ACR Group Reports Record Second Quarter Results
04 Octobre 2006 - 2:59PM
PR Newswire (US)
Strong Demand and Operating Efficiencies Contribute To
Single-Quarter Records In Revenue, Profitability HOUSTON, Oct. 4
/PRNewswire-FirstCall/ -- ACR Group, Inc. (AMEX:BRR), a leading
national wholesale distributor of heating, ventilation and air
conditioning ("HVAC") equipment and supplies, today announced
record results for the second quarter and six-month period ended
August 31, 2006 (fiscal 2007), highlighted by significant growth in
revenue and net income. ACR Group reported total revenues of $76.1
million in its second quarter, a 24.5 percent increase from
revenues of $61.1 million in the year-ago period. Net income for
the quarter grew 81.2 percent to $3.4 million, or $0.29 per diluted
share, compared with net income of $1.8 million, or $0.17 per
diluted share, in the second quarter of fiscal 2006. For the
six-month period ended August 31, 2006, ACR Group reported total
revenues of $138.1 million, a 27.0 percent increase from revenues
of $108.7 million in the comparable period last year. Net income
for the six-month period grew 150 percent to $5.0 million, or $0.44
per diluted share, compared to net income of $2.0 million, or $0.18
per diluted share, in the year ago period. The year-over-year
increase in revenue and profitability was attributable to strong
demand for the full range of products offered by the Company,
including 13 SEER HVAC equipment that complies with new federally
mandated minimum efficiency standards. Price increases on
commodity-based products, continued demand for existing inventory
of lower efficiency HVAC equipment and typical summer weather
patterns also helped bolster revenues and net income. "During a
period of seasonally strong demand, the pre-season purchase of
select products provided inventory availability that enabled us to
serve our customers in an effective manner, contributing to
broad-based operational strength in each of our business units,"
said Alex Trevino, Jr., President and CEO of ACR Group. "Demand
remained strong during our fiscal second quarter in each of our
major markets, the bulk of which are situated throughout the
Sunbelt region. As we expand our regional footprint into new growth
markets such as Arizona, we will continue to target select regional
platforms where our quality, competitively priced brands and
"one-stop-shop" service model have the potential to capture
significant market share." Gross margin increased 268 basis points
to 26.2 percent in the second quarter, compared to 23.5 percent in
the year-ago period. For the six-month period ended August 31,
2006, the Company's gross margin was 25.5 percent, compared to 23.4
percent for the same period last year. Disciplined point-of- sale
pricing for lower-efficiency equipment and commodity products
contributed to record gross margins during the second quarter. The
Company's operating margin grew 287 basis points to 8.0 percent in
the quarter, compared with 5.1 percent in the year-ago period.
Operating margin rose to 6.5 percent for the six-month period ended
August 31, 2006, compared to 3.4 percent in the year-ago period.
Operating income at each of the Company's five business units
increased at least 34 percent in the six-month period when compared
to fiscal 2006. Rational cost control at each of Company's major
business units contributed to significant operating leverage in the
period. "Our second quarter results benefited from a combination of
favorable demand and pricing trends, coupled with broad-based
operational execution at the branch level, resulting in record
revenues and net income," commented Trevino. "Given our breadth of
quality products, growing branch presence and seasoned team of HVAC
professionals, we are well-positioned to further penetrate the
residential and light commercial HVAC distribution markets." Fiscal
Second Quarter 2007: Key Highlights * Total revenues increased 24.5
percent to $76.1 million in the second quarter of 2007, up from
$61.1 million in the year-ago period. * Same-store sales, which
exclude four branches opened after the first quarter of fiscal
2006, increased 22 percent in the second quarter of fiscal 2007
from the year-ago period. * Gross margin increased to 26.2 percent
from 23.5 percent in the year-ago period. * Operating income
increased 94.7 percent to $6.0 million in the second quarter of
2007, up from $3.1 million in the year-ago period. * Net income
increased 81.2 percent to $3.4 million in the second quarter of
2007, up from $1.8 million in the year-ago period. "Equipped with
some of the most experienced branch managers and sales personnel in
the HVAC distribution industry, ACR Group has benefited from a
'customer-first' mentality at the field level," continued Trevino.
"In an industry environment recently characterized by major product
and pricing changes, our branch managers' focus on product
availability has allowed us to continually meet customer demand on
a real-time basis, a key point of competitive differentiation which
has enabled us to capture incremental profitability over time,
resulting in the creation of additional value for our
shareholders." About ACR Group, Inc. With more than $200 million in
revenue during fiscal 2006, ACR Group, Inc. (AMEX:BRR) is one of
the largest independent distributors of heating, ventilation and
air conditioning (HVAC) equipment and supplies in North America.
The Company is one of the leading distributors of HVAC products to
both residential and commercial contractors at 54 branch locations
throughout ten states. The Company is committed to building a
regional presence throughout the Sunbelt states and in other
geographies with the potential for sustained economic growth.
Forward-Looking Statements Statements in this release that relate
to management's expectations or beliefs concerning future plans,
expectations, events, and performance are "forward-looking" 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. Actual results or events could differ materially from
those anticipated in the forward-looking statements due to a
variety of factors including, without limitation, weather
conditions, the effects of competitive pricing, general economic
conditions, and availability of capital. For more detailed
information on the risks and uncertainties associated with these
forward-looking statements and the Company's other activities, see
the periodic reports filed by the Company with the Securities and
Exchange Commission such as Form 10-K, Form 10-Q and Form 8-K. ACR
GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME
STATEMENTS (In thousands, except per share amounts) (Unaudited)
Three Months Ended Six Months Ended August 31, August 31, 2006 2005
2006 2005 Sales $ 76,143 $ 61,140 $ 138,067 $ 108,678 Cost of sales
56,228 46,789 102,897 83,212 Gross profit 19,915 14,351 35,170
25,466 Selling, general and administrative costs 13,853 11,238
26,158 21,741 Operating income 6,062 3,113 9,012 3,725 Interest
expense 659 379 1,202 678 Interest derivative loss (gain) 158 (43)
(60) 162 Other non-operating income (199) (171) (313) (323) Income
before income taxes 5,444 2,948 8,183 3,208 Provision for income
taxes 2,079 1,092 3,134 1,192 Net income $ 3,365 $ 1,856 $ 5,049 $
2,016 Earnings per share: Basic $ .30 $ .17 $ .45 $ .18 Diluted $
.29 $ .17 $ .44 $ .18 Weighted average shares outstanding: Basic
11,225 10,977 11,220 10,958 Diluted 11,563 11,223 11,534 11,269
DATASOURCE: ACR Group, Inc. CONTACT: Investor Relations
Representative, Mr. Noel Ryan, Director, Lambert, Edwards &
Associates, +1-616-233-0500; Company Representative, Mr. Tony
Maresca, Chief Financial Officer, ACR Group, Inc., +1-713-780-8532
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