ACR Group, Inc. Reports Earnings for the Fiscal Year and Fourth Quarter Ended February 28, 2006
May 23 2006 - 1:36PM
PR Newswire (US)
- Revenues Top $200 Million on Strong Fourth Quarter Sales -
HOUSTON, May 23 /PRNewswire-FirstCall/ -- ACR Group, Inc.
(AMEX:BRR), today announced earnings for its fiscal year and fourth
quarter ended February 28, 2006. The Company's fiscal year revenues
surpassed $200 million for the first time, and the Company had
positive earnings per share in the fourth fiscal quarter for the
second time in its history. The Company has historically incurred
losses in the fourth fiscal quarter because cooler weather
conditions reduce customer demand at that time of the year. Sales
for the fiscal year ended February 28, 2006 were $204.3 million,
compared to $199.6 million for the fiscal year ended February 28,
2005. As previously reported, the Company's business units based in
Georgia and Colorado were adversely affected by a transition of
their HVAC equipment brands at the beginning of fiscal 2006.
However, strong growth in sales at the Company's other business
units enabled the Company to exceed prior year sales. Same-store
sales increased 17% in fiscal 2006 over fiscal 2005, excluding the
stores in the Georgia and Colorado business units affected by the
brand transition. Net income for the fiscal year ended February 28,
2006 was $2,754,000, or $0.24 per diluted share, compared to
$4,211,000, or $0.38 per diluted share, for the fiscal year ended
February 28, 2005. The decrease in earnings in fiscal 2006 was
attributable to the equipment brand transition at the Georgia and
Colorado business units. Aggregate operating income at the
Company's other business units rose 28% in fiscal 2006 over 2005.
Gross margin percentage on sales increased to 23.7% in fiscal 2006,
from 23.4% in fiscal 2005, as a result of improved purchasing
arrangements with certain key vendors. Sales for the fourth quarter
ended February 28, 2006 were $45.6 million, compared to $42.6
million for the quarter ended February 28, 2005. Excluding the
stores that changed equipment brands, same-store sales increased
19% in the fourth quarter of fiscal 2006 from 2005. Net income in
the fourth quarter of fiscal 2006 was $84,000, or $.01 per diluted
share, compared to $399,000, or $.04 per share, in the fourth
quarter of fiscal 2005. Aggregate operating income at the Company's
business units not affected by the equipment brand transition rose
22% in the fourth quarter of fiscal 2006 over 2005. Commenting on
the Company's year-end and fourth quarter results, Alex Trevino,
Jr., President and Chief Executive Officer of ACR Group, stated,
"We ended fiscal 2006 with strong sales momentum that has carried
over into the first quarter of fiscal 2007. As we have reported
each quarter in fiscal 2006, the transition from selling Goodman
brand equipment was painful but, in our opinion, was still a
necessary step to ensure attractive future growth opportunities for
the Company. Clearly, our mission in fiscal 2007 is to regain and
surpass the previous operating performance of our Georgia and
Colorado business units, and we have taken steps to accomplish
this, including adding another brand of equipment in the Georgia
unit. We are encouraged by higher sales volume in the first quarter
of fiscal 2007, and believe that the momentum will carry over to
the second fiscal quarter, which historically is our highest sales
quarter. Although we will not be immune if the new construction
market continues to slacken, we believe that the weighting of our
business toward the aftermarket/service segment of the HVAC
industry, and our geographic concentration in high-growth areas of
the Sunbelt, position us to mitigate adverse effects." About ACR
Group, Inc. ACR Group, Inc. is a wholesale distributor of
air-conditioning, heating, and refrigeration ("HVACR") equipment
and supplies. The Company owns and operates 51 branch locations
that are organized into five business units covering nine states.
The Company recently announced that, in the second and third
quarters of fiscal 2007, it would open up to three branches in
Arizona, where the Company has not previously had any branch
operations. Safe Harbor Statements in this news 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. The
Company does not undertake any obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events, or otherwise. (financial data to follow) ACR GROUP,
INC. CONSOLIDATED RESULTS OF OPERATIONS (in thousands, except per
share amounts) Quarter Ended Year Ended February 28 February 28
2006 2005 2006 2005 Sales $45,621 $42,631 $204,312 $199,553 Cost of
sales 34,561 31,843 155,981 152,908 Gross profit 11,060 10,788
48,331 46,645 Selling, general and administrative expenses 10,630
9,962 43,197 39,315 Operating income 430 826 5,134 7,330 Interest
expense 423 273 1,489 1,060 Interest derivative loss (gain) (65) 69
(247) 50 Other non-operating (income) (181) (145) (666) (579)
Income before income taxes 253 629 4,558 6,799 Provision for income
taxes 169 230 1,804 2,588 Net income $84 $399 $2,754 $4,211
Earnings per share: Basic $.01 $.04 $.25 $.39 Diluted $.01 $.04
$.24 $.38 Weighted average and equivalent shares: Basic 11,054
10,716 11,006 10,696 Diluted 11,426 11,226 11,360 11,028
DATASOURCE: ACR Group, Inc. CONTACT: Alex Trevino, Jr., President
and CEO, or Tony Maresca, Sr. Vice President & CFO, both of ACR
Group, Inc., +1-713-780-8532
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