-----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, Talr/tzFK/tRFXVA0FhF8ys2uQC8eLm/I0rNh94V3j5TWkosVbSz6NvzH+jebyyj oesS3h1MAsfesdi7oGlP9w== 0001275287-06-001032.txt : 20060223 0001275287-06-001032.hdr.sgml : 20060223 20060222180159 ACCESSION NUMBER: 0001275287-06-001032 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060222 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060223 DATE AS OF CHANGE: 20060222 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: 06637205 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 ar4908.txt FORM 8-K ================================================================================ 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): February 22, 2006 ---------- 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 February 22, 2006, Aaron Rents, Inc. issued a press release to announce its financial results for the fourth quarter and fiscal year of 2005. A copy of the press release is attached as Exhibit 99.1. 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 February 22, 2006 announcing the Company's financial results for the fourth quarter and fiscal year 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: February 22, 2006 Chief Financial Officer EX-99.1 2 ar4908ex991.txt EXHIBIT 99.1 Exhibit 99.1 Contact: Gilbert L. Danielson Executive Vice President Chief Financial Officer AARON RENTS, INC. REPORTS FOURTH QUARTER AND FISCAL YEAR RESULTS; REVENUES UP 22% FOR QUARTER; 19% FOR YEAR; SAME STORE REVENUES UP 11.5%; DILUTED EPS $.29 FOR QUARTER; $1.14 FOR YEAR ATLANTA, February 22, 2006 - 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, 2005. For the fourth quarter of 2005, revenues increased 22% to $296.2 million compared to $242.1 million for the fourth quarter of 2004. Net earnings for the fourth quarter increased to $14.6 million versus $13.8 million last year. Diluted earnings per share for the fourth quarter were $.29 compared to $.27 per share a year ago. For the year, revenues increased 19% to $1.1 billion compared to $946.5 million for 2004. Net earnings for the year increased to $58.0 million versus $52.6 million last year. Diluted earnings per share were $1.14 for 2005 compared to $1.04 in 2004. "We are pleased with our fourth quarter results and believe we are on track to continue our rapid expansion in the 2006 year," said R. Charles Loudermilk, Sr., Chairman and Chief Executive Officer of Aaron Rents. "Our intermediate term goal is to have 2,000 stores open, a combination of Company-operated and franchised stores, and feel we can achieve that in a few years. For the fourth quarter, the Aaron's Sales & Lease Ownership division increased its revenues to $265.5 million, a 24% increase over the $214.0 million in the fourth quarter of 2004. For the year, revenues were $1.0 billion, a 21% increase over the $831.1 million recorded 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 11.5% during the fourth quarter of 2005 compared to the fourth quarter of 2004. Same store revenues for the twelve month period ended December 31, 2005 increased 8.3% compared to the same period a year ago. The fourth quarter was the 16th consecutive quarter that the Company has experienced an over 5% quarterly same store revenue growth compared to the same quarter a year ago. The Aaron's Corporate Furnishings division, the Company's rent-to-rent operations, increased revenues 8% during the fourth quarter to $30.0 million compared to $27.8 million for the fourth quarter a year ago. Revenues for the year were $117.5 million, up 8% from $108.5 million a year earlier. Consolidated rentals and fees increased 23% for the fourth quarter and 22% for the year. In addition, franchise royalties and fees increased 9% in the fourth quarter and 17% for the year. Non-retail sales, which are primarily sales of rental merchandise to Aaron's Sales & Lease Ownership franchisees, increased 28% for the quarter compared to the fourth quarter last year and 15% 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 $419.7 million for the year of 2005, a 17% increase from the comparable prior year period. Revenues of franchisees, however, are not revenues of Aaron Rents, Inc. Included in the Company's other revenue in 2005 is a $565,000 gain and a corresponding $355,000 after-tax gain, previously reported, realized from the sale of shares of a competitor's common stock which had been purchased by the Company in various open market transactions. In addition, results for 2004 included $5.5 million in other revenue and a corresponding $3.4 million after-tax gain, or $.07 per diluted share, from the sale of another competitor's stock also acquired on the open market. While these stock sales had a positive impact on earnings in those periods, the size of the 2004 stock sale masks the strong period over period improvement in earnings -- excluding the profit from these two stock transactions in both periods, earnings would have been up 17% for the 2005 year compared to 2004. During the fourth quarter, the Aaron's Sales & Lease Ownership division opened 24 new Company-operated stores, 19 new franchised stores, and one RIMCO store. In addition, during the quarter the Company acquired nine stores from three different franchisees. The Company also acquired 19 stores in the fourth quarter from an independent rental operator, seven of which were merged into existing Aaron's Company-operated stores, seven were opened as new Company-operated stores, and another five were sold to franchisees. During the quarter the Company also purchased the accounts of three other third party stores. For the 2005 year, the Company and its franchisees added a net of 167 sales and lease ownership stores, a 16% increase for the year in store count, including, in addition to acquisitions, the opening of 75 new Company-operated stores and 71 new franchised stores. During the fourth quarter and fiscal year the Company awarded area development agreements to open 14 and 64 additional franchised stores, respectively. At the end of December 2005 there were 272 franchise stores awarded that are planned to be opened over the next several years. At December 31, 2005 the Company had 1,198 stores open, of which the Aaron's Sales and Lease Ownership division accounted for 739 Company-operated stores, 392 franchise stores, and nine RIMCO stores. The Company also had 58 rent-to-rent stores. "We expect revenues in the first quarter of 2006 to be in excess of $315 million and diluted earnings per share in the range of $.38 to $.41," Mr. Loudermilk continued. "For the 2006 year we expect Company revenues in excess of $1.3 billion (excluding revenues of franchisees) and diluted earnings per share in the range of $1.45 to $1.55. We also anticipate that for the foreseeable future we will continue to record very positive quarterly same store revenue growth. We plan to increase our combined Company-operated and franchised store count approximately 15% per annum during the next several years." Aaron Rents will hold a conference call to discuss its quarterly and annual financial results on Thursday, February 23, 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 1,200 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 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 future periods. 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, --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) Revenues: Rentals and Fees $ 218,440 $ 177,974 $ 845,162 $ 694,293 Retail Sales 14,567 13,559 58,366 56,259 Non-Retail Sales 54,130 42,172 185,622 160,774 Franchise Royalties and Fees 7,598 6,999 29,474 25,093 Other 1,417 1,349 6,881 10,061 Total 296,152 242,053 1,125,505 946,480 Costs and Expenses: Retail Cost of Sales 9,977 9,222 39,054 39,380 Non-Retail Cost of Sales 50,446 38,940 172,807 149,207 Operating Expenses 129,922 106,902 507,158 414,518 Depreciation of Rental Merchandise 79,399 64,079 305,630 253,456 Interest 2,839 1,589 8,519 5,413 Total 272,583 220,732 1,033,168 861,974 Earnings Before Taxes 23,569 21,321 92,337 84,506 Income Taxes 8,961 7,554 34,344 31,890 Net Earnings $ 14,608 $ 13,767 $ 57,993 $ 52,616 Earnings Per Share $ .29 $ .28 $ 1.16 $ 1.06 Earnings Per Share Assuming Dilution $ .29 $ .27 $ 1.14 $ 1.04 Weighted Average Shares Outstanding 49,961 49,738 49,846 49,602 Weighted Average Shares Outstanding Assuming Dilution 50,836 50,798 50,805 50,575
SELECTED BALANCE SHEET DATA (In Thousands) December 31, December 31, 2005 2004 ------------- ------------- (Unaudited) Cash $ 6,973 $ 5,865 Accounts Receivable 42,812 32,736 Rental Merchandise, Net 550,932 425,567 Property, Plant and Equipment, Net 133,759 111,118 Other Assets, Net 122,569 125,002 Total Assets 857,045 700,288 Bank Debt 91,336 45,528 Senior Notes 100,000 50,000 Total Liabilities 422,574 325,110 Shareholders' Equity $ 434,471 $ 375,178 -----END PRIVACY-ENHANCED MESSAGE-----