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SECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended May 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number: 0-9061
 ELECTRO RENT CORPORATION
  CALIFORNIA
(State or other jurisdiction 
of incorporation or organization)
    
    95-2412961
(I.R.S. Employer
Identification No.)
 
 (818) 786-2525
 None
 Common Stock without par value
 o þ
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TABLE OF CONTENTS  PART IIPART IIIPART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RisksItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements With Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEXHIBIT 13EXHIBIT 23(a)EXHIBIT 31(a)EXHIBIT 31(b)EXHIBIT 32(a)EXHIBIT 32(b)    Table of Contents  DOCUMENTS INCORPORATED BY REFERENCE
 1.
    
    Inside front cover and pages 10-17 and 18-36 of the Annual Report to Security Holders
for the fiscal year ended May 31, 2007 (the 2007 Annual Report) are incorporated by
reference in this Form 10-K Annual Report.
 2.
    
    Proxy Statement for the Annual Meeting of Shareholders to be held on October 18, 2007
(the 2007 Proxy Statement).
 CROSS REFERENCE SHEET
 
 
 PART II
 Caption and ReferenceForm 10-K Item
    
    in 2007 Annual ReportNumber and Caption
    
    or 2007 Proxy Statement5.
    
    Market for the Registrants Common Equity and
Related Stockholder Matters
    
    Annual Report page 366.
    
    Selected Financial Data
    
    Annual Report inside front cover7.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    Annual Report pages 10-178.
    
    Financial Statements and Supplementary Data
    
    Annual Report pages 18-35
 
 PART III
 10.
    
    Directors and Executive Officers of the Registrant
    
    
    
    Annual Proxy Statement
    
    Election of Directors
    
    Executive Officers
    
    Code of Ethics
    
    Audit Committee
    
    Compliance with Section 16 of the Securities Exchange Act of 1934
    
    Transactions With Management11.
    
    Executive Compensation
    
    
    
    Annual Proxy Statement
    
    Executive Compensation
    
    Compensation Committee Interlocks and Insider Participation
    
    Compensation Committee Report
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12.
    
    Security Ownership of Certain Beneficial Owners
and Management
    
    
    
    Annual Proxy Statement13.
    
    Certain Relationships and Related Transactions
    
    
    
    Annual Proxy Statement
    
    Transactions With Management14.
    
    Principal Accountant Fees and Services
    
    
    
    Annual Proxy Statement
    
    Proposal 2  Approval of
Selection of Independent Auditors
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Forward Looking Statements.
 This Report contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. You can find many (but not all) of these statements by looking for words such as
approximates, believes, expects, anticipates, estimates, intends, plans would,
may or other similar expressions in this Report. We claim the protection of the safe harbor
contained in the Private Securities Litigation Reform Act of 1995. We caution investors that any
forward-looking statements presented in this Report, or which we may make orally or in writing from
time to time, are based on the beliefs of, assumptions made by, and information currently available
to, us. Such statements are based on assumptions and the actual outcome will be affected by known
and unknown risks, trends, uncertainties and factors that are beyond our control or ability to
predict. Although we believe that our assumptions are reasonable, they are not guarantees of
future performance and some will inevitably prove to be incorrect. As a result, our actual future
results can be expected to differ from our expectations, and those differences may be material.
Accordingly, investors should use caution in relying on past forward-looking statements, which are
based on known results and trends at the time they are made, to anticipate future results or
trends.
 Some of the risks and uncertainties that may cause our actual results, performance or
achievements to differ materially from those expressed or implied by forward-looking statements
include those set forth in Item 1A. Risk Factors of this Report.
 This Report and all subsequent written and oral forward-looking statements attributable to us
or any person acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. We do not undertake any obligation to release
publicly any revisions to our forward-looking statements to reflect events or circumstances after
the date of this Report.
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PART I
 
 Item 1 Business
     
    
    Our acquisition cost;
    
    Our estimates of current and future market demand for rentals;
    
    Our estimates of current and future supply of product;
    
    The book value of the product after depreciation and other impairment;
    
    Our estimates of the effect of interest rates on rental and leasing fees as well
as capital financing; and
    
    Our estimates of the potential current and future sale prices.
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Share-Based Payment
    Year ended May 31,
    
    2007
    
    
    2006
    
    
    2005U.S.
    
    $
    109,576
    
    
    $
    102,528
    
    
    $
    94,415Foreign
    
    
    15,675
    
    
    
    12,278
    
    
    
    13,201Total
    
    $
    125,251
    
    
    $
    114,806
    
    
    $
    107,616
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www.electrorent.com
 
 Item 1A. Risk Factors
  COMMON STOCK PRICE FLUCTUATIONS
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FLUCTUATIONS IN OPERATING RESULTS
             7




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RISKS ASSOCIATED WITH TECHNOLOGY CHANGES
    8




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RISKS ASSOCIATED WITH CUSTOMER SOLVENCY
   COMPETITION
         RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
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RISKS ASSOCIATED WITH OUR MANUFACTURERS AND SUPPLIERS
   DEPENDENCE ON KEY PERSONNEL
   10




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CONTROL BY MANAGEMENT AND OTHERS
    RISKS ASSOCIATED WITH POSSIBLE ACQUISITIONS AND NEW BUSINESS VENTURES
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RISKS ASSOCIATED WITH FLUCTUATING INTEREST RATES
   ANTI-TAKEOVER PROVISIONS
     
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
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Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
 Market for Common Stock.
  Sales of Unregistered Securities.
  Securities Authorized for Issuance Under Equity Compensation Plans.
  Number of shares ofNumber of shares of
    
    
    
    common stock remainingcommon stock to be
    
    
    
    available for futureissued upon exercise
    
    Weighted-average exercise
    
    issuance under equityof outstanding options,
    
    price of outstanding options,
    
    compensation planswarrants and rights
    
    warrants and rights
    
    (excluding shares(a)
    
    (b)
    
    reflected In column (a))663,209
    
    $9.89
    
    942,500
 Stock Repurchases.
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ISSUER PURCHASES OF EQUITY SECURITIES
 Total Number of
    
    
    Average PricePeriod
    
    Shared Purchased
    
    
    Paid per ShareMarch 2007
    
    
    
    
    
    
    April 2007
    
    
    126,050
    
    
    $
    13.21May 2007
    
    
    98,550
    
    
    $
    13.16Total
    
    
    224,600
    
    
    $
    13.19
   Dividends.
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Performance Graph.
  Cumulative Five Year Total Return
Value of $100 Invested on May 31, 2002
Fiscal Years Ended May 31
 
 2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007Electro Rent Corporation
    
    
    
    100
    
    
    
    
    80
    
    
    
    
    121
    
    
    
    
    130
    
    
    
    
    183
    
    
    
    
    160NASDAQ Stock Market (US)
    
    
    
    100
    
    
    
    
    95
    
    
    
    
    122
    
    
    
    
    127
    
    
    
    
    136
    
    
    
    
    165Russell 2000
    
    
    
    100
    
    
    
    
    92
    
    
    
    
    120
    
    
    
    
    131
    
    
    
    
    155
    
    
    
    
    185Value Line Industrial Services
    
    
    
    100
    
    
    
    
    97
    
    
    
    
    138
    
    
    
    
    157
    
    
    
    
    230
    
    
    
    
    297
 
 Item 6. Selected Financial Data
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risks.
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Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
  
 Item 9A. Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
  Changes in Internal Control over Financial Reporting
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Inherent Limitations on Effectiveness of Controls
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    Internal ControlIntegrated Framework
    17




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Internal ControlIntegrated Framework Internal ControlIntegrated Framework
  /s/
 
 
 Item 9B. Other Information
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  
 Item 11 Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director
Independence
  
 Item 14. Principal Accountant Fees and Services
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
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2007 AnnualReportItem
    
    Page Number1.
    
    Financial StatementsConsolidated Statements of Operations for each of the
three years in the period ended May 31, 2007
    
    
    18Consolidated Balance Sheets at May 31, 2007 and 2006
    
    
    19Consolidated Statements of Shareholders Equity for
each of the three years in the period ended May 31,
2007
    
    
    20Consolidated Statements of Cash Flows for each of the
three years in the period ended May 31, 2007
    
    
    21Notes to Consolidated Financial Statements
    
    
    22-34Report of Independent Registered Public Accounting Firm
    
    
    35
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Exhibits listed by numbers corresponding to Exhibit Table of Item 601 of Regulation
S-K
 Exhibit Index
 ExhibitNumber
    
    Document Description(3)
    
    Articles of Incorporation (Restated) and bylaws are incorporated by reference to
Exhibits 1.2 and 6.1, respectively, of Registration Statement (Form S-14), File No.
2-63532. A copy of the Restated Articles of Incorporation and the Certificate of
Amendment of Restated Articles of Incorporation filed October 24, 1988 are incorporated
by reference to Exhibit (3) to the Annual Report (Form 10-K) for the fiscal year ended
May 31, 1989. A copy of the Certificate of Amendment of Restated Articles of
Incorporation filed October 15, 1997 is filed as Exhibit (3) to the Annual Report (Form
10-K) for the fiscal year ended May 31, 1999. A copy of the amendment to the bylaws
adopted October 6, 1994 is incorporated by reference to the Annual Report (Form 10-K)
for the fiscal year ended May 31, 1995. A copy of the amendment to the bylaws adopted
November 15, 1996 is incorporated by reference to Exhibit (3) of the Annual Report (Form
10-K) for the fiscal year ended May 31, 1997.(10)(A)(1)
    
    The Electro Rent Corporation Employee Stock Ownership And Savings Plan, June 1, 1985
Restatement, and the Electro Rent Corporation Employee Stock Ownership And Savings Plan
Trust Agreement, are incorporated by reference to Exhibits 10(A)-(1) and 10(A)-(2) of
the Registrants Annual Report (Form 10-K) for the fiscal year ended May 31, 1985. A
copy of Amendment No. One to the Restated ESOP is incorporated by reference to Exhibit
(10)(A) of Registrants Annual Report (Form 10-K) for the fiscal year ended May 31,
1987.*(10)(A)(2)
    
    A copy of the Electro Rent Corporation Employee Stock Ownership And Savings Plan,
Restated As Of June 1, 1989 is incorporated by reference to Exhibit (10)(A) of the
Annual Report (Form 10-K) for the fiscal year ended May 31, 1989.*(10)(A)(3)
    
    Copies of the following documents amending and supplementing the ESOSP and ESOP as
heretofore amended are incorporated by reference to Exhibit (10)(A)-(1) to (7) of the
Annual Report (Form 10-K) for the fiscal year ended May 31, 1995:(10)(A)(4)
    
    Adoption Agreement For The Vanguard Prototype 401(K) Savings Plan dated August 1, 1994.*(10)(A)(5)
    
    Electro Rent Corporation Savings Plan Trust Agreement dated September 1, 1994.*(10)(A)(6)
    
    Electro Rent Savings Plan Supplement To The Vanguard Prototype 401(K) Savings Plan
Adoption Agreement dated September 24, 1994.*(10)(A)(7)
    
    Second Amendment To Electro Rent Corporation Employee Stock Ownership & Savings Plan
(Restated As Of June 1, 1989) dated as of June 1, 1991*(10)(A)(8)
    
    Third Amendment To Electro Rent Corporation Employee Stock Ownership And Savings Plan
(Restated As Of June 1, 1989) dated June 15, 1994*(10)(A)(9)
    
    Fourth Amendment To Electro Rent Corporation Savings Plan (Restated As Of June 1, 1989)
dated September 1, 1994*(10)(A)(10)
    
    Electro Rent Corporation Employee Stock Ownership Plan Trust Agreement dated September
1, 1994.*
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ExhibitNumber
    
    Document Description(10)(A)(11)
    
    A copy of the GE Rentals Supplement to the Vanguard Prototype 401(k) Savings Plan
Adoption Agreement adopted October 10, 1997 is incorporated by reference to Exhibit
10(A) of the Annual Report (Form 10-K) for the fiscal year ended May 31, 1998.*(10)(C)
    
    A copy of the Electro Rent Corporation Supplemental Retirement Plan is incorporated by
reference to Exhibit (10)(C) of Registrants Annual Report (Form 10-K) for the fiscal
year ended May 31, 1987.*(10)(D)(1)
    
    The Executive Employment Agreement between the Company and Daniel Greenberg, Chairman of
the Board of Directors and Chief Executive Officer, originally entered into December 15,
1986 and amended November 22, 1988 by Amendment No. One To Executive Employment
Agreement, as further amended and restated as of July 15, 1992. A copy of the Executive
Employment Agreement (Amended And Restated as of July 15, 1992), and as further amended
as of October 2001) is incorporated by reference to Exhibit (10)(D)-(1) of Registrants
Annual Report (Form 10-K) for the fiscal year ended May 31, 1993. A copy of Amendment
No. 1 to the Amended and Restated Executive Employment Agreement, dated October 12, 2001
is incorporated by reference to Exhibit 10(D)-(1) of Registrants Annual Report (Form
10-K) for the fiscal year ended May 31, 2003.*(10)(D)(2)
    
    The Executive Employment Agreement between the Company and William Weitzman, President
and Chief Operating Officer, originally entered into December 15, 1986 and amended
November 22, 1988 by Amendment No. One To Executive Employment Agreement, as further
amended and restated as of July 15, 1992 and amended by Amendment No. 1 to the Amended
and Restated Executive Employment Agreement, dated October 12, 2001. A copy of
Executive Employment Agreement (Amended And Restated as of July 15, 1992, and as further
amended as of October 2001) is incorporated by reference to Exhibit (10)(D)-(1) of
Registrants Annual Report (Form 10-K) for the fiscal year ended May 31, 1993. A copy
of Amendment No. 1 to the Amended and Restated Executive Employment Agreement, dated
October 12, 2001 is incorporated by reference to Exhibit 10(D)(2) of the Registrants
Annual Report (Form 10-K) for the fiscal year ended May 31, 2002.*(10)(D)(3)
    
    Letter setting forth terms of retirement of William Weitzman, President and Chief
Operating Officer, a copy of which is incorporated by reference to Exhibit 10(D)(3) of
the Registrants Current Report on Form 8-K for events occurring October 9, 2003.10(D)(4)
    
    Employment Agreement, dated as of October 31, 2005, between Electro Rent Corporation and
Gary B. Phillips is incorporated by reference to Exhibit 10.2 of the Current Report on
Form 8-K filed by Electro Rent Corporation on November 1, 2005.10(D)(5)
    
    Employment Agreement, dated as of October 31, 2005, between Electro Rent Corporation and
Steven Markheim is incorporated by reference to Exhibit 10.1 of the Current Report on
Form 8-K filed by Electro Rent Corporation on November 1, 2005.10(D)(6)
    
    Employment Agreement, dated as of October 31, 2005, between Electro Rent Corporation and
Craig R. Jones is incorporated by reference to Exhibit 10.3 of the Current Report on
Form 8-K filed by Electro Rent Corporation on November 1, 2005.(10)(E)(1)
    
    A copy of the Electro Rent Corporation 1990 Stock Option Plan, the Electro Rent
Corporation Stock Option Agreement (Incentive Stock Option) and the Electro Rent
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ExhibitNumber
    
    Document DescriptionCorporation Stock Option Agreement (Nonstatutory Option) are incorporated by reference
to Exhibits (10)(E)-(1), (10)(E)-(2) and (10)(E)-(3), respectively to the Annual Report
(Form 10-K) for the fiscal year ended May 31, 1990. A copy of Amendment Number One To
Electro Rent Corporation 1990 Stock Option Plan adopted October 3, 1991 is incorporated
by reference to Exhibit (10)(E) of the Annual Report (Form 10-K) for the fiscal year
ended May 31, 1992. A copy of Amendment Number Two To Electro Rent Corporation 1990
Stock Option Plan adopted April 11, 1995 is incorporated by reference to Exhibit (10)(E)
of the Annual Report (Form 10-K) for the fiscal year ended May 31, 1995.*(10)(E)(2)
    
    A copy of the Electro Rent Corporation 1996 Stock Option Plan, the Electro Rent
Corporation Stock Option Agreement (Incentive Stock Options) and the Electro Rent
Corporation Stock Option Agreement (Nonstatutory Stock Options) are incorporated by
reference to Exhibits (10)(E)-(1), (2) and (3) respectively to the Annual Report (Form
10-K) for the fiscal year ended May 31, 1996. A copy of Amendment Number One To Electro
Rent Corporation 1996 Stock Option Plan adopted November 1, 1996 is incorporated by
reference to Exhibit (10)(E) of the Annual Report (Form 10-K) for the fiscal year ended
May 31, 1998.*(10)(E)(3)
    
    A copy of the Electro Rent Corporation 1996 Director Option Plan and the Electro Rent
Corporation Stock Option Agreement for the 1996 Director Option Plan are incorporated by
reference to Exhibits (10)(E)-(4) and (5) respectively to the Annual Report (Form 10-K)
for the fiscal year ended May 31, 1996.(10)(E)(4)
    
    Electro Rent Corporation 1996 Director Option Plan Amendment No. One is incorporated by
reference to Exhibit (10)(E) to the Annual Report (Form 10-K) for the fiscal year ended
May 31, 2001.10(E)(5)
    
    A copy of the Electro Rent Corporation 2002 Employee Stock Option Plan, the Electro Rent
Corporation Stock Option Agreement (Incentive Stock Options) and the Electro Rent
Corporation Stock Option Agreement (Nonstatutory Stock Options) is incorporated by
reference to Exhibit (10)(E) of the Annual Report (Form 10-K) for the fiscal year ended
May 31, 2002.10(E)(6)
    
    Electro Rent Corporation 2005 Equity Incentive Plan.(11)
    
    Statement re computation of per share earnings is incorporated by reference to the 2007
Annual Report,
 [page 29].(13)
    
    2007 Annual Report. Only those portions of the 2007 Annual Report expressly
incorporated hereby by reference are deemed filed.(21)
    
    Subsidiaries of the Registrant.      Genstar Rental Electronics, Inc., a Canadian corporation      ER International, Inc., a Delaware corporation      Electro Rent Asia, Inc., a California corporation      Electro Rent (Tianjin) Rental Co., Ltd., a Chinese wholly foreign-owned
enterprise      Electro Rent Europe NV, a Belgium corporation(23)(A)
    
    Consent of Deloitte & Touche LLP, the Companys independent registered public accounting
firm.(31)(A)
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
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ExhibitNumber
    
    Document Description(31)(B)
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer(32)(A)
    
    Section 1350 Certification by Principal Executive Officer(32)(B)
    
    Section 1350 Certification by Chief Financial Officer
 Schedule of Financial Statements Required by Regulation S-X, which is excluded from the
2007 Annual Report by Rule 14a-3(b) (1)
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SIGNATURES
  Electro Rent CorporationDated: August 10, 2007.
    
    By
    
    /s/ Daniel GreenbergDaniel GreenbergChief Executive Officer and Director
  SIGNATURE
    
    TITLE
    
    DATE/s/ Daniel Greenberg

Daniel Greenberg
    
    Chairman of the Board and
Chief Executive Officer
    
    August 10, 2007/s/ Craig R. Jones

Craig R. Jones
    
    Chief Financial Officer
    
    August 10, 2007/s/ Gerald D. Barrone

Gerald D. Barrone
    
    Director
    
    August 10, 2007/s/ Nancy Y. Bekavac

Nancy Y. Bekavac
    
    Director
    
    August 10, 2007/s/ Karen J. Curtin

Karen J. Curtin
    
    Director
    
    August 10, 2007/s/ Joseph J. Kearns

Joseph J. Kearns
    
    Director
    
    August 10, 2007/s/ S. Lee Kling

S. Lee Kling
    
    Director
    
    August 10, 2007James S. Pignatelli
    
    Director
    
    August 10, 2007
 24