Aaron Ups Its Rents: Fool by Numbers

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On Oct. 25, Aaron Rents (NYSE: RNT) released third-quarter earnings for the period ended Sept. 30.

• Operating margins improved 361 basis points, primarily thanks to a decline in operating expenses.
  
• Aaron's sales and lease ownership division performed well. Sales increased 15%, and same-store sales increased 6.9%. The division opened 32 new stores and acquired 11 franchised stores during the quarter.
  
• Long-term debt declined 48.6%, while cash increased 709.7% to $55 million.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q3 2006	Q3 2005	Change
Sales*	$325	$318	$279	14%
Net Profit	--	$17	$9	96.6%
EPS	$0.30	$0.32	$0.17	88.2%
Diluted Shares	--	55	51	7.7%

*Includes rentals and fees, retail sales, non retail sales, franchise royalties and fees and other.

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	82.76%	82.03%	0.73
Operating Margin	9.28%	5.67%	3.61
Net Margin	5.47%	3.17%	2.30

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest.	$55	$7	709.7%
Accounts Rec.	$41	$44	(5.2%)
Inventory	$554	$728	(23.9%)

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	-	-	N/A
Long-Term Debt	$90	$175	(48.6%)

Learn the ways of the balance sheet.

Cash Flow Highlights

The company did not provide a cash flow statement. (For shame!)

Find out why Fools always follow the money.

Related Companies:

• Rent-A-Center (Nasdaq: RCII)
• Rent-Way (NYSE: RWY)
• United Rentals (NYSE: URI)

Related Foolishness:

• Rent-A-Center Buys Growth
• Rent-A-Center Finds the Fuel for Growth

Rent-a-Center is a Motley Fool Inside Value recommendation.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.