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EX-99.2 - EX-99.2 - COMFORT SYSTEMS USA INCa10-4903_1ex99d2.htm
8-K - CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES - COMFORT SYSTEMS USA INCa10-4903_18k.htm

Exhibit 99.1

 

 

CONTACT:

 

William George

 

675 Bering Drive, Suite 400

 

 

Chief Financial Officer

 

Houston, Texas 77057

 

 

713-830-9600

 

713-830-9600

 

 

 

 

713-830-9696

 

FOR IMMEDIATE RELEASE

 

COMFORT SYSTEMS USA REPORTS FOURTH QUARTER AND FULL YEAR RESULTS

 

— Strong Earnings and Cash Flows —

 

Houston, TX — March 1, 2010 — Comfort Systems USA, Inc. (NYSE: FIX), a leading provider of commercial, industrial and institutional heating, ventilation and air conditioning (“HVAC”) services, today announced net income of $7,602,000 or $0.20 per diluted share, for the quarter ended December 31, 2009, as compared to net income of $12,491,000 or $0.32 per diluted share, in the fourth quarter of 2008.  Net income from continuing operations for the three months ended December 31, 2009 was $7,536,000 or $0.20 per diluted share as compared to $12,720,000 or $0.32 per diluted share for the fourth quarter of 2008.  The Company reported revenues from continuing operations of $256,693,000 in the current quarter, as compared to $327,908,000 in 2008.  The Company also reported free cash flow of $6,730,000 in the current quarter, as compared to $32,101,000 in 2008.  Backlog as of December 31, 2009 was $550,248,000 ($523,146,000 on a same store basis) compared to $554,280,000 as of September 30, 2009.  Backlog as of December 31, 2008 was $751,633,000.

 

Bill Murdy, Comfort Systems USA’s Chairman and CEO, said, “We are pleased to report that in the fourth quarter and for all of 2009 we achieved strong profitability and generated substantial cash despite a challenging environment.  Once again our workforce delivered industry-leading quality and results.  As expected we are reporting revenue and backlog declines, although we remain optimistic in light of our solid backlog levels and our demonstrated ability to book smaller projects and service work.  We are confident that we will earn more than our share of available business in the coming months.”

 

The Company reported net income for the year ended December 31, 2009 of $34,182,000 or $0.89 per diluted share, as compared to $49,690,000 or $1.24 per diluted share in 2008.  Net income from continuing operations for the year ended December 31, 2009 was $34,596,000 or $0.90 per diluted share as compared to $49,804,000 or $1.24 per diluted share for 2008.  The Company also reported revenues of $1,128,907,000 from continuing operations for 2009, as compared to $1,321,770,000 in 2008.  Free cash flow for the year ended December 31, 2009 was $45,564,000 as compared to free cash flow of $68,935,000 in 2008.

 

Bill Murdy concluded, “We anticipate solid profitability in 2010 and we believe we can improve our competitive position in the markets we serve.  We plan to invest in existing operations and we believe that over the coming months we will continue to add new businesses in attractive geographies.”

 

As previously announced, the Company will host a conference call to discuss its financial results and position in more depth on Tuesday, March 2, 2010 at 10:00 a.m. Central Time.  The call-in number for this conference call is 1-888-713-4216 and enter 51850181 as the passcode.  Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PUKWBPU4B.  Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection.  The call can also be accessed on the Company’s website at www.comfortsystemsusa.com under the Investor tab.  A replay of the entire call will be available until 6:00 p.m. Central Time, Monday, March 8, 2010 by calling 1-888-286-8010 with the conference passcode of 75606263, and will also be available on our website on the next business day following the call.

 

Comfort Systems USAÒ is a premier provider of business solutions addressing workplace comfort, with 80 locations in 72 cities around the nation.  For more information, visit the Company’s website at www.comfortsystemsusa.com.

 



 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current plans and expectations of future events Comfort Systems USA, Inc. and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, among others, the use of incorrect estimates for bidding a fixed-price contract, undertaking contractual commitments that exceed our labor resources, failing to perform contractual obligations efficiently enough to maintain profitability, national or regional weakness in construction activity and economic conditions, financial difficulties affecting projects, vendors, customers, or subcontractors, our backlog failing to translate into actual revenue or profits, difficulty in obtaining or increased costs associated with bonding and insurance, impairment to goodwill, errors in our percentage-of-completion method of accounting, the result of competition in our markets, our decentralized management structure, shortages of labor and specialty building materials, retention of key management, seasonal fluctuations in the demand for HVAC systems, the imposition of past and future liability from environmental, safety, and health regulations including the inherent risk associated with self-insurance, adverse litigation results and other risks detailed in our reports filed with the Securities and Exchange Commission. A further list and description of these risks, uncertainties and other factors are discussed under “Item 1A. Company Risk Factors.” These forward-looking statements speak only as of the date of this filing. Comfort Systems USA, Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, developments, conditions or circumstances on which any such statement is based.

 

— Financial tables follow —

 



 

Comfort Systems USA, Inc.

Consolidated Statements of Operations

For the Three Months and Twelve Months Ended December 31, 2009 and 2008

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

2009

 

%

 

2008

 

%

 

2009

 

%

 

2008

 

%

 

Revenues

 

$

256,693

 

100.0

%

$

327,908

 

100.0

%

$

1,128,907

 

100.0

%

$

1,321,770

 

100.0

%

Cost of services

 

202,022

 

78.7

%

255,046

 

77.8

%

903,357

 

80.0

%

1,061,830

 

80.3

%

Gross profit

 

54,671

 

21.3

%

72,862

 

22.2

%

225,550

 

20.0

%

259,940

 

19.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SG&A

 

42,848

 

16.7

%

52,387

 

16.0

%

169,023

 

15.0

%

180,784

 

13.7

%

(Gain) loss on sale of assets

 

(8

)

 

21

 

 

(106

)

 

(290

)

 

Operating income

 

11,831

 

4.6

%

20,454

 

6.2

%

56,633

 

5.0

%

79,446

 

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

(163

)

(0.1

)%

156

 

 

(617

)

(0.1

)%

1,160

 

0.1

%

Other income

 

12

 

 

(94

)

 

17

 

 

64

 

 

Income before income taxes

 

11,680

 

4.6

%

20,516

 

6.3

%

56,033

 

5.0

%

80,670

 

6.1

%

Income tax expense

 

4,144

 

 

 

7,796

 

 

 

21,437

 

 

 

30,866

 

 

 

Income from continuing operations

 

7,536

 

2.9

%

12,720

 

3.9

%

34,596

 

3.1

%

49,804

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

Operating income (loss), net of income tax (expense) benefit of $48, $110, $181, and $(35)

 

48

 

 

 

(229

)

 

 

(339

)

 

 

(114

)

 

 

Estimated gain (loss) on disposition, net of tax expense of $(214), $—, $(214), and $—

 

18

 

 

 

 

 

 

(75

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

7,602

 

3.0

%

$

12,491

 

3.8

%

$

34,182

 

3.0

%

$

49,690

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.20

 

 

 

$

0.33

 

 

 

$

0.91

 

 

 

$

1.26

 

 

 

Discontinued operations -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

 

 

(0.01

)

 

 

(0.01

)

 

 

 

 

 

Estimated loss on disposition

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

0.20

 

 

 

$

0.32

 

 

 

$

0.90

 

 

 

$

1.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.20

 

 

 

$

0.32

 

 

 

$

0.90

 

 

 

$

1.24

 

 

 

Discontinued operations -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

 

 

 

 

 

(0.01

)

 

 

 

 

 

Estimated loss on disposition

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

0.20

 

 

 

$

0.32

 

 

 

$

0.89

 

 

 

$

1.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

37,780

 

 

 

38,825

 

 

 

38,046

 

 

 

39,424

 

 

 

Diluted

 

38,208

 

 

 

39,217

 

 

 

38,451

 

 

 

40,025

 

 

 

 

Note 1:  The diluted earnings per share data presented above reflects the dilutive effect, if any, of stock options and contingently issuable restricted stock which were outstanding during the periods presented.

 

Supplemental Non-GAAP Information – Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) (Unaudited):

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2009

 

%

 

2008

 

%

 

2009

 

%

 

2008

 

%

 

Net income

 

$

7,602

 

 

 

$

12,491

 

 

 

$

34,182

 

 

 

$

49,690

 

 

 

Discontinued operations

 

(66

)

 

 

229

 

 

 

414

 

 

 

114

 

 

 

Income taxes

 

4,144

 

 

 

7,796

 

 

 

21,437

 

 

 

30,866

 

 

 

Other income

 

(12

)

 

 

94

 

 

 

(17

)

 

 

(64

)

 

 

Interest (income) expense, net

 

163

 

 

 

(156

)

 

 

617

 

 

 

(1,160

)

 

 

(Gain) loss on sale of assets

 

(8

)

 

 

21

 

 

 

(106

)

 

 

(290

)

 

 

Depreciation and amortization

 

3,630

 

 

 

3,092

 

 

 

13,432

 

 

 

12,586

 

 

 

Adjusted EBITDA

 

$

15,453

 

6.0

%

$

23,567

 

7.2

%

$

69,959

 

6.2

%

$

91,742

 

6.9

%

 

Note 1:  The Company defines adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as net income, excluding discontinued operations, income taxes, other income, interest (income) expense, net, (gain) loss on sale of assets and depreciation and amortization.  Other companies may define Adjusted EBITDA differently. Adjusted EBITDA is presented because it is a financial measure that is frequently requested by third parties.  However, Adjusted EBITDA is not considered under generally accepted accounting principles as a primary measure of an entity’s financial results, and accordingly, Adjusted EBITDA should not be considered an alternative to operating income, net income, or cash flows as determined under generally accepted accounting principles and as reported by the Company.

 



 

Comfort Systems USA, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

December 31,

 

December 31,

 

 

 

2009

 

2008

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

127,850

 

$

117,015

 

Accounts receivable, net

 

203,353

 

266,602

 

Costs and estimated earnings in excess of billings

 

20,432

 

19,123

 

Other current assets

 

61,520

 

40,905

 

Assets related to discontinued operations

 

 

1,544

 

Total current assets

 

413,155

 

445,189

 

Property and equipment, net

 

34,671

 

35,650

 

Goodwill

 

100,194

 

90,940

 

Identifiable intangible assets, net

 

19,380

 

16,281

 

Other noncurrent assets

 

7,548

 

10,432

 

Total assets

 

$

574,948

 

$

598,492

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

250

 

$

 

Current maturities of notes to former owners

 

917

 

1,336

 

Accounts payable

 

83,848

 

98,190

 

Billings in excess of costs and estimated earnings

 

66,343

 

97,505

 

Other current liabilities

 

97,672

 

100,957

 

Liabilities related to discontinued operations

 

 

397

 

Total current liabilities

 

249,030

 

298,385

 

Long-term debt, net of current maturities

 

 

 

Notes to former owners, net of current maturities

 

6,441

 

9,363

 

Other long-term liabilities

 

13,493

 

4,273

 

Total liabilities

 

268,964

 

312,021

 

Total stockholders’ equity

 

305,984

 

286,471

 

Total liabilities and stockholders’ equity

 

$

574,948

 

$

598,492

 

 

Selected Cash Flow Data (in thousands):

 

 

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

 

 

(unaudited)

 

 

 

 

 

 

 

2009

 

2008

 

2009

 

2008

 

Cash provided by (used in):

 

 

 

 

 

 

 

 

 

Operating activities

 

$

9,497

 

$

35,895

 

$

54,251

 

$

82,851

 

Investing activities

 

$

(11,581

)

$

(3,913

)

$

(18,822

)

$

(65,034

)

Financing activities

 

$

(9,929

)

$

(17,267

)

$

(24,594

)

$

(40,433

)

 

 

 

 

 

 

 

 

 

 

Free cash flow:

 

 

 

 

 

 

 

 

 

Cash from operating activities

 

$

9,497

 

$

35,895

 

$

54,251

 

$

82,851

 

Purchases of property and equipment

 

(3,037

)

(3,794

)

(9,457

)

(14,572

)

Proceeds from sales of property and equipment

 

270

 

 

770

 

656

 

 

 

 

 

 

 

 

 

 

 

Free cash flow

 

$

6,730

 

$

32,101

 

$

45,564

 

$

68,935

 

 

Note 1:  Free cash flow is defined as cash flow from operating activities less customary capital expenditures, plus the proceeds from asset sales.  Other companies may define free cash flow differently.  Free cash flow is presented because it is a financial measure that is frequently requested by third parties.  However, free cash flow is not considered under generally accepted accounting principles as a primary measure of an entity’s financial results, and accordingly, free cash flow should not be considered an alternative to operating income, net income, or cash flows as determined under generally accepted accounting principles and as reported by the Company.