Aarons 2012 Annual Report Download - page 15

5
PART I.
ITEM 1. BUSINESS
General
Aaron’s, Inc. (―we‖, ―our‖, ―us‖, ―Aaron’s‖ or the ―Company‖) is a leading specialty retailer of consumer electronics,
computers, residential furniture, household appliances and accessories. We engage in the lease ownership, lease and
retail sale of a wide variety of products such as widescreen and LCD televisions, computers, living room, dining room
and bedroom furniture, washers, dryers and refrigerators. We carry well-known brands such as JVC®, Mitsubishi®,
Panasonic®, Sony®, Hewlett-Packard®, Simmons®, Frigidaire®, LG®, Samsung® and Sharp®. Our major operating
divisions are the Aaron's Sales & Lease Ownership division, the HomeSmart division and the Woodhaven Furniture
Industries division, which supplies the majority of the upholstered furniture and bedding leased and sold in our stores.
Our strategic focus is on expanding our sales and lease ownership business, which includes Aaron’s Sales & Lease
Ownership and HomeSmart stores, through opening new Company-operated stores, expanding our franchise program,
and making selective acquisitions.
As of December 31, 2012, we had 2,073 stores, comprised of 1,324 Company-operated stores in 29 states and 749
independently-owned franchised stores in 48 states and Canada. We have added 294 Company-operated and 265
franchised stores since the beginning of 2008. Included in the Company store counts above are 1,246 Aaron’s Sales &
Lease Ownership stores and 78 Company-operated HomeSmart stores. Aaron’s Sales & Lease Ownership division
includes 19 Company-operated RIMCO stores, our wheels, tires and accessories sales and lease ownership concept.
We have a history of revenue growth and profitability. Total revenues increased to $2.223 billion in 2012 from $1.592
billion in 2008, representing an 8.7% compound annual growth rate. Our total net earnings from continuing operations
increased to $173.0 million in 2012 from $85.8 million in 2008 representing a 19.2% compound annual growth rate.
Our former Chairman, R. Charles Loudermilk, Sr., established Aaron’s in 1955, and we were incorporated under the
laws of Georgia in 1962. Our principal business address is 309 E. Paces Ferry Road, N.E., Atlanta, Georgia, 30305-
2377, and our telephone number is [phone].
We own or have rights to various trademarks and trade names used in our business including Aaron’s, Aaron’s Sales &
Lease Ownership, HomeSmart, RIMCO and Woodhaven Furniture Industries.
Aaron's Sales & Lease Ownership. Our Aaron’s Sales & Lease Ownership division is primarily a monthly payment
model and focuses on providing durable household goods to lower to middle income consumers who have limited or no
access to traditional credit sources such as bank financing, installment credit or credit cards. Our sales and lease
ownership program enables these customers to obtain quality-of-life enhancing merchandise that they might otherwise
not be able to afford, without incurring additional debt or long-term obligations.
Our strategic focus is to expand our Aaron’s Sales & Lease Ownership division by opening Company-operated stores,
expanding our franchise program and making selective acquisitions. We franchise our sales and lease ownership stores
in select markets where we have no immediate plans to enter. Our franchise program:
 provides additional revenues from franchise fees and royalties;
 allows us to grow more quickly;
 enables us to achieve economies of scale in purchasing, distribution, manufacturing and advertising for our
sales and lease ownership stores; and
 increases exposure to our brand.
HomeSmart. In 2012 we expanded our HomeSmart division through an acquisition and new store openings, resulting
in a net increase of seven Company-operated stores. The HomeSmart division has been established to serve weekly
customers and the stores offer products that are similar to those in our Aaron’s stores.