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EX-99.1 - EX-99.1 - COMFORT SYSTEMS USA INCa11-11469_1ex99d1.htm
8-K - 8-K - COMFORT SYSTEMS USA INCa11-11469_18k.htm

Exhibit 99.2

 

 

 

 

 

 

 

 

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 FIRST QUARTER RESULTS

 

Houston, TX — May 3, 2011 — Comfort Systems USA, Inc. (NYSE: FIX), a leading provider of commercial, industrial and institutional heating, ventilation and air conditioning (“HVAC”) services, today announced a net loss of $5,170,000, or $0.14 per diluted share, for the quarter ended March 31, 2011, as compared to net income of $1,927,000, or $0.05 per diluted share, in the first quarter of 2010.  The Company reported revenues of $282,059,000 in the current quarter.  On a same-store basis, the Company reported revenue of $241,240,000, as compared to $236,475,000 in 2010.  The Company also reported negative free cash flow of $21,179,000 in the current quarter, as compared to negative free cash flow of $12,580,000 in the first quarter of 2010.  Backlog as of March 31, 2011 was $619,482,000 compared to $617,898,000 as of December 31, 2010.

 

Bill Murdy, Comfort Systems USA’s Chairman and CEO, said, “Seasonally low activity levels and the continued effects of a deep construction recession combined to produce our first quarterly operating loss in eight years.  The loss was caused by generally weak results at most of our locations and by specific job write-downs at our South Alabama operation, which was recently consolidated into a successful neighboring operation in the Florida Panhandle.  As in past years, first quarter cash flow was negative, but we expect that cash flow will improve in future quarters.  Backlog remained at overall solid levels this quarter.”

 

Bill Murdy concluded, “Despite the weak start, we expect to be profitable and achieve positive free cash flow in 2011.  Although market conditions remain difficult, especially in new construction, we believe that we remain well-positioned to capitalize on opportunities when construction markets improve.”

 

As previously announced, the Company will host a conference call to discuss its financial results and position in more depth on Wednesday, May 4, 2011 at 10:00 a.m. Central Time.  The call-in number for this conference call is 1-888-680-0890 and enter 24812045 as the passcode.  Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PXJE3DWMK.  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, Wednesday, May 11, 2011 by calling 1-888-286-8010 with the conference passcode of 11069608, 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 84 locations in 70 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 of 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” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.  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 Ended March 31, 2011 and 2010

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2011

 

%

 

2010

 

%

 

Revenues

 

$

282,059

 

100.0

%

$

236,475

 

100.0

%

Cost of services

 

247,850

 

87.9

%

196,967

 

83.3

%

Gross profit

 

34,209

 

12.1

%

39,508

 

16.7

%

 

 

 

 

 

 

 

 

 

 

SG&A

 

42,622

 

15.1

%

37,409

 

15.8

%

Gain on sale of assets

 

(85

)

––

 

(5

)

––

 

Operating income (loss)

 

(8,328

)

(3.0

)%

2,104

 

0.9

%

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(461

)

(0.2

)%

(221

)

(0.1

)%

Other income (expense), net

 

(80

)

––

 

12

 

––

 

Income (loss) before income taxes

 

(8,869

)

(3.1

)%

1,895

 

0.8

%

Income tax (benefit) expense

 

(3,699

)

 

 

730

 

 

 

Income (loss) from continuing operations

 

(5,170

)

(1.8

)%

1,165

 

0.5

%

 

 

 

 

 

 

 

 

 

 

Gain on disposition of discontinued operation, including income tax benefit of $–– and $29

 

––

 

 

 

762

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(5,170

)

(1.8

)%

$

1,927

 

0.8

%

 

 

 

 

 

 

 

 

 

 

Income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic-

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

(0.14

)

 

 

$

0.03

 

 

 

Gain on disposition of discontinued operation

 

––

 

 

 

0.02

 

 

 

Net income (loss)

 

$

(0.14

)

 

 

$

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted -

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

(0.14

)

 

 

$

0.03

 

 

 

Gain on disposition of discontinued operation

 

––

 

 

 

0.02

 

 

 

Net income (loss)

 

$

(0.14

)

 

 

$

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

37,537

 

 

 

37,533

 

 

 

Diluted

 

37,537

 

 

 

37,819

 

 

 

 

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
March 31,

 

 

 

2011

 

%

 

2010

 

%

 

Net income (loss)

 

$

(5,170

)

 

 

$

1,927

 

 

 

Discontinued operation

 

––

 

 

 

(762

)

 

 

Income taxes

 

(3,699

)

 

 

730

 

 

 

Other (income) expense, net

 

80

 

 

 

(12

)

 

 

Interest expense, net

 

461

 

 

 

221

 

 

 

Gain on sale of assets

 

(85

)

 

 

(5

)

 

 

Depreciation and amortization

 

4,819

 

 

 

3,636

 

 

 

Adjusted EBITDA

 

$

(3,594

)

(1.3

)%

$

5,735

 

2.4

%

 

Note 1:  The Company defines adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as net income (loss), excluding discontinued operation, income taxes, other (income) expense, interest expense, net, gain 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 (loss), net income (loss), 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)

 

 

 

March 31,
2011

 

December 31,
2010

 

 

 

(unaudited)

 

 

 

Cash and cash equivalents

 

$

63,636

 

$

86,346

 

Accounts receivable, net

 

232,825

 

233,893

 

Costs and estimated earnings in excess of billings

 

25,699

 

26,648

 

Other current assets

 

56,522

 

56,061

 

Total current assets

 

378,682

 

402,948

 

Property and equipment, net

 

42,657

 

43,620

 

Goodwill

 

149,090

 

147,818

 

Identifiable intangible assets, net

 

39,088

 

39,616

 

Other noncurrent assets

 

6,758

 

6,018

 

Total assets

 

$

616,275

 

$

640,020

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

300

 

$

300

 

Current maturities of notes to former owners

 

2,017

 

967

 

Accounts payable

 

88,581

 

101,134

 

Billings in excess of costs and estimated earnings

 

62,466

 

63,422

 

Other current liabilities

 

98,650

 

102,387

 

Total current liabilities

 

252,014

 

268,210

 

Long-term debt, net of current maturities

 

2,700

 

2,700

 

Notes to former owners, net of current maturities

 

24,919

 

25,969

 

Other long-term liabilities

 

29,575

 

30,357

 

Total liabilities

 

309,208

 

327,236

 

Total stockholders’ equity

 

307,067

 

312,784

 

Total liabilities and stockholders’ equity

 

$

616,275

 

$

640,020

 

 

Selected Cash Flow Data (in thousands):

 

 

 

Three Months Ended
March 31,

 

 

 

(unaudited)

 

 

 

2011

 

2010

 

Cash used in:

 

 

 

 

 

Operating activities

 

$

(19,066

)

$

(11,461

)

Investing activities

 

$

(1,874

)

$

(2,554

)

Financing activities

 

$

(1,770

)

$

(4,065

)

 

 

 

 

 

 

Free cash flow:

 

 

 

 

 

Cash used in operating activities

 

$

(19,066

)

$

(11,461

)

Purchases of property and equipment

 

(2,360

)

(1,222

)

Proceeds from sales of property and equipment

 

247

 

103

 

 

 

 

 

 

 

Free cash flow

 

$

(21,179

)

$

(12,580

)

 

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.