-----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, RFywi+xmPWzY6L/mCV2Odxi1dnOYzp17pbpb1coUJpAO8crCjut4j5D1j+6ETPNR 4JkXDBkl9TQYOZdOC4rXLw== 0001275287-05-002814.txt : 20050728 0001275287-05-002814.hdr.sgml : 20050728 20050728075707 ACCESSION NUMBER: 0001275287-05-002814 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050727 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050728 DATE AS OF CHANGE: 20050728 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: 05979024 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 ar3198.txt ================================================================================ 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 27, 2005 ---------- AARON RENTS, INC. ------------------------------------------------------ (Exact name of Registrant as Specified in its Charter) Georgia 1-13941 58-0687630 ------------------------------- ---------------- ------------------- (State or other Jurisdiction of (Commission File (IRS Employer Incorporation or Organization) Number) 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): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] 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 27, 2005, Aaron Rents, Inc. (the "Company") issued a press release to announce its financial results for the second quarter of 2005. A copy of the press release is attached as Exhibit 99.1. The press release presents certain revenue and earnings information excluding the Company's revenues and profit on the dispositions of its investments in Rainbow Rentals, Inc. stock in the second quarter of 2004 and in Rent-Way, Inc. stock in the second quarter of 2005. Because the Company is not primarily engaged in the business of buying and selling securities for trading purposes, management believes that presentation of non-GAAP financial measures such as its revenues and earnings excluding the effect of these stock transactions is useful because it allows investors and management to evaluate and compare the core operations of the Company from period to period in a more meaningful manner than relying exclusively on GAAP financial measures. 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. As used herein, "GAAP" refers to accounting principles generally accepted in the United States. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Businesses Acquired: None. (b) Pro Forma Financial Information: None. (c) Exhibits: EXHIBIT NO. DESCRIPTION - ----------- ----------------------------------------------------------------- 99.1 Aaron Rents, Inc. press release dated July 27, 2005, announcing the Company's financial results for the second quarter of 2005 (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 ----------------------------- Gilbert L. Danielson Executive Vice President, Date: July 27, 2005 Chief Financial Officer EX-99.1 2 ar3198ex991.txt Exhibit 99.1 AARON RENTS, INC. REPORTS RECORD SECOND QUARTER REVENUES AND EARNINGS; SAME STORE REVENUES UP 7.3%; EARNINGS GUIDANCE RAISED ATLANTA, July 27 /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 record second quarter revenues and earnings for the three months ended June 30, 2005. For the second quarter of 2005, revenues increased 18% to $271.3 million compared to $230.3 million for the second quarter in 2004. Net earnings increased to $16.1 million versus $15.4 million for the same period a year ago. Diluted earnings per share were $.32 compared to $.30 per share last year (which included a $.07 per share gain on the disposition of Rainbow Rentals stock). For the first six months of this year, revenues advanced 16% to a record $550.7 million compared to $472.8 million for the first half of 2004. Net earnings for the first half were up 22% to a record $34.5 million versus $28.2 million for the corresponding period last year. Diluted earnings per share for the first six months were $.68 for 2005 and $.56 for 2004. "We continue to execute the plans we have articulated to our investors over a number of years," said R. Charles Loudermilk, Sr., Chairman and Chief Executive Officer of Aaron Rents. "In recent years, our business has thrived even in periods of uncertain strength in overall consumer spending habits. Our growth prospects are, as they have been, excellent and we are well on our way to meeting our operating and financial objectives for the year." Included in the Company's other revenue in the 2005 second quarter and six month results is a $565,000 gain realized from the sale of Rent-Way, Inc. common stock which the Company purchased in various open market transactions. In addition, results for the second quarter and six months of 2004 included $5.5 million in other revenue and a corresponding $3.4 million after-tax gain, or $.07 diluted per share, from the disposition of the Company's Rainbow Rentals, Inc. stock when Rainbow merged with Rent-A-Center, Inc. in May 2004. Excluding the revenue and profit from these two stock transactions in all periods, revenues would have been up 20% for the second quarter and 18% for the six months of 2005, and earnings would have been up 31% for the second quarter and 38% for the six months of this year. A schedule reconciling the Company's revenues and earnings excluding the effect of these stock transactions to its revenues and earnings determined in accordance with GAAP follows the statement of earnings and balance sheet data accompanying this release. Rentals and fees for both the second quarter and first six months increased 21% over the previous year. In addition, franchise royalties and fees increased 27% for the second quarter and 24% year-to-date. Non-retail sales, which are primarily sales of rental merchandise to Aaron's Sales & Lease Ownership franchisees, increased to $42.2 million for the second quarter from $35.3 million in the comparable period in 2004 and to $87.8 million for the first six months compared to $81.8 million for the same period 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 $209.5 million for the first six months of 2005, a 22% increase over the comparable prior year period. Revenues of franchisees, however, are not revenues of Aaron Rents, Inc. The Aaron's Sales & Lease Ownership division increased its second quarter revenues 22% to $241.5 million compared to $198.3 million last year. First six months sales and lease ownership revenues increased 19% to $490.2 million compared to $412.9 million 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 7.3% during the second quarter of 2005 compared to the second quarter of 2004. Same store revenues also increased 4.0% for Aaron's Sales & Lease Ownership stores open over two years at the end of June 2005. During the second quarter the Aaron's Sales & Lease Ownership division opened 17 new Company-operated stores and 18 new franchised stores. In addition, during the quarter the Company acquired 11 franchised stores, acquired 10 stores from independent rental operators, and purchased the accounts of 17 other third party stores. Through the three months and six months ended June 30, the Company awarded area development agreements to open 8 and 37 additional franchised stores, respectively. At the end of June there were a total of 304 franchised stores awarded that will open over the next several years. At June 30 the Aaron's Sales and Lease Ownership division had 684 Company- operated stores and 368 franchise stores. In addition, the Company operated 59 rent-to-rent stores. "Our guidance for the third quarter of 2005 is to expect revenues in excess of $270 million and diluted earnings per share in the range of $.26 to $.28, compared to $.21 per share in the third quarter of 2004," Mr. Loudermilk continued. "We plan to open approximately 90 new Company-operated and 70 new franchised stores in 2005, as well as continuing to add stores through acquisition. We are raising our earnings guidance for the 2005 fiscal year and expect Company revenues in excess of $1.1 billion (excluding revenues of franchisees) and diluted earnings per share in the range of $1.25 to $1.28. Our initial guidance for 2006 is to continue to increase our store base between 15% and 20% per year and to achieve diluted earnings per share in the range of $1.45 to $1.55." Aaron Rents will hold a conference call to discuss its quarterly financial results on Thursday, July 28, 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, 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 1,110 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 2004, 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 2005 and 2006. 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, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Revenues: Rentals and Fees $ 206,626 $ 170,225 $ 415,771 $ 342,597 Retail Sales 13,314 12,578 29,357 29,049 Non-Retail Sales 42,212 35,272 87,783 81,771 Franchise Royalties and Fees 7,137 5,610 14,328 11,526 Other 2,049 6,601 3,447 7,836 Total 271,338 230,286 550,686 472,779 Costs and Expenses: Retail Cost of Sales 8,892 8,663 19,628 20,373 Non-Retail Cost of Sales 39,089 32,709 81,722 76,015 Operating Expenses 121,602 100,658 241,233 202,751 Depreciation of Rental Merchandise 74,374 62,062 149,504 125,532 Interest 1,737 1,266 3,337 2,474 Total 245,694 205,358 495,424 427,145 Earnings Before Taxes 25,644 24,928 55,262 45,634 Income Taxes 9,524 9,543 20,720 17,432 Net Earnings $ 16,120 $ 15,385 $ 34,542 $ 28,202 Earnings Per Share $ .32 $ .31 $ .69 $ .57 Earnings Per Share Assuming Dilution $ .32 $ .30 $ .68 $ .56 Weighted Average Shares Outstanding (1) 49,792 49,632 49,780 49,478 Weighted Average Shares Outstanding Assuming Dilution (1) 50,774 50,525 50,761 50,393
(1) Shares outstanding adjusted for a 3-for-2 partial stock split effective August 16, 2004. Selected Balance Sheet Data (In Thousands) June 30, December 31, 2005 2004 ---------- ------------ (Unaudited) Cash $ 4,808 $ 5,865 Accounts Receivable, Net 32,871 32,736 Rental Merchandise, Net 470,611 425,567 Property, Plant and Equipment, Net 119,177 111,118 Other Assets, Net 119,744 125,002 Total Assets 747,211 700,288 Bank Debt 76,799 45,528 Senior Notes 50,000 50,000 Total Liabilities 337,555 325,110 Shareholders' Equity $ 409,656 $ 375,178 Reconciliation of Revenues and Earnings Excluding Stock Sales (In thousands, except per share amounts) (Unaudited) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Total Revenues $ 271,338 $ 230,286 $ 550,686 $ 472,779 Less Revenues from Stock Sales 565 5,500 565 5,500 Revenues Excluding Stock Sales 270,773 224,786 550,121 467,279 Net Earnings 16,120 15,385 34,542 28,202 Less Gain from Stock Sales 355 3,394 355 3,394 Net Earnings Excluding Gain From Stock Sales $ 15,765 $ 11,991 $ 34,187 $ 24,808 SOURCE Aaron Rents, Inc. -0- 07/27/2005 /CONTACT: Gilbert L. Danielson, Executive Vice President and Chief Financial Officer of Aaron Rents, Inc., +1-678-402-3334/ /Web site: http://www.aaronrents.com/ -----END PRIVACY-ENHANCED MESSAGE-----