ATLANTA - Furniture manufacturer Aaron's, Inc. (NYSE: AAN) profits dropped 55 percent in the third quarter even as revenues increased 32 percent to $707.6 million. Net earnings fell 55 percent to $9.3 million from $21.1 million a year ago, and the company, which manufactures furniture for lease,  acknowledges it is struggling.

For example, the $170.3 million increase in revenue was due to $189.8 million in revenue from Progressive, a lease-to-own firm it acquired in April 2014, while Aaron's core furniture and appliance leasing business dropped.

"We continue to expect that approximately $50 million in annual cost savings will be achieved by the end of 2015," Gilbert Danielson, interim CEO and CFO of Aaron's, Inc. "During the third quarter we closed 44 under-performing stores and restructured our home office and field support to more closely align with current business conditions."

Earnings looked worse owing to 2013 pre-tax earnings from a $13.4 million accrual related to then-pending regulatory investigation by the California Attorney General, and, in the second quarter, a $15 million accrual related to the same investigation and $4.9 million of retirement expenses and a change in the company's vacation policies. Without these charges the drop in net earnings would have been $2.6 million . 

Aaron's operates 14 Woodhaven furniture and mattress manufacturing factories in seven states that produce goods for lease and retail at more than 2,000 company-operated and franchised stores in 48 states and Canada. Output from the Woodhaven furniture factories is more than $100 million.