Aarons 2002 Annual Report Download - page 4

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TO OUR SHAREHOLDERS:
We are quite pleased with the performance of
the Company during 2002, as we achieved record
revenues and began seeing the results of our
aggressive store expansion of the last several
years. Some of the highlights for the year are:
• Revenues in 2002 were the highest in
the Company’s history. Systemwide
revenues, including the revenues of
both Company and franchised stores,
reached $874.7 million, a 19% increase
over last year. Revenues of the Aaron’s
Sales & Lease Ownership division
increased 31% for the year.
• Net earnings more than doubled in
2002 to $27.4 million. As planned, our
new stores began ramping up in rev-
enues during 2002 and the rent-to-
rent business stabilized, resulting
in the earnings increase for the
year.
• Our store base ex-
ceeded the 700 store
milestone during
the year with the
Aaron’s Sales &
Lease Owner-
ship store
count increasing 12%, on top of a 26%
increase the previous year. The Com-
pany ended the year with 714 stores in
43 states and Puerto Rico, including
232 franchised stores, as well as 70
stores in the Rent-to-Rent division.
• We had a record year in franchising.
During the year, we opened 31 fran-
chise stores and awarded area devel-
opment agreements for the opening of
151 additional franchise units. The
backlog of franchise stores scheduled
for opening over the next several years
was 213 stores at the end of 2002, an
all-time high.
• A difficult economy often allows well-
capitalized companies to make oppor-
tunistic acquisitions and in August we
acquired Sight’n Sound Appliance
Centers, Inc., a traditional credit
retailer based in Oklahoma City. Now
operating under a new Sight & Sound
name, the 25-store chain is a specialty
retailer of furniture, appliances, and
consumer electronics. This acquisition
represents a test of years of in-house
research on the possibility of convert-
ing the retail customer who does not
qualify for traditional credit financing
into a sales and lease ownership cus-
tomer. Although retail sales from
Sight & Sound have been disappoint-
ing to date, we are happy to report
that the early returns from the sales
and lease ownership departments in
the stores are quite favorable. If this
experiment is successful, it will
increase future expansion opportuni-
ties for us.
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