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Comfort Systems USA Reports First Quarter Results

-- Profits and Margins Increase Strongly on Higher Revenues

HOUSTON, May 01, 2008 (BUSINESS WIRE) -- 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 $8,241,000 or $0.20 per diluted share, for the quarter ended March 31, 2008, as compared to net income of $1,806,000 or $0.04 per diluted share, in the first quarter of 2007.

Bill Murdy, Comfort Systems USA's Chairman and CEO, said, "We are pleased to report to our stockholders a record first quarter highlighted by continued improvement in overall profitability. The sharp increase in profits compared to the first quarter of last year marks a promising start to 2008. Our operations displayed remarkable and broad based strength this quarter, especially in light of the fact that the first quarter historically reflects seasonal weakness."

The Company reported revenues of $295,705,000 ($283,327,000 on a same store basis) in the current quarter, as compared to $249,640,000 in 2007. Following a very strong fourth quarter cash flow, the Company reported negative free cash flow of $3,718,000 in the current quarter, which was funded entirely by existing cash balances. Backlog as of March 31, 2008 was $811,255,000 ($733,170,000 on a same store basis), compared to $786,673,000 as of December 31, 2007. Backlog as of March 31, 2007 was $700,522,000.

Murdy continued, "Same store revenue grew by 13% thanks to fine execution by our team members, successful business development and diversification at many existing operations, good underlying activity levels and good weather for construction activity. Recent acquisitions also made a strong contribution, and we look forward to more strength from them as the year progresses. Our Atlas subsidiary, which experienced grave challenges in 2007, is on track with its recovery plan and broke even for the quarter."

Bill Murdy concluded, "Although we are keenly aware of the economic challenges that we all face, today our business activity pipeline remains active. Our Company's culture was formed in adverse conditions, and with the growth and improvements we have worked on over the past few years we believe that we are prepared to weather any business climate. Backlog is up compared to last year, and we continue to feel very positive about our prospects for 2008."

As previously announced, the Company will host a conference call to discuss its financial results and position in more depth on Friday, May 2, 2008 at 10:00 a.m. Central Time. The call-in number for this conference call is 1-888-713-4216 and enter 47188910 as the passcode. Participants may pre-register for the call at www.theconferencingservice.com/prereg/key.process?key=PWCVWAEH3. 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, Friday, May 9, 2008 by calling 1-888-286-8010 with the conference passcode of 66003775, and will also be available on our website on the next business day following the call.

Comfort Systems USA(R) is a premier provider of business solutions addressing workplace comfort, with 73 locations in 58 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 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, national or regional weakness in non-residential construction activity, difficulty in obtaining or increased costs associated with bonding, shortages of labor and specialty building materials, the use of incorrect estimates for bidding a fixed price contract, undertaking contractual commitments that exceed our labor resources, retention of key management, the Company's backlog failing to translate into actual revenue or profits, errors in the Company's percentage of completion method of accounting, the result of competition in the Company's markets, 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 the Company's reports filed with the Securities and Exchange Commission. Important factors that could cause actual results to differ are discussed under "Item 1A. Company Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2007. These forward-looking statements speak only as of the date of this release. 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 Comfort Systems USA, Inc.'s expectations with regard thereto or any change in events, 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, 2008 and 2007
               (in thousands, except per share amounts)
                             (unaudited)

                                      Three Months Ended
                                          March 31,
                        ----------------------------------------------

                            2008          %         2007         %
                        ------------- --------- ------------ ---------
Revenues                $    295,705     100.0% $   249,640     100.0%
Cost of services             242,285      81.9%     213,126      85.4%
                        -------------           ------------
Gross profit                  53,420      18.1%      36,514      14.6%

SG&A                          40,640      13.7%      34,377      13.8%
Gain on sale of assets           (30)       --          (19)       --
                        -------------           ------------
Operating income              12,810       4.3%       2,156       0.9%

Interest income, net             678       0.2%         551       0.2%
Other income                     106        --           33        --
                        -------------           ------------
Income before income
 taxes                        13,594       4.6%       2,740       1.1%
Income tax expense             5,353                    934
                        -------------           ------------
Net income              $      8,241       2.8% $     1,806       0.7%
                        =============           ============


Income per share:
  Basic -               $       0.21            $      0.04
  Diluted -             $       0.20            $      0.04

Shares used in
 computing income per
 share:
  Basic                       39,839                 40,499
  Diluted                     40,484                 41,303


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,
                         ---------------------------------------------
                             2008         %         2007         %
                         ------------ --------- ------------ ---------
Net income               $     8,241            $     1,806
Income taxes                   5,353                    934
Other income                    (106)                   (33)
Interest income, net            (678)                  (551)
Gain on sale of assets           (30)                   (19)
Depreciation and
 amortization                  2,540                  1,544
                         ------------           ------------
Adjusted EBITDA          $    15,320       5.2% $     3,681       1.5%
                         ============           ============


Note 1: The Company defines adjusted earnings before interest, taxes,
 depreciation and amortization ("Adjusted EBITDA") as net income,
 excluding income taxes, other income, interest income, 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, 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)

                                               March 31,  December 31,
                                                 2008             2007
                                             ------------ ------------
                                             (unaudited)

Cash and cash equivalents                    $     88,636 $    139,631
Accounts receivable, net                          270,717      261,402
Costs and estimated earnings in excess of
 billings                                          22,009       18,463
Other current assets                               42,078       31,127
                                             ------------ ------------
  Total current assets                            423,440      450,623
Property and equipment, net                        29,853       21,442
Goodwill                                           82,503       68,621
Other noncurrent assets                            28,593        6,381
                                             ------------ ------------
  Total assets                               $    564,389 $    547,067
                                             ============ ============

Current maturities of long-term debt         $         -- $         --
Current maturities of capital lease
 obligations                                           92           --
Current maturities of notes to former owners        4,709          375
Accounts payable                                   85,030       90,866
Billings in excess of costs and estimated
 earnings                                         110,547      104,236
Other current liabilities                          85,282       86,216
                                             ------------ ------------
  Total current liabilities                       285,660      281,693
Long-term debt, net of current maturities              --           --
Capital lease obligations, net of current
 maturities                                            83           --
Notes to former owners, net of current
 maturities                                         9,791        1,125
Other long-term liabilities                         3,158        1,671
                                             ------------ ------------
Total liabilities                                 298,692      284,489
Total stockholders' equity                        265,697      262,578
                                             ------------ ------------
  Total liabilities and stockholders' equity $    564,389 $    547,067
                                             ============ ============



Selected Cash Flow Data (in thousands):
---------------------------------------------

                                                Three Months Ended
                                                     March 31,
                                             -------------------------
                                                    (unaudited)
                                                 2008         2007
                                             ------------ ------------
Cash provided by (used in)
  Operating activities                       $    (1,046) $   (12,828)
  Investing activities                       $   (44,305) $    (6,872)
  Financing activities                       $    (5,644) $    (1,548)

Free cash flow:
  Cash from operating activities             $    (1,046) $   (12,828)
  Purchases of property and equipment             (2,752)      (2,490)
  Proceeds from sales of property and
   equipment                                          80           41
                                             ------------ ------------

Free cash flow                               $    (3,718) $   (15,277)
                                             ============ ============


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.

SOURCE:
Comfort Systems USA, Inc.

Comfort Systems USA, Inc., Houston
William George, 713-830-9600
Chief Financial Officer

Our company went public in June 1997, with the intention of becoming a nationwide provider of building systems installation and maintenance.

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