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Larry Thomas

Aaron's revenues rise 11.8% in second quarter

ATLANTA — Buoyed by solid increases in same-store revenues and customer traffic, rent-to-own powerhouse Aaron's Inc. said second-quarter revenues rose 11.8%.

Profits for the quarter ended June 30 were more than triple last year's second quarter, which included a one-time charge of $36.5 million for litigation expenses.

Total revenues for the quarter were $539.5 million, up from $482.7 million in the same quarter last year. Same-store revenues for company-owned stores were up 6.1% and customer count on a same-store basis was up 8.8%.

Net income was $36.2 million or 47 cents per share. That's up from $10.8 million or 13 cents per share in the comparable quarter.

"Once again we are announcing outstanding financial results, which were in line with our expectations," said Ronald Allen, president and CEO. "Regardless of current economic times, customer demand remains strong in both our company-owned and franchised stores. Our unique business model provides high-quality basic household furnishings that are desired by our customers, and our superior service and flexible payment terms enable them to obtain these needed products."

For the six months ended June 30, revenues were $1.13 billion, up 10.9% from $1.02 billion in the first half of 2011.

First-half profits were $107.5 million or $1.40 per share. That's up from $55.2 million or 68 cents per share in the first half of 2011. Earlier this year, Aaron's reversed all but $1 million of the litigation expense from 2011, which accounted for much of the earnings increase.

The company is projecting third-quarter revenues of $530 million and earnings per share of 40 cents to 44 cents.

For the full year, revenues are projected to be more than $2.2 billion and earnings per share are projected at $2.27 to $2.35.

In 2011, Aaron's had revenues of $2.02 billion and earnings per share of $1.43.

As of June 30, there were 1,176 company owned and 706 franchised Aaron's Sales and Lease Ownership stores, 78 company owned and one franchised HomeSmart stores, and 17 company owned and six franchised Rimco stores.

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