (excluding
revenues of franchisees) in excess of $445 million. -- First
quarter diluted earnings per share in the range of $.49 to $.54 per
share, excluding any significant store or asset sales. -- Fiscal
year revenues (excluding revenues of franchisees) of approximately
$1.75 billion. -- Fiscal year diluted earnings per share in the
range of $1.72 to $1.87, an increase over the previous guidance of
$1.70 to $1.85 per diluted share. -- As previously announced,
anticipate new store growth of approximately 5% to 9% over the
store base at the end of 2008, for the most part an equal mix
between Company-operated and franchised stores. This will be a net
store growth after any opportunistic merging or disposition of
stores. -- The Company will continue as warranted to consolidate or
sell stores not meeting performance goals. -- The Company also
plans to continue to acquire franchised stores, convert independent
operator's stores to Aaron's franchised stores, or sell
Company-operated stores to franchisees as opportunities present
themselves. Conference Call Aaron Rents will hold a conference call
to discuss its quarterly financial results on Tuesday, February 17,
2009, 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, http://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
1,557 Company-operated and franchised stores in 48 states and
Canada. The Company's MacTavish Furniture Industries division
manufactured approximately $69 million at cost of furniture and
bedding at 12 facilities in five states in 2008. The entire
production of MacTavish is for shipment to Aaron Rents stores.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this news release regarding Aaron
Rents, Inc.'s business that 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 the fiscal year ended
December 31, 2007. 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) (Unaudited)
Three Months Ended Twelve Months Ended December 31, December 31,
2008 2007 2008 2007 Revenues: Rentals and Fees $293,165 $265,550
$1,178,719 $1,045,804 Retail Sales 10,824 8,808 43,187 34,591
Non-Retail Sales 87,146 76,537 309,326 261,584 Franchise Royalties
and Fees 11,965 10,406 45,025 38,803 Other 1,794 3,361 16,351
14,157 Total 404,894 364,662 1,592,608 1,394,939 Costs and
Expenses: Retail Cost of Sales 6,540 5,363 26,379 21,201 Non-Retail
Cost of Sales 80,136 70,400 283,358 239,755 Operating Expenses
176,565 165,605 705,566 617,106 Depreciation of Rental Merchandise
106,307 97,928 429,907 391,538 Interest 1,225 2,259 7,818 7,587
Total 370,773 341,555 1,453,028 1,277,187 Earnings from Continuing
Operations Before Taxes 34,121 23,107 139,580 117,752 Income Taxes
13,111 8,753 53,811 44,327 Net Earnings from Continuing Operations
21,010 14,354 85,769 73,425 Earnings from Discontinued Operations,
Net of Tax 69 1,138 4,420 6,850 Net Earnings $21,079 $15,492
$90,189 $80,275 Earnings Per Share: From Continuing Operations $.39
$.27 $1.61 $1.35 From Discontinued Operations .00 .02 .08 .13 Total
$.39 $.29 $1.69 $1.48 Earnings Per Share Assuming Dilution: From
Continuing Operations $.39 $.26 $1.58 $1.33 From Discontinued
Operations .00 .02 .08 .13 Total $.39 $.28 $1.66 $1.46 Weighted
Average Shares Outstanding 53,526 54,084 53,409 54,163 Weighted
Average Shares Outstanding Assuming Dilution 54,236 54,791 54,189
55,082 Selected Balance Sheet Data (In thousands) (Unaudited and
Preliminary) December 31, December 31, 2008 2007 Cash $7,376 $4,790
Accounts Receivable, Net 59,375 46,294 Rental Merchandise, Net
679,572 558,322 Property, Plant and Equipment, Net 224,431 243,447
Other Assets, Net 263,384 182,947 Assets of Discontinued Operations
- 77,376 Total Assets 1,234,138 1,113,176 Bank Debt 35,000 82,884
Senior Notes 58,000 80,000 Total Liabilities 472,594 439,796
Shareholders' Equity $761,544 $673,380 DATASOURCE: Aaron Rents,
Inc. CONTACT: Gilbert L. Danielson, Executive Vice President, Chief
Financial Officer of Aaron Rents, Inc., +1-404-231-0011 Web site:
http://www.aaronrents.com/
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