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 is a Motley Fool Inside Value recommendation.

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