UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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| ITEM 7.01 | Regulation FD Disclosure |
On April 29, 2022, Comfort Systems USA, Inc., a Delaware corporation (the “Company”), a leading provider of commercial, industrial and institutional heating, ventilation, air conditioning and electrical contracting services, posted to the “Investor” section of its Internet website (www.comfortsystemsusa.com) an investor presentation slideshow. The Company intends to use this slideshow in making presentations to analysts, potential investors, and other interested parties.
The information included in the investor presentation includes financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. The Company believes that the presentation of certain non-GAAP measures provides useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
The information in this Form 8-K being furnished under Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The investor presentation contains forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on the Company’s expectations and involve risks and uncertainties that could cause the Company’s actual results to differ materially from those set forth in the statements. These risks are discussed in the Company’s filings with the Securities and Exchange Commission, including an extensive discussion of these risks in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
A copy of the presentation is furnished herewith as Exhibit 99.1.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits.
|
Exhibit |
Description |
| 99.1 | Investor presentation dated April 29, 2022 |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COMFORT SYSTEMS USA, INC. | ||
| By: | /s/ Laura F. Howell | |
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Laura F. Howell Senior Vice President and General Counsel |
Date: April 29, 2022
Exhibit 99.1
Quality People. Building Solutions. NYSE: FIX April 29, 2022
SAFE HARBOR Certain statements and information in this presentation may constitute forward - looking statements within the meaning of applicab le securities laws and regulations. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” o r o ther similar expressions are intended to identify forward - looking statements, which are generally not historic in nature. These forward - looking statements ar e based on the current expectations and beliefs of Comfort Systems USA, Inc. and its subsidiaries (collectively, the “Company”) concerning future de vel opments and their effect on the Company. While the Company’s management believes that these forward - looking statements are reasonable as and when made, ther e can be no assurance that future developments affecting the Company will be those that it anticipates, and the Company’s actual results of operations, financial condition and liquidity, and the development of the industry in which the Company operates, may differ materially from those mad e in or suggested by the forward - looking statements contained in this presentation. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward - looking statements contained in this presentati on, those results or developments may not be indicative of our results or developments in subsequent periods. All comments concerning the Company ’s expectations for future revenue and operating results are based on the Company’s forecasts for its existing operations and do not include the pot ential impact of any future acquisitions. The Company’s forward - looking statements involve significant risks and uncertainties (some of which are beyond the Company’s control) and assumptions that could cause actual future results to differ materially from the Company’s historical experience and its pres ent expectations or projections. Important factors that could cause actual results to differ materially from those in the forward - looking statements include, bu t are not limited to: the use of incorrect estimates for bidding a fixed - price contract; undertaking contractual commitments that exceed the Company’s labor resources; failing to perform contractual obligations efficiently enough to maintain profitability; national or regional weakness in constructio n a ctivity and economic conditions; the Company’s business being negatively affected by health crises or outbreaks of disease, such as epidemics or p and emics (and related impacts, such as vaccine mandates or supply chain disruptions); financial difficulties affecting projects, vendors, customer s, or subcontractors; the Company’s backlog failing to translate into actual revenue or profits; failure of third party subcontractors and suppliers to co mplete work as anticipated; difficulty in obtaining or increased costs associated with bonding and insurance; impairment to goodwill; errors in the Compa ny’ s percentage - of - completion method of accounting; the result of competition in the Company’s markets; the Company’s decentralized management structure; m ate rial failure to comply with varying state and local laws, regulations or requirements; debarment from bidding on or performing government contracts; sh ortages of labor and specialty building materials or material increases to the cost thereof; retention of key management; seasonal fluctuations in th e demand for mechanical and electrical 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; an increase in our effective tax rate; a material information technology failure or a material cyber security breach; risks associated with acquisitions, such as challenges to our ability to integrate those companies into our internal control env ironment; our ability to manage growth and geographically - dispersed operations; our ability to obtain financing on acceptable terms; extreme weather cond itions (such as storms, droughts, extreme heat or cold, wildfires and floods), including as a result of climate change, and any resulting regulations or restrictions related thereto; and other risks detailed in our reports filed with the Securities and Exchange Commission (the “SEC”). For additional information regarding known material factors that could cause the Company’s results to differ from its project ed results, please see its filings with the SEC, including its Annual Report on Form 10 - K, Quarterly Reports on Form 10 - Q, and Current Reports on Form 8 - K. Readers are cautioned not to place undue reliance on forward - looking statements, which speak only as of the date hereof. The Company undertakes no obl igation to publicly update or revise any forward - looking statements after the date they are made, whether as a result of new information, future eve nts, or otherwise. NON - GAAP MEASURES Certain measures in this presentation are not measures calculated in accordance with generally accepted accounting principles (“ GAAP”). They should not be considered a replacement for GAAP results. Non - GAAP financial measures appearing in these slides are identified in the footno te. See the Appendices for a reconciliation of these non - GAAP measures to the most comparable GAAP financial measures.
COMFORT SYSTEMS USA 2 • Leading national mechanical, electrical and plumbing (“MEP”) installation and service provider • $3.5+ billion yearly revenue • 14,000 employees • History of profitable growth • Balanced construction and service portfolio
NATIONAL FOOTPRINT 3 173 locations | 128 cities | 14,000 employees
8% 14% 41% 29% 8% New Construction Existing Building Construction Modular Construction Service Projects Service Calls, Maintenance & Monitoring REVENUE BREAKDOWN – YTD 2022 4 Activity YTD 2022 Revenue = $885.2M Healthcare 15% Education 10% Government 7% Industrial 46% Office Buildings 9% Other 6% Retail / Restaurant / Entertainment 7% Market Sector
CONSTRUCTION BACKLOG 5 $763 $948 $1,166 $1,602 $1,511 $2,312 $2,733 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 2016 2017 2018 2019 2020 2021 Q1 2022 ($ in millions)
SERVICE MAINTENANCE BASE 6 $111 $116 $123 $127 $130 $147 $154 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 2016 2017 2018 2019 2020 2021 Q1 2022 ($ in millions)
RECENT FINANCIAL PERFORMANCE 7 Three Months Ended Twelve Months Ended ($ in millions, except per share information) 3/31/22 3/31/21 12/31/21 Revenue $885.2 $669.8 $3,073.6 Net Income $86.8 $26.5 $143.3 Diluted EPS $2.40 $0.73 $3.93 Adjusted EPS (1) $0.91 $0.73 $3.93 Adjusted EBITDA (2) $60.7 $51.2 $255.8 Operating Cash Flow $63.7 $84.6 $180.2 ( 1) Adjusted EPS is a non - GAAP financial measure. Adjusted EPS excludes tax gains. See Appendix II for a GAAP reconciliation to Ad justed EPS. (2) Adjusted EBITDA is a non - GAAP financial measure. See Appendix I for a GAAP reconciliation to Adjusted EBITDA.
FOCUS ON CASH FLOW • Positive free cash flow for 23 consecutive years • Increased dividend for 10 consecutive years • Debt/TTM EBITDA = 1.56 • $115.6M cash at March 31, 2022 • $412.5M total debt at March 31, 2022 • Debt capacity – $372.5M borrowings at 3/31/22 – $600M senior credit facility – 2025 maturity 8
9 CONSISTENT CAPITAL ALLOCATION ($ in thousands) $73,595 76% $13,116 14% $9,711 10% Average 2006 - 2021 Acquisitions Share Repurchases Dividends $96,423 $75,837 $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 Free Cash Flow Disc Spending
10 CAPITAL RETURNED ($ in thousands) Fiscal Periods Share Repurchases Dividends Capital Returned 2015 $8,330 $9,358 $17,688 2016 $13,088 $10,264 $23,352 2017 $9,007 $10,987 $19,994 2018 $28,533 $12,268 $40,801 2019 $19,550 $14,543 $34,093 2020 $30,120 $15,499 $45,619 2021 $27,054 $17,384 $44,438
STRONG MARKETS 11 Vertical Exposure • Pharma • Tech • Institutional • Manufacturing Trends • Industrial • Indoor Air Quality • Service • Modular Insert a picture here
MODULAR OFF - SITE CONSTRUCTION 12
OUR STRENGTH 13 • Consistent free cash flow • Strong Balance Sheet • Acquisition record • Leading innovation • Profitable growth
THANK YOU 14 173 Locations 42 operating companies across America at 173 locations in 128 cities 14,000 of the most qualified HVAC and electrical contracting personnel in America 14,000 Employees $3.5+ Billion $3.5+ billion in yearly revenue CONTACT: Julie Shaeff Chief Accounting Officer 1 - 800 - 723 - 8431 ir@comfortsystemsusa.com www.comfortsystemsusa.com
APPENDIX I – GAAP RECONCILIATION TO ADJUSTED EBITDA 15 Three Months Ended March 31, Twelve Months Ended December 31, ($ in thousands) 2022 2021 2021 Net Income $86,762 $26,491 $143,348 Provision (Benefit) for Income Taxes (49,053) 8,737 46,926 Other (Income) Expense, net (56) 69 (188) Changes in the Fair Value of Contingent Earn - out Obligations (4,088) (1,186) (7,820) Interest Expense, net 2,126 1,494 6,172 Gain on Sale of Assets (323) (350) (1,540) Tax - related SG&A costs 4,455 — — Depreciation and Amortization 20,837 15,976 68,944 Adjusted EBITDA $60,660 $51,231 $255,842 Note: The Company defines adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as net in come, provision for income taxes, other expense (income), net, changes in the fair value of contingent earn - out obligations, interest expense, net, gain on sale of assets, goodwill impairment , other one - time expenses or gains 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 acco rdi ngly, 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 t he Company.
APPENDIX II – GAAP RECONCILIATION TO ADJUSTED EPS 16 Three Months Ended March 31, 2022 2021 Diluted Income per Share $2.40 $0.73 Tax Gains (1.59) — Tax - Related SG&A Costs, Net of Tax 0.10 — Diluted Income per Share Excluding Tax Gains $0.91 $0.73 Note: Diluted income per share excluding tax gains is presented because the Company believes it reflects the results of the cor e ongoing operations of the Company, and we believe it is responsive to frequent questions we receive from third parties. This measure, however, is not considered a primary measure of an entity ’s financial results under generally accepted accounting principles, and accordingly, should not be considered an alternative to operating results as determined under generally accepted accounting p rin ciples and as reported by the Company.