Aarons 2014 Annual Report Download - page 91

Download and view the complete annual report

Please find page 91 of the 2014 Aarons annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 102

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102

81
In 2012, the results of the Company's operating segments were impacted by the following items:
• Sales and Lease Ownership earnings before income taxes included a $35.5 million reversal of a previously accrued
lawsuit loss contingency.
• Other segment loss before income taxes included $10.4 million in retirement charges associated with the retirement of
the Company’s founder and Chairman of the Board.
NOTE 13: RELATED PARTY TRANSACTIONS
The Company leases certain properties under capital leases with certain related parties that are more fully described in Note 6
above.
NOTE 14: QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Certain reclassifications have been made to prior quarters to conform to the current period presentation.
(In Thousands, Except Per Share Data) First Quarter Second Quarter Third Quarter Fourth Quarter
Year Ended December 31, 2014
Revenues $ 585,423 $ 672,510 $ 707,564 $ 759,742
Gross Profit * 292,393 319,405 322,686 331,837
Earnings Before Income Taxes 60,710 13,562 13,199 34,233
Net Earnings 38,339 8,505 9,295 22,094
Earnings Per Share .53 .12 .13 .30
Earnings Per Share Assuming Dilution .53 .12 .13 .30
Year Ended December 31, 2013
Revenues $ 593,010 $ 550,545 $ 537,224 $ 553,852
Gross Profit * 302,439 282,276 265,056 263,080
Earnings Before Income Taxes 81,042 40,387 29,420 34,111
Net Earnings 51,000 25,854 21,138 22,674
Earnings Per Share .67 .34 .28 .30
Earnings Per Share Assuming Dilution .67 .34 .28 .30
* Gross profit is the sum of lease revenues and fees, retail sales, and non-retail sales less retail cost of sales, non-retail cost of
sales, depreciation of lease merchandise and write-offs of lease merchandise.
The comparability of the Company's quarterly financial results during 2014 and 2013 was impacted by certain events, as
described below on a pre-tax basis:
• The first quarter of 2014 included an $872,000 charge for financial advisory and legal costs related to addressing
strategic matters, including proxy contests, and $803,000 in transaction costs related to the Progressive acquisition.
• The second quarter of 2014 included an additional $12.4 million charge for the financial advisory and legal costs
related to now-resolved strategic matters, an additional $5.5 million in transaction costs in connection with the
Progressive acquisition and $2.3 million in leasehold improvement impairment charges related to the closure of 44
Company-operated stores announced July 15, 2014.
• The third quarter of 2014 included an additional $385,000 charge for financial advisory and legal costs related to now-
resolved strategic matters, an additional $6.9 million in restructuring charges related to the store closures noted above,
$9.1 million due to the retirements of both the Company's Chief Executive Officer and Chief Operating Officer, an
additional $371,000 in transaction costs related to the acquisition of Progressive and regulatory income of $1.2 million
that reduced previously recognized regulatory expense upon the resolution of the regulatory investigation by the
California Attorney General into the Company's leasing, marketing and privacy practices.
• The second quarter of 2013 included a $15.0 million charge related to an accrual for loss contingencies for the then-
pending regulatory investigation by the California Attorney General and a $4.9 million charge related to retirement
expenses and a change in vacation policies.
• The third quarter of 2013 included an additional $13.4 million charge related to the then-pending regulatory
investigation.