Aarons 2005 Annual Report Download - page 4

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Aaron Rents has never been better positioned
for growth after achieving record revenues and
earnings in 2005, our 50th year. We celebrated
the anniversary by exceeding $1 billion in revenues
and increasing our total store count to almost
1,200 despite the impact of two unprecedented
back-to-back hurricanes in major markets.
Highlights of 2005 include:
•Our revenues reached $1.13 billion, a 19%
increase over 2004, fueled by a 21% increase
in revenues in the Aaron’s Sales & Lease
Ownership division, the key driver of
our growth.
•Franchised Aaron’sSales & Lease Ownership
stores increased their revenues 17% for the
year to $419.7 million. Revenues of franchisees,
however, are not revenues of Aaron Rents.
•Fully diluted earnings per sharewere$1.14
compared to $1.04 in 2004. Excluding the
gains recorded in both years from the sale of
our investment positions in several competitors’
stock, net earnings increased over 17% for the
year, an exceptional performance by our people
given the challenges posed by the hurricanes in
the third quarter. Including the $355,000 and
$3.4 million in after-tax gains in 2005 and 2004,
respectively, from the sales of several competi-
tors’ stock, net earnings increased 10.2%.
•Nearly 11% of our stores — approximately
125 Company-operated and five franchised
stores — felt the effects of Hurricanes Katrina and
Rita. Yet despite significant loss of merchandise
and property damage, and lost business from
storeclosures, evacuations and displaced
employees and residents, our employees rose to
the challenge, reopening stores within weeks.
•Thirty-eight sales and lease ownership stores in
our system achieved annual revenues in excess
of $2 million, a record high number that is a
validation of Aaron’s business concept.
•Our aggressive pace of store openings added
anet 167 combined Company-operated and
franchised stores in 2005, a 16% increase over
the previous year.
•The Aaron’s Corporate Furnishings division
increased revenues 8% for the year due to
higher corporate demand and the immediate
need for temporary furnishings resulting from
the hurricanes.
•Our 50th anniversary provided exceptional
opportunities for promotional events which
leveraged our multifaceted marketing programs
to dramatically increase Aaron’s excellent
name recognition.
The Company’s revenues increased 19% for the
year to a record$1.13 billion compared to $946.5
million for the same period in 2004. Net earnings
rose 10% to $58.0 million versus $52.6 million
ayear ago, or $1.14 per diluted share for 2005
compared to $1.04 per diluted share for 2004.
Our Aaron’sSales & Lease Ownership division
increased revenues 21% to $1.0 billion from
$831.1 million in 2004. Same store revenues
for stores open the entirety of both years
advanced 8.3%.
The Aaron’s Corporate Furnishings division
increased its revenues 8% to $117.5 million from
$108.5 million in 2004, the best performance in a
number of years.
At the end of 2005, we had 1,198 stores open,
of which the Aaron’s Sales & Lease Ownership
division accounted for 739 Company-operated
stores, 392 franchised stores and nine RIMCO
stores. In addition, the Aaron’s Corporate
Furnishings division operated 58 stores.
To Our Shareholders