ACR Group Reports Fourth Quarter and Fiscal 2007 Year-End Results
14 Maggio 2007 - 3:00PM
PR Newswire (US)
Announces Record Year-End Revenue and Profitability HOUSTON, May 14
/PRNewswire-FirstCall/ -- ACR Group, Inc. (AMEX:BRR), a leading
national wholesale distributor of heating, ventilation and air
conditioning ("HVAC") equipment and supplies, today announced
results for the fourth quarter and fiscal year 2007, highlighted by
record results for the year-ended February 28, 2007. In fiscal
2007, ACR Group reported the highest annual revenue, gross margin
and net income in the history of the Company. For the year ended
February 28, 2007, the Company reported total revenues of $239.6
million, a 17.3 percent increase from revenues of $204.3 million in
fiscal 2006. Fiscal 2007 net income grew 108.5 percent to $5.7
million, or $0.49 per diluted share, compared to net income of $2.8
million, or $0.24 per diluted share, in fiscal 2006. Same-store
sales, which excludes seven branches opened after fiscal 2005,
increased 13 percent in fiscal 2007. Multiple factors contributed
to ACR Group's record year-end results, including: favorable
point-of-sale pricing; solid demand for higher-margin HVAC
equipment that complies with federally mandated minimum efficiency
standards; the favorable impact of commodity cost-related price
increases; demand for the remaining inventory of lower efficiency
HVAC equipment within niche multi-family and replacement markets;
and broad-based demand for the full range of products offered at
the Company's 54 branch locations. These factors enabled the
Company to increase gross margin by 180 basis points to 25.5% in
fiscal 2007, from 23.7% in fiscal 2006. "During fiscal 2007, we
capitalized on a number of favorable industry trends, the sum of
which contributed to broad-based strength within each of our five
business units," said Alex Trevino, Jr., President and CEO of ACR
Group. "As further affirmation of our commitment to invest for
future growth, we opened five new branch locations during fiscal
2007, including three in Arizona - a 'green-field' market for the
Company. As one of the largest independent distributors in the
highly fragmented HVAC distribution industry, we remain poised to
further penetrate high-growth markets, as compelling opportunities
for profitable growth arise." Fiscal 2007 fourth quarter revenues
of $45.6 million were essentially level compared to the year-ago
period. ACR Group reported a net loss for the quarter of
$(226,000), or $(0.02) per fully diluted share, compared with net
income of $84,000, or $0.01 per diluted share, in the fourth
quarter of fiscal 2006. While favorable point-of-sale pricing and
inventory management had a positive effect on gross margin during
the quarter, a steady weakening in the residential new construction
market had a disproportionate impact on results in the period,
amplified by the customary seasonal slowing of the replacement
business. As is typically expected during the early stages of a new
branch opening, ACR Group's three Arizona branches reported an
aggregate operating loss during the period that reduced earnings by
$.01 in the fiscal fourth quarter. Operating margin increased 210
basis points to 4.6 percent in fiscal 2007, compared to 2.5 percent
in the prior-year period. Selling, general and administrative
(SG&A) expenses as a percentage of sales for all of fiscal 2007
declined 20 basis points to 20.9 percent, compared with 21.1
percent in the prior fiscal year. Excluding incentive compensation,
same-store SG&A expenses grew five percent in fiscal 2007 when
compared to the prior fiscal year. "We are pleased with the
significant margin expansion achieved during fiscal 2007,"
continued Trevino. "Gross profit increased by 26 percent in fiscal
2007 compared to the prior fiscal year, while operating income more
than doubled during the same period. Disciplined expense control
helped us to generate substantial leverage within our operating
model during the year. Our decentralized large-branch strategy and
'one-stop-shop' approach continue to resonate with the contractors
we serve." Fiscal Year 2007 | Year-End Financial Highlights -- In
fiscal 2007, ACR Group reported the highest annual revenue, selling
margin and net income in the history of the Company. -- Revenues
grew 17.3 percent to $239.6 million in fiscal 2007, compared to
revenues of $204.3 million in the prior year. -- Same-store sales,
which excludes seven branches open one year or less, increased 13
percent in fiscal 2007 when compared to fiscal 2006. -- For the
fiscal year ended February 28, 2007, gross margin grew 180 basis
points to 25.5 percent, compared to gross margin of 23.7 percent in
the prior year. -- Operating margin increased 210 basis points to
4.6 percent in fiscal 2007, up from 2.5 percent in fiscal 2006. --
Net income more than doubled to $5.7 million in fiscal 2007, up
from $2.8 million in fiscal 2006. About ACR Group, Inc. With nearly
$240 million in revenue for the fiscal year ended February 28,
2007, 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. For Immediate Release ACR GROUP, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENTS (In
thousands, except per share amounts) (Unaudited) Quarter Ended Year
Ended February 28 February 28 2007 2006 2007 2006 Sales $45,562
$45,621 $239,643 $204,312 Cost of sales 33,925 34,561 178,607
155,981 Gross profit 11,637 11,060 61,036 48,331 Selling, general
and administrative expenses 11,663 10,630 50,042 43,197 Operating
income (loss) (26) 430 10,994 5,134 Interest expense 531 423 2,451
1,489 Interest derivative (gain) - (65) (84) (247) Other
non-operating (income) (154) (181) (659) (666) Income (loss) before
income taxes (403) 253 9,286 4,558 Provision (benefit) for income
taxes (177) 169 3,544 1,804 Net income (loss) $(226) $84 $5,742
$2,754 Earnings (loss) per share: Basic $ (.02) $.01 $.51 $.25
Diluted $ (.02) $.01 $.49 $.24 Weighted average and equivalent
shares: Basic 11,230 11,054 11,225 11,006 Diluted 11,648 11,426
11,625 11,360 DATASOURCE: ACR Group, Inc. CONTACT: Investor
Relations, Mr. Noel Ryan, Director, Lambert, Edwards &
Associates, +1-616-233-0500, for ACR Group, Inc.; or Mr. Tony
Maresca Chief Financial Officer of ACR Group, Inc.,
+1-713-780-8532, ext 101
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