Aarons 2006 Annual Report Download - page 4

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2
To Our Shareholders
We are proud to reflect on our 2006 accomplishments, the
51st year of operations for Aaron Rents. We ended the year
stronger than ever and are poised for continued growth.
For the year, revenues increased 18% to a record $1.327
billion compared to $1.126 billion for the same period of
2005. Net earnings for the year were a record $78.6 million
versus $58.0 million last year, an increase of 36%. Diluted
earnings per share were $1.47 for 2006 compared to $1.14
in 2005.
The Aaron’s Sales & Lease Ownership division continues to
be our primary engine of growth, with a 19% increase in
revenues in 2006. Same store revenues for stores open the
entirety of 2006 and 2005 increased 7.2%.
Fifty-eight of the Aaron’s Sales & Lease Ownership stores
in our system achieved annual revenues in excess of $2
million during the year, the greatest number in our history.
Six stores exceeded $3 million in annual revenues. Since
1999, the year we first began reporting quarterly same
store revenue growth, our same store revenue in the
Aaron’s Sales & Lease Ownership division has increased
at least 5% a quarter, a remarkable achievement of
consistent growth.
In 2006, 78 new Company-operated stores and 75 new
franchised stores were opened in the Aaron’s Sales &
Lease Ownership division. The Company has maintained an
aggressive pace of store openings and added a combined
net of 146 new Company-operated and franchised sales
and lease ownership stores for the year, a 13% increase in
store count over the previous year.
Our franchisees collectively reported revenues of $486
million for 2006, a 16% increase over the prior year.
Note that franchisee revenues are not revenues of Aaron
Rents and are not included in our consolidated financial
statements. During 2006, the Company awarded area devel-
opment agreements for the opening of 73 new franchised
stores, and at year end the pipeline of franchised stores to
be opened over the next few years stood at 233. The pace
of awarding new franchised stores accelerated in the sec-
ond half of 2006, and we expect strong growth in 2007.
We had 531,000 corporate sales and lease ownership
customers and 274,000 franchise customers at the end of
the year, a 15% increase over the year-end 2005 levels.
Our Aaron’s Corporate Furnishings division posted a
revenue increase of 5% for the year and continues to focus
on national accounts and other corporate businesses.