Acr Group Inc 10-Q Quarterly Report January 2007

Houston, TX, Jan. 9, 2007 - 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 third quarter and nine-month period ended November 30, 2006 (fiscal 2007), highlighted by sustained growth in revenue and net income.

ACR Group reported total revenues of $56.0 million in the third quarter, a 12.0 percent increase from revenues of $50.0 million in the year-ago period. Net income for the quarter grew 40.5 percent to $919,000, or $0.08 per diluted share, compared with net income of $654,000, or $0.06 per diluted share, in the third quarter of fiscal 2006. Net income in the fiscal 2007 third quarter included a gain of $24,000 attributable to an increase in the fair market value of an interest rate swap agreement, versus a comparable gain of $344,000 in the year-ago period.

For the nine-month period ended November 30, 2006, ACR Group reported total revenues of $194.1 million, a 22.3 percent increase from revenues of $158.7 million in the comparable period last year. Net income for the current nine-month period grew 123.5 percent to $6.0 million, or $0.52 per diluted share, compared to net income of $2.7 million, or $0.24 per diluted share, in the year ago period. Same-store sales for the nine-month period ended November 30, 2006, which excludes seven branches opened after fiscal 2005, increased 17.8 percent from the year-ago period.

The year-over-year increase in revenue and profitability was attributable to broad-based demand for the full range of products offered by the company, including higher efficiency HVAC equipment that complies with federally mandated minimum efficiency standards first put into effect in early 2006, favorable point of sale pricing and sustained demand for the remaining inventory of lower efficiency HVAC equipment. The Company reported that, despite robust same-store sales growth in the early weeks of the fiscal 2007 third quarter, branch sales slowed in the final weeks of the quarter, in line with historical trends entering the seasonally slowest quarter of the year.

“Throughout fiscal 2007, we’ve remained committed to identifying additional avenues of profitable growth, as evidenced by our five branch openings in this year alone - the most new branch openings announced by the Company since fiscal 2001,” said Alex Trevino, Jr., President and CEO of ACR Group. “As we continue to diversify our geographic presence in high growth markets throughout the country, we remain focused on penetrating new geographies that position us to grow our existing base of dealer and contractor relationships.”

Gross margin increased 180 basis points to 25.4 percent in the fiscal 2007 third quarter, compared to 23.6 percent in the year-ago period. For the nine-month period ended November 30, 2006, the Company’s gross margin was 25.5 percent, compared to 23.5 percent for the same period last year. The improved selling margins reflected a continuation of conditions that arose earlier in fiscal 2007, including both a shift of sales to higher efficiency HVAC equipment and demand for the remaining inventory of lower efficiency HVAC equipment.

The following information was filed by Acr Group Inc on Friday, January 12, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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CIK: 711307
Form Type: 10-Q Quarterly Report
Accession Number: 0000711307-07-000004
Submitted to the SEC: Tue Jan 16 2007 2:46:09 PM EST
Accepted by the SEC: Tue Jan 16 2007
Period: Tuesday, January 16, 2007
Industry: Wholesale Hardware And Plumbing And Heating Equipment And Supplies