<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report under Section 13 or 15 (d)
of the Securities Exchange Act of l934
SEPTEMBER 30, 1999 0-12385
------------------ -------
For Quarter Ended Commission File No.
AARON RENTS, INC.
----------------------------
(Exact name of registrant as
specified in its charter)
GEORGIA 58-0687630
------- ----------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
309 E. PACES FERRY ROAD, N.E.
ATLANTA, GEORGIA 30305-2377
---------------- ----------
(Address of principal executive offices) (Zip Code)
(404) 231-0011
--------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER
FISCAL YEAR, IF CHANGED SINCE LAST REPORT)
Indicate by check mark whether registrant (l) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
l934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X]
No [_]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Shares Outstanding as of
Title of Each Class November 8, 1999
------------------- ----------------
Common Stock, $.50 Par Value 16,079,031
Class A Common Stock, $.50 Par Value 3,829,506
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
AARON RENTS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(unaudited)
September 30, December 31,
1999 1998
------------ -----------
(in thousands)
<S> <C> <C>
ASSETS:
Cash $ 98 $ 95
Accounts Receivable 18,112 16,226
Rental Merchandise 303,124 277,505
Less: Accumulated Depreciation (95,184) (83,342)
----------- -----------
207,940 194,163
Property, Plant and Equipment, Net 53,752 50,113
Prepaid Expenses and Other Assets 17,744 11,577
----------- -----------
Total Assets $ 297,646 $ 272,174
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts Payable and Accrued Expenses $ 33,669 $ 33,461
Dividends Payable -- 415
Deferred Income Taxes Payable 8,118 7,811
Customer Deposits and Advance Payments 10,190 9,889
Bank Debt 66,496 50,411
Other Debt 1,333 1,316
----------- -----------
Total Liabilities 119,806 103,303
Commitments & Contingencies
Shareholders' Equity:
Common Stock, Par Value $.50 Per Share;
Authorized: 25,000,000 Shares;
Shares Issued: 18,270,987 9,135 9,135
Class A Common Stock, Par Value $.50 Per Share;
Authorized: 25,000,000 Shares;
Shares Issued: 5,361,761 2,681 2,681
Additional Paid-in-Capital 54,197 54,284
Retained Earnings 153,472 134,511
----------- -----------
219,485 200,611
Less: Treasury Shares at Cost,
Common Stock, 2,185,256 Shares
at September 30, 1999 and 1,558,991 Shares
at December 31, 1998 (27,409) (17,604)
Class A Common Stock, 1,532,255 Shares at
September 30, 1999 and 1,525,255 Shares at December 31, 1998 (14,236) (14,136)
----------- -----------
Total Shareholders' Equity 177,840 168,871
----------- -----------
Total Liabilities & Shareholders' Equity $ 297,646 $ 272,174
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 3
AARON RENTS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------- -----------------------
September 30, September 30,
---------------------- ------------------------
1999 1998 1999 1998
----------------------- ------------------------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
REVENUES:
Rentals and Fees $ 79,963 $ 73,662 $ 237,204 $ 215,640
Retail Sales 16,160 15,761 47,240 47,278
Non-Retail Sales 10,334 4,190 28,639 13,397
Other 2,922 2,269 7,963 6,208
--------- --------- --------- ---------
109,379 95,882 321,046 282,523
--------- --------- --------- ---------
COSTS AND EXPENSES:
Retail Cost of Sales 11,675 11,245 33,893 33,470
Non-Retail Cost of Sales 9,886 3,919 26,865 12,482
Operating Expenses 51,349 48,825 150,272 142,165
Depreciation
of Rental Merchandise 25,556 23,036 76,033 65,686
Interest 1,053 828 2,729 2,921
--------- --------- --------- ---------
99,519 87,853 289,792 256,724
--------- --------- --------- ---------
EARNINGS BEFORE
TAXES 9,860 8,029 31,254 25,799
INCOME TAXES 3,752 3,123 11,892 10,053
--------- --------- --------- ---------
NET EARNINGS $ 6,108 $ 4,906 $ 19,362 $ 15,746
========= ========= ========= =========
EARNINGS PER SHARE $ .30 $ .23 $ .96 $ .78
--------- --------- --------- ---------
EARNINGS PER SHARE
ASSUMING DILUTION $ .30 $ .23 $ .94 $ .76
--------- --------- --------- ---------
CASH DIVIDENDS DECLARED
PER SHARE
Common Stock $ -- $ -- $ .02 $ .02
--------- --------- --------- ---------
Class A Common Stock $ -- $ -- $ .02 $ .02
--------- --------- --------- ---------
WEIGHTED AVERAGE
SHARES OUTSTANDING 20,078 21,091 20,111 20,159
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING
ASSUMING DILUTION 20,393 21,508 20,495 20,619
========= ========= ========= =========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 4
AARON RENTS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------
1999 1998
----------- -----------
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net Earnings $ 19,362 $ 15,746
Depreciation and Amortization 83,783 72,271
Deferred Income Taxes 307 2,529
Change in Accounts Payable and
Accrued Expenses 208 1,533
Change in Accounts Receivable (1,886) (2,910)
Other Changes, Net (2,190) (2,011)
----------- -----------
Cash Provided by Operating Activities 99,584 87,158
----------- -----------
INVESTING ACTIVITIES
Additions to Property, Plant and Equipment (17,686) (25,152)
Book Value of Property Retired or Sold 7,083 11,127
Additions to Rental Equipment (158,299) (129,432)
Book Value of Rental Equipment Sold 73,257 45,320
Contracts and Other Assets Acquired (10,125) (1,841)
----------- -----------
Cash Used by Investing Activities (105,770) (99,978)
----------- -----------
FINANCING ACTIVITIES
Proceeds from Revolving Credit Agreement 134,858 122,158
Repayments on Revolving Credit Agreement (118,773) (148,183)
Proceeds from Common Stock Offering -- 39,958
Increase in Other Debt 17 1,491
Dividends Paid (816) (801)
Acquisition of Treasury Stock (12,553) (2,454)
Issuance of Stock Under Stock Option Plans 3,456 653
----------- -----------
Cash Provided by Financing Activities 6,189 12,822
----------- -----------
Increase in Cash 3 2
Cash at Beginning of Year 95 96
=========== ===========
Cash at End of Period $ 98 $ 98
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 5
AARON RENTS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A: PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Aaron Rents, Inc.
("the Company") and its wholly-owned subsidiary. All significant intercompany
accounts and transactions have been eliminated.
The Consolidated Balance Sheet as of September 30, 1999, and the Consolidated
Statements of Earnings and Cash Flows for the nine months ended September 30,
1999 and 1998, have been prepared without audit. In the opinion of management,
all adjustments necessary to present fairly the financial position, results of
operations and cash flows at September 30, 1999 and for all periods presented
have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the financial statements and notes thereto included
in the Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1998. The results of
operations for the period ended September 30, 1999 are not necessarily
indicative of the operating results for the full year. Certain amounts in the
1998 segment information have been reclassified to conform to the 1999
presentation.
NOTE B: COMPREHENSIVE INCOME
There were no differences between net income and comprehensive income for the
quarter or nine month periods ended September 30, 1999 and 1998.
NOTE C: SEGMENT INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- -------------------------
SEPTEMBER 30 SEPTEMBER 30
--------------------------- -------------------------
1999 1998 1999 1998
--------------------------- -------------------------
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Revenues from external customers:
Rent-to-Rent $ 43,436 $ 43,647 $ 130,754 $ 130,625
Rental Purchase 62,254 48,310 181,682 141,686
Franchise 2,330 1,866 6,364 5,037
Other 154 1,607 838 5,026
Manufacturing 12,583 14,380 41,827 40,493
Elimination of intersegment revenues (12,154) (14,234) (41,176) (40,258)
Cash to accrual adjustments 776 306 757 (86)
------------------------ -------------------------
Total revenues from external customers $ 109,379 $ 95,882 $ 321,046 $ 282,523
======================== =========================
Earnings before income taxes:
Rent-to-Rent $ 2,751 $ 4,346 $ 12,139 $ 15,000
Rental Purchase 4,446 1,647 15,057 7,540
Franchise 1,335 985 3,555 2,390
Other (236) (754) (801) (1,856)
Manufacturing 86 461 558 1,130
------------------------ -------------------------
Earnings before income taxes for
reportable segments 8,382 6,685 30,508 24,204
Elimination of intersegment profit (10) (393) (298) (1,052)
Cash to accrual adjustments 789 360 656 105
Other allocations and adjustments 699 1,377 388 2,542
======================== =========================
Total earnings before income taxes $ 9,860 $ 8,029 $ 31,254 $ 25,799
======================== =========================
</TABLE>
<PAGE> 6
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Special Note Regarding Forward-Looking Information: Except for historical
information contained herein, the matters set forth in this Form 10-Q are
forward-looking statements. The Company notes that the forward-looking
statements set forth involve a number of risks and uncertainties that could
cause actual results to differ materially from any such statements, including
the risks and uncertainties discussed in the Company's Annual Report on Form
10-K for the year ended December 31, 1998, filed with the Securities and
Exchange Commission, under the caption "Certain Factors Affecting Forward
Looking Statements," which discussion is incorporated herein by this reference.
RESULTS OF OPERATIONS:
QUARTER ENDED SEPTEMBER 30, 1999 VERSUS QUARTER ENDED SEPTEMBER 30, 1998:
Total revenues for the third quarter of 1999 increased $13.5 million (14.1%) to
$109.4 million compared to $95.9 million in 1998 due primarily to a $6.3
million (8.6%) increase in rentals and fees revenues, plus a $6.5 million
(32.8%) increase in sales. Of this increase in rentals and fees revenues, $7.8
million was attributable to the Aaron's Rental Purchase division. Rentals and
fees revenues from the Company's rent-to-rent operations increased $201,000,
excluding $1.7 million of rental and fees from the Company's convention
furnishings division, which was sold in the fourth quarter of 1998.
Revenues from retail sales increased $399,000 (2.5%) to $16.2 million in 1999,
from $15.8 million for the same period last year. This increase was primarily
due to increased sales of new merchandise in the Company's rent-to-rent
operations along with increased new and rental return sales in the Company's
rental purchase operations. Non-retail sales, which primarily represent
merchandise sold to Aaron's Rental Purchase franchisees, increased $6.1 million
(146.6%) to $10.3 million compared to $4.2 million for the same period last
year. The increased sales are due to the growth of the franchise operations
coupled with the addition of a new distribution center.
Other revenues for the third quarter of 1999 increased $653,000 (28.8%) to $2.9
million compared to $2.3 million in 1998. This increase was attributable to
fees and royalties from franchise operations increasing $370,000 (23.0%) to
$2.0 million compared to $1.6 million last year, reflecting the addition of 21
franchised stores since the end of the third quarter of 1998 and increasing
operating revenues of maturing franchise stores.
Cost of sales from retail sales increased $430,000 (3.8%) to $11.7 million
compared to $11.2 million last year, and as a percentage of retail sales,
increased slightly to 72.2% from 71.3%. Cost of sales from non-retail sales
increased $6.0 million (152.3%) to $9.9 million from $3.9 million, and as a
percentage of sales, increased to 95.7% from 93.5%. The reduced margins on
non-retail sales was primarily the result of lower margins on certain products
sold to franchisees.
Operating expenses increased $2.5 million (5.2%) to $51.3 million from $48.8
million. As a percentage of total revenues, operating expenses were 46.9% in
1999 and 50.9% in 1998. Operating expenses decreased as a percentage of total
revenues between quarters primarily due to increased revenues in the Aaron's
Rental Purchase division and the sale of the Company's convention furnishings
business which had higher operating expenses than traditional rent-to-rent and
rental purchase operations.
<PAGE> 7
Depreciation of rental merchandise increased $2.5 million (10.9%) to $25.6
million, from $23.0 million, and as a percentage of total rentals and fees,
increased slightly to 32.0% from 31.3%. The increase as a percentage of
revenues is primarily due to a greater percentage of the Company's rentals and
fees coming from the Aaron's Rental Purchase division, which depreciates its
rental merchandise at a faster rate than the Rent-to-Rent division.
Interest expense increased $225,000 (27.2%) to $1.1 million compared to
$828,000. As a percentage of total revenues, interest expense was 1.0% in 1999
compared to 0.9% in 1998. The increase in interest expense as a percentage of
total revenues was due to higher debt levels in the third quarter of 1999 which
was primarily the result of reacquiring 853,000 shares of the Company's stock
for $12.6 million during 1999.
Income tax expense increased $629,000 (20.1%) to $3.8 million for 1999 compared
to $3.1 million for the same period in 1998. The Company's effective tax rate
was 38.1% for the third quarter of 1999 compared to 38.9% for the same period
last year, primarily due to lower state income tax rates.
As a result, net earnings increased $1.2 million (24.5%) to $6.1 million in the
third quarter of 1999 compared to $4.9 million for the same period in 1998. As
a percentage of total revenues, net earnings were 5.6% in the current quarter
as compared to 5.1% for the same period last year.
The weighted average number of shares outstanding during the third quarter of
1999 was 20,078,000 compared to 21,091,000 (20,393,000 versus 21,508,000
assuming dilution) for the same period last year.
NINE MONTHS ENDED SEPTEMBER 30, 1999 VERSUS NINE MONTHS ENDED SEPTEMBER 30,
1998:
Total revenues for the first nine months of 1999 increased $38.5 million
(13.6%) to $321.0 million compared to $282.5 million in 1998 due primarily to a
$21.6 million (10.0%) increase in rentals and fees revenues, plus a $15.2
million (25.1%) increase in sales. Of this increase in rentals and fees
revenues, $25.4 million was attributable to the Aaron's Rental Purchase
division. Rentals and fees from the Company's rent-to-rent operations increased
$1.2 million excluding $5.1 million of rental and fees from the Company's
convention furnishings division, which was sold in the fourth quarter of 1998.
Revenues from retail sales decreased $38,000 (0.1%) to $47.2 million in 1999,
from $47.3 million for the same period last year. This decrease was due to
decreased new sales in the Rent-to-Rent division. Non-retail sales, which
primarily represent merchandise sold to Aaron's Rental Purchase franchisees,
increased $15.2 million (113.8%) to $28.6 million compared to $13.4 million for
the same period last year. The increased sales are due to the growth of the
franchise operations coupled with the addition of a new distribution center.
Other revenues for the nine months of 1999 increased $1.8 million (28.3%) to
$8.0 million compared to $6.2 million in 1998. This increase was primarily
attributable to franchise fee and royalty income increasing $1.1 million
(26.2%) to $5.4 million compared to $4.3 million last year, reflecting a net
increase of 21 franchised stores since the end of the third quarter of 1998 and
increased operating revenues of maturing franchise stores.
Cost of sales from retail sales increased $423,000 (1.3%) to $33.9 million
compared to 33.5 million in 1998, and as a percentage of retail sales,
increased to 71.7% from 70.8%. The increase
<PAGE> 8
in cost of sales as a percentage of sales is due to lower margins from rental
return sales in the Rent-to-Rent division. Cost of sales from non-retail sales
increased $14.4 million (115.2%) to $26.9 million from $12.5 million, and as a
percentage of sales, increased slightly to 93.8% from 93.2%.
Operating expenses increased $8.1 million (5.7%) to $150.3 million from $142.2
million. As a percentage of total revenues, operating expenses were 46.8% in
1999 and 50.3% in 1998. Operating expenses decreased as a percentage of total
revenues between periods primarily due to the Company's acquisitions of
RentMart Rent-To-Own, Inc. and Blackhawk Convention Services in December 1997.
The RentMart stores were relatively immature and had lower revenues over which
to spread expenses and Blackhawk's convention furnishings business had higher
operating expenses as a percentage of revenues than traditional rental purchase
and rent-to-rent operations. The RentMart stores are now more mature and have
more revenue over which to spread expenses and the convention furnishings
business was sold in the fourth quarter of 1998.
Depreciation of rental merchandise increased $10.3 million (15.8%) to $76.0
million, from $65.7 million, and as a percentage of total rentals and fees,
increased to 32.1% from 30.5%. The increase as a percentage of rentals and fees
is primarily due to a greater percentage of the Company's rentals and fees
coming from the Aaron's Rental Purchase division which depreciates its rental
merchandise at a faster rate than the Rent-to-Rent division.
Interest expense decreased $192,000 (6.6%) to $2.7 million compared to $2.9
million. As a percentage of total revenues, interest expense was 0.9% in 1999
compared to 1.0% in 1998. The decrease in interest expense as a percentage of
revenues was due to slightly lower debt levels in the first quarter of 1999
compared to the first quarter of 1998 which was the result of the Company's
April 1998 public stock offering and lower interest rates.
Income tax expense increased $1.8 million (18.3%) to $11.9 million for 1999
compared to $10.1 million for the same period in 1998. The Company's effective
tax rate was 38.1% for the first nine months of 1999 versus 39.0% for the same
period in 1998, primarily due to lower state income tax rates.
As a result, net earnings increased $3.6 million (23.0%) to $19.4 million for
the first nine months of 1999 compared to $15.7 million for the same period in
1998. As a percentage of total revenues, net earnings were 6.0% in the first
nine months compared to 5.6% for the same period last year.
The weighted average number of shares outstanding during the first nine months
of 1999 was 20,111,000 compared to 20,159,000 (20,495,000 versus 20,619,000
assuming dilution) for the same period last year.
LIQUIDITY AND CAPITAL RESOURCES:
During the first nine months of 1999, the Company paid a semi-annual dividend
that was declared in December 1998 of $.02 per share on both Common Stock and
Class A Common Stock. On November 3, 1999, the Company declared a semi-annual
dividend payable on January 3, 2000 of $.02 per share on both Common Stock and
Class A Common Stock.
Cash flow from operations for the nine months ended September 30, 1999 and 1998
was $99.6 million and $87.2 million, respectively. Such cash flows include
profits on the sale of rental return merchandise. The Company's primary capital
requirements consist of acquiring rental
<PAGE> 9
merchandise for both rent-to-rent stores and Company-operated Aaron's Rental
Purchase stores. As the Company continues to grow, the need for additional
rental merchandise will continue to be the Company's major capital requirement.
These capital requirements historically have been financed through a revolving
credit agreement, cash flow from operations, trade credit, proceeds from the
sale of rental return merchandise, and stock offerings. The revolving credit
agreement provides for unsecured borrowings up to $90.0 million which includes
a $6.0 million credit line to fund daily working capital requirements. At
September 30, 1999, an aggregate of $66.5 million was outstanding under this
facility, bearing interest at an average rate of 5.90%. The Company uses
interest rate swap agreements as part of its overall long-term financing
program. At September 30, 1999, the Company had swap agreements with notional
principal amounts of $40.0 million which effectively fixed the interest rates
on an equal amount under the Company's revolving credit agreement at 6.93%.
The Company believes that the expected cash flows from operations, proceeds
from the sale of rental return merchandise, bank borrowings and vendor credit,
will be sufficient to fund the Company's capital and liquidity needs for at
least the next 24 months.
YEAR 2000
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs or hardware that have date-sensitive software or embedded
chips may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, generate invoices, or engage in similar normal
business activities. The Company is continuing its assessments of the impact of
the Year 2000 across its business and operations, including its customer and
vendor base. The Company has substantially completed its identification of
information technology systems ("IT systems") that are not Year 2000 compliant
and continues to implement a comprehensive plan to verify its IT systems and
non-information technology systems ("non-IT systems"), including embedded
electronic circuits in equipment and hardware, products, telecommunication,
building security and manufacturing equipment, are Year 2000 compliant. The
Company's plan to resolve the Year 2000 Issue involves the following four
phases: (1) assessment, (2) remediation, (3) testing, and (4) implementation.
The Company is simultaneously working on all four phases and has substantially
completed phases (1), (2) and (3) and will complete phase (4) during the fourth
quarter 1999.
The Company has substantially completed the process of querying its significant
suppliers and subcontractors (external agents). The Company is not aware of any
external agents with a Year 2000 issue that would materially impact the
Company's results of operations, liquidity, or capital resources. However, the
Company has no means of ensuring that external agents will be Year 2000
compliant. The inability of external agents to complete their Year 2000
resolution process in a timely fashion could materially impact the Company. The
effect of non-compliance by external agents is not determinable.
The Company's significant IT systems, including financial, accounting, store
operating and point-of-sale software, have recently been or are in the process
of being updated or replaced. The upgrading and rewriting of the Company's IT
systems is being completed to gain further strategic advantages over
competitors and is not the result of any anticipated Year 2000 issues. In
addition, as part of the Company's continuing process to update IT and non-IT
systems, management has required vendor-purchased and internally developed
systems be Year 2000
<PAGE> 10
compliant. Management of the Company expects the cost of the Year 2000 project
to be less than $500,000.
The Company has contingency plans for certain critical applications and is
working on such plans for others. These contingency plans involve written
corporate and store procedures for continued operations in a manual
environment.
Management of the Company believes it has an effective program in place to
resolve the Year 2000 issue in a timely manner. As noted above, the Company has
not yet completed all necessary phases of the Year 2000 program. In the event
that the Company does not complete phase four, the Company will continue the
affected functions either manually and / or through the partial use of systems
that are not year 2000 compliant. In addition, disruptions in the economy
generally resulting from Year 2000 issues could also materially adversely
affect the Company. For example, the Company could be subject to litigation for
computer systems product failure, equipment shutdown or failure to properly
date business records. The amount of potential liability and lost revenue
cannot be reasonably estimated at this time. See "Special Note Regarding
Forward-Looking Information".
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) The following exhibits are furnished herewith:
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C>
27 Financial Data Schedule (for SEC use only)
</TABLE>
(b) No reports on Form 8-K were filed by the Registrant during the nine
months ended September 30, 1999.
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AARON RENTS, INC.
(Registrant)
Date - November 15, 1999 /s/ Gilbert L. Danielson
---------------- ---------------------------
Gilbert L. Danielson
Executive Vice President
Chief Financial Officer
Date - November 15, 1999 /s/ Robert P. Sinclair, Jr.
---------------- ---------------------------
Robert P. Sinclair, Jr.
Vice President
Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AARON RENTS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER
30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 98
<SECURITIES> 0
<RECEIVABLES> 18,112
<ALLOWANCES> 0<F1>
<INVENTORY> 207,940<F2>
<CURRENT-ASSETS> 0<F3>
<PP&E> 53,752<F4>
<DEPRECIATION> 0<F4>
<TOTAL-ASSETS> 297,646
<CURRENT-LIABILITIES> 0<F3>
<BONDS> 0
0
0
<COMMON> 11,816
<OTHER-SE> 166,024
<TOTAL-LIABILITY-AND-EQUITY> 297,646
<SALES> 75,879
<TOTAL-REVENUES> 321,046
<CGS> 60,758
<TOTAL-COSTS> 287,063
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,729
<INCOME-PRETAX> 31,254
<INCOME-TAX> 11,892
<INCOME-CONTINUING> 19,362
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,362
<EPS-BASIC> .96
<EPS-DILUTED> .94
<FN>
<F1>THE ALLOWANCE OF DOUBTFUL ACCOUNTS IS NETTED AGAINST TOTAL ACCOUNTS RECEIVABLE
IN THE ACCOUNTS RECEIVABLE BALANCE.
<F2>RENTAL MERCHANDISE HAS BEEN CLASSIFIED AS INVENTORY FOR PURPOSES OF THIS
SCHEDULE. RENTAL MERCHANDISE HAS BEEN SHOWN NET OF 95,184 ACCUMULATED
DEPRECIATION.
<F3>THE FINANCIAL STATEMENTS ARE PRESENTED WITH AN UNCLASSIFIED BALANCE SHEET.
<F4>PP&E HAS BEEN SHOWN NET OF ACCUMULATED DEPRECIATION.
</FN>
</TABLE>
