Aarons 2004 Annual Report Download - page 5

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The business plan at Aaron Rents is to rapidly grow
the Company. We have more than doubled our store
count over the past five years, and approximately
40% of our Company-operated Aaron’s Sales &
Lease Ownership stores have been added during the
last two years. As these new stores, as well as older
stores and our franchised stores, grow in revenues
and earnings, we anticipate improvement in future
operating margins.
We are particularly proud of the opening of
the 1,000th Aaron’s store at the end of the year in
Swainsboro, Georgia.
Our rent-to-rent division stabilized in 2004 after
several years of declining revenues. The division
remains an important source of revenues and
earnings for Aaron Rents, and we see signs of a
general improvement in business for the division,
especially with corporate customers.
Once again, MacTavish Furniture Industries,
the Company’s manufacturing division, posted
record results, manufacturing more than $70 million
(at cost) of furniture for our stores out of 10
production facilities. We also opened two additional
fulfillment centers in 2004, bringing our total to
13, to accommodate store growth. We anticipate
opening several more fulfillment centers in 2005.
We continue to believe that vertical integration is
a strategic advantage for the Company.
During the year, there were numerous changes
within the Aaron’s Sales & Lease Ownership
Division, including the creation of two additional
regional field operations, a reflection of the growth
of the division. Kevin J. Hrvatin was promoted to
Vice President, Western Operations, and Greg G.
Bellof was promoted to Vice President, Mid-Atlantic
Operations. In addition, Dave A. Boggan, having
served most recently as Vice President of Marketing
and Merchandising, was named Vice President,
Mississippi Valley Operations. Mark A. Rudnick
was named Vice President, Marketing, and Mitchell
S. Paull was appointed Senior Vice President,
Merchandising and Logistics. Finally, Michael
W. Jarnagin, in his capacity as manager for our
furniture manufacturing plants, was promoted
to Vice President, Manufacturing. We are proud
of the career opportunities with Aaron Rents, and
it is gratifying to recognize and promote talented
employees who have contributed to the Company’s
success for a number of years.
We are careful stewards of our financial resources
and fund our growth with cash flow from opera-
tions and external financing. Our balance sheet is
very strong, and we believe we have the financial
capability to continue to rapidly grow the Company.
We believe we can have over 2,000 Aaron’s Sales
& Lease Ownership stores in the United States, as
experience has shown we can operate stores in a
town or city that has a trading area of over 20,000
people. By continuing to grow as we have over the
past several years, we feel it will not take long to
achieve this goal.
As we have stated before, our goal is unchanged:
to build Aaron’s into the premier, market-dominant
company in our industry, recognized by our
customers and peers as the standard-bearer for
integrity, honesty and fairness — and a company
that earns a premium return for its shareholders.
We will proudly mark our 50th anniversary in 2005.
Your Company started with an investment of $500
and now has a billion dollar market capitalization.
Do the Math.
We appreciate all of the hard work by all of our
associates, lenders, vendors, and other business
partners which has so greatly contributed to the
success of the Company. We are proud that over the
years we have delivered superior performance and
that these efforts have been reflected in the returns
to our shareholders.
R. Charles Loudermilk, Sr.
Chairman and Chief Executive Officer
Robert C. Loudermilk, Jr.
President and Chief Operating Officer