Aaron profit up 6.1% in 4Q
By Clint Engel -- Furniture Today, March 13, 2006
Atlanta — Aaron Rents posted a 6.1% gain in fourth quarter profit and a 22.4% increase in revenue as aggressive expansion and solid execution continued to pay off for the nation's second-largest rent-to-own chain.
Fourth-quarter net income came to $14.6 million on revenues of $296.2 million.
Revenues for the Aaron's Sales & Lease Ownership division grew 24% in the quarter to $265.5 million for company-owned stores. Same-store revenue was up 11.5% for the period — the 16th consecutive quarter of same-store growth of more than 5%.
For the year, net earnings grew 10.2% to $58 million as revenues rose 18.9%, to $1.1 billion. Same-store revenue was up 8.3%.
Aaron said its earnings improvement for the year was masked by its sale of shares of a competitor's stock in 2004, which led to a $3.4 million after-tax gain that year (compared with a $355,000 after-tax gain for a similar sale this past year). Excluding the profit from the two stock transactions, earnings would have been up 17% in 2005.
For the year, Aaron added a net 167 Sales & Lease Ownership stores for a 16% gain in store count, including 75 new company-owned stores, 71 new franchise locations and some stores gained through acquisitions. It ended the year with 1,198 total stores — 739 company-owned and 392 franchised units in the Sales & Lease Ownership division, 58 rent-to-rent stores and nine RIMCO stores (specializing in rentals of tire rims).
The franchise stores collectively had revenues of $419.7 million for the year (not included in Aaron's corporate revenues), up 17% from 2004.
Aaron Chairman and CEO Charlie Loudermilk said the company will continue its expansion this year and beyond, with a plan to increase its combined company-owned and franchised store count by about 15% annually over the next several years.
"Our intermediate term goal is to have 2,000 stores open ... and we feel we can achieve that in a few years," Loudermilk said.
| Aaron Rents | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 12/31 | 2005 | 2004 | Change |
| (a) Includes after-tax gains from the sale of common stock of competitors of $355,000 in the 2005 year and $3.4 million in the 2004 year. | |||
| Revenues | $296,152,000 | $242,053,000 | 22.4% |
| Operating income | 286,175,000 | 232,831,000 | 22.9% |
| Net income | 14,608,000 | 13,767,000 | 6.1% |
| Earnings per share | 0.29 | 0.28 | 3.6% |
| Year ended 12/31 | 2005 | 2004 | Change |
| Revenues | $1,125,505,000 | $946,480,000 | 18.9% |
| Operating income | 952,698,000 | 797,273,000 | 19.5% |
| Net income (a) | 57,993,000 | 52,616,000 | 10.2% |
| Earnings per share | 1.16 | 1.06 | 9.4% |
