Goodman Global, Inc. today announced results for the third quarter of 2006. The company reported net sales of U.S. $517.2 million for the 3 months ended Sept. 30, 2006, a 15 percent increase compared with net sales of $451.3 million for the same period last year.
For the third quarter of 2006, the company generated net income of $30.6 million, compared with $22.6 million for the third quarter of 2005. Net income for the third quarter 2006 included a $0.2 million expense related to a lower effective tax rate on prior quarters' IPO-related adjustments. Third-quarter 2005 net income included $0.3 million, net of taxes, in monitoring fees related to the 2004 acquisition by Apollo. Excluding the impact of the 2006 tax rate change-related expense and the 2005 monitoring fees, third-quarter 2006 adjusted net income increased 34 percent to $30.8 million from the prior year's third-quarter adjusted net income of $22.9 million.
In the third quarter 2006, the company benefited from a lower applicable tax rate, which added $2.0 million to net income and $0.03 to diluted earnings per share. This included a $1.2 million benefit related to the prior year's taxes and a $0.8 million cumulative benefit from a lower effective tax rate, including $0.3 million associated with the prior two quarters.
Diluted earnings per share were $0.43 for the third quarter of 2006, and $0.35 in the prior year's third quarter. Excluding the 2006 tax rate change-related expense and the 2005 monitoring fees, third-quarter 2006 adjusted earnings per share increased 22 percent to $0.44, compared with the prior year's third-quarter adjusted earnings per share of $0.36. In April 2006, Goodman completed the initial public offering of the company's common stock. A portion of the proceeds was used to redeem all of the outstanding Series A Preferred Stock, including accrued dividends. Further adjusting earnings per share as though the IPO had been completed at the beginning of 2005 and the preferred stock redeemed at that time, third-quarter 2006 adjusted earnings per share increased 33 percent from third-quarter 2005 pro-forma adjusted earnings per share of $0.33.
Goodman reported third-quarter 2006 EBITDA of $72.0 million, compared with third-quarter 2005 EBITDA of $63.0 million. EBITDA for the third quarter of 2005 included monitoring fees of $0.5 million. Excluding monitoring fees, third-quarter 2006 EBITDA increased 13 percent from an adjusted EBITDA of $63.5 million for the same period last year.
Record net sales of $517.2 million surpassed last year's third-quarter sales by 15 percent. Changes in volumes and mix, including the benefit of the transition to higher-priced 13-SEER units, led to a 13 percent increase in sales. A second-quarter 2006 price increase added 2 percentage points to the sales growth. The company believes it achieved market share gains in all major product categories. Goodman's year-to-year decline in compressor bearing units was less than reported industry trends and was offset by continued growth in units across all other major product categories.
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