Comfort Systems USA Reports Fourth Quarter and Full Year 2018 Results
The Company reported net income of
Mr. Lane concluded, “Our operations achieved unprecedented success in 2018, with annual earnings per share growing by more than 60% from 2017 to 2018. In 2018, we benefited from favorable tax rate changes; however, our pre-tax income was also up markedly, increasing by 47.3% as a result of improving execution and strong same store growth. In light of our substantial increase in backlog compared to the end of 2017, and given our perception that industry conditions continue to be strong, we believe that we are well positioned for continued success in 2019.”
The Company will host a webcast and conference call to discuss its
financial results and position on
Certain statements and information in this press release may
constitute forward-looking statements regarding our future business
expectations, which are subject to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The words “believe,”
“expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,”
“could,” or other similar expressions are intended to identify
forward-looking statements, which are generally not historic in nature.
These forward-looking statements are based on the current expectations
and beliefs of
For additional information regarding known material factors that
could cause the Company’s results to differ from its projected results,
please see its filings with the
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.
— Financial tables follow —
Comfort Systems USA, Inc. Consolidated Statements of Operations (In Thousands, Except per Share Amounts) |
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Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
2018 | % | 2017 | % | 2018 | % | 2017 | % | ||||||||||||||||||||||
Revenue | $ | 588,359 | 100.0 | % | $ | 461,072 | 100.0 | % | $ | 2,182,879 | 100.0 | % | $ | 1,787,922 | 100.0 | % | |||||||||||||
Cost of services | 470,184 | 79.9 | % | 367,341 | 79.7 | % | 1,736,600 | 79.6 | % | 1,421,641 | 79.5 | % | |||||||||||||||||
Gross profit | 118,175 | 20.1 | % | 93,731 | 20.3 | % | 446,279 | 20.4 | % | 366,281 | 20.5 | % | |||||||||||||||||
SG&A | 80,458 | 13.7 | % | 70,033 | 15.2 | % | 296,986 | 13.6 | % | 266,586 | 14.9 | % | |||||||||||||||||
Goodwill impairment | — | — | — | — | — | — | 1,105 | 0.1 | % | ||||||||||||||||||||
Gain on sale of assets | (315 | ) | (0.1 | )% | (206 | ) | — | (945 | ) | — | (670 | ) | — | ||||||||||||||||
Operating income | 38,032 | 6.5 | % | 23,904 | 5.2 | % | 150,238 | 6.9 | % | 99,260 | 5.6 | % | |||||||||||||||||
Interest expense, net | (1,089 | ) | (0.2 | )% | (749 | ) | (0.2 | )% | (3,637 | ) | (0.2 | )% | (3,086 | ) | (0.2 | )% | |||||||||||||
Changes in the fair value of contingent earn-out obligations | (2,559 | ) | (0.4 | )% | 1,870 | 0.4 | % | (2,066 | ) | (0.1 | )% | 3,715 | 0.2 | % | |||||||||||||||
Other income (expense) | 79 | — | 992 | 0.2 | % | 4,141 | 0.2 | % | 1,049 | — | |||||||||||||||||||
Income before income taxes | 34,463 | 5.9 | % | 26,017 | 5.6 | % | 148,676 | 6.8 | % | 100,938 | 5.6 | % | |||||||||||||||||
Provision for income taxes | 9,307 | 18,478 | 35,773 | 45,666 | |||||||||||||||||||||||||
Net income | $ | 25,156 | 4.3 | % | $ | 7,539 | 1.6 | % | $ | 112,903 | 5.2 | % | $ | 55,272 | 3.1 | % | |||||||||||||
Income per share | |||||||||||||||||||||||||||||
Basic | $ | 0.68 | $ | 0.20 | $ | 3.03 | $ | 1.48 | |||||||||||||||||||||
Diluted | $ | 0.67 | $ | 0.20 | $ | 3.00 | $ | 1.47 | |||||||||||||||||||||
Shares used in computing income per share: | |||||||||||||||||||||||||||||
Basic | 37,102 | 37,232 | 37,202 | 37,239 | |||||||||||||||||||||||||
Diluted | 37,467 | 37,626 | 37,592 | 37,672 | |||||||||||||||||||||||||
Supplemental Non-GAAP Information — Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) — (Unaudited) (In Thousands)
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||||||||
2018 | % | 2017 | % | 2018 | % | 2017 | % | ||||||||||||||||||||||||||||||
Net income | $ | 25,156 | $ | 7,539 | $ | 112,903 | $ | 55,272 | |||||||||||||||||||||||||||||
Provision for income taxes | 9,307 | 18,478 | 35,773 | 45,666 | |||||||||||||||||||||||||||||||||
Other expense (income), net | (79 | ) | (992 | ) | (4,141 | ) | (1,049 | ) | |||||||||||||||||||||||||||||
Changes in the fair value of contingent earn-out obligations | 2,559 | (1,870 | ) | 2,066 | (3,715 | ) | |||||||||||||||||||||||||||||||
Interest expense, net | 1,089 | 749 | 3,637 | 3,086 | |||||||||||||||||||||||||||||||||
Gain on sale of assets | (315 | ) | (206 | ) | (945 | ) | (670 | ) | |||||||||||||||||||||||||||||
Goodwill impairment | — | — | — | 1,105 | |||||||||||||||||||||||||||||||||
Depreciation and amortization | 11,957 | 10,120 | 42,689 | 37,456 | |||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 49,674 | 8.4 | % | $ | 33,818 | 7.3 | % | $ | 191,982 | 8.8 | % | $ | 137,151 | 7.7 | % | |||||||||||||||||||||
Note: The Company defines adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as net income, 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 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) |
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December 31, | December 31, | |||||||
2018 | 2017 | |||||||
Cash and cash equivalents | $ | 45,620 | $ | 36,542 | ||||
Billed accounts receivable, net | 481,366 | 382,867 | ||||||
Unbilled accounts receivable | 37,180 | — | ||||||
Costs and estimated earnings in excess of billings | 10,213 | 30,116 | ||||||
Other current assets | 35,321 | 39,832 | ||||||
Total current assets | 609,700 | 489,357 | ||||||
Property and equipment, net | 99,618 | 87,591 | ||||||
Goodwill | 235,182 | 200,584 | ||||||
Identifiable intangible assets, net | 95,275 | 76,044 | ||||||
Other noncurrent assets | 22,789 | 27,544 | ||||||
Total assets | $ | 1,062,564 | $ | 881,120 | ||||
Current maturities of long-term debt | $ | 3,279 | $ | 613 | ||||
Accounts payable | 176,167 | 132,011 | ||||||
Billings in excess of costs and estimated earnings | 130,986 | 106,005 | ||||||
Other current liabilities | 156,626 | 135,099 | ||||||
Total current liabilities | 467,058 | 373,728 | ||||||
Long-term debt | 73,639 | 59,926 | ||||||
Other long-term liabilities | 23,820 | 29,521 | ||||||
Total liabilities | 564,517 | 463,175 | ||||||
Total stockholders’ equity | 498,047 | 417,945 | ||||||
Total liabilities and stockholders’ equity | $ | 1,062,564 | $ | 881,120 | ||||
Selected Cash Flow Data (Unaudited) (In Thousands)
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Cash provided by (used in): | |||||||||||||||||||||
Operating activities | $ | 79,188 | $ | 48,398 | $ | 147,190 | $ | 114,090 | |||||||||||||
Investing activities | $ | (9,441 | ) | $ | (18,062 | ) | $ | (95,710 | ) | $ | (128,968 | ) | |||||||||
Financing activities | $ | (43,375 | ) | $ | (23,290 | ) | $ | (42,402 | ) | $ | 19,346 | ||||||||||
Free cash flow: | |||||||||||||||||||||
Cash from operating activities | $ | 79,188 | $ | 48,398 | $ | 147,190 | $ | 114,090 | |||||||||||||
Purchases of property and equipment | (5,209 | ) | (18,637 | ) | (27,268 | ) | (35,467 | ) | |||||||||||||
Proceeds from sales of property and equipment | 621 | 575 | 1,698 | 1,359 | |||||||||||||||||
Free cash flow | $ | 74,600 | $ | 30,336 | $ | 121,620 | $ | 79,982 | |||||||||||||
Note: 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190221005975/en/
Source:
William George
Chief Financial Officer
713-830-9650