Aaron Rents Adds 82 Former Heilig Meyers LocationsAnd Posts Second Quarter Results

Furniture World News

Aaron Rents, Inc., the nation's leader in the rental, sales and lease ownership, and specialty retailing of residential and office furniture, consumer electronics and home appliances, announced revenues and earnings for the second quarter and first half of 2001. "These results reflect the strong growth of our sales and lease ownership division and are in line with the revised expectations that we announced on July 5, reflecting the costs associated with our accelerated schedule of opening new stores and the effects of the slowdown in our rent-to-rent business," said R. Charles Loudermilk, Sr., Chairman and Chief Executive Officer of Aaron Rents, Inc. For the three months ended June 30, revenues increased 9% to a record $132.8 million compared to $121.9 million for the second quarter of 2000. Net earnings for the second quarter this year were $5.0 million versus $6.9 million. Diluted earnings per share for the quarter were $.25 compared to $.35 per share for the second quarter last year. For the first six months of this year, revenues advanced 11% to a record $274.2 million compared to $247.3 million for the first half of 2000. Net earnings for the six months were $12.3 million versus $14.2 million for the corresponding period last year. Diluted earnings per share for the first half of this year were $.61 compared to $.71 per share for the period last year. The Aaron's Sales and Lease Ownership division increased its second quarter revenues 21% to $93.7 million versus $77.5 million for the second quarter last year. Systemwide revenues for this division, including franchised stores, rose 22% to $139.4 million versus $114.4 million compared to the second quarter a year ago. First half sales and lease ownership revenues increased 22% to $191.5 million compared to $156.8 million last year, and systemwide revenues advanced 24% to $285.3 million compared to $230.1 million for the first half last year. Revenues from Company-operated sales and leasing stores open in comparable quarters increased 10.6% during the second quarter compared to the same period a year ago. Revenues from the Company's rent-to-rent stores open in comparable quarters were down 9.3% compared to the previous year. In its accelerated schedule of new store openings, the Company's sales and lease ownership division opened 26 new stores in the second quarter, 16 Company-operated and 10 franchise stores, and added one store through acquisition. "We are planning to open another 60 Company-operated stores and over 15 franchised stores during the second half of this year," Mr. Loudermilk said. "These new stores will result in the adding of over 120 sales and lease ownership stores during the 2001 year." While the smaller rent-to-rent division felt the effects of the soft economy during the second quarter, the Company's acquisition of 52 additional Heilig-Meyers real estate locations in early July, for a total of 82 former Heilig-Meyers locations acquired since their Chapter 11 filing, has opened the way for even faster growth in the sales and lease ownership division. The Company expects that its 2001 revenues will exceed $565 million and that systemwide revenues will rise above $750 million for the year. Aaron Rents, Inc. based in Atlanta, currently has more than 590 Company- operated and franchised stores in 42 states 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 11 facilities in four states.