Aarons 2000 Annual Report Download

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Aaron Rents, Inc.
Annual Report | 2000
Opening Doors to Unlimited Opportunities...

Table of contents

  • Page 1
    O p e n i n g D o o r s t o U n l i m i t e d O p p o r t u n i t i e s ... Aaron Rents, Inc. Annual Report | 2000

  • Page 2
    ..., household appliances and accessories, with 554 stores in 42 states and Puerto Rico. The Company is positioned as "America's Premier Name in Furniture Rental and Lease Ownership." Its major operations are the Aaron's Sales & Lease Ownership division (formerly Aaron's Rental Purchase division...

  • Page 3
    ....8 Total Assets Rental Merchandise, Net Interest-Bearing Debt Shareholders' Equity Book Value Per Share Debt to Capitalization Pre-Tax Profit Margin Net Profit Margin Return on Average Equity Stores Open Sales & Lease Ownership Sales & Lease Ownership Franchised Rent-to-Rent Total Stores 263 193...

  • Page 4
    ...our store count in Aaron's Sales & Lease Ownership, our rental purchase division, by 24%, a record number of store openings. ❚ We made our initial expansion outside the United States with the acquisition of 10 stores in the Commonwealth of Puerto Rico. ❚ We acquired a total of 26 store locations...

  • Page 5
    ... supporting the costs of our internal growth program, the purchase of the Texas plant and the store and lease acquisitions. To meet the demands created by our record growth, we continued to strengthen our excellent management team. W. Kenneth Butler, President of the Aaron's Sales & Lease Ownership...

  • Page 6
    Aaron's new lines of personal computers have met strong response from customers. Targeting a larger share of the growing PC market, Aaron's entered into a strategic alliance with CompUSA, a leading computer manufacturer, to offer two of its most popular models.

  • Page 7
    ... of rental, lease ownership and retail credit customers. Driving Aaron's rapid expansion is its "Dream Products" program. This targets the high end of the market with "dream" products such as large-screen televisions, home theater systems, leather upholstery, stainless steel Aaron's Sales & Lease...

  • Page 8
    ... merchandise to the customers, a critical success factor in our market. Aaron's Sales & Lease Ownership features its Dream Products and pricing on the Internet at www.shopaarons.com. Franchising Nationwide Expansion A aron's Sales & Lease Ownership franchise owners are opening new stores and new...

  • Page 9
    Aaron's stores, much larger than a conventional competitor's, give customers a far greater selection of leading brand name merchandise plus the Company's own lines of furniture and accessories.

  • Page 10
    Aaron's offers a wide range of designer-inspired furniture for residential rental customers. The Company continues as the leader in La-Z-Boy furniture rentals and also carries many other major brands of merchandise.

  • Page 11
    ... now working at home. To gain share of the office furniture market, Aaron's began laying the groundwork for collaborative relationships with manufacturers to market and distribute office products nationally. The concept is to utilize existing Aaron Rents stores while developing quick ship programs...

  • Page 12
    ... customers. Aaron also provides special events furniture, office panel work stations, housewares, appliances and electronics. Free in-office consultation and assistance with space planning are also part of the services available to business clientele, who have a choice of rental, purchase or lease...

  • Page 13
    Aaron's provides free in-office consultation and assistance with space planning as part of the services available to business clientele, who have a choice of rental, purchase or lease purchase. Small office/home office customers comprise a growing target market.

  • Page 14
    ...with the fast-track store expansion, Aaron Rents opened its sixth distribution center last year in Baltimore with the seventh center scheduled for opening in the first quarter of 2001 in North Carolina. These centers in key locations across the country are part of the Company's long-term strategy to...

  • Page 15
    ...335 Stores Open: Company-Operated Franchised Rental Agreements in Effect Number of Employees 1 361 193 281,000 3,900 320 155 254,000 3,600 291 136 227,400 3,400 292 101 219,800 3,100 240 61 179,600 2,550 Systemwide revenues include rental revenues of franchised Aaron's Sales & Lease Ownership...

  • Page 16
    ... decrease was the result of new sales in the rent-to-rent division decreasing and the discontinued sale of prepaid cellular air time in the rental purchase division. Non-retail sales, which primarily represent merchandise sold to Aaron's Sales & Lease Ownership franchisees, increased $26.4 million...

  • Page 17
    ....3 million, respectively. Such cash flows include profits on the sale of rental return merchandise. The Company's primary capital requirements consist of acquiring rental merchandise for both rent-to-rent and Company-operated Aaron's Sales & Lease Ownership stores. As the Company continues to grow...

  • Page 18
    ... (In Thousands, Except Share Data) Assets December 31, 2000 December 31, 1999 Cash Accounts Receivable Rental Merchandise Less: Accumulated Depreciation Property, Plant & Equipment, Net Prepaid Expenses & Other Assets Total Assets Liabilities & Shareholders' Equity $ 95 23,637 381,930 (114,217...

  • Page 19
    17 Consolidated Statements of Earnings (In Thousands, Except Per Share) Revenues Year Ended December 31, 2000 Year Ended December 31, 1999 Year Ended December 31, 1998 Rentals & Fees Retail Sales Non-Retail Sales Other Costs & Expenses $359,880 62,417 65,498 15,125 502,920 44,156 60,996 227,...

  • Page 20
    ... Flows (In Thousands) Operating Activities Year Ended December 31, 2000 Year Ended December 31, 1999 Year Ended December 31, 1998 Net Earnings Depreciation & Amortization Deferred Income Taxes Change in Accounts Payable & Accrued Expenses Change in Accounts Receivable Other Changes, Net Cash...

  • Page 21
    ... and sales operations. Rental Merchandise consists primarily of residential and office furniture, consumer electronics, appliances and other merchandise and is recorded at cost. The sales & lease ownership division depreciates merchandise over the agreement period, generally 12 months, when on rent...

  • Page 22
    ...$90,000,000, which includes a $6,000,000 credit line to fund daily working capital requirements. Amounts borrowed bear interest at the lower of the lender's prime rate, libor plus .50%, or the rate at which certificates of deposit are offered in the secondary market plus .625%. The pricing under the...

  • Page 23
    ... Thousands) December 31, 2000 December 31, 1999 Deferred Tax Liabilities: Rental Merchandise and Property, Plant & Equipment Other, Net Total Deferred Tax Liabilities Deferred Tax Assets: Accrued Liabilities Advance Payments Other, Net Total Deferred Tax Assets Net Deferred Tax Liabilities $25,770...

  • Page 24
    ... Company leases one building from an officer of the Company under a lease expiring in 2008 for annual rentals aggregating $212,700. The Company maintains a 401(k) savings plan for all full-time employees with at least one year of service with the Company and who meet certain eligibility requirements...

  • Page 25
    ... of the options is amortized to expense over the options' vesting period. The Company's pro forma information follows: (In Thousands Except Per Share) 2000 Years Ended December 31, 1999 1998 Pro Forma Net Earnings Pro Forma Earnings Per Share Pro Forma Earnings Per Share Assuming Dilution $25,910...

  • Page 26
    ... Products and Services of Reportable Segments Aaron Rents, Inc. has four reportable segments: sales & lease ownership, rent-to-rent, franchise and manufacturing. The sales & lease ownership division offers electronics, residential furniture and appliances to consumers primarily on a monthly payment...

  • Page 27
    ...Thousands) 2000 Years Ended December 31, 1999 1998 Revenues From External Customers: Sales & Lease Ownership Rent-to-Rent Franchise Other Manufacturing Elimination of Intersegment Revenues Cash to Accrual Adjustments Total Revenues From External Customers Earnings Before Income Taxes: Sales & Lease...

  • Page 28
    ... of Aaron Rents, Inc. and Subsidiaries as of December 31, 2000 and 1999, and the consolidated results of their operations and their cash flows for the years ended December 31, 2000, 1999 and 1998, in conformity with accounting principles generally accepted in the United States. Atlanta, Georgia...

  • Page 29
    ... the New York Stock Exchange under the symbols "rnt" and "rnt.a," respectively. The approximate number of shareholders of...Store Location Map At December 31, 2000 Company-Operated Sales & Lease Ownership Franchised Sales & Lease Ownership Rent-to-Rent Total Stores Manufacturing & Distribution Centers...

  • Page 30
    ... Information Corporate Headquarters 309 E. Paces Ferry Rd., N.E. Atlanta, Georgia 30305-2377 (404) 231-0011 http://www.aaronrents.com Subsidiaries Aaron Investment Company 10th & Market Streets Mellon Bank Building 2nd Floor Wilmington, Delaware 19801 (302) 888-2351 Aaron Rents, Inc. Puerto Rico...

  • Page 31

  • Page 32
    Aaron Rents, Inc. 309 E. Paces Ferry Rd., N.E. Atlanta, Georgia 30305-2377 (404) 231-0011 www.aaronrents.com