-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MkQZoTZtsmr/KznsPjNhX/oPHdPTMIgGdoiZ0up/j0oHSkXnYinCsopH6Ywym/f8 zrq17aipRnYWSa0oTqjo1A== 0001144204-07-038115.txt : 20070725 0001144204-07-038115.hdr.sgml : 20070725 20070725073749 ACCESSION NUMBER: 0001144204-07-038115 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070724 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070725 DATE AS OF CHANGE: 20070725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AARON RENTS INC CENTRAL INDEX KEY: 0000706688 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 580687630 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13941 FILM NUMBER: 07997817 BUSINESS ADDRESS: STREET 1: 309 E. PACES FERRY ROAD, N.E. STREET 2: (NONE) CITY: ATLANTA STATE: GA ZIP: 30305-2377 BUSINESS PHONE: 404-231-0011 MAIL ADDRESS: STREET 1: 309 E. PACES FERRY ROAD, N.E. STREET 2: (NONE) CITY: ATLANTA STATE: GA ZIP: 30305-2377 8-K 1 v081748_8k.htm
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 24, 2007
 
 
AARON RENTS, INC.
(Exact name of Registrant as Specified in its Charter)

Georgia
 
1-13941
 
58-0687630
(State or other Jurisdiction of
Incorporation or Organization)
 
(Commission File
Number)
 
(IRS Employer
Identification No.)

309 E. Paces Ferry Road, N.E.
Atlanta, Georgia
 
 
30305-2377
(Address of principal executive offices)
 
(Zip code)

Registrant’s telephone number, including area code: (404) 231-0011

Not Applicable   
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
 
 

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 24, 2007, Aaron Rents, Inc. issued a press release to announce its financial results for the second quarter of 2007. A copy of the press release is attached as Exhibit 99.1.

The press release presents the Company's growth in net earnings from the first six months of 2006 to the comparable period in 2007 excluding the gain from the sales of the Company's Puerto Rican operations in 2006 and a parking deck at the Company's corporate headquarters in 2007. It also presents the Company's estimate of its diluted earnings per share for fiscal 2007 excluding the gain on the sale of the parking deck. As neither dispositions of a significant number of stores to a single purchaser nor material real estate sales are common occurrences in the Company's businesses, management believes that presentation of these particular non-GAAP financial measures are useful because they allow investors to more easily evaluate and compare the performance of the Company's core sales and lease ownership and corporate furnishings businesses from period to period. Non-GAAP financial measures however should not be considered in isolation or as an alternative to financial measures calculated and presented in accordance with GAAP, such as the Company's GAAP basis net earnings and diluted earnings per share, which are also presented in the press release.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements of Businesses Acquired:

None.

(b) Pro Forma Financial Information:

None.

(d) Exhibits:
 

 
Exhibit No.
Description
   
99.1
Aaron Rents, Inc. press release dated July 24, 2007, announcing the Company’s financial results for the second quarter of 2007 (furnished pursuant to Item 2.02 of Form 8-K).
   

 
 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


   
AARON RENTS, INC.
     
     
By:
/s/ Gilbert L. Danielson 
Date: July 24, 2007
  
Gilbert L. Danielson
Executive Vice President,
Chief Financial Officer

EX-99.1 2 ex99.txt Aaron Rents, Inc. Reports Second Quarter Revenues and Earnings ATLANTA, July 24 /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 revenues and earnings for the three months ended June 30, 2007. For the second quarter of 2007, revenues rose 12% to $359.0 million compared to $321.7 million for the second quarter of 2006. Net earnings were $19.7 million versus $20.7 million for the same period a year ago. Diluted earnings per share were $.36 compared to $.39 per share last year. Last year's second quarter results included a pre-tax gain of $4.4 million, or approximately $.06 per diluted share, from the sale of the Company's former Puerto Rico operations. For the first six months of this year, revenues were up 12% to $746.9 million compared to $669.0 million for the first six months of 2006. Net earnings for the first half of 2007 increased 16% to $48.9 million versus $42.2 million for the corresponding period last year. Diluted earnings per share for the first six months were $.89 for 2007 and $.81 for 2006. Included in the Company's other revenues in the first six months of 2007 was a pre-tax $4.9 million gain from the sale in the first quarter of a parking deck at the Company's corporate headquarters. The Company's other revenues in the second quarter and first six months of 2006 included the aforementioned gain from the sale of the Company's Puerto Rican stores. Excluding these two transactions the Company's net earnings on a non-GAAP basis would have been up 17% for the six months of 2007 compared to the six months of 2006. "We feel we are still on track to add 250 stores during fiscal year 2007," said R. Charles Loudermilk, Sr., Chairman and Chief Executive Officer of Aaron Rents. "Our Aaron's Sales & Lease Ownership division continues to do well and our prospects for the division's future have not changed." Aaron's Sales & Lease Ownership division second quarter revenues increased 13% to $327.6 million compared to $290.2 million last year. First six months sales and lease ownership revenues increased 12% to $678.8 million compared to $604.5 million recorded a year ago. 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 5.0% during the second quarter of 2007 compared to the same quarter a year ago. Same store revenues increased 3.0% for Aaron's Sales & Lease Ownership stores open over two years at the end of June 2007. Aaron's Corporate Furnishings division revenues during the second quarter were $30.6 million compared to $31.1 million a year ago and revenues for the first half were $61.8 million versus $63.4 million. Consolidated rentals and fees for both the second quarter and first half advanced 13% over the comparable previous year periods. In addition, franchise royalties and fees were up 18% and 19% for the second quarter and year-to-date, respectively. Non-retail sales, which are primarily sales of rental merchandise to Aaron's Sales & Lease Ownership franchisees, increased to $56.7 million for the second quarter from $46.4 million in the comparable period in 2006 and to $126.9 million for the first six months compared to $110.4 million for the first six months last year. The increases in the Company's franchise revenues and the shipments of non-retail sales are the result of the increase in revenues of the Company's franchisees, who collectively had revenues of $136.2 million during the second quarter and $283.8 million for the first six months of 2007, a 15% and 16% increase, respectively, over the prior year periods. Revenues of franchisees, however, are not revenues of Aaron Rents, Inc. During the second quarter the Aaron's Sales & Lease Ownership division opened 15 new Company-operated stores, 19 new franchised stores, acquired 14 franchised stores and sold a Company-operated store to a franchisee. The Aaron's Corporate Furnishings division also opened one new store during the quarter and purchased the accounts of a third party operator, merging these accounts into the new store. Through the three months and six months ended June 30, the Company awarded area development agreements to open 55 and 106 additional franchised stores, respectively. At the end of June there were a total of 276 franchised stores awarded that are expected to open over the next several years. At June 30, 2007 the Aaron's Sales and Lease Ownership division had 868 Company-operated stores, 454 franchised stores, 22 Company-operated RIMCO stores, and two franchised RIMCO stores. In addition, the Company operated 60 corporate furnishings stores. "Our 2007 store opening plans have not changed, and we anticipate adding approximately 190 stores during the second half of 2007, of which we expect roughly 35 stores will be franchised stores," Mr. Loudermilk continued. "Our guidance for the third quarter of 2007 is to expect revenues in excess of $355 million and diluted earnings per share in the range of $.31 to $.35. For the entire 2007 year we expect Company revenues of approximately $1.5 billion (excluding revenues of franchisees) and are lowering our previous diluted earnings per share range of guidance of $1.55 to $1.65 for the year to $1.50 to $1.60 (excluding the gain on the first quarter parking deck sale), primarily due to the anticipated start-up costs of the substantial number of new stores planned to be added during the last half of the year." Aaron Rents will hold a conference call to discuss its quarterly financial results on Wednesday, July 25, 2007, 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 1,400 Company-operated and franchised stores in 48 states and Canada 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 13 facilities in five 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 the fiscal year ended December 31, 2006. 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 Six Months Ended June 30, June 30, 2007 2006 2007 2006 Revenues: Rentals and Fees $277,927 $245,794 $563,724 $500,040 Retail Sales 12,514 15,932 28,140 35,102 Non-Retail Sales 56,654 46,357 126,907 110,384 Franchise Royalties and Fees 9,602 8,120 19,516 16,448 Other 2,288 5,524 8,632 7,040 Total 358,985 321,727 746,919 669,014 Costs and Expenses: Retail Cost of Sales 8,484 10,867 18,791 23,273 Non-Retail Cost of Sales 52,130 43,307 116,260 103,098 Operating Expenses 163,737 142,818 325,414 286,774 Depreciation of Rental Merchandise 101,063 90,321 204,114 183,602 Interest 1,896 2,724 3,785 5,946 Total 327,310 290,037 668,364 602,693 Earnings Before Taxes 31,675 31,690 78,555 66,321 Income Taxes 12,018 11,040 29,691 24,110 Net Earnings $19,657 $20,650 $48,864 $42,211 Earnings Per Share $.36 $.40 $.90 $.83 Earnings Per Share Assuming Dilution $.36 $.39 $.89 $.81 Weighted Average Shares Outstanding 54,191 51,887 54,176 51,040 Weighted Average Shares Outstanding Assuming Dilution 55,065 52,705 55,046 51,896 Selected Balance Sheet Data (In Thousands) (Unaudited) June 30, December 31, 2007 2006 Cash $10,600 $8,807 Accounts Receivable, Net 41,607 43,495 Rental Merchandise, Net 619,532 612,149 Property, Plant and Equipment, Net 189,749 170,294 Other Assets, Net 162,443 144,861 Total Assets 1,023,931 979,606 Bank Debt 7,000 15,612 Senior Notes 90,000 90,000 Total Liabilities 369,457 372,591 Shareholders' Equity $654,474 $607,015 Reconciliation of Revenues and Earnings Excluding Asset Sales of Parking Deck and Puerto Rican Stores (In thousands) (Unaudited) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 Total Revenues $358,985 $321,727 $746,919 $669,014 Less Revenues from Asset Sales - 4,425 4,878 4,425 Revenues Excluding Asset Sales 358,985 317,302 742,041 664,589 Net Earnings 19,657 20,650 48,864 42,211 Less Gain from Asset Sales - 2,884 3,034 2,884 Net Earnings Excluding Gain From Asset Sales $19,657 $17,766 $45,830 $39,327 SOURCE Aaron Rents, Inc. -----END PRIVACY-ENHANCED MESSAGE-----