ATLANTA - Residential furniture manufacturer and retailer Aaron's said its second quarter earnings were negatively impacted by legal costs related to legal action taken by the California Attorney General.

Revenues increased 2% to $552.1 million for the second quarter.  But net earnings fell by a third to $25.9 million.

Included in pre-tax earnings for the second quarter of 2013 is an additional $15 million accrual for loss contingencies for pending legal and regulatory proceedings. Most of the accruals for legal and regulatory loss contingencies relate to a pending investigation by the California Attorney General into Aaron's leasing, marketing and privacy practices.

"We were expecting better revenue and customer growth during the quarter," said Ronald W. Allen, CEO of Aaron's. "However, Shipments of products to our franchisees again were below last year's numbers, as customers of our franchised stores are experiencing similar economic challenges."

Aaron's reported that its Woodhaven Furniture Industries division manufactured approximately $95 million, at cost, of furniture and bedding at its 14 facilities in seven states in 2012. Most of the production of Woodhaven is for shipment to Aaron's stores.

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